Category: Branding

The Ad Network for Demand Creation

Extremely interesting article in MediaPost last week, including three important points I want to focus on.

The first point is the quote by Forbes.com President & CEO Jim Spanfeller.  He says, “Ad network spending is all about demand fulfillment while direct-to-publisher display is much aligned with the traditional advertising goals of demand creation.  It is interesting to see the shift of dollars toward demand creation as we see signs of life in the economy.  He’s right of course that the vast majority of ad networks are focused on demand fulfillment or DR or “bottom-of-the-funnel” (pick your favorite expression).  But there’s an embedded assumption in his statement that the only alternative to DR-focused networks is direct-to-publisher.  This is not true.

Brand.net delivers the positives of an ad network – scalability and efficiency – with a unique platform that was built by brand media experts for brand media experts.  Brand.net is the only ad network exclusively focused on demand creation – branding.  The second point is the fact that half of the 100 senior marketing executives surveyed by Forbes were unhappy with ad networks due to underperformance vs. expectations.  This is a particularly important point in an environment where dollars are scarce and ad networks are plentiful; both advertisers and publishers should chose their ad network partners carefully.  Finally, the article highlights some marketer concerns with BT – specifically, effectiveness and privacy.  That’s a meaty topic for another post, but suffice to say that I believe those waters will get murkier before they get more clear.  Stay tuned.

P&G focuses on the long term

Really insightful article about P&G in Ad Age a few days back. Focused on investments they are making now in long-term growth *over the next decade*. A far cry from the recent fascination with instant gratification marketing that seems to have taken hold (at least in much of the press) during “this economy”.

One of the data points cited in the article was a Consumer Edge survey of 1,000 consumers, which found 19% of Tide’s core users have traded down, at least at times, to value brands during the recession. Of them, 81% said they’ll probably stick with value brands after the recession. An example of the significant, permanent share loss possible when branding investments slip – a topic we have discussed on this page previously.

Even Wall Street likes the long-term focus – a rare occurrence at that address. The article notes that “expectations that P&G will pull back on earnings and sales guidance for next year has been sending its stock *up* in recent weeks, because they signal a more aggressive posture for the long term. Were Mr. Lafley next week to reaffirm a commitment to double-digit earnings growth he’s delivered for nearly a decade, some analysts believe the short-term focus could actually disappoint investors and hurt the stock…Deutsche Bank analyst Bill Schmitz says, ‘Share losses are a slippery slope, and we believe management understands nipping it in the bud now is a lot less expensive than trying to take it back later.’”

We couldn’t agree more and while the short-term results of effective Branding are measurable, the full effect will play out over the long term. This is strategic marketing at its best and sets an example others would be wise to follow.

People Eating Advertising?

There is a well-written and entertaining article on Grape Nuts in yesterday’s Wall Street Journal. It included a fantastic quote from Carin Gendell, senior brand manager for Grape Nuts in the ’80s. “Grape Nuts,” she says, “was people eating advertising.”. The same could be said of many, many foods today.

I have personally had discussions with more than one processed food company where they are viewing advertising as a raw material input to their finished product – much in the same way as grain, corn syrup or cardboard for that matter. While it’s not necessarily appetizing, it’s undeniably true and brings up an interesting point. Effective advertising has become as important an ingredient in many products as the raw materials from which the actual product itself is made. It’s important to note that Carin says “was” and not “is,” because Grape Nuts has lost share dramatically since those heydays – another important reminder of what can happen to a brand if it loses touch with its customers.

I am actually a big Grape Nuts fan – I happen to like “the rhythmic crunching that reverberates around your skull” – so I hope the current $5M campaign moves the needle.

Marketers To AdAge: Expect Brand Marketing Rebound

Ad Age: “Do you think we’re going to see a rebound in brand marketing in the second half of the year?”

Marketers: “Yes”

While the timing of macro-economic recovery is uncertain, smart Brand marketers know that a recession is (1) a great time to gain share of voice and reach consumers with a message that will pay dividends long term and (2) a critical time not to lose share of voice to competitors, especially generics, because winning it back is not a sure thing and very painful to do. As competitors over-focus on the bottom of the purchase funnel, maintaining proper balance throughout the funnel can drive sales in the short term, while positioning a Brand to accelerate into the inevitable recovery.

Furthermore, research has repeatedly shown that Brands that cut spending in economic downturns lose share to competitors and private label products. Permanently. When times are tough, we all must focus more than ever on getting the most impact out of every dollar of spend. But dollars smartly used can go much farther in this economy, so make sure the revised plan doesn’t put you on a track to permanent market share declines, but rather at an advantage to your competitors now and for years to come.

Cutting Spending Hurts Brands Long Term

Great article in Ad Age today.  Brands that cut spending in economic downturns lose share to private label products.  Permanently.  Some exceptionally smart marketers (P&G, L’Oreal) were identified as bucking the budget cutting trend last quarter, but the trend itself means that too many brands were pulling back on these critical ongoing investments.  When times are tough, we all must focus more than ever on getting the most impact out of every dollar of spend.  However, making cuts today that are proven to lead to permanent market share declines is exactly the sort of short-term thinking that got us into “this economy” in the first place.  At least Wall Street can blame the Fed…

Tropicana

Cinderella, those masters of 80’s hair metal, had their biggest hit with “You don’t know what you got (until it’s gone)”.

As much as I have tried to suppress those dark days for music, I couldn’t help but hum a few bars to myself as I read today’s Ad Age story about the negative impact of Tropicana’s recent packaging overhaul. Continue reading “Tropicana”

Notes From This Morning’s IAB Webinar

I sat in on the “IAB Internet Advertising Revenue Year End 2008” briefing this AM. It was a good high-level check-in on the state of the market and I particularly enjoyed the commentary by Professor Peter Fader of Wharton. To paraphrase some of his comments:

Because you can see immediate payoffs from performance-based advertising, it gives you comfort. But that doesn’t mean you’re not getting good payoffs on brand-building or other less direct forms of marketing. Companies should not overly focus on the short-term. The impact of advertising is slow and cumulative, with brand effects show up over the long term. Even attaching electrodes to peoples brains isn’t going to change this, so marketers need to be patient and incorporate longer-term thinking.

Similar to my comments in this byline and good advice for sure.

Digital Marketing: Is it Time to Forget Measurement?

The following is a re-post from my guest blog column published today in AdAge. It ties in very nicely with coverage on measurement coming out of the IAB Annual Meeting, including my previous boss, Wenda Harris Millard’s keynote and this piece by AdAge’s Abbey Klaassen

Digital Marketing: Is it Time to Forget Measurement?

Why Online Advertising is Hindered by its Biggest Strength

In several recent pieces I have written about the opportunities and limitations of measurement in online media, particularly for branding. If you read those articles, the title of this byline might seem strange. For the rest of you, this title might seem like downright heresy. Please, read on before you call the exorcist.

The internet wasn’t always the multibillion dollar industry that it is today. Less than 15 years ago, most websites we know today didn’t exist. The relatively few that did were searching for business models. Some went with a subscription model, at least for a while (most notably AOL), while most content-focused sites honed in on advertising as the main source of revenue. As they did, they faced a huge challenge: how could they sell advertising against more established media with what then was an extremely short list of assets.

Recall the internet circa 1996, the year one of the biggest and best known content sites, Yahoo, went public: bandwidth was narrow, content was thin, audiences were small, creative was primitive. However, the internet did excel in one area: it was awash with data. Page views, time spent, clicks, conversions — a treasure trove of new metrics, along with some “old” ones that hadn’t been as readily available with other media.

I was recently talking this over with my former boss from Yahoo, Wenda Harris Millard, and she added that the measurability of this new medium also tapped into a broader theme in the advertising business at the time — growing dissatisfaction with measurement of traditional media. So, quite rationally, the internet advertising value proposition focused on measurement.

As the industry grew — faster than any media in history — more sophisticated targeting (behavioral, retargeting, “hyper-targeting”) and measurement (“engagement,” “search lift”) capabilities were developed. The focus on measurement evolved and became more ingrained, almost to the point of being the unquestioned orthodoxy. It was as if the core benefit of the internet vs. other media was measurement. Period.

Therefore, to sell more ads you need more measurement. (Two secondary factors, customization and short lead-times, also received significant emphasis—but those are topics for another day.)

The reason for my provocative headline is this: if today, in February 2009, we started with a blank PowerPoint slide and asked the same question that was asked some 15 years ago — how do we sell ads against more established media — would we select the same strategy? I think the answer is no.

Consider the “balance sheet” of the Internet now compared to then. Assets have grown tremendously: bandwidth is broad, content is deep and compelling; audiences are huge; sight sound and motion have entered the creative mix, through rich media and video. And the balance sheets of the other major consumer media have accumulated significant liabilities: print is facing declining circulation and, especially in newspapers, a rapidly aging demographic; radio ad sales are off sharply, while at the same time the once-promising satellite radio subscription model has proved endlessly unprofitable; TV, after getting past the “fragmentation” issue that was the obsession of the 1990s, has been covered by the huge black storm cloud that is DVR penetration. In 2008, 29% of all US households used DVRs, according to Barclay’s Capital — and that number is forecast to double by 2012 and reach nearly 80% by 2016. Those of us with DVRs watch dramatically fewer commercials. It’s just a fact.

So, if we were starting fresh in today’s environment, I would simply argue that we wouldn’t (and thus shouldn’t) lead with measurement. The measurement pitch has obviously worked extremely well for direct response; about 30% of DR-focused measured media spend is now online. But 95% of brand spending, or more than $100 billion, is still offline. For those budgets, I think our collective pitch should be more like “Your audience moved. Your marketing needs to follow them. Let us show you how the internet can deliver the same quality, scalability and value as TV.” Measurement should still be an important part of the story — we’d be foolish to ignore all the opportunities there — but I submit that it should be the sizzle not the steak.

That’s one of my missions at Brand.net: as stakeholders in the biggest, most powerful consumer media today, how do we provide the world’s leading brand advertisers the quality, scale and value of TV, the prior generation’s No. 1 consumer mass media? By making the critical, powerful, yet fragmented content environment of the internet more consistent and more buyable. And more measurable, of course — but measurable by the criteria and metrics brands have developed over decades to evaluate efficacy of 100s of billions of dollars of spend.

When we as an industry can do this, we can finally move large brand budgets online, following the audiences that are already there. This shift will in turn provide financial support for publishers to develop yet deeper, richer, more engaging online content experiences.

Some of you may still want to call the exorcist, but for the rest of you, let’s get to work.