Saturday, December 26, 2009
Thursday, December 24, 2009
“Optimization Algorithm”; too many companies used this term this year. Companies came out of the woodwork to help us “optimize” our campaigns with an automated solution on a special proprietary, mathematical formula that no-one else had, but not many were able to deliver on the promise they made. That’s not to say they won’t figure it out in 2010, but in 2009 this was an easily over-hyped, over-used term.
Another term that was tossed around and used to describe just about everything was “platform”. In 2009 everyone wanted to be a platform. No one wanted to a service and absolutely no one wanted to be a website. Being a website was soooo 2002. Being a platform was everyone’s desire, with sites like Facebook leading the charge and a nation of emulators following behind. In 2010 I hope that people will be comfortable with themselves and realize that if you’re a website, or a service, that it’s not so bad. You don’t have to be a platform to be considered a success!
Another overused buzzword in 2009 was “Data”. Now, data is not a buzzword in and of itself, but the overuse of the term made it so ubiquitous as to be annoying. Everyone had “new data” that would improve targeting or “new data” that would provide unique insights. The fact is that new data is only as useful as the old data is ineffective. What that means is that if you build a better mousetrap, but the old mousetrap that everyone uses is working fine, then nobody is going to buy the new mousetrap. In 2010 I’m certain that data will be of continued importance, but I hope that companies will take the time to determine exactly what to do with the data and shoot for impactful usage, not iterative, incremental improvements. Use the data for better ad delivery as well as targeting based on recency, not just to give us deeper demographic information.
“Apps” were all the rage in 2009, and they look to be even more so in 2010, but as Apps continue to play a role, the cream will rise to the top. The challenge has been made and the gauntlet has been thrown and the development of apps is getting better. No more stick figures fighting; its high resolution, detailed graphics. It’s about useful apps, no more expensive red blinking lights.
The term “recession” was thrown around in 2009 as a reason for everyone’s unhappiness, but that is a term that I won’t allow in 2010. The term “recovery” is going to get overused as well, but the fact is that we drive our own success. Our efforts in this business as well as in others is what drives the growth of the economy and the more effort we put in and the more jobs we create, the better things are going to get. There may be 10% unemployment because a number of jobs have been cut over the last 18 months, but our industry is a place where those jobs can be re-created and its up to us to make it happen.
In 2010 I want the buzzwords to be related to positive steps in our business. I want the buzzwords to be “increased shareholder value” and “competitive job environment”. I want to see 2010 begin the decade as the decade of growth, but managed growth this time (no bubbles). I think it can happen, and all because of people like you.
Wednesday, December 16, 2009
At first pass this sounds like a really simple question and you’d expect the answer to be just as simple, but it’s not. Back during Web 1.0 this was an obvious problem because the Internet hadn’t yet reached the mass audience penetration. Back then you would be hitting the 30-40% of the audience that was online and you’d be hitting them with lots of frequency and with under-developed creative executions. No matter what you bought; Excite, Webcrawler, Netscape, Yahoo or Pathfinder, you’d be hitting the same “smallish” group of users.
Around 2000-2001, otherwise recognized as the birth period of Web 2.0, audience penetration started to become a non-factor as it inched closer to 70% of the US (even more in some other countries), but the medium was still maturing and the percentage of heavy internet users was small and they would typically garner the majority of the attention against your online campaigns. You could buy the homepage of Yahoo and reach a large audience, but it would be the same audience every couple of days.
Now at the close of 2009, and as we enter into a new decade and the birth of Web 3.0, this question becomes interesting again. The mass audience is here. The creative units are impactful. The integration of video and the mass adoption of social media make for an attractive mix of possibilities for advertisers and I don’t really think you can say that a brand could spend too much online. There are single placements that will drive large reach in a short period of time, rivaling and exceeding that of any prime time television show. There are more ways to target an audience and reduce waste than there are with any other medium. There are more unique, targeted content opportunities and the creative impact is far higher than anything in the past. You can create customized solutions with short-term runs or you can go deep with a partner and create content that will live the length of the year, and possibly beyond. Most consumers go to the web for information that will influence purchase decisions (a recent stat said that 74% of US consumers go to the web for information on buying electronics). Social media brings true brand evangelism to the forefront and gets as close to true word of mouth marketing as one vehicle can possibly achieve. And the scope of possibilities in search alone will bankrupt some ad budgets just trying to maintain proper position for a 100% share of voice. Put simply, no brand is having trouble spending their budgets online.
No; this question is a no-brainer now. The Internet can take the budget and be very effective, but what is difficult to grasp is just how much work it would be to spend that money correctly.
Spending $10MM online requires more time and attention than it does to spend $10MM in television. You can spend that much in TV with 4 people, but online it will likely take 10-12 people, and that is the lesson we’ve learned over the last few years. Spending the money means being accountable and being accountable takes time and attention, unlike in TV when spending the money just requires a phone call. TV is not an accountable medium, and the old adage of “I know half of my advertising is working, I just don’t know which half” is where that comes from.
If you spend $10MM online you will know exactly what was working and what wasn’t, but for my money that’s a good thing. If I were going to spend $10MM on paid advertising, I would certainly want to know it worked, wouldn’t you?
So to answer the question; no-one gets accused of spending too much in online these days, but they get accused of under-valuing the execution and the analysis of these efforts, and that could be their downfall.
Thursday, December 10, 2009
At first pass these Demand Side Networks seem like a good idea; they allow for the agency to retain more control over the inventory their clients are purchasing and therefore steward their brands in an environment that can be risky at the very least. This is a strategic reason and one that I believe in whole-heartedly. Being something of an agency purist, I believe that strategy is what should drive the relationship between client and agency, not technology.
Unfortunately, many agencies are developing these solutions for revenue reasons. Many media buying shops have identified the volume of dollars they spend with the ad networks and have theorized that if they create the same solution, using existing ad exchange technology, that they can avoid passing these dollars along. In doing so they are gambling with their client’s dollars. Most of the ad networks, at least the reputable ones, have spent millions of dollars refining their algorithms and developing technology that makes their solutions work. In many cases they will happily open the kimono, so to speak, and share the breadth of this technology with you to prove a point; that this is simply not easy. The first dirty little secret on most of the demand side networks is that they are staffed by 2-3 employees working some spreadsheets and balancing loads to optimize inventory for their clients. This methodology simply can’t rival that of the investment in the scaled solutions offered in the marketplace. Trust me; I tried it and it simply doesn’t work that well.
The second little dirty secret is that many of the agencies building these solutions are including them on all their clients’ media buys and getting paid on both sides. When an agency buys media, they typically charge a media commission between 5-15% and many agencies are applying that commission to the media they buy on their own demand side network. This would be ok if it wasn’t for the fact that they are also making money on the arbitrage buying on the other end, which is the way these networks make their money in the first place. As an example, that means the agency can buy the inventory at $0.50, sell it to their client at $1.00 and keep the difference of $0.50. This would also be ok if they’re not charging commission on the media buy, thereby double dipping. If I were a media-buying client, I would demand in my contract that my agency not charge commission on any media run through their demand side solution. If they can achieve my objectives and make money through the arbitrage, that would be acceptable, but the client’s needs come first and that should be the driving decision for using that platform, not agency revenue desires.
And of course, what goes without saying is these advertising buys on the demand side networks should be held to the same if not higher, goals than the rest of the media buys. It’s arguable that they should be held to a higher metric since the agency does indeed have a stake and does have stronger control of the inventory.
So if your agency is creating and spending your money on a demand side network, don’t be afraid to ask the hard questions and understand what their goals are with the platform. Ask to meet the team working on that solution and understand the technology behind the solution, but also understand that the solution is no different than the rest of the marketplace. There are other solutions that can work for you.
There is no silver bullet in online advertising and beyond search there are few scalable solutions that can rival ad networks and their targeting capabilities, so don’t overlook them. Just be sure to ask the right questions before you spending your dollars with any solution that presents itself.
Thursday, December 3, 2009
Have you developed your core WTF strategy?
Your WTF strategy refers to “Website, Twitter Facebook” (what did you think I was talking about). These three components are the new hub for customer and audience interaction.
As an individual, who writes a lot about our business, I have to manage my website, my Twitter feed and my Facebook page proactively to ensure that I am distributing my messages properly. As a brand you have to manage the same components but with different objectives in place. For me as an individual, it’s a means of encouraging people to follow me so that I can amass a larger audience of readers for my Mediapost column (ten years and running now). For a brand it’s about creating a web of customer interaction that results in driving trial, sales or simply driving traffic to your site. For a publisher it’s a means of tapping into that wider audience whom you can monetize across multiple platforms, even expanding into print and other media.
The WTF strategy is a proactive plan for managing your outreach and managing your interaction with your target audience in multiple locations. It used to be that your website was the core of your target interaction, but that is no longer the case as we expand the role that social media plays and continue down the path towards a more distributed architecture for the web. These days you can choose to follow a brand via email registrations, but if you only offer email then you miss a number of opportunities. Brands expand into social media routinely, but in many cases they forget to tie all of these components together and create a unified editorial strategy. If you tackle this from an unorganized point of view, then you create inefficiencies and you create situations where you open yourself up to make mistakes.
Of course some people will look at this idea as elementary, but that’s the exact reason it gets overlooked daily. I can name on two hands the number of brands that are doing a good job of translating messaging across all of their consumer platforms; online and offline and within online, from their website to their social media presence and beyond. The problem is that feeling of ownership. The website can be moderated much more easily than a Facebook page and a Twitter feed can be shared and spread virally much easier than either of the previously mentioned components. Once items can be shared and commented on, brand managers lose faith. They lose faith in the very consumers that are engaging with the product, which if you break it down is actually a very sad statement. By losing faith you are basically saying that your consumers are smart enough to buy your product, but you don’t believe they are going to like it and speak positively about it.
It’s that final statement that creates the irony of the WTF strategy. If you are proactive and you create a strategy that allows you to make proper use of your Website, Twitter and Facebook then you should be able to stay on top of and manage the kinds of situations that might actually make you scream “WTF”.
Proactive strategy development is what most brands are lacking, especially in the area of social engagement. It’s too easy to look somewhere else and focus your attention on other aspects of your day then it is to tackle something entirely new. It’s analogous to the ostrich that sticks their head in the sand whenever it gets scared. The ostrich does not exactly represent the highest end of the evolutionary food chain and neither do you when you act that way.
Don’t be afraid to sit down and tackle an area that you may not be comfortable with. I think when you get down to the brass tacks of the issue you’ll see that the underlying strategy is no different than the rest of your media strategy. The tactics might require some expertise, but the strategy is going to feel far more familiar than you think.
Besides, wouldn’t you rather proactively create a WTF strategy than have to deal with the CYA of not having thought about it in advance? I would.