Archive for April, 2008

A Web Shift in the Way Advertisers Seek Clicks

Posted in Uncategorized on April 22, 2008 by southborough

Tyler Townsend, a digital media manager who plans online advertising for travel clients at Ypartnership, an agency in Orlando, had $150,000 to spend on behalf of a Caribbean island’s visitors bureau. And this client did not care about branding — it wanted action.

So Mr. Townsend, who once might have made a simple buy on a site like Yahoo, created a complex campaign, which ran in March. He bought ads on Budget Travel, and he bought out Lonely Planet’s home page for a week. He used custom ad networks that included travel-themed sites, and another that would put the ads only on high-end sites.

Last year, Mr. Townsend said, many clients were happy to spend money just to raise awareness. Since January, however, “everyone’s retail-oriented. They want as many clicks for the dollar as possible,” he said.

So far, the threat of a recession has not slowed the migration of ad dollars to the Internet — as Google’s strong results showed on Thursday, when it reported a 30 percent jump in net income for its first quarter. But as Mr. Townsend’s campaign suggests, the slowing economy might be changing where those ad dollars are being spent.

Increasingly, marketers are looking to ad networks, which sell display advertising across groups of Web sites. Some networks offer targeted advertising; others, called vertical ad networks, include sites that focus on one subject, like travel or sports.

Their growth could mean a lower share of advertising for portals like AOL and particularly for Yahoo, which is particularly strong in traditional display advertising. (Yahoo will report its quarterly earnings on Tuesday.)

In 2007, United States revenue growth slowed at three of the four major portals (Yahoo, AOL and Google) according to an analysis by eMarketer. The fourth is MSN. Any downturn could also be bad news for media sites that attract a lot of display advertising, like CNN.com or nytimes.com, at premium rates.

In the United States, $21.1 billion was spent on online advertising last year, up from $16.9 billion in 2006, according to eMarketer. Search advertising — Google’s stronghold — is the majority of that spending, according to Jeffrey Lindsay, an analyst at Sanford Bernstein.

According to a report by Imran Khan, an Internet analyst at JPMorgan Chase, ad networks “are growing much faster than the general graphical advertising industry.” He estimated that the top 20 ad networks had earned $2 billion in 2007, or 14 percent of the display market.

The reasons ad networks are thriving are price and improved technology. Ad networks charge much lower cost per thousand ads served (known as CPMs), as low as $4 on an ad network with some targeting, compared with $40 and up for some ads on premium sites like MSN or Yahoo.

“While the home pages are still very effective media buys, the price tags on them have become a little outrageous for many advertisers. For all the growth that has gone on from a site standpoint, there are other ways to amass that type of audience fairly quickly that are more efficient,” said Margaret Clerkin, the chief executive of Mindshare Interaction, a media-buying firm.

The improved technology has helped. Ad networks once served ads to pages where no advertiser wanted to be, like pages that get few hits or those with controversial content. Now, though, many attractive sites are not major home pages. Also, many ad networks now offer targeting (as do portals, for a higher price), matching ads to likely buyers.

For example, if an airline wants to promote a flight from Dallas to Chicago, it can direct those ads to users with Internet addresses from those areas. Marketers can also direct ads by content: a reader on a cellphone ratings site is probably looking to buy a new phone, while another reader on the Yahoo technology home page might be browsing stories about Wi-Fi and not looking to buy anything.

David Metter, chief marketing officer of MileOne/Atlantic Automotive, a group of car dealerships with over 3,000 employees, said that it was possible to “blow your spend” on a home page ad.

“I would much rather get more specific and go to the customers and have maybe less eyeballs and higher quality eyeballs, or less leads and higher quality leads,” he said.

Based on the success of ad networks, some big players are buying their way into the game. Yahoo bought BlueLithium for $300 million last September. Last July, AOL bought Tacoda for a reported $275 million, and in November, it bought Quigo Technologies for a reported $350 million. Last May, Microsoft bought aQuantive, which owns some ad networks through a subsidiary, for $6 billion. DoubleClick, which also owns ad networks, was acquired by Google for $3.1 billion. Dozens of other networks have sprung up — one tally at eConsultant lists more than 80.

“There’s no slowdown in terms of a really targeted ad spend,” said Mitch Lowe, whose network, Jumpstart Automotive Media, handles ads for 12 automotive sites. (Jumpstart was sold to Hachette Filipacchi Media last year for $110 million.)

However, the reliance on ad networks mean that two of their major attractions — that they are simple and that they are cheaper — are diminished.

“These are the gold rush days now for ad networks,” said David Hallerman, senior analyst with eMarketer. “And that kind of counters the appeal of ad networks for advertisers’ agencies, which was to simplify the purchase of ads. And that’s why its unlikely that a great number of ad networks will survive.”

Even given the choice of ad networks, the continued flow of dollars online means that prices are rising.

Mr. Townsend says that his clients were happy with their campaign and want him to do a similar one. Except this time, they want him to hit the networks even harder.

“We thought,” Mr. Townsend said, “for this amount of dollars, we can get you this many more impressions than we did.”

Media And The Social Web

Posted in Uncategorized on April 22, 2008 by southborough

By Seana Mulcahy

 

Move over, World Wide Web, and give a warm welcome to the World Live Web (WLW). Actually it’s been around for many years now. Unfortunately it hasn’t popped up in our beloved industry until late. 

Doc Searls is the Senior Editor for the Linux Journal, the original (and still the leading) Linux publication, which was calling it the “Live Web” over six years ago. But what is it? Well a variety of elements including blogs, feeds, tags, etc. The concept doesn’t deal with plain ole static Web pages; it’s dynamic and ever-changing.

Searls posted some compelling info over three years ago now. Typically in our business I think three years ago is beyond old news. However, this has a shelf life and applies to folks just starting to question it and explore it. Searls outlines the “difference between the Wide Web and the Live Web:”

 

· The simple difference is the Live Web is syndicated. That means every time something is posted or updated, a notification goes out, informing the world about it.

· The most familiar syndication method is RSS, which commonly stands for Really Simple Syndication.

· Wide Web search engines send out spiders to crawl through every site on the Web…Live Web search engines crawl only syndicated pages and only when they’re notified by a fresh feed from those pages.

· Wide Web indexing is proactive and archives everything, while Live Web indexing is reactive and archives only what’s fresh.

· What matters most usually is what’s freshest — or both relevant and fresh.

However, back to our industry…most are late to the race. That’s why it kills me when most agency types question it. Just ask your agency what they do beyond traditional online display advertising. Most won’t even get the question. The more advanced will probably say anything digital like search engine marketing, email, word-of-mouth — or some combination of diverse terms. The advanced will say advertising within social media. Even most of the advanced types can’t define what it means. Just ask them. Most likely they won’t be able to give you the two-minute elevator pitch. Some may push you off by referring you to someone in digital media or even public relations. And many will look at you like you are a dope and say, “Sites like MySpace and Facebook, of course.”

I’ll let you in on a little secret: Digital media pioneers strategize via a different lens. Fresh rankings and content are preferred. News is old often within moments — but it’s more than getting there first. It’s about relevance, authenticity and engagement. I’ve been saying it for years now; it’s not about traffic, it’s about qualified traffic. I guess I’ll add to that and wordsmith later, vis a vis relevancy.

My firm often partners or gets asked to partner with other service providers. Often traditional agencies and marketers come to us to handle the digital elements of a brand’s business. In some instances we partner with other service firms.

Let’s just say we keep a close eye toward whom we partner with. Most of the traditional guys need us (not just me and my company — digital folks at large). They still don’t get the online “stuff.” There remain a fair amount of digital types that think their respective services can be done in a vacuum. Their crystal balls resemble a fun-house mirror to me.

I recently had an exec-level person question the validity of our integrity in regard to our recommendations for a brand. We centered our campaign on the social Web (or live web). I can’t get into what they were. The bottom line is, we got questioned; in a bad way.

I’m still not sure where the questioner was coming from. All I know is that he doubted our thinking and threw out accusations (we’ll leave it at that). It was almost as if he thought we were “making up” venues and opportunities that didn’t exist. Social media to him had to be like traditional media and be clear-cut negotiated spaces with standardized ad sizes (units) and cost per thousand (CPM) pricing.

If you want to advertise, market and promote in areas that are “live,” how they hell can you determine that before such conversations, brand chatter, tags, etc., happen??? You can’t. If someone is guaranteeing that, then have them email me off list. I simply don’t believe (right now) you can.

Heck, if it means passing up business, isn’t it worth it — based on methodology, practice and passion? I think so. Over to you. Would you sacrifice a relationship based on your beliefs?