I guess it was just a matter of time, but the Interactive Advertising Bureau (IAB) has determined that spending on web ads was more this year than for magazines, cable television, radio, or outdoor.
That said, the rich get richer... 89% of the total spend was on the top 50 web sites. Gotta get me a top 50 web site!
We've been saying this for a long time, but traditional agencies are not really structured correctly for the online world. It's not that they CAN'T deliver strong digital solutions per se. It's just a lot more difficult for them. I'll follow up later with why I think that's true, and what I see as the opportunities for smaller, more nimble and creative interactive shops.
Silicon Alley Insider today posted an article entitled 'Ad Agencies Facing "A World Of Hurt"'.
The old way: marketers hire agencies to create mass-media campaigns. The new way: marketers want many messages targeted at individuals and communities. And they're getting antsy about traditional shops' inability to deliver. Forrester analyst Peter Kim quotes one marketing exec who calls the agencies "a necessary evil" to the process, rather than a partner. Which leaves the door wide open for new startups who can deliver...
A few months ago I wrote about how page views were not going to be around much longer as a used metric to determine the effectiveness of a website. Well, apparently Nielsen/Net Ratings is replacing the page view metric with "time spent", which they feel is much more valuable.
Frankly, this metric (IMO) can be tough to get accurate data on. For example, if I go to an article on NYTimes.com and spend 5 minutes reading it, my time spent should be 5 minutes. But how is the website supposed to know I spent 5 minutes if my next action is to go to Gmail in my browser? I never followed up with the NYTimes.com server, so it has no way of knowing if I was there for 3 seconds or 3 hours. The only way it can know is if I return a few minutes later and click on another article. But even then it's not terribly accurate since maybe I was on a page, read it for 20 seconds, went to the bathroom, and then a few minutes later came and clicked on a new page. Was my time spent 20 seconds? 5 minutes? As far as the web server is concerned, it was 5 minutes, but that's not really true, is it?
The nice thing about page views is that it's easy to measure and objective. However, with AJAX, widgets, etc., it has become suspect as an effectiveness measurement. Time spent is a lot more subjective, but if we can find a way to feel confident in the data, is more telling about actual site usage.
Steve Rubel writes about "The Imminent Demise of the Page View", pointing out that more modern websites with their fancy Ajax and Flash implementations don't require multiple page views in order to provide content and interactivity. In a world where the page view is the metric by which many (most?) online agencies measure success, what comes next? How much slower will the rollout of user-friendly, immersive, interactive implementations be since the agency world has strong financial incentives to delay the inevitable?
Clearly we need to start looking at other actionable items, such as content delivery or purchase. It's going to have to be more specific to the goals of the individual company. Given that, how do we come up with a universal metric to show relative success between different websites? If I want to buy media, for example, and I'm comparing two sites and one has twice the page views of another, but the one with the fewer page views is much more compelling and interactive and is clearly hurt in the page view metric by its advanced user interface, which one do I go with?
This is important for our clients and I'll be watching closely to see what the industry starts to push as a new standard.
As an example, Steve writes in "Watch Videos Without Leaving the Google Homepage" about the example of Google now allowing people to watch Google videos without leaving the Google viewer. Net/net this will decrease page views to sites that house these videos. However, the content from these sites is still be watched. Clearly the page view is lessening as a valid metric.
It appears that the savviest major marketers like P&G, Unilever and Microsoft are finally coming around to the idea that the money spent on a SuperBowl ad could be put to better use...
There are a few dozen blogs I check out fairly routinely and one of those is Chris Keane's who writes a lot about web design, usability, best practices and other related topics. This morning when I looked at his blog I noticed something rather odd. Chris has a couple of ads automatically generated on his blog from Google Adsense in order to raise a few pennies through his blog. Certainly there's nothing wrong with that. However, I'm not sure how Chris felt (without revealing TOO much of his politics) when an ad showed up this morning pointing people to Ann Coulter's website...
Chris recently had a post called "Digg = New Media's Christian Coalition" and I'm wondering if Google's automated system picked up on those keywords and thus placed the Coulter ad. That said, this should serve as a warning to those considering placing AdSense ads on their websites. If it's important for your site that random ads should not appear, don't use AdSense - there's too much risk. Google's algorithm isn't smart enough (at least not yet) to know that Ann Coulter should not be showing up on Chris' blog...
So it seems that Agency.com is one of the agencies pitching Subway and decided to create a "viral" video of themselves pitching subway as their pitch. How "meta".
I couldn't even watch the entire thing - it's SO damned boring!Viral? Yes... but I don't see it winning the business. I guess we'll see.
Anyway, Coudal Partners put up a spoof which could have maybe been funnier, but was cute in concept. Itake it Coudal isn't pitching...
Mediaweek reports that an increasing number of mainstream advertisers are experimenting with advertising on podcasts. Of note, however, is that 60% of podcast listeners claim that they fast-forward through commercials. The usual trick of having the podcast host endorse or speak of the product/service has been the typical way of getting around this issue.
I think it's interesting that mainstream advertisers are trying this. Typically, those with the big bucks want to try to get mass exposure. Clearly, podcast advertising doesn't gain that at this time. There are very few podcasts that get major exposure. However, this is clearly a case of "long tail" advertising, and I think the business model for this is going to become more and more obvious over the next year.
pqmedia has a new report out entitled "Alternative Advertising and Marketing Outlook 2006". You can download an executive summary. It shows quite clearly that the biggest advertising growth areas right now are online advertising and mobile and interactive marketing. Word-of-mouth marketing is also experiencing large growth.
The AMN found that brand marketers are accelerating the shift of advertising and marketing dollars away from conventional media to newer media that are using digital technology to reach youth and influential demographics. In many cases these alternative media tactics are doing a better job of reaching target demographics, delivering stronger ROI metrics, or are more engaging to consumers.
Second Life is a virtual world where people can purchase land, and then create any kind of avatar and community they want. Want to be a gorgeous model? A doctor? A drug dealer? You can be anything you want to be. People actually purchase (with real money) land on which to build a house. There is an entire virtual economy taking place here. And, with nearly 275,000 "residents" as of today, it seems to be thriving.
People spend large amounts of time in this environment, which is sort of a SimCity on steroids. So what opportunities might there be for marketers? Harvard Business Review recently published an article entitled "Avatar-Based Marketing" that explores the potential.
When marketing online, “you want sustained engagement with the brand rather than just a click-through” to a purchase or product information, says Bonita Stewart, responsible for interactive marketing for DaimlerChrysler’s Jeep, Chrysler, and Dodge brands. “Avatars create an opportunity for just this type of engagement.”
Something's gotta give. The traditional 30-second spot is becoming more expensive every year, with record fees being paid during the Super Bowl and American Idol. Yet, TV's reach and effectiveness is decreasing. Was TV such an amazing deal in previous years that it still makes sense nowadays to budget huge sums for television advertising anyway?
According to a survey by the Association of National Advertisers, 78% of advertisers say that TV advertising has become less effective during the past two years. They largely blame video-on-demand and Tivo for this, which obviously has an impact. But so does the fragmentation of television and the Internet. Think "micro"... micro-communities, micro-advertising, etc.
It's just common sense. When there were 3 major broadcast networks, a few local channels, and that was it... well of course mass advertising was going to work. But there will never be a MASH moment again. It's VERY rare that a single event brings the entire nation together (and when it does, it's usually some sort of tragic event during which you wouldn't want to advertise.) There is so much choice now, which is great for consumers but not so great for traditional advertisers.
A new way of thinking is required. And it's starting. The leading edge is jumping on the bandwagon and it's just a matter of time before everyone else starts to catch up.
User-generated online media (all that "Interactivism" stuff we talk
about) is growing extremely rapidly. Ad spending on blogs, podcasts and RSS
feeds grew nearly 200% from 2004 to 2005 and is projected to grow another 145%
in 2006. Research
done by PQ Media suggests that the root causes are audience fragmentation, the
ineffectiveness of traditional advertising, and the desire to reach the 18 - 34
market. Among the paper’s findings:
I really enjoyed Mastercard's ad last night, promoting a consumer-generated content campaign that ties in with their long running and highly recognizable "Priceless" campaign. Mastercard invited the audience to participate by entering a competition to develop the best priceless idea.
By including their customers, they gain awareness, augment their already huge opt-in online customer database, create word-of-mouth, and get people coming to their website where they can promote their products. This is a great first step towards customer empowerment.
Purchasing a 30-second spot during the Academy Awards... $1.3 million.
Allowing your audience to participate... priceless!
According to a recent eMarketer report, ad spending in podcasts will grow from $80 million in 2005 to $300 million in 2010. Clearly this is not mass market, but it's growing so fast it should be part of any media consideration set.
So this is what happens if you do a SuperBowl ad with or without regard for the Internet. Most notible is what GM did to Ford. Many of us saw the sweet, nostalgic "Kermit the Frog" ad placed by Ford... "It's Not Easy Being Green". I actually enjoyed that ad, although that might be in part because my wife and I sometimes sing that song to our 15 month old daughter to help her fall asleep.
That said, GM, knowing full well that Ford was going to use Kermit in their ad, bought the keyword "Kermit" on Google! GM created a microsite that focuses on the use of corn-based ethanol as a substitute for oil (a hot-button topic if ever there was one).
What a nice job of using some basic Internet technologies to steal the thunder from a campaign by a major competitor.
And what a terrible waste of millions of dollars by Ford. They couldn't even devote a few thousand of those dollars to a smart keyword campaign?
I'm sure Ford's agency, having placed a $2.5 million ad buy, doesn't believe they did anything wrong...
Coca-Cola is trying a rather innovative approach to advertising their sponsorship of the Torino Olympics. They have asked students from a number of different nations to blog and podcast their experiences as spectators. I'll be very curious to find out how successful this is. It's pretty cutting edge marketing. Great stuff.
Well, the statement that "targeting is necessary to market to this demographic" is obvious, but such an old school way of looking at things. Yes, if you're going to put up banner ads, make sure they're targeted to your audience. This is marketing 101 type of stuff. It doesn't matter if it's college students like in this article, or any other group.
However, according to this research, 59% still ignore the ad. The research talks all about the ways in which college students use the web. Instead of being about how best to integrate marketing efforts into the ways students actually use the web, the article talks about banner ads. Lame.
80 percent of respondents use the Web for purchases, up from 21 percent in an early study. Nearly half regularly download music, and 71 percent are active users of online banking.
This group has multiple e-mail addresses. Sixty-eight percent of recent graduates use multiple e-mail addresses, and 42 percent retain their .edu account. Graduates prefer to their alma mater newsletter in e-mail form (73 percent). Already, 78 percent read news online; up 20 percent from an earlier report.
Networking through alumni channels is shifting to use of social networks. Socializing through alumni groups fell from 70 percent in 2003 to just 30 percent. In that time, visits to social networking sites rose 30 percent.
So college students immerse themselves in the medium. They create and join networks and communities. They get their news and entertainment online. But the way to reach them is banner ads? I think not!
Many traditional marketing and advertising agencies (even ones that claim to be "online experts") treat the Internet as just another medium to broadcast a marketing message (the way the SuperBowl was handled certainly proves that!) These agencies see email blasts as a cheaper form of direct mail or banner ads as a somewhat more efficient type of television advertising. And while others recognize that the Internet can help support sophisticated one-to-one relationships with customers through online CRM programs, such efforts are only a good first step. While such programs can certainly be of benefit, the best opportunities on the Internet are fundamentally different from those in traditional media. The traditional worldview limits the possibilities of what can be accomplished.
By its very nature, the Internet is a highly complex system. Extremely small actions can have major consequences online. A single comment on somebody’s blog can spread via syndication technologies like RSS to millions of people within seconds of being posted. This dynamic has helped to make marketers feel unsure in this brave new world. How does a company market itself in a medium where the customers are in control -- where they can easily exchange information about pricing, customer service, or product quality? And where a single negative comment is archived forever to be found by the masses on Google?
Issues like these don’t just apply to corporations. For example, how important is it for a politician to make sure that empowered constituents stay “on message”? How can a not-for-profit organization leverage the Internet in ways to give it influence, visibility and a reach that would have been impossible just a few short years ago?
Emergent online communities form and grow every day, and it is in helping to nurture and empower these communities where opportunities lie for marketers.
An important question for any online marketer is, who controls your message? Success online is rooted in relinquishing control of your message to those you are trying to reach – your customers. Allowing them to speak, rather than speaking down to them, is the first step. Marketers must remember that the Internet is made up of empowered individuals who do not want to be treated as a mass consumer or a demographic. The ease and immediacy of communications from anyone to anyone is what makes the Internet so different from traditional media. Broadcast and narrowcast marketing each implies that the source of the message is in control, but this is not how the Internet works. The organic power of online entities like message boards, chat rooms, blogs, podcasts, RSS, grassroots communities, expert opinion sites, mobile smart mobs, and viral emails change the equation dramatically.
While marketers cannot hope to control the Internet, successful companies work to empower their natural communities to sit up, interact, get involved, take action and tell others.
Individuals respond well to organizations that are perceived as being encouraging and supportive of their communities, and brand loyalty is what results. The desired effect is the exponential power of positive word-of-mouth.
Your company has fans. Some of them are BIG fans.
They are the people who buy your product or service, again
and again.
They are the people who tell their friends about you. They
are your best sales people, really. Are you taking care of your fans? With all
of the choices in the world today, they won’t stick around forever if you’re
not.
Are you aware that they talk to each other? In fact, the Internet is making it easier than ever for them to communicate. Are you participating in these conversations? Are you inspiring them? What do they want to talk about? What are they saying about you? What are they saying TO you? Do you listen? You can be sure that other people are listening.
Ad agencies for the biggest brands in America ought to be ashamed. It's 2006. Yet, the big agencies - the ones with which brands like Budweiser, Burger King, Ford, and several big financial houses (jeez, the ads were cute but for the life of me I can't remember who those ads were for) spend millions and millions of dollars with every year - don't even TRY to do anything innovative. How is it that in 2006, SuperBowl ads have no integration with anything outside of television? Where's the call to action?
A major problem in the agency business is that most agencies with the slightest bit of creativity or innovation quickly get acquired into large holding companies where they quickly lose what made them interesting in the first place. A client with a lot of money comes along and says "we want to do a SuperBowl commercial" and the agencies happily take their money without producing anything remotely worth the money. Meanwhile, SuperBowl ads just get more and more expensive, but provide less and less value.
Let me just say right here, right now, that if one of our clients came to us with millions to spend on an ad campaign, it wouldn't be spent on a silly 30-second TV ad that would exist solely to provide a slight bit of diluted awareness to a whole lot of people with nothing more to it than that.
What a waste.
Last Tuesday I posted about how GoDaddy.com might get more publicity out of their commercial being rejected from the SuperBowl. Well, they apparently went through more than one dozen revisions before finally having one accepted. Personally, I thought the ad was boring, especially compared to last year's. You have to wonder how close this was to actual dialog...
GoDaddy: Fine. You win. I can't deal with this anymore. We'll just put together a non-offensive version of this thing that suggests that there's something sexual going on if you go to our website.
ABC: Fine. We're so sick and tired of watching essentially the same ad again and again. Did you sign our $2.5 million check?
I truly wonder if GoDaddy think this was worth it. I guess we'll find out next year.
Bob Liodice, the President of the Association of National Advertisers, writes about how technology has fundamentally changed marketing from "the creative art of yesteryear into a true business discipline for tomorrow." He writes about how consumers are now in control, the explosion in available media channels (Internet, podcasting, blogging, mobile, etc.), how brand equity is now managed, and how marketing is now measured. Finally he discusses the pillars upon which CMO's today must work to reinvent themselves.
I'm thinking that dollar-for-dollar, the "banned" ads are going to provide more value than the ones that actually air during the Super Bowl. These ads are going to be extremely viral. If I'm Go Daddy, am I hoping that the network won't play my ad? It would save me millions of dollars, increase my noteriety, and make my ad one of the hottest things on the net...
Hasbro is launching an online campaign that's worth keeping a look out for because of their innovative use of interactive video. The ad units use a technique called "hotspotting", which enables a viewer to mouse over a part of the video to make something happen.
It will be interesting to see if more advertisers start trying this as a way of bringing viewers into the experience.
ClickZ has brought together a number of luminaries from different parts of the interactive spectrum to weigh in on what 2006 will bring. Predictions are written about:
While there is certainly some hype and buzzwordiness here, it's worth a read.
Perhaps an unfortunate theme in this post and the last, but yes, sex does sell. However, mainstream TV is pretty squeamish about how far an advertiser can go (the recent Go Daddy ads are really pushing the limits, IMO). Here is an example of an advertiser (Napster) who decided to create an ad that would NEVER get TV time, knowing full well that the viral nature of the Internet could make it popular. This ad is clever and funny, if perhaps not appropriate for the workplace. The 30-second spot maybe isn't dead after all, if it's used in innovative ways.
We at Abstract Edge maintain that traditional advertising is on the wane. The time is now for innovative companies to start testing newer methods for reaching customers and deepening relationships. An IBM Business Consulting Services report speaks about two kinds of TV viewers - traditional couch potatoes and the "anytime, anywhere" crowd. Guess which crowd is growing?
So does this mean the end of advertising? Well, certainly as we know it. The good news is that there will still be tremendous opportunity for innovative and intelligent marketers.
Some of the tips from the article include:
Business Week: What a Girl Wants from Advertisers. The article expresses the idea that one way to market to younger women is to think about how you might act on a date.
Jaffe Juice: I really have to agree with Joseph Jaffe on this one. AT&T's new ad campaign doesn't convince me in the slightest that anything has changed about the company. There is nothing innovative here whatsoever. And this from a communications company that has the opportunity and reach to take true advantage of newer forms of marketing that are SO much more cost effective and potentially successful.
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