Interesting article last week on Silicon Alley Insider, commenting on recent OPA/comScore study designed to help the advertising world get beyond the click. This topic is near and dear for me and I have written on it previously. Now, I don’t always agree with the OPA (for example, I’m not sure I would have gone with “The Silent Click” as a title for the research – sounds like a bad Meryl Streep movie), but in this case they are right on. Clicks don’t equal sales. Period. (Sales don’t equal ROI either, by the way). The research (slide 11) showed online ad exposure increased online sales by 7%. We’ve seen the same dynamic looking at offline sales as well; those exposed to online advertising buy more of the advertised product in offline retail stores. This is an even more powerful result than the online data presented by OPA/comScore because nearly 90% of all retail spending still occurs offline, even higher in key brand categories like CPG. Interestingly, the OPA deck stops short of presenting any actual correlations (or lack thereof) between CTRs and the other variables they discuss. So I will pick up where they leave off – in our offline sales lift results to date we have seen no correlation between CTR and ROI (offline sales lift vs. media spend). What drives ROI is a mix of Cost/HH reach and quality of content environment where ads are shown. Clicks might be useful for something, but not as a proxy for ad effectiveness.
Jessica Vascellaro’s WSJ article this morning on Yahoo!’s display ad platform, APT, caught my attention. The problem Yahoo! is trying to solve with APT – (quoting Jessica) “that it remains a big pain today for advertisers to buy display ads across multiple sites and for publishers who have lots of online advertising space to sell to find demand for it” – is exactly the problem we founded Brand.net to solve. Continue reading “Thoughts re: Today’s WSJ article on Yahoo!’s APT”
I was catching up on content from last week’s Ad Age digital conference when I came across this clip. Turner Executive Walker Jacobs begins by exploring some common themes with respect to tension between top publishers and networks, but the part that really caught my attention is the short exchange at the very end of the clip between prominent market analyst Henry Blodget and David Moore, Chairman of ad network 24/7 (now renamed B3 within WPP):
Moore: “It wouldn’t hurt us at all if every premium site out there never used us again. We’d be fine. We don’t need ‘em.”
Blodget: “So, to heck with quality content.”
Moore: “Quality, really, is in the eye of the beholder.”
I had to rewind the clip and watch a few times to make sure I understood what Mr. Moore was saying. I was, frankly, a little shocked to hear that from a senior executive at WPP, parent company of some of the premier agencies in online advertising, who represent many of the most iconic brand marketers on the planet – AT&T, Unilever, Sprint, Macy’s, Campbell’s Soup and Colgate Palmolive among them. I’ve had the privilege to work with each of those brands in my past life with Greg Coleman and Wenda Millard at Yahoo!, and have worked again with many of them in my new life at Brand.net. Throughout that decade of experience, these brands have consistently reinforced the critical importance of both the quality of execution and the quality of the content surrounding their ads. In short, the eyes of these beholders have insisted on very high content quality standards.
Because of this, we only buy from top quality sites. If every premium site out there never used us again, it would not be possible for us to meet our clients’ standards for top quality ad environments. However, the way the web is evolving makes maintaining quality an ever more difficult challenge. The common practice of intermingling professional edit and UGC on the same page means that even if we start with the best sites, there are some individual pages that can create problems (most often due to user comments). This is why we assembled a top notch technical team that in partnership with IBM has delivered a market-leading page-level filtering capability we call SafeScreen. SafeScreen allows us to deliver the best of the best to our clients, which is what they look to us to provide. Starting with top quality sites and continuing to lead the market with page-level filtering capability, we take our commitment to quality seriously and we always will. It’s who we are. And it’s what top advertisers told us at Yahoo! and tell us at Brand.net they are looking for from a partner.
So, a word to our premium site partners: we *do* need you, we *will* need you, and we will continue to work with you on issues that matter to both of us, including the need to constructively avoid channel conflict. I am tired of glorified link farms supported by belly fat ads. Let’s bring quality advertisers to quality content and watch the web thrive.
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…
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.
Many interesting points raised in this recent MediaPost Blog. Certainly an interesting take on one of the reasons for the current predominance of DR over Branding in online advertising and I agree wholeheartedly that online display ads are a far better branding medium than it’s currently fashionable to believe. (I found myself thinking, “AMEN!” as I read that paragraph. Well put.)
I also agree that the more compelling the creative opportunities for brand marketers the better, as long as a standard approach can be developed. I’m not sure that the tethered ad approach that’s recommended is the right solution, but that doesn’t detract from the argument against clutter. A publisher choosing to go to with 100% tethered ads would likely execute that choice operationally the same way they would execute any other new ad unit, so the real question is, “What’s the most effective ad unit for brand marketers?”. Certainly a worthwhile question. Would also point out that networks as whole wouldn’t necessarily lose in the scenario outlined. Many certainly would if the new unit was less effective (lower ROI) for DR campaigns, but Brand marketers and Branding-focused ad networks would welcome any new standard unit that improved results for online branding.
I was happy to see Brand.net was recommended in a recent recent research report from Forrester Research entitled “Ad Networks for Brand Advertisers”. Forrester’s research suggests that as brand marketers focus on doing more with less, Brand-focused ad networks are a good solution driving increased efficiency and decreased cost without sacrificing quality or control. The note is fairly brief, but includes some valuable advice for online brand marketers evaluating networks. In particular, Forrester recommends careful vetting of potential network partners. In a crowded ad network market it’s important to separate the networks that can deliver against complex brand requirements from those with more DR-focused capabilities. Good advice.
The summary of the report is available here.
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.
This week Randall Rothenberg, the President of the IAB, released a self-proclaimed “manifesto” which picks up many relevant themes to our work at Brand.net.
It’s quite long, but the first 3 sections and the last 2 echo conversations we have with partners (advertisers, agencies and publishers) literally on a daily basis. As I said in my comment to Randall’s article, there’s more confusion than information in too much of the ongoing debate about CPMs, formats/standards and the role of networks. Everyone – advertisers, agencies, publishers and networks – would be better served if we could collectively take a step back from today’s disproportionate focus on DR and think more broadly about what it takes to make the Internet work for the full funnel. In doing so we will find long-term, sustainable solutions to many of today’s challenges.
Standards are an extremely important issue, but I think Tillinghast really has it wrong in this article which ran in the New York Times this week.
First of all, his quote: “We made it possible for any Web site to run ads through the ad networks. That’s created an oversupply of space.”, doesn’t make sense. How does enabling different distribution channels create oversupply of product? It’s all the same inventory after all – the only difference is whether or not the sale is through an intermediary. Regardless, deliberately creating “complicated”, “unusual” formats is exactly the wrong answer. The reason for the “soft middle” as he puts it is an inefficient, manual buying process for anything but DR-focused advertising. Since DR only accounts for ~1/3 of measured media spend, these operational barriers have created the imbalance of supply and demand that is responsible for declining yields and accompanying publisher hand-wringing. Tillinghast’s prescription – every publisher should make their own unique ad units to deliberately make the buying process less efficient – will make all of this worse, not better. Picture TV with only product placements (no 30-spots) and no networks (national buy takes 100 phone calls and associated logistics). That’s an obvious disaster for advertisers and content providers alike.
The answer is more standardization, not less. The author is correct to be skeptical.