Future of Online Advertising

Heather Luttrell (indieclick) - Deciphering trends in online advertising

June 7, 2007

Heather explains what IndieClick does, providing interesting, innovative publishers with marketing and advertising solutions. Work with people like Deviant Art, Record labels, Last.fm

Marketplace is 13-35 online tastemaker and influences. Have a waiting list of about 5000 websites!

They want non-offensive, beautiful advertising - non punch the money type stuff!

Great advertising deserves a receptive audience.

On the web there is a tremendous amount of amazing content - thousands of sites have brilliant writing that goes unseen. How does a site get popular? Usability, great promotion (linking, talking to other people), viral effect, audience engagement, cult of personality, new forms of technology - widgets, RSS, players etc).

IndieClick breaks sites down into categories to help publishers know what stage they're at.

Bleeding edge - sites you maybe haven't heard about yet! Vox, blip.tv, vimby, twitter, iminlikewithyou, found magazine

Leading edge - last.fm, iMeem, deviantART, digg, superdeluxe, culture vulture sites, artist sites, local/regional blogs

Arrived: LiveJournals, TheSuperficial,YouTube, Facebook

Some bleeding edge sites never make it - we don't know why - but we get behind them because we think they're important.

Who are we to say what the future of advertising is? What we can do is provide a framework to analyse which sites are up and coming for advertisers/marketers. Online advertising can be analyzed within the same framework as above.

Arrived: search, text, buzz marketing, rich media, integrated community, site takeovers, remnant, interstitials

Leading edge: featured content, advertising integrated with editorial (content-driven -altoids did this recently), integrated promotion, behavioural/psychographic targeting (a lot of interesting stuff happening here), widgets, advertising content that invites user interaction, virtual worlds, intellitxt (like snap.com) - they find it a little intrusive, but worth keep an eye on as likely to see more.

Bleeding edge: advertising technologies replaceing media planners (a lot of technologies will enable a client to directly particiapte in mediaplanning process, a lot more information available), digital production of assets in overseas markets, records labels monetizing of online film distribution, mobile advertising, exclusive content, experimental video ad delivery (agreed with a lot of what Jeremy said, also VideoEgg doing good stuff), multiple custom niche communities, advertising following content (RSS advertising), product placement.

Some of the things that will affect the landscape of online advertising?

if someone works out how to truly do DRM for people's content, that will change intellectually property management completely.
Disintegration of content from the platform (container)
Consolidation of major players
Remnant players expanding into premium markets - should have an interesting effect on pricing
New forms of media (instant messenger, mobile, twittervision).
New hardware - phones are going to have a big impact

Audience's acceptance of new forms of advertising - audiences could reject your amazing new ad format, and that can be devasting - members of the community can go straight to the press.

Advances in ad-serving technology - metrics of distribution are not being captured properly.

Flight of talent from print and television - see this a lot in LA, very intelligent,talented people who have a lot of experience in their fields, and change a lot of how online ad community does things - thinks very exciting.

Online advertising metrics

So what's important in the future of online advertising?

Ad Age last week said 'The Key to building buzz is... advertising'! :)

Everyone want to create buzz.

Be everywhere your audience lives in the online world with the right message for the community - you can't focus on any one destination any more.

Pair messaging/creative with content.

Push the envelope and experiment with bleeding edge advertising techniques, but dedicate no more than 20% of your resources to experimental efforts.

Still need to improve your metrics - they look at banner metrics, CPMs, how did different banners run on different sites, how does that compare to different campaigns, then talk to clients about how campaign performed on their sites - visitors, purchases etc. A lot of people don't realise they only have half the story.

Q. Sometimes it's difficult to track usage with things like Ajax?

A. We visit a lot of sites at different times of day. There are different types of sites depending on category - some have lower clickthrough rates because they're destination - so appropriate to click on expandable banner that says in the site. But if a site has an event listing for example, there might be a higher click through away from the site.

Jeremy Allaire (Brightcove): Ads in Online Video

June 7, 2007

Going to walk through some of the key trends in the online video landscape, looking at the needs of the content owners and advertisers and marketers.

What's happening with content and programming? We're seeing some fascinating things. An emergence of open distribution platforms and self service for people to easily produce online video content. Create an explosion in new programming concepts. Think about digital TV having hundreds of channels, video online will have 1000s of professionally produced video.

Traditional print and web publishers not historically in television space have been launching video as brand extensions. The idea of the television network has changed.

'Fragment or be fragmented' is how Jeremy likes to describe this new space, with micro and major channels.

A lot of traditional media companies are having to rethink how they do things, and launch lots of focussed microchannels - hyper verticalized niches to compete in this area.

For example, Discovery have their 13 or so traditional channels - but they've also started to launch micro channels, such as Turbo (automotives - boats, planes).

To change spheres a bit, that was a traditional company, but there are thousands of media channels that are launching from the bottom up. Brightcove distributing well over 3000 channels from professional media companies.

Shipwrecked Central - a channel about dives from shipwrecks, they have a few hundred videos. They are distributed from traditional outposts, but now also through the various distributors on the web. An emerging publisher or niche publisher can now reach people in the same way, with large CPM etc and get a business started in this way. This frames how advertisers and marketers should think about buying media in this area. With thousands of video channels, you can't always maybe buy on Lost or something, but you can get good traction in these niche areas on the web.

Explosion in distribution options in broadband video options. moving from a world where the marketer drives people to a destination where they control them, to a world where consumers are everywhere - throughout the web in forums, chatrooms, IM, media portals, video aggregators, blogs. And so sitting behind this are strategies that content owners can pursue along online distribution - what marketers need to do is follow where that content goes around the web.

There will be more branded destination sites for consumers to access this video, managed syndication and portal distribution. Content owners must develop blended distribution strategies. You need to chart out where to meet and touch consumers. There are new requirements for defining, segmenting and reporting on - and selling available inventory - in a massively distributed universe. This all requires flexibility around who/how advertising is sold.

Looks at Wall Street Journal, example where you can copy code of video content and paste it into another place - ie. user has an interest in a video, takes the clip and redistributes it. The physical file doesn't move - just redistributed. But the video can retain the ads, any branding, framing etc - so the media buyer buying this content on the Wall Street Journal can actually create this incremental viral inventory.

They've taken this further, with managed syndication - they provide that content for other website owners to distribute in a controlled, managed way. BrightCove has a syndication market place where as a site owner you can apply to distribute say Dow Jones video channel on your pages.

Timesdaily.com - a regional news group - they don't produce or have access to national video, but they do have video on the site, supplemented by extra national video from Reuters, Sony BMG etc.

From a marketer's perspective, what does it mean to buy this 'massively distributed' media?

Need to gain an understanding of 'syndicated inventory'
Get comfortable with the diverse contexts for media distribution
Domain-based measurement no longer viable - so need metrics for content not just sites
High likelihood for sales channel content

Also, when it comes to distributing marketing content:

Understand branded marketing content can be syndicated
'Brand content' as a new form of media buy
Developing an 'affiliate network' for marketing content

Spend a few minutes on what's happening in industry today when it comes to formats and policies in video advertising - a lot of concern about this. The industry is somewhat stalled with these existing formats and policies. Typical approach is a 15-30 second pre-roll with companion banner attached to 2-4 mins video, run every other clip.

A lot of challenges with this:

perceived end user reaction is negative - roughly true, but not had any effect on performance that they've measured. but an opportunity to do something better
limited opportunities for brand engagement
not well suited to support mid-form and long-from content (like traditional tv) - economics don't roll out
creative fatigue developing due to insufficient inventory and too heavy rotation on commerical media sites - same ads running every other clip for a month straight, not good for end user, publisher or marketer.

Brightcove is trying to address some of these issues. For example, with innovative formats (overlay formats - on time basis, small text, graph, video; takeovers - deep, interactive experience; bumper sponsorships - shorter pre-rolls, 3 second 'brought to you by' then a mid-roll half way through video over a portion of screen with action to engagement, then sponsorship takeover). The sponsorship is triggered by a click on overlay.

Brightcove thinks there needs to be some sort of agreement between advertiser and publisher is to follow strict adherance to creative rotation guidelines - eg., ensure 3 or 4 creative experiences so less fatigue better experience for consumer.

Dominant advertising players are pursuing a holistic vision composed of:

AdPlatforms - technology used by mid-large media brands to serve and operate advertising
Ad marketplaces - selling and trafficking ads in your own sites, but then fill and serve more and more in other advertising networks.
All formats - another aim of these major players is to dominate text, display, rich media and video.

Implications:

Very likely that publishers will rely on combination of tech platforms and marketplaces to drive highest yield and value.
Buyers will need to get comfortable with content inventory dynamically moving between content owner controlled sales and marketplace controlled fulfillment.

Jeremy thinks this is positive progression for the industry.

Finally, things to think about:

Watch the role of consumer participation in media - as viewers, fans, critics, programmers and producers.
Support media and brand exposure in their online 'homes' - blogs, social networks, RSS readers, communities
Allow end users to become programmers - favorites, playlists, viral sharing/embedding, social bookmarking
End users are producers - simple, allow end-users to upload media to you; powerful - allow end-users to remix and refashion brand.

Some examples - Haagen Dazs, wherein end users came up with own ice cream flavors and produced their own short-form editorial video around it. Another, Boston.com (owned by New York Times) - submit your local sports content.

Q. is there enough usage to support a business case for advertising with thousands and thousands of micro channels?

A. It's early days. When you look at the economics, it suggests to me that it's a very good business. There are some creative issues - it's got to be well executed, but just in the last 6 months we have seen these microchannels emerge that are accessing national tv advertising with thousands of CPMs. We're probably in year 2 of a 10 year revolution in this.

Q. A question about the rights of talent and content copyright in these new forms of distribution;

A. It varies dramatically. Increasingly the content owner/distributor are trying to as clearly as possible outline those rights and tie them into the contracts of the video producer - eg. we think your content

Pete Affeld: Numeric Analytics

June 7, 2007

If you don’t get better at analytics – somebody’s going to eat your lunch!!

Pete was at the event to launch their new service.

Web analytics right now are still something of a mystery. Optimization can’t be found through averages. If you think of all the KPI, all the metrics, we have cost per order, click through rate – they’re pretty simple averages, but can be misleading.

An incremental approach can make more sense. What did you get out of the last dollar – not what do you get per average dollar, but the last one, and the one before that.

Analytics has made a lot of progress in last few years. Been through a few generations. The first – basic traffic and response counting, the second, basic and non-monetize averages, this third generation – revenue not tied to traffic but actual purchases.

Examples of advanced analytics in online advertising:

profit maximization of banner ad campaigns
profit maximization of site offers
visit and purchase frequency modeling
lifetime value modeling

Jim Coudal (The Deck): Targeted Ad Networks - Cost per influence vs. Cost per Thousand

June 7, 2007

Coudal Partners is a creative company that happens to run an ad network, called the Deck.

The Deck is a network for creative types just like Coudal Partners. Jim calls it a lo-fi, high volume ad network.

Eighteen sites in the network, 10 million page view a month.

Usually at Coudal Partners they go through a very 'subtractive' process when doing creative work; they take things away until they get to the core. With the Deck, they didn’t do this – but if they had. Here’s an imaginary brief for what they would have done...

They wanted the Deck to be simple. They wanted it to be easy to run, and simple to sell to advertisers.

Coudal Partners have a lot of insight into the various different parties involved in setting up an ad network. They’ve been publishing a blog at Coudal.com since 1995 so have a good perspective on being a publisher too.

Everyone’s job description at coudal.com starts with ‘screw around on the web all day’ – so they have a clued-up perspective on what's hot on the web as well.

So all in all they thought they’d have pretty much a good starting place to make the whole advertising/publishing thing much better.

They had some great partners to start out with – such as 37signals, creators of leading web applications, originators of the Ruby on Rails framework that powers so many web 2.0 sites, also A List Apart, the established online resource for web designers.

More on the Deck. There are no custom features at all. Each month, 17 ad slots are available. When an advertiser buys a slot, they buy a whole month and the ad appears in 6 impressions.

They don’t give anyone statistics – apart from the CPM.

The vast proportion of advertisers renews.

They only show a single ad on any page.

Jim flicks though some of the sites and the ads – only ad on the page. They don’t provide stats because they can’t - they don’t redirect the ads. Also seen as organic links, as no redirecting. So smaller sites get better presence because of the site’s high page ranks.

They like the idea of wining and dining media buyers – but don’t have the time and don’t have the staff!

The other part of the brief is to make it better for publishers and viewers. Publishers are design obsessive. Having one single ad enables them to exert creative control of the rest of the site. The ad is static – that is non-negotiable, and the text link is limited too. Good for the publisher.

But they also preclude affiliates from any other third party – with the exception of ads they do themselves. Jim says that’s also good for the advertiser.

Cue an Emerson, Lake and Palmer analogy. They were a pretentious, progressive bunch of rock gods. At recording sessions they would all turn their sliders right up – so all on full volume. Jim thinks that’s a good metaphor for the online advertising space. Too much noise.

The Deck won’t take an ad unless they have used and can endorse the product that’s being sold (currently turn down a number of requests to advertise a month). Better for the affiliates, and better for the publisher. Doesn’t mean they have to be evangelists. They’ll take an ad for a movie if they might go and see it – or a web 2.0 ad for a product that they might use but probably won’t have need for. In the long run, he thinks the inventory will be more valuable.

Another thing The Deck does differently is that advertisers have to pay in advance for campaigns. So, affiliates get paid for May ads in May.

For affiliates, they see that when they join their traffic increases too. Being part of The Deck is an endorsement of their site also.

Deck sites involve are fairly active (rather than passive) reading – they have very loyal readers, and lots of content to read on them. It’s a very influential audience.

Advertisers have the right of first refusal on the next month’s slots. There is also the roadblock option – when advertisers can buy all of the slots on one day of the month for a premium.

To make the online ad experience for readers better – the ads are relevant since the Deck vets them.

Jim says they’re not creating new things with the Deck, but innovating and controlling the ad network in a new way.

Q. Do you choose publishers or do they apply?

A. People do contact us, but to date all additions have been by invitation. Growing slowly, but have a couple of major US additions to announce in the summer.

Q. I read some of the sites in the Deck, but generally by feed so I never see your ads – have you considered RSS feeds?

A. Yes, part of our agreement with our affiliates is that they will include in RSS feeds – tests are going on next month with Coudal.com and 37signals.

Henry Copeland (Blogads.com): Cracking the Blogosphere

June 7, 2007

Henry begins with a few quotes on blogging. Hiawatha Bray - 'Blogging is an ephemeral fad, destined to burn itself out in a year or two'. 2002.

The average blog reader is more wealthy than most. They are very loyal. And they read them at work! Blog reading is a lifestyle; paper reading etc is very passive.

What's the secret sauce? A complete history of media in two slides.

Info/entertainment touch points are exponentiating.

There are billions of touchpoints out there now. And that's what makes it so difficult for marketers - they're running away from you into the corners.

Chris Lock (of Clue train Manifesto) says now marketing is a cocktail party.

Henry showed some examples of 'smart' and 'dumb' ads.

Smart ads:

multiple links
cool image
faux video
hand-made feel
puzzle invites link

dumb ads:

no links
dull, text-heavy image
tell, rather than show
feels 'designed'
full story negates click.

Stuff that looks like a real human being was involved in it's production is important - since that's what the blogosphere is about.

Some case studies, including Audi A3 Art of the Heist, to Catch a Predator.

Perezhilton.com - sheargenius took over the site and had great effects.

The blog revolution is: First person, real time, handcrafted, iterative, cohesive... and so is the new age of advertising!

Q. How would you compare your company to FM?

A. FM are very tech-orientated. We're strong in politics, culture, views etc. We're also not venture-funded, so we're taking it slow and easy!

Q. What do you think about authenticity about Pay Per Post?

A. I'm kind of sad about it. It's wholly inauthentic. I think it's problematic to blend honest outpourings etc that blogs are. I thought that bloggers would take the place of journalists.

Q. How much do you help people to create their own campaigns - ie. is it expensive to carry a campaign with you?

A. Whether you've got 100,000 dollars, or you're advertising your own books that you're publishing via Lulu.com, we'll talk to you. We're a DIY model. We'll steer people to agencies when we can if people can afford it.

Q. Your tips are at odds with Greg's when it comes to placing the brands in ads?

A. Yes. Most people aren't after a dynamic logic study (ie. looking out for brand awareness), most people want to know if their ads get clicked. This space [the blogspace] is the antithesis of brands - people don't want big brands on their living room walls, or their blogs.

Q. I'm a blogger and a company. I want to make money, but some bloggers have relinquished control of what appears on their site to the network - do you offer any control?

A. You accept individual campaigns on the site. Some people accept campaigns from people who they don't endorse, but take the money.

Q. How do you charge advertisers?

A. CPC is tough for everybody (fighting click-fraud etc), so we pay on time-based sponsorship.

Ted Murphy (PayPerPost): Connecting bloggers to advertisers

June 7, 2007

In a blog, the writers control 100% of the advertising and the reach. Blogs have a larger reach than ever before.

The Blog ad networks, such as Federated Media, enable you to tune into the A-list bloggers. But, they are relatively small. Hundreds of blogs, rather than thousands – but how do you tap into the long tail?

There are blog outreach programs – such as the example of Microsoft’s Ferrari laptop campaign, which they gave to some prominent bloggers. And some bloggers gave Microsoft coverage, but some bloggers weren’t receptive to that and felt it was unethical.

PayPerPost is kind of similar – you’re giving bloggers something, but with a twist.

In the PayPerPost marketing model, bloggers can see the opportunity of writing something about a category that interests them and getting rewarded for it. The reviews get human-edited at PayPerPost to ensure they don’t contain any unsuitable material (pornography, racial abuse etc).

The blog posting then generates more traffic and all the good things that provides.

The PayPerPost network is a network of networks. Their posters belong to other online networks.

The core marketplace features of PayPerPost:

brand awareness
word of mouth
traffic generation
social media optimization

Ted shows the blogger dashboard - it shows the different opportunities, which bloggers can then vote on.

Advertisers can target on scale - eg. they can offer the opportunity to sites that fulfill different criteria (eg. alexa rating of x, blogs that cover y). You can have media assets displayed in the posts.

The results? Ted showed the impact in Technorati with increases in the number of people blogging about subjects.

There are lots of options when looking at blog advertising. Ted believes that having a range of approaches is important. With this system, you can do it by yourself - you don't need an agency.

Q. What's your reach? And aren't there bloggers who disapprove of this kind of thing?

A. 27,000 bloggers, 6500 advertisers right now. There are two type of blogger - some that consider themselves journalists, and they won't provide 'sponsored content'. There is a larger audience that looks at their blog in a different way, and thinks they can run their blog as they want.

Q. Do you segment out your bloggers?

A. Yes, the bloggers self-identify so you can choose based on that. As the network grows, they will be offering advanced segmentation.

Q. Do you have advertisers taking advantage of your service for SEO purposes?

A. I'm sure there are advertisers who use it for our purpose but our business model isn't based on that so it's not something we focus on. From Google's point of view, they're not really going to love something they make money on - eg. their own ads.

Chas Edwards (Federated Media): Marketing beyond Google, Yahoo!, AOL & MSN with scale, quality and safety

June 7, 2007

Three of the top 15 sites last year were social media sites.

Doesn’t advocate separating social media from traditional site advertising budget – should be asking where do I engage my customers.

Gets back to the fundamentals of marketing – where are my customers, where are they most engaged and how to do I do business with them.

Readers online tend to be the most engaged. Business Week in terms of numbers of readers is much larger than TechCrunch – but TC in the start-up, web 2.0 space is much more influential, by BW's own admission.

Similarly, Google says Dooce has more reach, and is seen as more credible than say iVillage and Baby-Center – because of the influence, trust and relevance of the site. Lots of people link to it, etc.

Reach is getting easier – you can buy lots of impressions with Google and ad networks.

What is important, is standing out from the noise. This is harder than it’s ever been.

How do we generate demand on the internet in the way that brands used to on television>

Chas gave a couple of FM case studies, Microsoft, Symantec etc

In another, he cites an example of Ask.com, which had a campaign with the objective of trying to convince people that their search algorithm is better than Google. So FM worked out a campaign with Askaninja.com.

It was a successful ‘passing on’ type campaign.. Ask’s banners ran next to the Ninja, he thanks the sponsors at the end of the video, and directed people to a bonus video at Ask.com if you typed in ninjuice. 8.3% watched the ask,com ad spot, queried ninjuice at Ask.com and clicked to watch the bonus video. This was a 4-5 minute process for the users. Compare that to conventional advertising and the benefits are clear.

Ask.com didn’t try and create their own viral phenomenon – attached themselves to an aleady successful viral brand.

Digg.com – intel sponsored visualization application.

The technology that powers digg is clearly complex, and digg labs shows the patterns behind which stories make it on the site.

Intel were already doing a multiply campaign – which involved multiplying processing power. It’s like multiplying you by 5 so that you can do more, and so a perfect fit to sponsor digg’s visualization application.

So to wrap up some of the themes here – what we talk about as conversational marketing.

Locate your customers - understand where they are, but don’t worry if social or traditional site
Follow the leaders and partner with them
Build relationships that bots can’t provide – eg. The partnerships with TechCrunch and digg, those people that have risen above the noise.
Add value to existing conversations - the conversation is theirs, not yours
Good conversations involve listening, not just talking

In answer to a question, Chas cites one of the campaigns that he really likes is the Dove Real Women. What’s smart is that campaign created a conversation about body image, etc, lead to the best viral campaign in the last few months of the video Dove Evolution (a regular woman being transformed through make-up, photography, photoshop etc to a billboard), because who wants to have a conversation around soap and moisturiser! They recognised the conversation wasn’t about their products per se.

Brent Hill (Feedburner): Advertising and RSS Feeds, next year’s big thing?

June 7, 2007

In 2003 blog software became sophisticated and made it easy for people to do good-looking blogs. There was an explosion in blogs all of a sudden.

Now there are loads of built-in features, advertising, widgets and so on.

RSS technology was perfect for blogs - feeds could be created that people could subscribe to them and read them in their feed readers.

Now in 2007 feeds cover an increasingly broader spectrum of content - blogs and regular sites use RSS.

The rate of change has been fast - commercial publishers responded quickly to seeing how bloggers were getting their content direct to readers.

Now corporate feeds are here - travel industry special offers, IBM, Target, Castrol etc.

A question they get asked often is what is the consumer experience when using reads. It's a bit like web-based mail - we're all getting used to that now, whereas used to be familiar with desktop. Feed reading is a new way to read content.

Content with RSS is on the move between the publisher and subscriber. FeedBurner provides analytics, promotion, interactivity and monetization tools to the publisher. Publishers include Bloggers, vid/Podcasters and commercial publishers.

Five reasons why you should consider RSS advertising.

The Quality of the content - it really hits home with the audience, quality publications and brands.
Reach - cites TechCrunch has 413,000 subscribers that hit this content via the feed that don't necessarily visit the site. If you publish a full feed with content and images, people happy not to go to site - that's an important consideration for moving to RSS advertising.
Multiple targeting options - You can advertise in feeds with RSS using the same content categories that you see in other areas. FeedBurner have profiled the audiences and created demographic profiles for feeds, as you expect on sites.
Effectiveness - very uncluttered online advertising environment
Industry-standard ad service - third party ad serving etc - offer all the usual targeting devices you expect in trad online advertising.

AdClimate - provides advertisers with additional security when advertising in user generated content.

There is an ad-serving feature, which screens content before serving ads. Eliminates any awkward adjacency of an ad appearing next to inappropriate content. Publishers can provide keywords for this.

Text ads in feeds have performed very well so far.

Can't use skyscraper and leaderboards in feed readers - inappropriate with the content - so an old school IAB format is used. The ads are kept standardized across different feed readers (showed IE, Bloglines etc)

Performance of feed-based ads has been very positive thus far, with high levels of retention and recognition among consumers.

Q. Many publishers have guaranteed inventory - do see a world where publishers sell their inventory directly?

A. We're seeing that already - and we expected this. Already seeing more publishers placing business in the RSS category.

Q. How accurate is your geo-targeting?

A. The reason geo works is that RSS is still based on IP requests. It gets tricky where you have aggregators in the middle - eg, yahoo! - so you don't know the originating address. But when it does work, geo-targeting works immensely well.

Q. Who's spending the money - brands or agencies? Secondly, are customers desensitized to ads in RSS?

A. Have worked with both - at the moment the majority comes from digital planners (estimates 90% of what you see). Second question - when at first ads appeared, there were a minority of people who complained - they expected to get their content for free. But thinks we're over that now. People are ok with getting a lot of content in exchange for advertising. Also, RSS advertising is not intrusive.

Q. is the audience all early adopters?

A. It is to some extent early adopters, and not necessarily mainstream - but people are adding content to their blogs and web pages without realizing they're actually generating RSS content.

Kim Malone (google): Adapting Advertising Models to an Evolving Web Experience

June 7, 2007

There's been a lot of questions today about the different models that are evolving.

There's no one model that's right for everyone's objective.

There are three things that are important phases in the consumer buy cycle to consider: Awareness, Consideration and Action.

Her example is that she bought a wedding dress! Awareness, she knew a few stores she was interested in. The first one - Google stock would have to go up 300% for her to afford it - but the second one she saw she loved and bought it.

What Google does is enable consumers to make the appropriate decisions at the appropriate moments, with all their different formats - video, text, display and watch this space, more coming out in the summer!

Once consumers know about your product and they're looking to know more, that's when you cost per click comes in. And for their action, the cost per action pricing model is currently in beta. For CPA you can use display or text.

The internet is not magic and you can't go straight to the action. You need to be clear where you're at, and use the right pricing models for that.

Kim will give a few case studies for all these (the one on CPA is 'made up' as they don't have one yet!)

Telus - wanted to take over the whole Canadian network - the objective was to promote Telus as the first wireless carrier to provide number portability.

The impact was unprecedented buzz, 90M+ ad impressions on 500 subverticals, 8M video impressions. 80k plus click-throughs.

The Google network recreates the effect of mass media - when there were only a few channels on network TV. The interesting thing about this campaign was there was equal spend among online, TV and print. But they reached the majority of course with online.

Bomgar - objective: acquire more qualified needs

Strategy - placed text ads on Google content, ran site -targeted campaigns on handpicked sites.

Acquired 2500 customers, strong ROI, $3 in revenue for every dollar spent on AdWords.

String Master: another small advertiser that made use of video Ad.

Objective to sell more guitar tuners to guitar players

Strategy - placed CPC video ads on specific sites in Google content network Impact - saw 40% increase in sales, not a CPA ad, but significantly increased requests from potential distributors.

How CPA works - advertiser sets cost per action value for a specific action on her site.

Here's a theoretical example - I want to sell my collection of mechanical bulls. Willing to pay $20 for everyone who purchases a bull after seeing the ad. A website owner will choose the category of ad - unusual, enables publisher to choose the category of ad from Google's content network - Google will serve ads from that category, and if an advertiser is willing to pay more - say $25 or it performs better, then Google will serve that ad.

Often to get results In order to get the results with CPA, you have to go through the motions - win the hearts and minds with CPC etc.

Questions from the audience:

Q. CPA ads weren't clearly labeled as ads and that this was contrary to what Google normally says it does.

A. Kim said they were open to feedback and would look at it.

Q. A question about which sees higher conversions, content network or search?

A. It is roughly the same on aggregate, but it's specific to the site - some do better in content search, some from the network.

Q. How do you know when you're ready for CPA?

A. Your mileage will vary according to how much you have to sell. If you're doing a garage sale - you don't need to do it, but if your business is a going concern, then you probably need to do some branding.

Q. How am I going to assure myself that I am going to get paid with CPA?

A. Google of course shares the concerns - they want advertisers to pay. There is a mechanism that will ensure that you can't sign up unless there is the ability to pay. It will be within 30 days - so they will know.

Q. Any plans for a mixed model, with PPC and CPA?

A. Kim said it’s logical to assume that they would consider that - iterating quickly and welcome feedback so want to adapt to that.

Q. What examples did better in content than in search?

A. The content network is really good if customers are in the consideration stage. Also, sites that really know their audiences know that people will be interested.

Q. Will Google be doing video advertising inside video content?

A. It’s a Great Idea. Watch this space.

Q. Is there a risk that publishers will urge viewers to click on an ad so they get paid, but don't actually want to buy?

A. Something that will be integrated into considerations as Google iterates.

Q. What's Google's approach to people using fake domains to attract clicks?

A. In the content network, people need to have content otherwise Google removes them. They monitor the quality of the content network very carefully. They do an audit every week and over 90% of sites are of assured quality, but if there are sites not in compliance, need to report it to Google.

Q. As a publisher who's using AdSense, but CPM is based on eCPM, so I can get people to click more if ads look more like content. How can we address this?

A. We track on the network which sites convert well, and which badly and adjust sites accordingly. If you’re tricking people with ads, they're not going to convert well - they have good ways of measuring that.

Bill White (Right Media): Online Advertising 401!

June 7, 2007

Let’s meet the players in this game. You’ve got the publishers, who want more revenue and less effort, more demand, premium sales, protect their users and independence.

Then there's the advertiser - they want better ROI less effort, global control, efficient audience reach, maximum audience relevance and brand protection.

The networks - they want more revenue, massive supply for demands, less friction for clients, etc.

Then you have the technology providers, who want increased usage and customers etc.

In the old ecosystem - there was a clear line between supply and demand between these parties.

In the new ecosystem, media companies own networks and ad agencies etc; acquisitions between publishers, networks, marketers, affiliates etc are commonplace (cites Yahoo!, Microsoft, Google, Meredith)- the lines are being blurred.

What's acceptable is there is openness and transparency in this marketplace unlike other mediums in the past.

Online auctions and exchanges have provided an incredible supply of behavior, traffic and patterns which have enabled this business to thrive.

It's not just about online - think about how media ties in to call centers.

Ad exchanges - like a LinkedIn for online advertising. An auction on every ad impression.

Before, media selling was a closed marketplace, daisy chaining between the different parties involved. Now, with ad exchanges, every single ad impression is being auctioned off in real time to create incremental ad value. The network barriers come down.

With an ad exchange, publishers can have relationships with say Google AdSense at better prices. Bill believes there can even be a futures market in advertising. There could be a clearing house.

Back in 2002 search spend projections were way off

Question from the audience - how do these networks deal with increasing consumer resistance to selling? Bill thinks that in online, this isn't so much of a problem as with other media - the money coming in proves this. They're tracking everything and will know when that really becomes a problem.

Another question from the audience on where do you see advertising going inside applications, for example inside games? Bill answers he'll be covering this in 501! It's way too early to consider this in a marketing perspective - he's going to wait until innovators such as Microsoft experiment in this then when it scales, he’ll be interested.

In answer to another question, in any media where supply is constrained (eg. limited inventory), the auction model is the right one.

Ron Belanger (Yahoo!): Future of Search Marketing: Understanding Consumer 2.0

June 7, 2007

A lot of talk about the future of search is exactly about the medium - what is happening with search? There's a lot of noise out there and that's difficult for marketers.

What do we know about 'Consumer 2.0'?

They're overworked and overwhelmed. In the US, since 1972 the average consumer is working 20% more!

On the flip side, they're addicted to leisure. Average US household spends 8% of earnings on leisure.

As marketers we need to understand how consumers value this time. They are information junkies. One of the things that surprised Ron when he started was the volume of searches done. Usage of information devices has also increased. Communities are built around passion points - people knitting sweaters, fly fishing fans etc.

In the early days with search, trying to get to the top of the listing we were competing with 3 or 4 competitors. Now we're competing wit the 12 million Americans who are blogging too.

The interesting thing for a marketer is to tie in to this passion. To tie in with the creators. We call this participation marketing.

Identify your best consumers
Listen to them
Collaborate with them
Let them create messages - often they can do it more passionately than you can.

Flip the funnel - it represents a risk yes, but the payoffs are worth it.

Yahoo! did a promotion with Shakira for her last album. They asked her fans to collaborate and create some content - in this case, user-generated video. They contacted fans taking advantage of things like the Spanish version of Yahoo - ending up creating 10,000 submissions!

How successful was it? The most downloaded video on Yahoo video.

It kept the song in people's mind a lot longer than it normally would. And this was done with relinquishing some of the control and enabling people to show their passion.

What are the implications for search marketers? Consumer 2.0 has limited recall. Think you've got a great campaign with your URL at the end? It's not working. People don't remember it. But if you've got a message they'll remember, that's working. 23% don't remember URLs at all.

Very little research on search and branding - the little we know is from marketing results. Ron says take some money out of CPA and direct response budget and measure brands - and let him know what you find!

In their research, 79% said that search introduced them to brands they were previously unaware of.

Think about where consumers go to find answers to things that life throws up at them - increasingly it's to search.

Yahoo! has been doing some studies in several categories. Eg. what kind of response do you get from people who don't even click on the ad?

They found a 40% lift in 'getting their attention' and 37% perceived a respectable brand - that's not even from clicks, so you're not paying for it.

Compare it to the people who did click on the ad, the numbers are off the chart. For those of you doing dynamic logic studies out there, it's tough to get these numbers from other mediums - but you can do it with online.

Yahoo! has also done research to understand how different searchers vary in behavior. Folks who come in via search rather than direct, tend to behave in the ways you want them to - ie. reading and seeking information. More likely to visit the store locator page for example, to email to a friend, to view return policy, request a catalogue etc.

Ron says there are going to be a lot more figures and work done on these kinds of metrics - as opposed to know where you're just going out to get clicks.

Searchers are more open to new brands. The average number of brands considered prior to purchase for a searcher is 2.5 - for non internet users 1.5 and non-searcher internet user 1.8. Consumers are increasingly less brand loyal.

Greg Stuart: How to guarantee the success of your online ads

June 7, 2007

Greg wants to encourage people to think about their own futures in online advertising.

Greg has been Involved in interactive advertising since 93. He titled his talk - What if we were wrong? But he also wanted to call his talk 'Marketing's Inconvenient Truth'.

If advertising had a slogan, it wouldn't be 'ads word wonders!' it would be - half the money is wasted - we say it to each other all the time.

Greg talked about some research that they did on $1billion ad spend, while putting together his book 'What Sticks'. Surveyed a million consumers too - so think it's the largest study compiled in the industry.

They found that $112 billion of US advertising spend is wasted.

What makes you confident that your ads work? What happens if you're wrong?

Three things to get right in any campaign:

Motivation - you've got to get the consumer motivation right
Message - how do you know your message is right?
Media - are you targeting consumers in right way?

36% of campaigns they tested failed on motivation.

31% failed on messaging - consumers didn't get it. Media - 83% of campaigns were 'seriously sub-optimal'. Media is tricky - usually has a pay and spray mentality, but even though this is a high stat - it does tend to work.

Marketing is hard - we don't give it enough credit for how hard it is. Suppose you have a campaign that has 5 potential campaign areas. That means you need to deal with

5 brand positionings
5 customer segmentations
5 ad creative approaches
5 magazine schedules
5 online plans

That means you have 3,125 options to deal with! How do you know which one is right? Do you trust your gut like a lot of people? The important thing is Research.

When Greg started in the 80s it was a simple world. Now 130M have wireless, 50m have games that are network connected.

Greg believes new medium every 5-7 years. And he is concerned that we're not going to be dealing with this well.

Marketers don't traditionally have the rigor and control that other business departments have - and that's a big problem. They're also the biggest spenders.

So what to do? Greg's not saying his is the only way, but he'd like the industry to tackle this and iterate. He complains that lots of industry bodies don't talk about these problems - and that concerns him.

He proposes that first off, acknowledge your own ignorance.

Second, seek universal agreement to goals. Now often of course, there will be times when people don't agree - but you need to have consensus! Greg cites an example where they sat for 90 minutes to hammer out the goals and agreed them.

Have a back up plan. What are you going to do if the message, motivation or media goes wrong? Get a plan B - apportioning blame and saying 'he screwed up' is not going to get your anywhere.

What's the value of each dollar spent?

Make sure your motivation sticks. Do consumers buy financial products because they're innovative? Probably not!

How bad is online creative? For 5 recent studies, creative testing was done prior to the research launch.

Only 1 brand's ads required no adjustment. 2 brands found half the ads were not effective, diluting the effectiveness of the campaign. 2 brands discarded all ads - paid cancellation fees etc because they didn't want to go back to the top and say they got it all wrong.

Greg compares two ads for Colgate. Ad A saw a 20% increase in purchase intent, Ad B 2%. The only difference was in Ad A the toothpaste tube figured earlier.

Online advertising must pass the glance test. I've got to get it in 2 seconds, work out what's important to me, and recognize the brand at a glance. That's the one major thing he wants people to take away from this talk.

Doesn't know why on TV they do problem, solution, then show the brand - why do that!? What happens if I turn away at the right moment? Advertising isn't subtle, and somehow going to lure people in. Consumers are wise to it.

47% of the online campaigns they looked at missed motivation AND message.

Media timing influences success. And media mix matter the most. Get that right and it influences success.

He hears over and over again that you need to get it right in one medium before moving on to the next - that's crap!

Greg doesn't want to take away innovation and creativity from the business - that's what makes it great and fun - but make it work.

Try something brand new - a takeover home page ad with sound. One company saw a 43% reach to their target market in one day with this tactic.

Advertising can be really powerful. It can transform the power of brands and companies when it works.

www.gregstuart.com

If advertising had a slogan, it wouldn't be 'ads word wonders!' it would be - half the money is wasted - we say it to each other all the time.

They found that $112 billion of US advertising spend is wasted.

What makes you confident that your ads work? What happens if you're wrong?

Three things to get right in any campaign:

Motivation - you've got to get the consumer motivation right
Message - how do you know your message is right?
Media - are you targeting consumers in right way?

36% of campaigns they tested failed on motivation.

Marketing is hard - we don't give it enough credit for how hard it is. Suppose you have a campaign that has 5 potential campaign areas. That means you need to deal with

5 brand positionings
5 customer segmentations
5 ad creative approaches
5 magazine schedules
5 online plans