TruEffect Blog

Display still healthy - but old approach needs to die

We’ve all seen a trend of positive indicators for the health of online display advertising over the last several months.Kantar Media predicts it will grow 5.0% in 2010, a number which normally would underwhelm, except that it follows a year in which display grew 7.3% while the industry saw overall ad spend drop a whopping 12.3%. Meanwhile, Yahoo! paid $100 million for media newbie Associated Content to bolster its inventory of traffic-generating material, and Facebook surpassed perennial leader Yahoo! to become the top US publisher of display ads on the web. And finally, this morning brought the announcement that GSI Commerce is acquiring specialty retargeting network Fetchback.com.

Display is not only alive and well, but it’s growing.But if display is going to continue to gain share of wallet from other channels, it’s entirely too inefficient. For what they’re worth, click through rates continue to remain below 1.0%. And while view-through has given display a tad more credit for performance, it fails to remove the waste. Digital display advertising is not like print or broadcast – so it’s time to stop simply throwing it out there to see what sticks (clicks).

At TruEffect, we work very hard to identify why our clients’ display campaigns deliver results, or not. If we focused only on the typical dimensions of performance like creative design, audience demographics, page position, interactivity or even copy, we’d miss the biggest part of the story.

Last week, TRA, a research firm devoted primarily to the cable set-top box, underscored our argument. According to President Bill Harvey, the gender and age of viewers has little correlation with the way they respond to ads. Yes, you may have a brand that is skewed heavily towards males with $100K+ incomes, but if the next affluent male you see in your campaign just bought your product, or a competitive product, that inventory is completely wasted. Some data we have assembled from recent campaigns tells the story better than words:

-A recent Telco client conducted an aggressive acquisition display campaign wherein 20% of the media was consumed by existing customers that could not make use of the offer and 42% was consumed by customers that were out-of-market and not eligible to buy.

-Despite frequency capping instructions provided to the publishers, a large direct response advertiser saw 42% of their display inventory consumed by 11.7% of their audience.

-And a large retail client saw 29% of all impressions consumed by users seeing a frequency of 30 ads or more!  (IOW – non-responders.)

These are just examples of why the industry feels that a 1% click-through rate and search-like CPCs are stretch goals. Display ads reach more consumers than any other online channel. If you can find out how to carve away even a small portion of the waste with a few simple techniques, it will easily become your most efficient channel.

– Scott Nelson

But, what do you really think social media is?

In an article today in iMedia Connection, with the provocative title (hey, it got me to click) “Why we need to kill social media”, Rob Key, CEO of Converseon, makes a well thought out argument that “the term 'social media’ itself is stunting the potential of the very force it is trying to describe and, hence, has outlived its usefulness.” Of course, Converseon is a “social media consultancy" so one can infer that the topic is near and dear to their hearts after years of trying to explain the so-called medium to clients.

But what entertained me were the comments. Apparently between the hours of 12:38 pm ET and 5:31 pm ET two warring factions managed to articulately (and somewhat diplomatically) duke it out. Shel Holtz, a consultant who develops social media strategies for companies, innocently started it all with his comment disagreeing with Rob’s point of view. Then Jeff Molander, professor of digital direct marketing at Loyola University’s school of business disagreed with Shel, siding with Rob and claiming that “all digital media is now social.”

Both camps made eloquent arguments. And, they are both right – depending upon the looking glass with which you happen to be currently viewing this complex topic. Is it really “media” from a marketing perspective, or a newly entrenched model so widespread it encompasses all modes of human communication? Like others in the online advertising biz, we at TruEffect have been watching as long held beliefs about consumer awareness are dispelled. Turns out, it's not a commodity to be understood and packaged within any one particular channel.  Those “eyeballs” do not live and function in a vacuum, and cannot be defined solely by their proclivity to type a keyword into Google, visit a particular website, Tweet about tomatoes, or leave lamps in their Overstock shopping cart.

Billions of words have been written on social media in the past few years. And, here I am – adding another 400 or so. But in the words of William Gibson, “The future is not Google-able.”

So, as of 5:31 pm ET, Jeff has had the last word.  I wonder if they left their computer screens and went out to “socialize.” All I know for sure, is that all three gentlemen in question, today, found an appropriate use of social media to further their individual causes. And now, I've done the same.

– Layne Salter

Rocky Mountain News - Rest in Peace

Today I was saddened to hear the long-awaited announcement that tomorrow one of our local newspapers will be ceasing operations.  The Rocky Mountain News is two months from its 150th anniversary and has won a Pulitzer Prize for journalism four times – an accomplishment shared by very few newspapers in the world.  And other awards stack up behind the Pulitzers. 

Now it would be easy to ask why I, an internet media guy, wouldn’t see this as another validation that online is the future.  And, isn’t this failure just another example of an industry that has not remained competitive and deserves to go extinct?  Well, it’s just not that simple.  The internet, and internet media, has been an explosive success because it has enabled the sharing of information across society with an efficacy and speed that boggles the mind.  We can learn a great deal about almost anything in seconds, which has redefined business, education, government, global trade, culture, health care, and even how we interact as human beings.  But, the internet does not create the content. 

People are the authors of everything we share online.  Teachers share their lessons.  Analysts share their expertise.  Scientists share their research.  Musicians share their songs.  And journalists share their news stories, photos and commentaries.  The internet has not offered any substitute for this wealth of knowledge, yet it seems to have put into jeopardy the business models that feed some of these authors, journalists in particular.  At its most lofty, journalism is chartered with reflecting every side of an issue as truthfully as possible. Thomas Carlyle’s “Fourth Estate” has been a cornerstone of a free and open society, and has been particularly important in American history. 

So what difference does this make to those of us in digital media?  Each and every one of us in the business can attribute our revenue and our paycheck to the media budgets of the advertisers that pay to get their message in front of consumers.  Consumers want content.  Compelling content.  Entertaining content.  Useful content.  It’s the content that draws traffic that drives ad revenue.  And one of the earliest and most successful sources of content on the web is news.  Journalism.  Obviously, we’ve evolved from headlines on CompuServe to tweets and blogs from “citizen journalists”, but we collectively depend heavily on the news, weather, entertainment and sports reporting from professionals.  Professionals who have failed to morph their business model in a sustainable way, but continue to blindly feed the model that is their Brutus.  Walter Isaacson provides an excellent analysis and a provocative proposal in his recent Time Magazine article.

We have heard in the last few days that television seems to be surviving quite nicely, thank you very much.  And that’s true – kudos to the ability of that industry to remain relevant.  But newspapers are the most entrenched source for local issues and the most connected with their communities.  Newspapers at every level provide an enormous amount of quality content that drives a lot of revenue to our industry.  If we fail to recognize the need to nourish and grow quality content, then we’ll find ourselves struggling for relevance as well.  How successful would an internet be if comprised solely of advertising??

I grew up on a Midwestern river which fueled the growth of towns large and small and supports fish and wildlife as well as agriculture and recreation.  As commerce up and down that river grew, the Army Corps of Engineers decided to make the channel deeper and straighter in an attempt to facilitate large shipping barges.  This well-intended move to efficiency and effectiveness turned the meandering river into a fast-flowing “ditch” that has become too treacherous for many swimmers and boaters, and eliminated some of the shallower pools and eddies that were home to all kinds of creatures.  The need of the people living along the river to exploit this natural resource for commercial gain has eaten away at the real value it brings.  What a self-defeating tragedy it would be if the internet ad industry followed suit and drove quality content providers such as professional journalists out of business. 

- Scott Nelson

Facebook loses battle with consumer privacy

 This week we can add Facebook to the online privacy debacles of late. A change in their terms of service got users in such an uproar, I'm surprised it didn't bring down the Twitter servers.  Mark Zuckerberg tried to calm the masses in a blog post  on Monday explaining that they didn't actually want to own all our data forever.

Then, on Tuesday, it was reported that the Electronic Privacy Information Center (EPIC) was preparing to file a complaint with the Federal Trade Commission. Now, if you've read the FTC Staff Report on Self Regulatory Principles for Behavioral Advertising, Principle 3 talks about "material changes to existing privacy promises" and states, "A company must keep the promises it makes with respect to how it handles data. If it wants to make a ‘material’ change in how the data is used, it must obtain ‘affirmative express consent’ from the affected customers." Whether EPIC was making this connection is not known. 

Not surprising, Facebook did an about face today , rolling back their terms of service to the previous version.  It's like a Privacy Tsunami created by millions of pissed off Facebook users. Hmmm....Perhaps the online ad industry needs to take a harder look at that FTC Staff Report.  Even if you don't fear potential privacy legislation, the instantaneous public consumer outrage, courtesy of social media, is enough to keep you up at night.   

– Layne Salter

Display - it's not just for branding anymore

This week Nat Worden of the Wall Street Journal wrote an insightful article on the state of advertising as a whole. Media titans everywhere are acknowledging that, even once the recession is over, advertising may never return in full force to major media outlets. The world is moving on.

No big surprises here, given that the past few years have shown a growing distaste among consumers for being advertised TO, rather than communicated WITH. Throw in the changing technology landscape and it's no wonder that traditional media is suffering. Disney Exec, Robert Iger, said they're feeling "signs of secular change as competition for people's time is increasing and the abundance of choice is allowing consumers to be more selective."

The rise of Search and Social Media have dominated the online arena as major players in the trend towards better relevance. "I searched on a brand, and voila! There it was!" Or " I'm going to try out this new [fill in the brand] because my BFF said it was so awesome." Well, It's a start. And research continues to confirm what we already knew – people don't consume media in a vacuum. Atlas Institute reports that the average person who converts on a site had 15 to 20 touch points prior to taking that particular action, and nine out of ten were exposed to ads from the same advertiser across two or more sites. So if your strategy to reduce media spend is to stick to only one channel, think again.

Advertisers and agencies might already be rethinking their online approach. Research shows that paid Search spending had its first major drop of 8% in Q4 of 2008. The decrease might simply represent overall ad spend cuts, or it could be signaling a trend towards a more balanced online media approach. With consumers having so many choices, being so selective, and demanding media on their own terms, doesn't it make sense to spread your word more wisely?

With Display ad technologies continuing to improve upon targeting and media accountability, and an inventory glut creating reduced display media rates, there's never been a better time to marry Display with your Search campaigns. And if you're already doing that, you can continue taming the online beast by taking a step back to re-evaluate the cost and effectiveness of all your online technology partners. There's always room for improvement.

– Layne Salter

Grownups say the darndest things

Americans love the First Amendment. But what happens when it intersects blogging, Twitter and other social media? A morning jaunt that began with an industry newsletter with the headline "ValueClick whacked over email; commentors gleeful," took me on a brief, but crazy ride.

First, a no doubt, well meaning, Media Development Manager at ValueClick (no, I won't mention his name and create yet another Search result for his faux pas) was publicly chastised by Jeremy Schoemaker on his ShoeMoney blog, and on his Twitter account. He called a sales email "spam" and implied it was in violation of the Canned Spam Act, simply because the sender made a copy and paste mistake and did not delete a previous form email to another prospective client. The onslaught of comments further raked the guy over the coals. Most of us understand that the Canned Spam Act  is for commercial emailers, not poor sales schlubs trying to do their job. Also, the fact that it was a cut and paste error implies that the solicitations were being sent individually, not as a mass email anyway. If we're going to blast others for spam, (no pun intended) let's at least understand our definitions.

From here, I was led to another article, "Virgin sues Adrants over fake Hudson River crash ad."  The ad, which turned out to be fake, said, "The Hudson River Crash: Just one more reason to fly Virgin."  The blog post even mentions that the source of the print was suspect, but what the heck. It's just a blog, right?  And from AdRants, after all, already known for its over the top commentary on advertisements. Is this libel, or simply a joke in poor taste gone bad?

From there, I wound up back at the ShoeMoney blog, and out of curiosity scrolled through some other posts, and came across a Fox news video outing the owner of the Lafayette French Pastry shop in New York. The bakery, said to be a celebrity favorite and used in "Sex and the City" is selling a chocolate cookie called "drunken negro heads." The baker says he has the right to name his pastries however he sees fit, but critics believe he's crossed the line between freedom of expression and blatant racism. Oddly, critics and journalists alike have failed to critique the actual cookie. I'm just wondering if the baker thought its wonderful taste warranted his flagrant disregard for political correctness? And Fox News – responsible journalism, or free advertising for the bakery?

By writing this, am I adding to the publicity cycles of things that should never have made headlines in the first place? Or simply expressing an opinion on the state of social networking?  Regardless, only time will tell if court intervention will propagate new legislation on our latest communication phenomenon.

Or, perhaps the economic slump has simply resulted in people having too much time on their hands? Nah, it's always been this way.

– Layne Salter

So, social media's not media after all? This explains a lot.

This week, Ted McConnell, general manager-interactive marketing and innovation at Procter & Gamble, didn't pull any punches when speaking bluntly about social media. "I think when we call it 'consumer-generated media,' we're being predatory," he said. "Who said this is media? Media is something you can buy and sell. Media contains inventory. Media contains blank spaces. Consumers weren't trying to generate media. They were trying to talk to somebody. So it just seems a bit arrogant. ... We hijack their own conversations, their own thoughts and feelings, and try to monetize it."

Maybe this answers the question of why social networking sites have yet to garner the success they seek in monetizing their sites? It's not really media? Who knew!?  McConnell also said that while he respects the targeting capabilities on Facebook, he doesn't feel comfortable with it. While many of us have thought it, blogged about it, or seen it be the topic of an occasional public outrage or two, we seldom hear marketing folks being so refreshingly blunt. 

So, what does make Media media, and what is acceptable content on which to create inventory? McConnell's criteria could also rule out user generated content on YouTube.  His premise would seem to dictate that when consumers are creating media they can't at the same time being consuming it.

And what consumer information is OK to target on? Are we OK with the behavioral targeting so many media networks use to infer data about us based upon our surfing habits? Perhaps the worst thing about that is its unavoidable inaccuracy.  At least it's not as intrusive as the newly engaged woman on Facebook receiving ads about how to not be a fat bride.  However, many companies, consultants, and technologies are betting the bank on the social media trend, not to mention the $1.4 billion sunk in ad dollars this year. What do you think? Maybe the answer is 42.

– Layne Salter

Social Media - the eyeballs have it

Marketers still struggle with wrapping their heads around the value of social media, and how to best connect their brands with communities. Because the online world moves at near light speed, our tendency is to jump in, or endlessly noodle over, the latest media trends and technology. The thing is – it takes time for these hatchlings to mature. But according to Forrester, 75% of Internet users now participate in social networking at some level, so if you were waiting to see if it's a flash in the pan, I think it's safe to say social media isn't going anywhere.

Social media ad dollars are also on the rise, with just over $1.4 billion estimated this year. While this is just a small fraction of the $24.9 billion online spend, it’s up 55% from last year. MySpace and Facebook snagged the largest portions of the advertising pie, but Twitter, Tagged, and Ning lead the race in audience growth (Nielsen Online). And it’s not just the youngsters anymore – Forrester found that 35 – 44 year olds are now jumping on the social bandwagon as well.

Despite Facebook’s “Beacon” faux pa earlier this year, a recent Forrester report shows 29% of users prefer targeted ads, while only 13% of users are worried about sites tracking their behavior. The trick is to not cross the “creepiness” line, which Facebook did by broadcasting shopping behavior without permission.

The thing is, consumers might be OK with trading their information for relevant ads, but perhaps advertisers and media providers are still missing the definition of “relevance.” While it's remotely relevant that I surfed game design schools, it’s not something I care about. By contrast, social networking sites have access to a bottomless well of demographic and psychographic information, some “declared," other "inferred." But lack of sophisticated targeting algorithms, or perhaps lack of a quantity of quality advertisers, still results in members getting ads that have nothing to do with their interests.

Who has the targeting information that could actually provide a relevant advertising experience users want? My money goes to the “known and trusted merchant.” Amazon knows everything I want – it’s in my wish list. IMDB and Netflix know my movie interests. Expedia knows where I like to go, and L.L.Bean knows I only shop with them at Christmas. If technology could provide a solution to integrate the advertiser data into the targeting equation, consumers might begin to actually feel "engaged." TruEffect continues to develop solutions to create the most optimum engagement between advertiser and consumer, anywhere they meet on the web.

So, what of the wonderful opportunity to intimately engage with your customers on social media? It still has a way to go, but in light years……. It might not be such a long wait.

– Layne Salter

Targeted marketing gone awry: does this Facebook profile make my butt look fat?

In a Washington Post article this week, staff writer Rachel Beckman shares her hilarious (to us anyway) experience of Facebook calling her fat.  Based on some unidentified data in her profile, possibly her status as "engaged," the facebook targeting engine begin serving her ads for how to get rid of "muffin top" and how to "not be a fat bride." A laughing matter? Hardly. This is a shining, and often too common, example of targeted advertising gone bad.

With all the potentially "good" uses of targeted advertising, why does a site as large and popular as Facebook make such a mistake? Is it lack of relevant advertisers? Bad data profiling and segmentation? Or perhaps just a penchant to insult people? And if even publishers with a wealth of targeting data can't get it right, then what's the outlook for the industry as a whole?

I went to my own Facebook page and on repeatedly hitting the refresh button, was served many diet ads. So apparently being female might be enough to trigger them. I also received ads for free Obama buttons, marketing groups, books, and wine. OK, so maybe they get it right part of the time. But still. With the technology that exists today, I really wish my favorite merchants would come find me, and then serve me up some stellar offers. I'm just sayin'.

– Layne Salter

Social Media. Hip or Hype?

I don't know what's worse – marketers and advertisers being infatuated with the social media frenzy, or the fact that an application as ugly as MySpace has led the way. I know, I know... I'm not being "with it." But every week I research news and trends for articles on internet Display or Search advertising, and all I find are articles about Social Networking.   

In today's MediaPost article "Social Marketing Limited by Advertiser Confusion"  Mark Walsh sites a recent JupiterResearch study that says actual advertising spend on social media has not "caught up with hype surrounding the emerging category."  I'm not surprised.

As an online marketer, I know we like to jump on the latest trends and technology, in a constant search for that silver bullet – the answer to our ROI dreams. But putting all our eggs in this basket is like taking the "blue pill" – we wake up, and believe whatever we want to believe. (Of COURSE the future of online marketing is social media – even though research points to the fact that, increasingly, people don't want to be advertised to. But let's go invade the sanctity of their private MySpace and Facebook pages anyway.) 

How about we take the "red pill" and find out just how deep the rabbit hole really goes? What do consumers really want? What products are they interested in? Are they already my customer, or am I talking to a prospect? While entire companies are rising out of social media advertising, like Umbria whose product claims to gauge a people's demographics by which words they use when writing, how are we really using this technology? And, is it more important than improving our Display and Search campaigns? Jupiter reported that half of advertisers are spending less than 5% on social media. This, coupled with mixed reports this year on the declining usage of Facebook and MySpace might cast aspersions on this popular new kid. If nothing else, we certainly know that audiences are fickle, and social networking requires a substantial investment of time.

Oh wait. I just received an invitation from the AMA for a webcast on "Building Corporate Social Networks." It promises to help me, "Connect to customers in new ways, stimulate interest in my company’s brand, empower customers to become brand advocates, and deliver interactive services to my customers."  Better go sign up right now, wouldn't want to miss anything important. 

– Layne Salter