I recently had a chance to discuss the future of online advertising with Shane Vaughan, VP of Marketing for Balihoo, and offered a forum in which to share his perspective. He has succinctly characterized how the relevance of advertising, enabled by the internet, will deliver more qualified customers while supporting, not replacing, traditional forms of advertising.
Pssst… there’s a not-so-well-kept secret you should know: Marketing is Dead
Or maybe it was Advertising is Dead?
Honestly, I’m about done with industry pundits and arm-chair consultants proclaiming the death of the industry as we know it. Even the venerable Bob Garfield of Advertising Age pontificates:
“People don’t like ad”
“Sure, when your ad characters draw a parade crowd on Madison Avenue or you strut up to the awards stage in Cannes with ratty sneakers and fake indifference, of course you feel loved. Alas, you aren’t, especially. In fact, you are mainly resented. A 2006 Forrester Research survey found that 63% of respondents believe there are too many ads, and 47% say ads spoil their reading or viewing enjoyment. This isn’t just talk. Depending on whose numbers you believe, between 50% and 70% of DVR users skip ads. The historical quid pro quo — acquiescence to advertising in exchange for free or subsidized content — is yet another casualty of the revolution.”
“Nor is there any reason to think interruption is better-tolerated online. Forrester reports that only 2% of consumers trust banner ads and 81% of broadband users deploy spam filters and pop-up blockers.”
Time for a career change?
So, people don’t like ads, and advertising and marketing is dying, might as well make my living betting on American Idol (Sanjaya at 8/1?).
No, I beg to differ.
Marketing and advertising are most certainly not dying. Radio did not kill newspapers. TV did not kill radio. And the internet is not going to kill everything. Media is a $400 Billion dollar a year business and it will continue to flourish. However, it’s changing.
The long-tail of advertising is officially upon us. Media fragmentation, social networking, and mobile broadband (among other things) are shattering our media and advertising options into smaller and smaller pieces. But the real secret is that this is good for users and for the customers. Why? Because we’re establishing relevancy.
The fact is that all the banner ads in the world will not persuade me to purchase an unnecessary vehicle. They will potentially get me to put a particular vehicle in my consideration set when I am ready to buy. However, and this is the key, if I’m already in the market for a vehicle, those ads that are RELEVANT to me are extremely interesting. I want to hear what they have to say about that vehicle, in fact, at that point, I would prefer a 30 minute infomercial giving me all of the details of that particular vehicle.
I believe that’s the major issue we’re facing as marketers: finding relevancy around our marketing messages. As media vehicles (and the consumers themselves) become more and more fragmented, our opportunities for relevancy are increasing dramatically. It’s an over-used and often misunderstood description, but the idea of the “long-tail” of advertising opportunities are a gold mine for marketers willing to put the time and effort into finding and executing on them.
Search marketing, behavioral targeting, micro-targeting; these are not “killing” traditional advertising and marketing, they’re allowing us as marketers to deliver more relevant messages to a smaller group of focused customers.
The question for us all: Do you know where your customers are? And are you speaking to them with relevant, contextual messages that integrate with (not interrupt) their daily lives?
If you answered no, it’s time to get to work…
– Shane Vaughan
One good marketing strategy is to offer products that the customer doesn’t have to spend over two hours fixing themselves! And if there was a problem maybe offer them something for their time of working on a brand new product that should have worked to begin with!
I’m not happy with HP products any more!
Advertising Is Finished?
According to the Yankee Group, online advertising will surpass $50 billion in spending by 2011. The change is more about the new place (online) where consumers get their advertising messages and less about the actual messaging. Marketers need to have an expanded line of tactics to reach their desired results. No longer can a few media buys cover the audience.
The shift in marketing dollars away from traditional venues such as newspapers and toward online is clear. The Star Tribune reported recently that revenues were down $75 million during the past two years. According to the marketing journal B to B, of the advertisers who are reducing their marketing budget due to concerns of the economic slowdown, 45.3 percent are reducing their print budget. For those who are increasing their marketing budget in this economic downturn, 48.5 percent are increasing online spending. This trend has been happening for awhile. For most business leaders examining their marketing budgets, this shift is presents a challenge of new spending patterns less understood than prior choices.
For ad agencies there is less surprise but more strategy development and integration effort required. Most agencies are used to “non-traditional†methods. Each client presents unique situations to the agency which leads to more complex dependencies in campaign implementation.
What Succeeds?
Success in any marketing campaign continues to be well-aligned brand messages that arrive at the right time to the right audience. In the past, an ad placed in a highly read trade journal or publication would create the lead that other tactics (trade shows, direct mail, sales efforts, etc.) would support. Now it is less clear where your message will be seen first: will it be the banner ad on the industry portal? The billboard on the way into town? Your own Web site? Through an article (PR)? Any of these could be the first point of communication in a campaign.
What’s Changed?
In a short phrase: improved contextual messaging. Now you can place your message more often into the key moments when your prospect is considering purchasing your product or service. Before marketers would bring out a new product in a magazine that delivered to the key audience. Now marketers are placing advertisements online so when your prospect is researching a purchase your product or service becomes a consideration.
The easiest method to explain is Google Ads. Marketers can purchase key terms like “Jamaican Resort†so prospective travelers looking online will find the marketer’s resort presented immediately when the search is made. Another method is to post a video on YouTube with “tags†such as “best resort†and “Jamaician†will reach another prospective client. Additionally, adding content under a profile in a social network site such as Facebook about a recent trip to the resort will open the door to other prospects.
Games and interactive gadgets have also led to significant impact for marketers. A recent example is a got-elf’d gadget that allowed people to place their own face onto a dancing elf. This was emailed out by the user to friends (over 27 million times) with the brand that created the gadget (OfficeMax) being presented all-throughout the piece that played for a couple of minutes.
For each of the “non-traditional†methods above the marketer needed to focus on both the context and message dramatically, while letting the spread of the message to happen more organically. Despite this lack of obvious control (formerly: the ad ran in the March issue on page 27) the marketer gets deeper information about the reach of the message (through clicks, downloads, links, forwards, etc.). Marketers need to be open to seeing results return flexibly and not date and place specific. The upside of this is that interest builds in a way that allows for prompt and excellent response from the marketer’s organization. The downside is that a warehouse of products may trickle out while the message finds its market. Clearly, the planning and integration with the core business is a greater requirement now more than ever.
What Should a Marketer Do?
Marketers need to be very clear about who their prospect is in all the segmentation and analytical ways possible. Not just knowing who your target client is, but when they shop, what sites they visit, the process they go through during investigating a purchase and more is required. There are fewer boundaries. Pricing out services such as accounting, architecture and insurance are more transparent because of the internet. Choices are also broader because of the removal of geographic boundaries. Anything with a sku can be searched online to find the best possible price and package. Marketers need to be more relevant and more important than great delivery service from FedEx or UPS from a distant vendor’s warehouse to win business.
People still like to buy from trusted sources. Local providers should always have an advantage over those from other geographic places. Accessible providers have an advantage more so than difficult to reach vendors. If you are marketing to a region such as the Twin Cities, does your Web site allow people to contact you by phone or email directly or are you still using a form online that makes for a less rewarding experience?
Put advertising messages on your own Web site to connect what you are doing online and off-line so prospects see your organization as a smart, connected and caring group. Put specific Web-based information into off-line ads. Don’t just link people to your home page if you know that they want to see something deep within your Web site. Too often marketers are engaging with prospects in new places and then make the prospect “start-over†when they visit your Web site or call your order line. You need to be more intelligent about connecting your featured product or service with the prospect’s interest.
Tips
Be less concerned with a launch date and more concerned with multiple launch points for marketing campaigns
Be more available to prospects through more venues, methods and times than ever before
Be open to packaging services and products in unique ways to overcome commodity pricing
Have goals well-established and measure success in multiple ways (requests for quotes, information, as well as purchase increase)
Database prospects in ways that will allow you to continue a marketing conversation with them over a longer-term than one purchase cycle – form relationships with prospects, not just customers
Define value in reach based on the depth of qualification. A person that clicks on a google ad is more valuable than someone that visits your Web site – do you have the available methods in place to know the difference?
Ask media partners (newspapers, magazines, etc.) to offer expanded reach opportunities (such as inclusion in their email marketing newsletters) beyond the ad you may still place with them. Online advertising is still a great value versus traditional advertising. Many publications will deal with you if you are willing to buy across a number of their properties (online, in-print and in person).
Ask your customers and prospects what competitors they considered before choosing you, the answers may surprise you and lead you to new insights about your consumer’s behavior.
The Bottom Line
Advertising isn’t dead. It is new and improved! Total advertising spending continues to expand despite downturns in the economy. Prices for specific placements are changing (broadcast and off-line are going down; online is going up) so reprice your plans at least annually. The amount of places you need to consider is growing to near infinity, so expand your media buys appropriately based on information you gather from customers and prospects. Focus on strong branding and creative messages to ensure when you have the moment you make the greatest impact. Be nimble. Google wasn’t an ad opportunity five years ago. YouTube wasn’t an option three years ago. Facebook wasn’t something to consider two years ago. There will be new opportunities arriving this year (Check out http://www.Joost.com http://www.slide.com and http://www.Stumbleupon.com) and next (perhaps you’ll be creating interstitials for streamed content, or authoring a lifestyle ‘zine soon – see http://www.dailycandy.com, http://www.thrilllist.com).
Adsoka’s clients are finding great success by applying the comments above in their specific businesses. Contact us to learn more, mention this article and we will do an initial analysis at no charge.
Search “Adsoka Success†at Google and see what happens.
BIBLIOGRAPHY
Ken Auletta, “The Search Party: Google Squares off with Its Capitol Hill Critics,†The New Yorker, January 14, 2008.
Kate Maddox, “Dealing with the Downturn,†B to B, February 11, 2008.
Yankee Group, https://www.yankeegroup.com/home.do (accessed January 14, 2008).
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