When everyone agrees on the answer, it makes for a convincing argument. Such is the case when a number of leading market researchers and analysts issues their forward looking forecasts on newspaper advertising spending. Sure, the exact numbers don’t match up precisely, but what’s important is the clear directional indication that it continues to show. These traditional media dollars are shifting, mainly online.
This is not all bad news, especially for those newspaper companies that saw this coming and have been diversifying their digital portfolios. Those firms, which there aren’t many of, but whom Gannett would clearly be one, are now positioned to shift these dollars from one hand to the other. Most however will just lose, as they don’t have competitive enough digital assets that advertisers value enough to buy.
The share shift continues, with newspaper ad spending predicted to decline over the next five years.
Within an new eMarketer report that looks at a Myers Publishing forecast on US advertising, the Internet is on pace to be the top media channel for advertising spend by 2011. This is why being in the digital advertising space is the right place to be. However for my friends in TV, if one was to aggregate the various sub-forms such as broadcast, national and local spots and cable, they still win in this rollout view. The only thing everyone on the digital side continues to talk about and yearn for is the shift of dollars to online to happen at a faster pace than currently foretasted below.
There really is a shift in dollars underway and continuing in the coming years between more traditional channels and digital.
Vibrant Media blends the best of both search & display advertising. It allows an advertiser to target the content within a publisher page on a keyword basis and upon a user initiated interaction with the green double-underlined keyword within the content of the page, a graphic display ad appears that allows rich media content to be inserted instantly.
Vibrant & ShopLocal have come together to form a joint partnership that brings the weekly ad to growing in-text advertising marketplace
ShopLocal has officially partnered with Vibrant to take the best of each others offerings to market. This means that the localized promotional content that ShopLocal brings can be distributed on a contextual targeted basis which will drive traffic back into the relevant area of a retailer’s online weekly ad (SmartCircular) site. This hybrid ad format can be bought on an CPC (Cost Per Click) or a CPV (Cost Per View) basis directly through the Vibrant sales channels.
Here is a mocked up sample of what the flash based Vibrant Media ads look like. This ad for example would be triggered by the keyword 'sunglasses'.
Maybe the simplest way to understand what this new partnership and localized in-text ads are is to imagine if a Pointroll PaperBoy rich media display ad had a baby with a Google AdSense paid search ad, their offspring would be a Vibrant Media Localized In-Text ad.
This joint partnership offering is a great blur of search and display ads. If offers:
- Localized content: Since weekly ad content is what is being featured within the Vibrant Media ads, the ad serving needs to be sensitive to the user’s geography so that the right version of the weekly ad content can be displayed
- Dynamic updating: The keywords that are targeted, the ad content and the landing pages are all automatically synced every day to ensure that only live and active weekly ad content is being used to content keyword target and populate the user initiated in-text ads.
- Keyword targeting: Vibrant Media’s system works by going after specific keywords contained within a great network of publisher’s content within a specific geo-location
- Product specific landing pages: The product featured within the ad is connected to the same item within the weekly ad site
- Rich reporting: Able to measure metrics such as the number of users that interacted with the ad and the number of users that clicked thru from the ad to the online weekly ad site
So here are the tidbits that stuck in my mind from ad:tech Chicago 2009 day #2:
Overall Digital Advertising / Marketing
- The total of all non-search digital advertising in 2009 is roughly only $10 billion dollars
- Basic measurement of audience size by services like Nielsen NetRatings have some fundamental flaws. For example, MLB.com reported total monthly page views in July of 2009 of close to 14 billion, while Nielsen NetRatings only reported 900 million. This huge error factor is one of the core reasons that spending online is being held back, as offline channels have trusted and fairly accurate measurement techniques and audience audit companies. One of the challenges is to the fundamental approach that Nielsen takes, which is panel based and not an audit based
- One idea taken from the movie studios that digital content owners should at least consider is the following: A consumer that goes to a movie theater pays for a ticket to see the film. That same consumer has to pay again if they want to, at a later point, watch the same movie at home via a DVD rental. The issue is some publishers that charge are adopting a model that is a pay once for global access across all mediums / content access points. This go directly against the model that the movie studios operate under where consumers must pay each time for each unique content consumption session
- On a successful paid content site such as MLB.com, only 5% of all users that visit this site convert to becoming a paid content subscriber. 95% of users come and only consume the free content on the site. Also mentioned that just because you have great content, it does not mean you will get consumers to pay. You have to have still have a great user experience. Also have to offer a free route (think WSJ here) and show these free users what they are missing out on (and the flip side, for those who do pay you need to show the added value of all the things that they are only able to get)
- Some panel experts where predicting a 13% drop within traditional advertising in 2009, but digital growing at around 10%
- Don Hamblen, the CMO at Sears Roebuck, Co. had these thoughts:
- To measure ROBO impacts, market mix modeling
- Really sees the power of combining both search AND display
- Search is the “new” circular for the purposes of customer acquisition and outreach
- The balance or mix percentage is not clear yet, but there seems to be an underlying agreement that there needs to be some split of advertising dollars across both integrated marketing AND traditional buying space & time (eg ad inventory)
- Technology is accelerating faster then one can keep up with. The goal instead of trying to run this rat race is to elevate above. The analogy given was the classic Wayne Gretzsky where the saying goes, “Don’t skate to where the puck is. Skate to where the puck will be.”
Social Media
- Around 40% – 45% of all internet users use at least one social site
- Twitter users only account for 11% of the overall Internet audience, or roughly 18 million people
- 50% of social users interact with social media on a daily basis
- The total ad dollars spent on social media in 2009 is just about $1 billion, which is just about 5% of the total advertising spend overall
Video
- The internet receives the largest share of time spent of any type of media during the generally agreed upon 8 hours media consumption day , at 29% (TV gets 27% for a reference point)
- Video equates to nearly a third (29%) of all time spent on the internet
- Nearly 2 in 5 broadband users have watched video online in the past 24 hours
- B2B audiences are not typically looking for nor motivated by online video
- Online video remains largely sold via CPM pricing, and is more expensive due to the scarcity and limited nature (when compared to network television)
Widget / Apps / Facebook Connect
- Social applications (sites within sites such as a Fan Page within Facebook) are best for mass reach. Also often times excel at the amount of engagement that these type of deployments can create
- Widgets are great for pushing content out and driving users back to a centralized location
- Facebook connect is best for bringing in bits social content into an existing web site experience
- The Three (3) B’s Of Widgets: Be there. Be relevant. Be useful.
- A ‘fan’ is more valuable than an email. Emails don’t multiple or amplify. Fans do
- A Twitter follower of Facebook fan should be thought about as a social CRM database and not an audience to blast messages to
- Standards are being set across the industry. Facebook is solely driven this. A “fan” is now a standard measure of ROI for social, just like an email address. A fan can be re-marketed to for example, much like an email
- There is NOT however a standard set of value that can be assigned to many of the social interactions. For example, what is one complete video view worth? $0.25? $1.00? One suggestion was to try and relate these type of social metrics back to the easily understandable costs of either Google CPC rates or display CPMs
- Suggestions to at least always share with client, other newer metrics that show a complete cost overview as it relates to the core KPI goal of the campaign / medium: Cost Per View, Cost Per Upload, Cost Per Install, Cost Per User
- One big issue is when a social campaign ends. What to do with the widget now? How to continue engaging your new Facebook fans?
- Brands should start thinking of their content as a web service that delivers that content across any platform or sites. This delivery engine of a brands content / messaging then reduces the risk of any one platform failing
- Stand alone gaming web sites are re-surging among the younger crowd
- App click thrus are higher than ads within Facebook. Example: 0.2% – 0.3% average click thru rates on RockYou apps which are higher than Facebook ads
Here are my collection of thoughts, musings and insights that various speakers and panelist shared on day one of ad:tech Chicago 2009 happening now at Navy Pier:
Overall Digital Advertising / Marketing
- Marketing = understand and meeting customer requirements
- A client asking for a Facebook strategy is the same as a client in the past asking for a NBC TV strategy. Its just one channel out of many within the same overall medium
- If you want to understand someones behavior, try to understand their incentives. Good line from Steven Levitt
- “The future doesn’t fit in past containers” – unless we fix organizational structures, we won’t be successful
- Retailers and retail media (think Walmart.com display ads with 50MM uniques per month) is exploding as a sub-industry
- Advertising spend in 2009: The two big dogs – Search 60% and 31% Display – take over 90% of all dollars
- Crowd survey – What areas of digital mrkt will be fastest growing in next 12 months:? Social 56% Video 12% Analytics 10% Search 9% Behavioral 8% & other 5%
- Forcasted CAGR by Forrester thru 2014: Social 34%, Mobile 27%, Display 17%, Search 15% & Email 11%. Interesting that display beat search, but I guess search is more mature
- Time.com GM: “We have NOT sold a standard media buy all year – they always now include custom programs, integrations, etc”. This seems very true from all of the custom publisher integration that ShopLocal has been involved with this year
Ad Networks
- There are nearly 400 ad networks worldwide. Ad networks have grown substantial in number over the last few years and the growth rate will continue as more specialty or vertical networks continue to sprout up
- Ad networks offer a quality audience, NOT quality inventory
- Ad networks in the last 5-7 years have driven most of the innovation in ad serving technologies, as publishers (portals excluded) have invested little to nothing in this regard. Ad networks for example were the ones that commercialized behavioral targeting (BT)
- Ad inventory (supply) still far exceeds advertiser need (demand)
- 24 / 7 Real Media (one of the larger networks of 1,000 top publisher sites) claims that they only want a publisher to allot somewhere between 10% – 15% of their unsold inventory to them. This was somewhat shocking as I always assumed that an ad network would be greedy and want 100% of unsold inventory. 24 / 7 Real Media’s justification is that the yield increase that they can provide erodes after this initial 10% – 15% of unsold inventory. Nice to see a company that is honest about what it can and cannot help with
- Ad networks that sell inventory on a CPA basis (cost per action or eCommerce transaction) are really giving away a lot of real value that is imparted when a graphical display ad is shown to a user that does not choose to take a CPA generating action. This inherent branding that is impressed upon users does have value and publishers and ad networks alike should NOT overlook and give this away
Agencies
- Nearly 80% of all advertising created globally comes from one of four agency holding companies
- Many agencies are losing or already have lost out on being a part of client’s “social media” strategy and/or execution. Examples abound of clients taking in-house the social aspects to their business such as Jet Blue, UPS, Toyota and Kohl’s
- For the most part, agencies have not been driving real innovation which equates to internal tools, technology platforms or other investment driven proprietary solutions. However the big 4 holding companies are starting to change this with some decent size acquisitions and/or capital expenditures
Display Advertising
- Dave Zinman, VP and GM of Display Advertising for Yahoo! made a few great points which included:
- Noticeable absences of online created brands, and noted what a missed opportunity this is for brand advertisers
- Display ads will become a whole lot more intelligent in the next 1-2 years as publisher BT insights about consumers are married up with dynamic or Smart Ad type ad serving technology works, display ads will basically become machine driven test and optimization (eg multi-variant) and used a great retail circular example to explain
- Two growth areas of display will be in performance based campaigns and with a large amount of offline media dollars coming online(cited for example that US retailers alone spend $5.7 billion dollars each year on newspaper advertising)
- Average CPM for all types of display advertising is right at $2.46 CPM
- Cited a DynamicLogix study that again reported that the MPU / Cube sized ad units that are in-line with page content are the most effective display ad format overall
Mobile
- A rough average CPM for mobile display advertising is around $10 – $20 CPM
- There are about 6 million iPhones in the US currently and counting
- There are roughly 62,000 iPhone applications live within the iTunes store and counting
- The average use time of an iPhone application declines by a third per day during the first month the app is installed on a user’s iPhone. This decline stabilizes at around 5 minutes of use per app per month
- Greystripe is an interesting play that is trying to build out a rich media ad network that is centered around being able to insert ads in over 1,000 unique iPhone applications. Typically these ads appear either as “pre-roll” (ads opens as application is loaded up) or “interstitial” (eg ad opens up in the middle of an app experience). Most of their network of iPhone apps are games at this point. Greystripe also has some sort of technology that converts a standard browse based Flash ad to a iPhone compatible format as well as the ability to jun ads on JAVA powered mobile devices
- For a real / serious mobile 6-8 week mobile campaign, roughly a spend of $250K was cited as what it would take to measure impactful results. Any well formed mobile campaign MUST include a SMS component AND a mobile optimized / WAP web site as these are the two ways that the masses are still using their mobile devices. Remember SmartPhones only make up roughly 11% of all mobile phones in circulation. The rest are Feature phones which are the free ones (think Motorola Razr) that are given away to consumers with a long term contract
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