Display Ads, Whither to Wither?

According to the "Natural Born Clickers" study (released recently by ComScore and media agency Starcom), the number of people online who click display ads has dropped 50% in less than two years. They conducted a similar study in 2007 which found that 32% of the respondents affirmed they clicked on banner ads; now, two years later, the figure is down to 16%.

Ad Age, in their article discussing the study, leaps to the question of whether Click-Thru-Rate is the proper metric for online display advertising. They report ComScore as determining, through "client studies," that banners generate significant lift in brand-site visitation, trademark search, and both online and offline sales among those exposed to the ads.

I have to confess to skepticism about this. I'd have to see those "client studies" to determine their scientific rigor.

While I believe in the importance of branding, and I am willing to admit that display ads might be able to help lift a brand's awareness or mindset penetration, I doubt very seriously that really accurate data can be identified to prove this. We in the interactive marketing space like to tout metrics as a core part of the web's value, but in the case of display ads, the most obvious or intuitive metric (clicks) are usually SO LOW as to be worthless as a way to make money. I sure wouldn't pay thousands of dollars for at best a 0.4% CTR...so it behooves publishers to try and justify, however possible, this revenue-generation method with which they are stuck.

The paradigm needs to continue to shift and we need to continue to innovate. A reader identified as "ivak99" makes a very good response to the Ad Age article in which he points out that internet users are "active" while banner presentation, like TV commercials, are intended for a "passive" viewer. Marketers need to leverage the strengths of the medium and craft content, as well as traffic-generation methods, that DO work on the web. Banner ads really don't and we should not be wasting money on them when we can innovate and figure out new and exciting ways to get our customers the stuff they need, and when they need it.

It's the End of the World as We Know It

…and I Feel Fine

(with apologies to REM)

Sean Carton recently wrote a very interesting column on ClickZ entitled “The End of Ad Agencies as We Know Them.” (http://www.clickz.com/3633372) He posits that a confluence of shifting forces have created a new world in which the “full-service monolithic agency model” is no longer effective and will likely die away.

• The Internet has changed how consumers are willing to receive information about products and services; instead of an “interrupt” model where channels are limited and attention has to be grabbed within a narrow set of viewing options, the consumer is now in charge and has a nearly infinite range of choices for viewing and receiving information
• Because of that, traditional media (broadcast television and newspaper/periodical readership, specifically) is experiencing monumental audience loss and a corresponding plummet in advertising revenue
• The economic downturn has exacerbated job loss in the advertising industry, releasing thousands of talented professionals into the market who often establish themselves as freelancers or independent contractors within their particular specialties. This has significantly improved the freelance pool and has made it relatively easy to find a qualified resource when one needs it for a particular project or program.

Agencies will need to remake themselves in a new image to cope with, and survive, these forces. Carton has an idea as to how that might work:

"So what's the agency of the future going to look like? Probably a lot smaller and focused on strategy, account/project management, creative leadership (but not execution), and media strategy (but not planning and buying). Most agencies will revolve around these hubs if they're honest with themselves. Agencies will exist to provide high-level strategic guidance that clients need in a media-chaotic environment. Agencies will expand or contract as needed or will explore radical solutions such as crowdsourcing to get work done for less money."

Historically, the B2B space has been smaller in scale than the monolithic full-service model as described by Carton, but the description is still applicable. Choices have been few on the business side, with media typically limited to trade publications and trade show sponsorship. Marketing consisted of making brochures or direct mail pieces, for the most part, or sponsoring educational outreach efforts that were necessarily limited in effect.

Now the options have exploded with the growth of the internet. Email marketing is now much more cost-effective and arguably more precise than printed mailers; web sites can be updated regularly and fresh information made available much more quickly and cheaply than a brochure redesign/print/mailing.

Coming from the interactive sphere, I have no reason to weep if this particular vision of Rome burning comes true. The key characteristics of interactive marketing are in direct contrast to those of traditional advertising.

Good interactive communications:

• Are crafted to receive interested visitors rather than reach out to grab attention
• Speak well to niche audiences as opposed to appealing to the lowest common denominator (and can speak directly to ALL audiences individually, there is no limit on the quantity or type of content that can be made available)
• Are measurable and can be tied to specific success metrics, vs. broadly distributed and only vaguely associated with quantifiable results

The challenge remains to develop a new agency model that can adapt to the realities of this new world and continue to properly service clients as well as be profitable. The value we bring as professional marketers will evolve from the “big idea” to more of a content-based approach, especially in these economic times where client staff has typically been reduced to skeleton levels. We will be integrated into not just the marketing of the client but the sales process as well. An agency of the future will:

• Staff core skills and abilities (like strategy, industry knowledge, creative direction, account relationship) but bring in freelance or independent resources for tactical execution needs (design, web programming, project coordination, media buying)
• Be a key partner to clients in developing content for use across all channels; this means becoming an expert in the client’s business and being able to step in and generate anything from press releases to web page content to technical white papers, at least in initial form. More importantly, the agency will need to be able to aggregate raw content from the client and refine to appropriate delivery format depending on the tactical need. Content management will be a key service in the future agency-client relationship.
• Build metrics and analysis into all client work; ROI calculations need to be considered for every engagement. Even broader-scope communications like TV or radio advertising are going to be tied into an interactive component, and agencies must be very sophisticated in how they track results that will cross several media channels and impact brand engagement over time. Clients will expect this as they themselves become more concerned with cost control and managing tighter budgets.
• Have a tight estimating and proposing process, which will then result in a tight project management process. Agencies need to know their actual costs for prospective projects, and make sure they know what they are providing for any retainer fee structure. Clients will pay for good talent, but measurable return is the benchmark of the future.

So it may be the beginning of the end, but smart marketers know that an end of an era marks the dawn of a new one, and if we play it properly we will emerge stronger from the cataclysm and succeed where others will fall away.

Summary from SES Chicago

Following is a summary of the key findings taken away from the Search Engines Strategies conference in Chicago last week.

• Social Media and Video dominated the conference; as search marketers move forward from traditional key phrase, text-based search into making sure they can be found in the so-called Web 2.0
• Content is once again confirmed as being king; it’s crucially important as the core source for all search marketing, social media exposure, viral propagation, and web-based public relations. Quality content serves as the basis for user interaction as well as the technical indexing aspect of all search engines.
• Local-type clients need to take control of their exposure in Local Search (i.e. Google Maps/Local, Yahoo Local). They should maximize representation on a variety of channels, including Flickr, YouTube, and Facebook/MySpace whenever possible.
• Keyword-driven search is still important but the paradigm is shifting. Companies need to monitor, and optimize, their exposure in the broader social media scene. They need to periodically scan blogs, Facebook/MySpace, social tagging engines (i.e. Digg, delicious, etc.) and reviews/comments on local search engines to see if they are being discussed, either positively or negatively.
• Universal Search combines web pages with video, blog, etc. entries to list on Search Engine Results Pages. Thus those non-web page elements are very important to maximize exposure for your key phrases and categorizations.
• Optimizing any web page but especially landing pages is easier with free tools like Google Optimizer. One should consider implementing a more rigorous protocol for testing pages to see what is most effective in achieving your conversion metric.

Specific tactics we might recommend for clients:

• Monitor social media, blogosphere, etc.
• Optimize client exposure in the broad interactive space by implementing or disseminating good quality content, such as press releases, white papers, blog posting, etc.
• Optimize local search engine listings for appropriate clients
• Check and take control of local listing
• Create product or service reviews
• Post videos of any kind on You Tube/Yahoo Video
• Post photos on Flickr
• Create Facebook pages
• Create opt-in communication programs
• Test landing/interaction pages and iterate for better conversions