Solid article on ClickZ last week with some insightful commentary from Nielsen Online CEO John Burbank. Mr. Burbank correctly identifies lack of brand dollars online as the source of current downward pressure on rates and publisher revenue. He’s 100% right that without these dollars following audiences online, the online publishing ecosystem will degrade and that users will not like the results. This second theme was echoed by Omar Tawakol, CEO of BlueKai, in another insightful piece for AdAge. So without a robust online ad market online, online publishing will suffer. And if that ad market doesn’t include the large brands that funded quality content in other media, online content quality will degrade to the detriment of users, advertisers and publishers alike. A tragedy of the commons of sorts.
Mr. Burbank went on to make the important point if publishers want to attract brand spend, they need to help brand advertisers measure results using metrics that are appropriate to the objectives of brand campaigns. He suggests that rather than focusing on clicks, brands should be focused on “whether their ads reach the desired targets, change the way consumers think about their brands, or help sell products.” Couldn’t have said it better myself. This is something we discuss with our clients every day. We actually partner with Nielsen to help our clients in CPG measure the extent to which their online campaigns sell product offline. The results speak for themselves. Online advertising works.
I do disagree with Mr. Burbank on one important point, however. He seems to suggest that ad networks are responsible for the current challenges online publishers face. It’s true that ad networks can put downward pressure on CPMs for a publisher, but that is primarily driven not by the fact that a network is doing the selling, but that the vast majority of networks sell almost exclusively to DR buyers. Those buyers are extremely price sensitive and thus the downward pressure. If there was a healthy level of demand by brand advertisers for online content, this downward pressure would be balanced and the online publishing ecosystem would be much more stable. Unfortunately, online branding today remains too inefficient for brand dollars to follow audiences online easily and balance this equation. So an ad network focused on branding, such as Brand.net, actually helps matters, increasing efficiency for brand buyers to help move budgets from other media, while not undermining the economics of the premium publishing model. This is another topic near and dear to my heart, which I addressed at some length in an iMedia post earlier this year.
Quick note on the ClickZ article last week about CPG companies ramping up online spend. Branding is tremendously important in this category, which includes many of the largest advertising spenders on the planet (P&G, Unilever, etc.). Companies like these are increasingly realizing that their customers are consuming a greater and greater share of their media online, so if they want to protect their brands they need have their ad budgets track that shift in behavior. The alternative is to risk losing share to new brands or – particularly as wallets tighten through the recession – private label products. Research indicates that such share losses can be permanent, so continued investment is critical even in “this economy”. Glad to see them staying sharp.
P&G is the largest marketer in the world.They are also one of the most successful. This recent article in Ad Age gives us some insights into why.
The article quotes Marc Pritchard, P&G’s global CMO:
“I’ve got a lot of passion for digital. It really is such an incredible way to connect with consumers and really have much deeper ongoing relationships with them… Our media strategy is pretty simple: Follow the consumer. And the consumer is becoming more and more engaged in the digital world.”
It’s that last part that’s most insightful for me. Keep it simple, follow the consumer. This is very good advice, as it seems too often marketers can get so focused on the dizzying array of niche products and capabilities online that they lose sight of what they are really trying to accomplish, which is exactly that: reach consumers. Lots of them. In the right environments and with the right messages. This is something near and dear to our hearts at Brand.net, because when done well it drives strong, measurable results.
The discussion of online spend ramping to the point that marketing mix models can begin routinely reading it is also an important one for 2 reasons. First because the 5% threshold they mention for an MMM read can represent a real inflection point for online spend for the CPG category – an extremely important category for the long-term health of the online ad ecosystem. Secondly, the discussion highlights that fact that marketers want to think of online as a medium in line with other media at their disposal. Online media is often sold as “special” or “different”, but the path to higher spend isn’t in forcing marketers to learn and embrace new technologies and metrics. Nor is it in driving marketers into niche strategies like BT or custom executions that are flashy, but have negligible reach and impact. Increasing online spend will undoubtedly involve new technology and learning on both the buy-side and the sell-side, but to focus on technology for technology’s sake is to miss the point. The path to long-term, significant, sustainable increases in digital spend will be paved in large part by helping marketers leverage the skills and tools they already have to better follow the consumer – a consumer who is becoming more and more engaged in the digital world.
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.
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.
Ad Age: “Do you think we’re going to see a rebound in brand marketing in the second half of the year?”
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.
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”
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.
There was a great article in Ad Age today about Ford focusing on the top of the funnel to gain share in the current market and improve their long-term competitive position. Ford and other forward-thinking marketers realize today’s market conditions are temporary, but their brands are long-term assets. Maintaining proper balance throughout the purchase funnel even during this critical, challenging time can build significant equity in a brand as competitors over-focus on the bottom of the funnel. As Ford has shown, increasing brand equity can yield measurable benefits now even while positioning a brand to accelerate into the inevitable recovery.