OMMA Day 2: Good Science - The Science of Online Marketing is Improving Mankind
We have the technology. We have the platform. We have the audience. The promise of digital technology for marketing is to benefit all links in the value chain. Tracking consumer wants, needs and behaviours will target them with fewer ads that are so relevant as to be more useful than intrusive. Publishers will realize the true value of their context with heartier CPMs that reward target-rich, well-lit environments. And digital media will knit these audience pockets together in networks that offer marketers necessary reach and scale with none of the waste of less accountable platforms. This perfect eco-system of digital media will deliver right-message, right-time, right-place marketing that serves all constituencies. Is marketing utopia just over that next ridge? Or is the “perfect eco-system” actually delivering reduced ad budgets that cannot support current marketing infrastructures or continue to underwrite good content?
MODERATOR:
Randall Rothenberg, President and CEO, Interactive Advertising Bureau
SPEAKERS:
Margaret Clerkin, Executive Director, MindShare Invention
Russell Fradin, President, Adify
Gian Fulgoni, Chairman, comScore, Inc.
Eric Wheeler, Chief Executive Officer, 33Across
Dave A. Yovanno, Chief Operating Officer, U.S. Media, ValueClick, Inc.
Q: Is targeting helping or hurting our industry?
A: Are we really delivering targeting the way we claim we do. There’s a lot of room for improvement.
A: ValueClick: Currently, it is hurting the industry. Targeting should bring more dollars into the online market place, but what it is actually doing is allowing advertisers to cherry pick.
A: Mindshare: One of the issues is around who actually owns the data, who is using it, and who is gaining the knowledge. The advertiser is paying for that, but the knowledge is also being gained by the publisher, who is using it to sell to other advertisers to the benefit of the publisher. There are advertisers who believe that the data belongs to them, and should be portable.
A: There are issues around cherry picking, but behavioral targeting allows us to analyze social networks like never before, and it’s the data that marketers have been craving for.
A: Adify: It’s a continuum. Without all the targeting, we probably don’t have an industry like we have. But you can’t just look at the targeting part of the equation. But it is very hard to deliver mass scale of micro targets. For any individual publisher, it is dangerous to get too targeted. If you are trying to target someone who traded a quarterback for a running back on their fantasy football page, you are going too far.
Q: If you look at the world of publishers and marketers, who is really benefiting?
A: comScore: If targeting was working the way we think in terms of accuracy and benefit, I’d think that what advertisers are willing to pay would be much higher than we’re getting. Ad networks should be able to charge much more than a single publisher. Targeting raises two promises to an advertiser. 1) I promise that I’ll deliver the audience that I’m selling you , and 2) I’m getting something significantly better than non targeted advertising. Direct response advertisers have an easier time of measuring that return. That’s much more difficult for brand advertisers.
Q: DR and branding used to be looked at completely separate entities. Are they coming together? Is there a blending?
A: Mindshare: Its definitely blending. No agency has just a single objective. So you need to be strategic about moving both or multiple objectives, and you need to allocate your dollars to do that.
A: 33Across: Being performance based is the only tangible metric that you can feed to the higher-ups that is measureable. Advertisers will pay a premium to have their brand associated with specific content. If their objective is DR, then they can turn to a network.
A: ValueClick: We’re seeing a widening of the gap in CPMs. The premium branded sites can still command a premium CPM, but there is very little going on in the middle. Thanks to social media, there is a driving down of CPMs. We’re seeing clients with their budgets in two or three chunks to spend against different objectives.
Q: Because social media is designed to engage people at extended periods of time, why isn’t it seen as beneficial for branding?
A: The way social media is structured, there is a titanic amount of inventory. It has nothing to do with the page views in social media. When you translate that to a CPM, it becomes miniscule on a pure CPMs. We are awash in low CPM inventory because a lot of social sites have a frequency of 10 million.
A: 33A: that is absolutely right. We’re moving away from marketing to customers to having conversations with them. Its not that social media is bad, its that we’re using the wrong metrics.
A: Mindshare: You can advertise in social media. But you need to find the people that will engage and influence other people.
A: 33A: We built ad systems for scale. How many of the IAB standard sizes are good for having a conversation with an audience.
Q: Are CPMs no longer an effective way to sell online advertising?
A: comScore: No. You don’t expect an immediate response from an ad in a magazine ad. To big brands, the things that are important are how many people am I reaching and am I influence them. If we want people to move money from traditional media to online, we need to give them the proof. If you show them a 2% click-thru rate, that isn’t going to happen.
A: 33A: You need to have some form of currency for people to trade on. For marketers with savvy, that doesn’t really matter. All advertising is held to some action globally, no matter what the pricing model is. In the DR world, there is either a sale or a lead. What is the equivalent in a branding model? That’s a much more complex question than a pricing model.
Q: Are you finding that you are customizing objectives for each individual client?
A: Mindshare: You have to figure out your clients objectives and the action that you want the user to take. You can do performance based deals with large publishers, but we aren’t going to move to one or the other. It isn’t black or white. If your goal is to increase your reach, that is going to be sold on a CPM basis.
A: ValueClick: This is one of the most self-loathing industry, but we’re the fastest growing advertising medium every. And we’re the only ones making money. But there are two kinds of fragmentation that hurts the business. The fragmentation of publishers makes it impossible to plan, so you need aggregation. The other is to date, advertisers have been able to get a return with nearly every new technology or method to do something. The media planners are deluged by all of these options.
A: A:33: Peter Naylor had something interesting to say. When you sell a deal on TV, you get high fives. When you sell a deal online, people say, “You sold that?” and then need to figure out if they can deliver it.
A: Mindshare: There is a lot of attribution given to search that isn’t rightfully there’s. There is a lot of research being conducted right now that is going to dramatically change that.
A: comScore: If you look at the consumer electronics market, you need to look at latent data for 90 days before you will see a conversion and that’s just online. 70% of the conversions happen offline.