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WSJ: Web Sites Debate Best Values for Advertising Dollars August 16, 2009

Posted by Bill in ad networks, Behaviorial Marketing, Digital, Online Advertising, online marketing, traditional advertising.
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Interesting read, especially with the study coming from the OPA… hardly an independent voice. However, it brings up a more holistic strategic question: How can we as an industry be doing a better job influencing share shift from broadcast and/or direct mail? Our competitors are not OPA sites versus portals versus ad networks; our competition needs to be anyone selling TV and traditional direct….

Study Produced for Online Publishers Says Proprietary Content Is Better Channel Than Portals or ‘Ad Network
by Emily Steel

For a time, Internet advertising was a rising tide lifting all boats. But as ad spending ebbs, there are more arguments about where on the Web advertising is the most fruitful.

The fight over shrinking Internet ad dollars pits online publishers that offer premium content against major Web portals such as AOL, MSN and Yahoo. Portals and publishers, meanwhile, also have to compete with the ad brokers that sell often cut-rate leftover ad space on Web pages with less visibility.

Web publishers this week are pointing to a study — ordered up by their trade group — that they say presents evidence that ads on their prime pages offer more bang for the buck.

Online Publishers Association’s report
The Online Publishers Association — which represents creators of Web content such as New York Times Co., ESPN.com, MSNBC.com and The Wall Street Journal — on Thursday is releasing a study that finds that ads appearing on the portals and bought through ad brokers are significantly less effective than the premium ads they sell on their own sites.

“A brand marketer might be tempted in a recessionary economy to look for the lower-cost option. What this study shows is that the lower-cost option is not a productive solution,” says Martin Nisenholtz, senior vice president of digital operations for New York Times Co.

The study, based on research from the WPP PLC research firm Dynamic Logic, taps three years of data that include more than 4,800 marketing campaigns. Dynamic Logic offers a syndicated tool that big advertisers use to measure the impact of their digital campaigns.

The study shows, for instance, that online ad awareness metrics — where consumers remember seeing a brand or product advertised on the Web in the past 30 days — was 21% greater for ads on content sites than portals and 50% greater than ads placed in bulk by ad brokers.

Rates have begun falling for display ads, the graphical ads that border a Web page and make up the bread and butter of most Web publishers’ revenues. U.S. spending on display ads will drop 17% this year, to $4 billion, according to projections from PricewaterhouseCoopers. These declines come after years of rapid growth. It’s bad news for media companies trying to make up for even steeper declines in their traditional businesses.

Overall, U.S. spending on online advertising is expected to drop 3.2 % to $24.1 billion this year, according to PwC.

Big digital publishers long have charged high rates for the ads that appear on high-traffic areas of their sites, such as the home page. The argument is that their professional, proprietary journalistic content should reflect well on an advertiser, says Ed Erhardt, who oversees ad sales at ESPN, which is a unit of Walt Disney Co.

The Web portals and ad brokers, for their part, say that while big banner ads on a premium Web site often garner more attention than small ads, advertisers are paying high prices for relatively small audiences. The portals say they provide an easy way for marketers to make a big splash with consumers with a single ad on their homepages, which attract big audiences.

As the economy has deteriorated, many marketers have sought out cheaper options, like “ad networks” that sometimes sell ad space for less than $1 per thousand times the ads appear. In comparison, Web publishers try to sell ads for upwards of $10 per thousand appearances.

Some media buyers say the study oversimplifies the planning work that advertisers do, as ad space purchases on premium content sites, portals and through ad networks each serve a different purpose.

“You go to media conferences, and there is a portal contingent, there is an [ad network] contingent. Sometimes I feel like saying to all of them, can’t we just get along? You all have a place at the table, says Steve Kerho, senior vice president of analytics, media and marketing optimization at Organic, a digital ad agency owned by Omnicom Group that works with marketers such as Chrysler, Bank of America and Kimberly Clark.

Portals like AOL and Yahoo are trying to position themselves as a one-stop shop for digital advertising. “We see value for advertising in all three,” says Jeff Levick, AOL’s president of global advertising and strategy for Time Warner’s AOL division.

Some ad and Internet industry executives worry that comparative research about any part of the online ad business could hurt the whole industry, by confusing advertisers who are still new to the ins and outs of the Web — a small but promising part of the slumping ad business.

“The reality is that consumers are spending more and more of their time online. We as an industry have not made the bridge to large marketers as to why the dollars should shift as well,” says Bill Wise, vice president of business development at Yahoo. “It is all part of us getting more market share for digital.”


Web 3.0– Predictions for 2008 (Part I) January 4, 2008

Posted by Bill in ad networks, Behaviorial Marketing, exchanges, mobile marketing, Online Advertising, online marketing, Right Media, social network, traditional advertising, video.
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1. Ad Networks need to go deep to strive. Ad Networks need to offer true differentiation and add unique value. I predict the untargeted or performance-based ad networks lose ground to the portals who are building their own ad networks, and to vertical ad networks and data/ behavioral ad networks who are building a defensible deep expertise.

2. Local & SMB market get to critical mass for a handful of players and the search engines pay attention to them. Its about time…

3. Video continues to not have a standard ad unit, but continues to take huge mindshare within brand departments, ad agencies, brand publishers and portals… and amongst the press, who loves to talk about the broadcast dollars shifting.

4. Mobile explodes. Similar to the social networks in 2007, huge amounts of venture capital will pour into this market without a material focus on established revenue streams.

5. Ad Exchanges go mainstream…!!!

More to come in Part II…

Why Yahoo Likes Newspapers November 28, 2006

Posted by Bill in Behaviorial Marketing, online marketing, Search Marketing, traditional advertising, Yahoo Search Marketing.
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November ‘06 will go down as the month the search giants got serious about newspaper plays. Google has unveiled plans to enter ad management for newspaper classifieds across 50 papers; last week, Yahoo countered by entering strategic partnerships–starting with collaboration on job classifieds, but set to expand into Yahoo help with newspapers’ maps and search presences–for 176 newspapers’ online divisions.

When you think about it, the Yahoo move seems surprising. Newspaper moves make sense for Google, which has long expressed plans for expanding into traditional media; and which, besides, goes for over $500 a share and has money to burn on new initiatives. But Yahoo’s poor Q3 performance, probable eminent downsizing, and “Peanut Butter Manifesto” that looks to streamline Yahoo’s activities, rather than expand them, makes a sudden shift into newspapers seems odd. It’s especially odd in light of the tough times that newspapers currently face, making Yahoo’s move into newspapers a change of course right into an ailing industry.

So my question for this week is: What does a troubled Yahoo see in a beleaguered newspaper business? The answer to that question, of course, lies in local advertising.

It’s not surprising that Yahoo would feel itself lagging in local. From its roots, Yahoo has been a leader in the general online world, from search to e-mail to online content. But leadership in general online services is very different from leadership in the local markets. Consider search: while Google nearly doubles Yahoo’s share of overall search (Google has roughly 50% of all searches, to Yahoo’s 25%), Google leads Yahoo by only a slim lead in share of local searches  (according to an e-Marketer study from earlier this year, Google holds about 29.8% of all local searches to Yahoo’s 29.2%).

That general search/local search split makes a good deal of sense, as broader channels operate in nearly opposite ways from local media. Most of the Internet–including search–is used to bring a wide, unknown world a little bit closer to you. That includes finding the Web site you don’t know about through search; it also includes letting you e-mail a friend you can’t speak to because you’re not in front of her. Services for the general Web focus on building better, smarter communication pathways to make a big world smaller.

Local advertising is something entirely different. Local channels focus on enhancing audiences’ participation in a corner of the world that’s already, quite literally, very close to home. Local media isn’t about making a big world small; it’s about entrenching people’s relationships with a world that already is very small. And so while winning in most Internet services relies on excelling at bridge-building across different locations and types of information, winning in local channels relies on becoming an extension of your particular locale. Google’s a powerhouse in global information-bridging, allowing it to take the lead in general search; but it’s Yahoo, which offers rich local information on its portal, that becomes a portion of users’ local experience, thereby reaping the rewards in share of online searches.

Yahoo understands this. And it also seems to understand that, at the end of the day, it’s newspapers that have the infrastructure to make themselves a part of the local scene in a way that globally-focused online players–including Yahoo itself–simply can’t. Newspapers have what Dean Singleton, CEO of MediaNews Group (which is partnering with Yahoo), refers to as “a huge sales force involving thousands of sales professionals”; they also have lots of local reporters creating enormous amounts of online locally-focused content. By tapping into those thousands of ad salespeople, Yahoo is able to capture local advertising markets it’s not built to capture on its own; meanwhile, by helping with the search presence of newspapers’ online content, it’s able to enhance the local results on Yahoo search (where that local content is now more likely to appear), without needing to create its own small army of local beat reporters.

In other words, Yahoo understands that it’s got two choices for expanding its local reach. It can either deliver more of its own local offerings–which will mean defying the Peanut Butter Manifesto by building a workforce to create more local content–or it can outsource its local workforce to the local experts (the newspapers), while doing what it does best as a global online service: serving as the network that takes information from the world’s many locations, and delivers that information to its users. By opting for the second choice, Yahoo’s managing to expand its local reach, while working less. Which is why Yahoo’s move into newspapers may look like it’s taking on more; but it’s actually a way to become more efficient by honing in on its core competencies. Far from being a dangerous expansion, that’s smart business.

To Recoup Click-through Losses, Redirect June 5, 2006

Posted by Bill in Behaviorial Marketing, Search Marketing.
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While the problem of non-converting visitors exists in all of online marketing, it’s particularly troubling in search. That’s because search is pay-per-click; and so every searcher who comes in carries a cost–and every non-converting searcher wastes your spend. While the loss is certainly reducible (you can sharpen your keyword list; improve your ad copy; and improve your demographic segmenting, to name a few solutions), loss is never completely avoidable. And when it happens, you have to recoup that loss somehow.
Typically, recouping losses means bringing in new searchers: once enough new searchers convert, they compensate for the non-converting ones. But even when coupled with overall improvements in your conversion path (like getting better ad copy, landing pages, and customer segmenting), the strategy is still inefficient. First, click-throughs are expensive; and so paying for more of them isn’t the cheapest way to make up for poor performance the first time. Second, your new wave of searchers will also include non-converting visitors–which means that, by trying to solve this problem, you’re creating the same issue all over again.
A much better bet stems from the basic efficiency principle that, often, it’s easier to improve what you have than it is to start from scratch. Which is why, rather than starting over, it’s cheaper to get those “lost” searchers to finally convert.
That’s the theory behind behavioral search retargeting, a new search method. (disclosure: my company is among those offering this service.) The premise goes like this: once a searcher has left your site without converting, you use display ads (banners, skyscrapers and the like) to follow her around the Internet, until she clicks on your ad and comes back to you. Since she’s entered your site before, she’s probably interested in the kinds of things that you sell; she’s also likely to recognize your brand. So even if she didn’t convert the first time around, she’s likely to click on your display ad at some point–and studies show that lost visitors who revisit within 72 hours are very likely to convert the second time.
(The name “behavioral search retargeting,” by the way, means that you’re retargeting your advertising to lost viewers in a new form, based on past search behaviors–like their clicking on your ad in the search results page.)
Not only is behavioral search retargeting strategically efficient, it’s also cheap. That’s because display ads, on the whole, cost a lot less than search ads do. To give one example: if a keyword costs $1 a click (which is on the lower end of prices for best positions), and you’ve got a 2.8 percent click-through rate (which is average), you’ll pay $28 for 1,000 impressions. Compare that with the very upper end of the display ad scale, in which you might pay $15 per 1,000 impressions. And since you’re advertising to people who are already likely to recognize your brand and your product type, you can get your ads to pop at much less coveted–and much cheaper–areas of a given site page.
In other words, you get to recoup a lot of your losses, at a much lower price; meanwhile, you’re assured that, sooner or later, a much higher percentage of the clicks that come in will ultimately convert.
A final, somewhat philosophical word. While all of this might sound like a bold new move for search, retargeting is really the logical next step in a broader evolution. Search began as a field about engines alone, but it’s becoming a field that’s as much about conversion architecture as it is about keywords. That’s only natural: search is the bridge that ties initial interest with final conversion, on nearly every conversion path. It includes the tasks of picking up traffic driven by TV spots, word of mouth, and generic needs; and driving that traffic to convert through Web sites, call centers, and bricks-and-mortar stores. And so search success is determined by how well you’re able to coordinate your traffic, at every step of the way.
Which is why getting the most out of search is as much a matter of overall conversion paths as it is a matter of bid changes; and why addressing the ways search impacts post-site behavior is a logical next step in where search takes advertising next.