Convince and Convert Blog: Where Social Media and Email Collide

A report last week by the Publishers Information Bureau found that advertising pages in the nation’s magazines declined by 7.4% compared to the first half of 2007. 

With the stock market down by about 20%, and house prices down at least that much in some parts of the country, a 7% dip in magazine ads may seem less frightening than the prospect that Angelina Jolie will somehow end up being mother to all of the world’s children. 

However, there are two inexorable trends in marketing right now and neither bode well for magazines mid or long-term. The economy will rebound at some point, but even when that happens, will magazines recoup their share of the advertising pie? In general, I think not. 

First, marketing is increasingly about measurability, and on that front magazines score no better than any other “traditional advertising” tactic like TV, radio, or newspaper. I would put magazines ahead of outdoor on that scale, because at least they have audited circulation. But how does the savvy marketing director (or agency media buyer) determine the financial impact and ROI of magazine? Short of tracking URLs and phone numbers (which basically pass the measurement buck off to another medium), it’s pretty difficult to isolate the effect of a magazine buy - which is why digital marketing is growing and everything else is stagnating in this down economy. 

The second issue for magazines is speed. The lead times required by monthly magazines for advertising and editorial are positively anachronistic. Consumer magazines are working on their October issues right now. Seriously? By October, Brett Favre could be playing quarterback for the Bears, and all of California could be on fire. In these uncertain times, committing to expensive magazine ads 90 days in advance seems like a leap of faith that fewer advertisers are willing to make. 

And speaking of speed, magazines without an especially sharp editorial focus and solid reporting are going to have a tough time in a culture where information is conveyed in 160-character bites RIGHT NOW. Interestingly, some of the magazines showing the biggest decline in ad pages this year are those who cover topics that are perhaps covered better online by sites and blogs.

Blender (-23.5%). See www.pitchforkmedia.com, last.fm

Business Week (-14.8%) See www.thestreet.com, www.cnbc.com, www.businessweek.com

PC Magazine (-35.8%) See www.gizmodo.com, www.cnet.com

Newsweek (-22.4%) Time (-21.1%) and U.S. News (-30.3%) See www.huffingtonpost.com, www.nytimes.com, and Twitter, where thousands of people are discussing current events as they happen, not a week later. 

Interestingly, one area of magazine-ville that showed consistent gains was food publications. With gas and food prices soaring, Americans are eating out less and trying to craft delicious meals at home. I’m not sure this trend is going to do anything about the obesity problem, however, as Cooking with Paul Deen ad pages were up 31%. That lady is physically incapable of executing recipes without at least one pound of sour cream. 

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Market Research firm Advertising Perceptions released a new survey of 1,811 media buyers showing that a whopping 72% of them believe Internet advertising spend will increase in the second half of 2008.

This is a shocking finding, considering that no other medium (other than mobile) was expected to grow by more than 28% of the respondents.

The outlook for newspapers and radio was especially pessimistic, with more than a third of respondents projecting overall spend to drop for those media in the next 6 months.

While we’re big supporters of mobile here at C&C, 55% of media buyers suggesting that mobile spend will increase was also a suprise. As a somewhat experimental tactic, we’d expect mobile to be set aside temporarily in this down economy. However, the measurability of mobile (which is also a terrific database acquisition tactic) could be fueling the optimism about it.

Without question, the measurability of Internet advertising and search marketing is what’s driving the move of ad dollars from traditional tactics like newspaper toward digital marketing. This move is going to be even more acute in a recession, as digital’s cost-effectiveness, speed of deployment, and targeting capabilities make it a “safe” media bet for most companies and agencies.

It will be very interesting to see if this movement of ad dollars toward digital results in markedly higher CPMs for banner ads by year end. We’re already seeing increases in PPC costs due to the “over-popularity” of Google.Similar Posts That You Might Enjoy

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In a shocking (and embarassing) revelation today, AdWeek uncovered that of the 56 world-class digital marketing agencies featured in their Annual Report Card, just 5 are purchasing their own brand names in PPC.

In fairness to the firms, most of them appear at or near the top of organic search results for their own brand names, but several studies have shown that click through rates (and conversion rates) typically increase when your brand is at the top of BOTH organic and paid search results. Incidentally, this is why the notion of dropping your paid search when you achieve organic search success is a bit of fallacy.

Also of note are smaller firms that are purchasing competitors’ brand names in PPC and showing up in paid search results. A crafty tactic, to be sure. Note that current case law says that you can in fact purchase competitors’ names and trademarks as a search term, but you cannot use those trademarks in your actual PPC ad copy.

If you’re an agency, why would you NOT cover as many bases as possible with your organic and paid search marketing efforts? The costs are minuscule and the results can be significant. In fact, at Off Madison Ave and Mighty Interactive (where I handle strategy and ideas), search marketing has long been a primary driver of serious new business leads.

If even the big digital shops aren’t buying their own brands in paid search, how many traditional agencies are doing so? If you’re not playing in this sandbox, get on it. You could literally have a campaign up by the end of the day. Similar Posts That You Might Enjoy

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Lots of hand wringing this week as Google launched their new Ad Planner, an online site comparison tool that utilizes data from Google members (pretty much the whole world) to categorize and evaluate Web sites.

This comes on the heels of Quantcast’s unveiling of their free Media Planner tool, which offers similar functionality.

Until now, meaningful site comparison data was only available from expensive providers like Nielsen and Hitwise. Now, with the release of dual, seemingly competent solutions in a month, what’s the impact on the Internet advertising and media buying space?

First, it’s becoming increasingly clear that Google is trying to disintermediate advertising from all sides. They are serving up ads for radio and TV stations. Inserting ads into remnant space for newspapers. And enabling clients to buy it all from the nifty Google interface. I predicted this more than two years ago, and it’s happening. Google wants to do to media buying what the Web did to travel planning, stock purchase and real estate research. Power to the people, and death to the middle man (agencies).

The good news, however, is that the availability of free data will dramatically increase interest in online advertising and media planning, the same way that Google Analytics dramatically increased interest in Web site traffic statistics. Did the release of the free Google Analytics kill off the established vendors like Omniture, Webtrends, CoreMetrics et al? Not yet. In fact, it provided a much-needed split in the industry between do-it-yourselfers and serious analytics consultants using enterprise tools.

Ad Planner will do the same for online advertising. Small and medium clients and agencies will increase their Internet ad buys due to the comfort of having real data about thousand and thousands of sites. And the big guys will continue using the enterprise solutions.

Should we be worried about Google and its long-term desire to take agencies out of the client>agency>media schema? I think the advertising industry is appropriately fearful. But, Google’s (and to a lesser extent Quantcast’s) new media planning tools will help before they hurt.

Sample Quantcast Excerpt for azfamily.com a site I founded MANY years ago.

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Media Daily News reporting from the Advertising Research Foundation conference in NYC says that Lee Doyle, CEO of Mediaedge:cia (who bill themselves as the world’s first global media planners) believes “low-interest” advertisers aren’t embracing the Web.

Why? Lee says it’s because consumers don’t use the Web to research paper towels or household goods….

Wow. So it would appear that the CEO of a global media buying company believes that people only go online to research considered purchase, and that despite the fact that Internet comprises 20% of media consumption, it’s only value is if soccer mom Google’s for “ultra-absorbent Bounty.”

How about packaged goods companies using behavioral targeting to identify moms and serve them up compelling ads for their brands? How about using Pointroll and other rich media to instant coupon? How about sponsoring podcasts aimed at moms?

Doyle also had the gumption to cite a lack of metrics beyond impressions and clicks as a drag on overall banner ad spending. His quote was “We need better measures of those things, so that we can look across different channels. Metrics need to be developed that more closely or “directly” align with “business results.”

Seriously? In comparison to TV, radio, outdoor and print (where Doyle and his brethren make their dough), banners are extraordinarily measurable. What’s the measurement secret sauce of a paper towel TV commercial? What crystal ball does he use to determine the “business results” of that inherently UNtrackable marketing tactic?Similar Posts That You Might Enjoy

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GroupM (the holding company for all of the WPP media agencies), issued a new report saying that share of spend on digital and interactive media has increased from 8% in 2005 to 14% this year.

They project the total to increase to 16% next year as new digital marketing tactics like mobile and behavioral targeting continue to emerge.

(Ironically, the GroupM site is totally devoid of any search optimization and violates all kinds of Web site best practices).

Companies and agencies often ask what percentage of their media budget should be devoted to digital marketing tactics. Frankly, the real answer is “as much as you can spend while proving measurable ROI.”

But, based on these findings, I’d estimate somewhere in the 10-15% range if pressed for a figure. In many cases, interactive spend for local companies is often a bit less than average because of the reduced amount of search marketing volume available. However, given the effectiveness of local search as a tactic, in some instances it comprises a very large portion of the company’s overall budget.

Even for agencies themselves, I’m seeing a new devotion to online promotion, with some firms generating the vast majority of their inbound new business leads from effective search optimization and highly targeted banner ads.

Take a look at the clients for whom your agency handles digital marketing. How many of them are spending 15%+ on interactive tactics?Similar Posts That You Might Enjoy

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Q.

I’m interested in pay per click search engine advertising, but I don’t know how much it will cost. Help!

A.

Projecting costs for pay per click can be as mysterious as Britney Spears’ career plan.

Like success in Iraq, multiple factors determine your PPC budget and success level, and they are inter-related.

The single most critical decision in a PPC program is term selection. Only bid on terms that are extremely relevant to your business. This is not a time to be optimistic along the lines of “Well we only provide service in Phoenix, but we’d like to provide service in Indiana someday, so let’s just bid on all the Indiana search terms.” That will blow through your budget faster than Kobayashi eating hot dogs.

Use a program like Word Tracker or Google’s term selection tool to find search terms that are right for you. By way of example, let’s assume you want to focus on 100 search terms, with combined daily search volume of 400 per day. That works out to approximately 12,000 potential searches per month.

Multiple studies – including our own research – have shown that on average one-third of searchers will click on paid ads, with the balance clicking on natural search results. Remember that the paid ads are typically at the top of the page and in the right hand column, often with some sort of blue or gray background color behind them.

Using this data point, we can assume that the universe of potential PPC clicks for your search term is 3,960 per month (12,000 x 33%). Assuming you are going to launch your campaign on Google and Yahoo (with possible expansion later), you will reach 80% of all searchers, so your official click universe is 3168 per month (3960 x 80%).

But what percentage of those 3168 searchers will click on your ad? Your click rate will depend on how aggressive you bid and how well-written your ads are. It’s not easy to craft a great ad in 80 characters, and very small changes can have big impacts on your results. Use Google and Yahoo’s tools to test many versions of your ad.

Recognize that your results are intrinsically linked, to some degree, to the behavior of your competition. You’ll often find competitors “bidding blind” in search engine advertising, paying whatever it takes to stay number one in the results. This is like getting pulled over because the guy next to you is speeding, and it can be extremely frustrating to watch them spiral up the per click prices for all bidders.

In general, we use a rate of 9% to project the percentage of paid clicks a solid ad will attract if it typically falls in the top 3 bid positions. This then gives you approximately 285 clicks per month on your ad (3168 x 9%). Remember, this is 9% of the people that click on paid listings.

Yahoo! provides a seemingly accurate bid price range tool. Use this tool to determine average top bid prices for your search terms. Add 15% to account for Google’s higher average click fees. If the average price for top 3 bid positions for your search terms is $2, use $2.30 as your average. Multiply that by your estimated clicks (285) and Shazam! you have your estimated monthly expenditure for PPC: $655 (285 x $2.30).

If you poured yourself a scotch three paragraphs ago, and if in your opinion, this formula is far too similar to watching sausage being made, I’ve found an easy resource for you to determine your estimated budget. Just use this Mighty Interactive PPC Calculator. Plug in some numbers, and it will do the numerical heavy lifting for you automatically.

For you cynics, I’m frequently asked about competitors nefariously clicking on ads late into the evening, costing you thousands in fake clicks. While “click fraud” does occur online, the search engines log every click by time and computer (IP) address, and have sophisticated algorithms that diagnose rampant abuse. Can you cost your hated rival a few dollars here and there by clicking on their ad? Yes, and they can do the same to you. Unfortunately, that’s part of the search engine game, but the chances any serious budgetary damage can be inflicted is pretty slim.Similar Posts That You Might Enjoy

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$15.9 billion. That’s what eMarketer projected was spent on U.S. online advertising in 2006. For a dose of perspective, that’s more than was spent on local radio ads, cable TV ads, billboards, and B-to-B Magazines like Solid Waste & Recycling.  In truth, online advertising trails only network television, local newspapers, and consumer magazines in total ad dollars spent.

What this means is that unless you run a Mennonite supply company, if you didn’t advertise online last year, chances are good that you’ll do so in 2007.

When you get into the online ad game, it’s important to realize that while it can work wonders, it’s not immune to the laws of marketing. Online ad campaigns can and do suck, and when they do it’s typically because one of the three critical mistakes was made. Let’s see if we can avoid that tragic scenario.

No Call to Action

People don’t want to click on your ad. The fact is, if the viewer wanted to be on your Web site, she would be there already. Instead, she is on some other Web site, and your challenge as a marketer is to get her to stop what she has chosen to do, and pay attention to your message.

And attention isn’t usually enough. What you really want is for the viewer to actually click on your ad. The critical mistake is to not explain the specific benefit of clicking. To get a person to instantly shift from their planned behavior to an unplanned behavior solely through the power of suggestion is not easy. Before you sell your services, you first have to sell the click.

Make sure all of your online ads have a distinct and concise call to action, and wherever possible keep the call to action present throughout the ad (don’t just show it on the fourth panel of the animation). Show your proposed ads to friends. Ask them to describe the benefit of clicking in five words or less. If they can’t, get back to work on your call to action.

No Post-Click Plan

Once someone clicks on your ad, you’ve won the battle but not the war. Don’t hang the “Mission Accomplished” banner in your office just yet. Far too many online advertisers still send clickers straight to the home page or some other generic place.

For maximum effect, send clickers to a special landing page or microsite that ties directly to the banner, with the same look and feel, messaging and offers. Remember that online advertising is a series of steps with the banner being first, and the click being second. Don’t overlook the third step which is driving clickers to act through a clear and persuasive post-click experience.

To this end, you should also distinctly measure post-click behavior using a Web analytics package. Since a click by itself doesn’t make you any money, make sure you’re measuring how many of those clicks translate into sales, leads, calls, etc.

No Creative Testing

One of the reasons for the explosive growth of online advertising is its easy measurability. It’s simple to determine how frequently a banner ad is clicked upon (the click-through rate) and to not use that critical information to improve your results is like signing a top free agent running back but keeping the same bad offensive line…

Like Britney Spears offspring, once you have one banner ad, it’s comparatively easy to create another. Consequently, when making online ads don’t make just one. Build three to five ads each with variations of graphics, offer, call to action and other factors.

Run all of your ads in rotation and carefully monitor the results. If one or more ads disproportionately yields more clicks than the others, ask your ad sales representative to allocate the impressions solely to the best performers. Even small changes can have a meaningful impact on click-through rate.

Also, if time and budget permits, test “rich media” versions of your ads. “Rich media” includes all the new-fangled ad formats like Flash, Pointroll, video ads and audio ads. Basically, any online ads like feature video, audio, complex animation, or fly across your screen are categorized as rich media.

While these ads can be a bit bothersome, one man’s annoying is another man’s successful ad campaign. Rich media ads are becoming more and more numerous because they work. A recent campaign for one of our clients tested traditional animated online ads against rich media versions, with the rich media ads delivering approximately 400% more clicks.

These days, the Internet is a lot like Hollywood in its mentality of conformity. I’ve taken my kids to at least a dozen movies about some form of animated creature in the past year. It’ll be “The Adventures of Lichen” soon if execs just keep playing follow the leader.

Go against the grain and try a rich media campaign. See www.pointroll.com for a good library of samples.

Riding the wave of Internet advertising growth is exhilarating, and it’s rewarding to see clients have success with this emerging medium. But the worst fate that could befall the industry is for first-time online advertisers to fail and lose faith in this unique and effective marketing tactic.Similar Posts That You Might Enjoy

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Rerouting inefficient markets is what the Internet does best. Wherever lack of information transparency requires regular folks to use specialists to make a transaction, the Internet will discredit and then cripple that industry. The former travel agents and stockbrokers serving your Bloomin’ Onion at Outback can attest to the Net’s unique ability to eliminate the middleman.

The next cabal of intermediaries wearing a bullseye sport coat is the buyers and sellers of advertising space and time. Today, it’s not that different from getting a rug in Istanbul or a necklace on the beaches of Rocky Point. The purchase of media shares a bunk with car sales in the shrinking barracks of business transactions where haggling is the norm.

Do print, broadcast and billboard companies have price lists? Sure, but they’re adhered to with Pitt-esque fidelity, and rarely published. Ad deals are negotiated and finalized in a tango of proposals and counter-proposals, faux outrage and coy denial. It requires two highly compensated people to seal even a modestly sophisticated advertising agreement.

It’s an inefficient marketplace that reeks of vulnerability and opportunity.

Internet advertising will tally $16 billion in the U.S. this year, and a preponderance of that lucre will go to the high flying gorillas of the industry: Google, Yahoo!, MSN – a post-modern Big Three Networks. But, the stock market-fueled requirement to continue growing like Barry Bonds necessitates the location of other major revenue streams, and offline advertising could prove to be the HGH of the online media giants.

“Our goal with adCenter is to advertise into any medium. This marketplace is begging for some efficiency in the media buying process.”
- Joanne Bradford, Chief Media Revenue Officer, Microsoft
June, 2006

The Big Three already have hundreds of thousands of customers buying ads every day, utilizing their Web-based systems for purchasing those cute little text ads that come up on top and on the right hand side of search engine results. The plan is to modify and extend that platform to enable advertisers to purchase offline advertising directly. No phone calls, no meetings over sushi, no negotiation. Whoever will pay the most for the ad gets the space, and anyone with a computer can play ball.

Taking a page from the eBay playbook (note Yahoo!’s new joint venture with the auctions king), the money isn’t necessarily in owning the ad space to be sold, it’s in taking a small piece of each transaction in exchange for facilitating the deal.

Newspaper classifieds advertising alone generated $3.8 billion in the first quarter of this year, according to the Newspaper Association of America. Just a two percent commission on that component of the offline media universe totals $76 million in commissions per quarter, and requires approximately zero overhead once the system is running.

Despite their chest thumping public statements, Microsoft is as usual already running behind in this new race to automated media buying dominance. Google purchased DMarc, a radio advertising company last January, and launched a pilot program in February that enabled Google advertisers to buy space in major magazines including Car and Driver, PC World, and Entrepreneur using a modified auction model.

By its own admission, the test was not particularly successful, and underscores why this transformation will not happen immediately. Except at small companies – not likely to be advertising in Car and Driver – different people in a corporate marketing department or ad agency are responsible for buying online and offline ads. The search marketing guy that understands Google inside and out doesn’t know the magazine market, and an auction model has all the familiarity of Mongolian goat blood liqueur to most offline media buyers.

Google will keep trying until they get it right. There’s too much money at stake to not take a long-term approach to this nascent business.

Says Tim Armstrong, Google’s Vice President of advertising sales,

“We’ve talked about the expansion into video ads, and eventually into television. My guess is for each of these major new media initiatives, we’ll have a few cycles of trying to find the right combination of advertiser product, targeting product, and business model that really takes off.”

Progress is already being made, as Google unveiled a video ad test in late May, and Emmis Radio, the country’s ninth largest station group (and owners of KKFR-FM in Phoenix) announced that they will install Google’s dMarc system in all its stations.

How long will it be before it’s common to purchase offline ads directly via a Web site? One year? Five years? It’s too early to predict when the tipping point will occur, but if you buy or sell ads for a living, now would be a good time to get friendly with your laptop.Similar Posts That You Might Enjoy

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Malcolm Gladwell is an author, pundit, and Carrot Top doppelganger who doles out bite-sized business wisdom like popcorn chicken. He posits in The Tipping Point that when enough of the right people start to perpetuate a trend, it can catch fire and grow geometrically almost overnight. 2006 will be the year that local online advertising experiences this tipping point phenomenon.

On a national level, online advertising is rebounding like Dennis Rodman, with overall ad spending up to a projected $11.2 billion in 2005, headed toward $18.5 billion in 2008, according to eMarketer. Huge traditional advertisers like Ford, McDonald’s, and Proctor & Gamble are moving marketing dollars toward online initiatives.

But locally, despite impressive year over year growth rates (46% increase in 2005 predicts Borrell Associates), online advertising remains somewhat of a novelty. Not the “Potato Chip That Looks Like the Virgin Mary” novelty it was just a few years ago, but there are still dozens of major Arizona companies that advertise offline, but have yet to dive into the online ad baptismal.

In fact, according to a comprehensive Borrell Associates survey, the Phoenix metropolitan area ranks just 29th in local online ad spending, but is the 15th largest media market based on Arbitron data. This means of course, that when it comes to local online advertising, Phoenix is getting beaten out by the likes of Albany (12th), Tampa (17th), and Hartford (26th).  Tucson is the number sixty one media market, but is just 93rd in local online ad spend, falling behind Waco – ouch.

Hartfordians better watch their backs, however, because this is the year that Arizona gets serious about online advertising.

The word is out about Arizona. Service businesses, franchise eateries, and new companies of every shape and description are moving in to grab their piece of the massive growth in our state. Old line Arizona companies will increasingly find themselves under siege by hungry, clever competitors whose tactics go well beyond creating name recognition through hollow, repetitive broadcast ads.

The comparatively low cost of Internet advertising, combined with the ability to precisely target prospective customers and measure results definitively will make it the marketing weapon of choice in competitive categories.

Many Arizona companies – new and old – are mid-sized. Most don’t have large, centralized marketing teams, relying instead on a mix of in-house personnel and outsourced expertise. Consequently, the advertising decisions of major local advertisers are significantly influenced by the opinions of their ad agencies.

In the past two years, most ad agencies in the state have added online capabilities or at least a partnership with an interactive firm. Historically, most of those capabilities have centered around Web site design – the showiest part of the business – but several sources in the online ad business say that recently major agencies have emitted sincere-sounding oohs and aahs about serious online ad programs for their clients.

Also fueling the local online ad boom in 2006 is the proliferation of legitimate sites on which to advertise. The Arizona Republic’s azcentral.com has long been the dominant local Web site on which to advertise – with some competition from Channel 3’s longstanding azfamily.com. Now, however, broadcasters have figured out what Channel 3 learned long ago – a good Web site generates revenue. Note the revamped or expanded sites from KNXV (abc15.com), KSAZ (fox10.com), KPHO (kpho.com), KASW (quick6.com), the various Clear Channel Radio sites, and KTAR (ktar.com).

All offer good online ad opportunities on sites that were once collectively a waste of good pixels. Plus, each of these sites have charged their sales teams with pushing online ads, and many have tied part of sales reps’ compensation to online sales success.

This combination of increased business competition, Internet savvy agencies, improved local Web sites, and motivated salespeople will combine to create a state-wide culture that finally puts the emphasis on Internet advertising that we’ve lacked for too long.Similar Posts That You Might Enjoy

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