Connected Advertising Blog

There was a time, 15 – 20 years ago or more, when media plans consisted of distinct media, each with a life of its own. The only connection they had was their relative impact on TRPs, reach and frequency. If there was one media that appeared to be too expensive, you simple asked where you could make up the TRPs. Perhaps this is a bit of a simplification, but not much. The challenge in today’s environment is that, too often, digital media is viewed through a very similar lens.

When planning digital media, there is a disconnect between the channels. Search budgets are allocated irrespective of display, email is treated independent of social (if there is a social component) and offline activities are seldom weighed when planning online efforts. What the traditional planning process misses is the inherent integration of all these aspects, whether it is intended and managed, or not. It goes beyond leveraging synergies. By ‘disconnecting’ these channels, you run the real risk of undermining their inherent value.

Not too long ago, there was an argument that leveraging the synergies of the digital channels was the sole purview of the national advertiser. With the advances in our understanding of consumers, and the capabilities of technology, this is no longer the case. Consumers are fine-tuning their own experiences on the web and mobile to target localized content. Between geo targeted ad delivery on the internet, re-marketing technology, and GPS enabled mobile devises, local businesses have as much at stake, and opportunity, with integration as do the national advertisers; perhaps more. With each channel, such as display, social or mobile, we can see the connections between channels.

The fact is, people don’t often click on display ads. But, it would be a mistake to assume that this means display is not effective. People who are exposed to display ads, will search for the company or product in the search engines, or type the company website into their browser. In fact, according to a ComScore study there is a 45.7% lift in site visits as a result of exposure to display ads over a 4 week period. If you are not managing your search campaign in synergy with display, you’ll not only miss opportunities, but you’ll also make false attributions.  Your search campaign needs to highlight keywords, ad copy and landing pages that are directly related to the display ads. One of the most dangerous pitfalls in online advertising is creating experiences that diverge from consumer expectations. If your display ads set up expectations that are not experienced through your search, you’ll lose the customer. Unfortunately, when not integrating the two, you’re likely to assume the search campaign stumbled; not seeing the connection to the display program that initiated the search in the first place. By planning from an integrated approach, you’ll leverage the synergies and minimize the mistakes.

Social networks are growing and many consumers see this as the primary mode of communicating online. According to Nielsen, the average user of social media has increased their time in the space by 143%. In total, Americans are spending 210% more time on social networks than a year ago. Email, offline, and even online display advertising can all leverage the power of social media by providing customers with an easy way to become a fan or a follower. Of course, you’ll need to give people a reason. For small businesses, using the social networks can drive customers to the store, running time sensitive offers; Inventory can be move with very targeted messaging; create unique content messaging to niche areas of your customer base. One click from an email, or a display ad, or visit driven by in-store POS can be the start of long relationship with customers. But, it can only happen if you seen the connections between the different media.

Every year it seems like we have more reasons to believe we live in a world of change. Over 2009 and moving quickly into 2010, mobile has exerted itself as a true medium for non-phone two way digital communication. Google is aggressively pushing forward with integrating online and mobile experiences so users can research at their desktop and have the same information available on their mobile. While display advertising is still nascent, location based searches are growing strong. So, you have to managed your location information online. If you don’t, users can easily receive old or even entirely wrong information about your business. Understanding how your address and phone number are managed online is key to developing successful mobile experiences – the two are very connected. Search marketing has also evolved to present click-to-call phone numbers as well as URL. Facebook and twitter have mobile services that let people take the social network with them wherever they are. On the mobile platform, we are seeing the convergence of location information, search, social and display advertising. If you don’t manage the integration of your digital advertising, consumers could very easily have 3, 4 or even more very different experiences with your business, all on the same 3 inch screen.

Integration, and targeted advertising, are available to businesses of every size. I’ve only highlighted a few examples of the inter-connectedness of digital advertising. All are within the control of small and medium size businesses. Whether you take the reins directly, or have an agency handle the heavy lifting for you, make 2010 the year you decide to integrate your digital marketing efforts.

Showing the continuing the challenge of display advertising that I wrote about a few months ago, ComScore, along with Starcom, release another study last month. Back then, about 16% of the users made up 80% of the clicks; now less than 10% do. 84% don’t click at all.

I find this trend interesting in light of a newly released study,”Americans Reject Tailored Advertising and Three Activities that Enable It” from the University of Pennsylvania – Annenberg School for Communication, in which 66% of respondents did NOT want ads that were specifically targeted to their interests.

There is an obvious challenge here. Users don’t like our display ad messages, and are not comfortable with the technology that can help us make them better. All is not entirely lost, as a significant portion are influenced by ads, as they are followed up by searches or direct-to-site navigation. But, much of the technology that lets us see that, is the very technology that consumers would rather we not use.

ComScore and iProspect studies on search and display ad relationships.

Key take-aways:
- Though it depends on the industry, there is potentially an additional activity of 60% versus the direct clicks (31% click, 21% say they type in the URL – iProspect).
- Approximately 1/3 of users have clicked on a display ad in the last 30 days(ComScore) to 6 months (iProspect)
- Conversely, 2/3 of users do not click on any display ads
- About 16% of users make up 80% of the clicks from display ads (ComScore)
- CTRs are in general decline, at about 0.1% (ComScore)
- Display ad value is quantifiable beyond the CTR based on search and direct URL entry following ad exposure.

Display ad costs should be measured against the incremental value based on KPI lift factors. On average display exposure increases site visits from 4.5% (control group not exposed to display ads) up to 6.6% (test users exposed to display ads). In other words, the incremental lift is 2.1 percentage points. (ComScore). Views and repeat visit tracking are important parts of media metrics. There is no way to properly assign value with out them.

Both studies are worth reading.
ComScore: How Online Avertising Works: Wither the Click?
iProspect: Search Engine Marketing and Online Display Advertising Integration Study

Narrative:
iProspect released “Search Engine Marketing and Online Display Advertising Integration Study” this month. Though it is very thought provoking, it needs to be interpreted from the right perspective. Primarily, this is not a study about ads, it is a study about users. This distinction is important because if the presentation the numbers is not interpreted properly, it can lead to some erroneous conclusions.

To illustrate my point:

“The key message from this study is that online display advertising is far from dead — its 31% direct response rate confirms that,” said Robert Murray, CEO, iProspect.

When we look at response rates, we look at how many times our ads are clicked versus how many times they are shown, or the CTR. What Robert Murray is referring to is that 31% of the people surveyed said that the had clicked on a display ad at some point over the past 6 months.

As I looked at the iProspect study, I recalled the ComScore study released in December 2008. It reviewed integration from an ad perspective and the user perspective rather than just the user perspective alone. I think this is important for several reasons:

1) Cost basis: most display advertising is still sold on a CPM. The value of a “user” has to be relative to the cost of the communication.
2) Industry: behavior varies greatly by industry.
3) Exposure: are users cognizant of how many exposures they receive before they react. This goes to cost basis.

When we look at each part of these two studies, we see some commonalities:

1) Both studies found that roughly 1/3 of users clicked on an add (ComScore in the last month, iProspect in the last 6 months).
2) There are strong synergies between search and display advertising. ComScore showed a 38% lift in advertiser’s branded search after display ad exposure, while the iProspect study simply showed that, of those who said they saw an ad, the response of 27% was to conduct a search on the brand, product or category.

The divergence
As a person with roots in media, on and off-line, every time someone suggests buying more ads, or bigger ads, I ask several questions. Key among them is: What is the incremental value of spending the money?

This is where the ComScore study is more helpful. It measures the lift in KPIs, such as site visits, competitive searches, TM / Brand searches and incremental sales. Contrast this with the iProspect study, which is survey based, and depends on users recollections over a six month period, with no control group against which to compare the test subjects. If you want to know the real value of additional advertising, it has to be measured not in absolute terms, but relative to the outcome of not increasing the advertising. In other words, what was the incremental affect received from spending more money.

One of the interesting findings on the ComScore study is that there is a 45.7% lift in site visits over a 4 week period as a result of exposure to display ads . Of those not exposed to the advertising, 4.5% eventually reach the test advertiser’s site, while 6.6% of those who were exposed reached the site, either by clicking, using search or navigating to the site directly. Another way to read this is that 68% of the people who reached the display advertisers’ sites would have done so with or with out the advertising. So while the total visit was 6.6% of the users who saw display ads, these ads contributed 2.1% of the users’ visits.

What is important is that the results vary greatly by industry. From a low of 21% lift in the travel industry to a high of 114% in the auto (though with a very low base % of visits to start).

On the flip side, there is also an increase in competitors’ sites visits following exposures to display ads. Over a 4 week period, the lift is 23.4% (13.5% vs 16.6% of users).

In essence, what display advertising does is spark shopping activity in general.

In addition to the number of people who eventually reach the advertisers’ sites, the way they get there is important; it directly affects the core measurement of CTR. Every one I speak with about the impact of display advertising acknowledges that the click is only one way to measure the influence of display advertising, but they are usually lost when trying to measure non-click activity. The iProspect study shines a light on the other behaviors as reported by users. 21% said they typed in the advertiser’s URL, while 27% did a search on the product, brand or company. Combining this insight with the lift that the ComScore study shows, and you can get some idea of a factorization you can apply to the CTR to estimate net visits resulting from display advertising. Though it depends on the industry, there is potentially an additional 60% versus the direct clicks (31% click, 21% say they type in the URL).

All this amounts to one fact: Direct measurements are ineffective. The only way to assess the real value of advertising is with robust tracking and analytics.

As we look at the brand, particularly online, we have to acknowledge that there are places where we are building brands, and places where we are mostly leveraging them. What makes this difficult is that there is no clear and absolute delineation. In the ‘old’ world, television was seen as the place to build brands. Newspapers or yellow pages leveraged them (with some building going on)… directing people to where to find ‘it’ and make the purchase (over simplification, but you get the idea). Today, even television is not completely dedicated to brand building, but has elements of leveraging. How do we know which we should be doing?

Building a brand is all the stuff we do before the consumer is ready to buy. Leveraging the brand is what we do when the consumer is ready to make the purchase; it is when we pull together the ‘feeling’ and equity we have created, then relate this to the consumer and their immediate need. We leverage the Brand as we sell the product or service. Which one we are doing at any point in time is less about us, and all about the consumer; at least it should be.

What brings me to this point is the perspective that the “brand” keywords are upper funnel and need to be controlled by the parent company, presenting the brand’s message. On the surface, this rationale may appear solid. However, this is the web. Old perceptions of how the brand is used by the consumer no longer apply. When someone types in “Honda”, they are as likely looking for a place to buy a Honda CR-V as they are trying to figure out what the “Honda” brand stands for and what types of cars Honda has. Brand messaging control in search is about the company. Understanding the intent of the search is about the consumer.

While this conversation regularly comes up in search, the same discussion needs to happen around display. Geo-targeting, behavioral targeting and other user profiling capabilities allow us to learn about consumer intent. As they visit sites, they may indicate that it is no longer time to tell them about Honda’s great quality, but instead focus on the great gas mileage of the Civic, or even the service and quality of a specific dealer. We have to be more open to the intent in order to provide the consumer with the right information.

In reality, everything we do either builds or diminishes the brand. We know that the web changes the way we interact with the consumers, but brands need to understand that it also means we have to be prepared for a much wider range of messaging than just the brand’s highlights. It is very likely that, when someone uses a branded keyword term, the best service a brand can provide is to step back and let a local dealer lead the conversation. If this is the case, but the brand insists on leading with a very upper funnel message, instead of leveraging what they have built, they end up diminishing it and frustrating the consumer.

In the early 90′s, one of the clients I had was an auto after-market repair chain that was a mix of corporate owned and franchise locations. The corporate client opened a new store not too far from a franchisee. The franchisee was up in arms. He shouted that the corporate location was stealing his customers, and as proof he showed a decreasing sales trend vs the prior year. The client asked us to run some numbers. Since we were ‘third’ party and both had business with us, the analysis would be accepted by both.

Well, to combat the corporate location, the franchisee began a series of promotions. x% off brake jobs, every x oil change free, free labor on exhaust installation, etc. The promotions worked really well… at lowering his average sale. It turns out, he was just running the promotions in store. There was no out-bound advertising to draw people in (or very little actually). So, while the corporate location did virtually nothing to decrease his customer base, his promotion-focused ‘solution’ did a lot to decrease the value of that base.

So, this is the lens through which I read the clickz article, “Promotions Could Overtake Display and Search Says Report” According to the study, search and display will peak, then decline while promotions will overtake them. The study was done by Borrell and Associates ( CEO Gordon Borrell) According to the study, display advertising is flat at about $12.6B and will decline by 1/2 over the next four years. “What’s driving it is an overall dissatisfaction or nagging feeling on the part of advertisers that their advertising isn’t working, or that they’re overspending on it,” said Borrell. “With the Internet, they can go straight to consumers. If they’re having a sale, they can put it up on their Web site and consumers will come to them, and if their Web site is good enough, consumers will keep coming back.”

“With the Internet, they can go straight to the consumers.”  I am not sure how. Decrease the display advertising, decrease the search
advertising, and anti spam laws are terrifying companies. How exactly do they go straight to the consumers with the promotions? The answer would appear to be, ” put it up on their Web site and the consumers will come to them..”. So, they are not attracting as many new customers (if any at all), and for any  customer that would come to the site anyway, they will give them a discount – promotion.

Now, contrast Gordon Borrell’s perspective with that of Jon Brancheau,(15 minute video) from GM.  GM’s director of media operations, Jon Brancheau, reveals the truth about the company’s digital budget allocations in a frank chat from the 2008 iMedia Driving Interactive Summit. He is bullish on the digital space.  Far from seeing digital as not working, this is a place to push the boundaries.

I cannot see a 50% decline in display advertising. As for it being flat the past 2 years, there has been an inventory influx with social media over that time. This has been high volume, low CPM inventory. Contrary to a retraction, as behavioral targeting improves and the niche value of the individual areas of inventory are identified, I believe this will increase. These low value segments will fine their place in the advertising ecosystem and help it grow.

I am not sure that Gordan Borrell believes in the ‘build-it-and-they-will-come’ myth that was debunked years ago. But the general sense of the article would lead one to believe that this is nearly so.

If we believe the advertising is not working, then we should fix it before we start leaving money on the table with unadvertised promotions. There really is no reason for any online advertiser to wonder if their efforts are working. We can track minutia. If we are unsure of performance, it is not a lacking of the media, but a lacking of our imaginations. There are many ways to tag metrics to our advertising. And it will probably cost less than running unadvertised promotions.

I know this is old news. I’ve said it, many others have said it also. Search and display advertising work together. Search is more than just directional. It is also brand… myopically the purview of display. But it is more than just having a search campaign, and a display campaign. It is important to keep these two coordinated to ensure optimum results.

Recently, two studies were released that lends credence to the interaction of search with the brand(Enqurio), and search and display (Yahoo! / ComScore) in a synergistic lift in results. First, the Yahoo!/ ComScore study on display and search together.

What I find interesting in this study is the disparity between online metrics (lift in pages views) and off-line metrics, lift in sales ($ per purchase or incremental sales).

Display and search collectively did not demonstrate synergistic impact on page views. A 46% lift from search and 37% lift in display, collectively a 68% lift. There is a redundancy in the lift. In other words, some of the page views you received would have come with either search or display alone. Unfortunately, most online marketing analysis stops at this level.

Now take a look at incremental in-store sales; whether measure in $ / purchase, or total dollars spent, there is a synergistic lift. In other words, a lift beyond simply the lift percentage of the two ad types summed. In-store total dollars lift was 43% for search and 15% percent for display when run independently. If these two were simply complementary, we would expect a total dollars spent lift of 58% when run together, (adding the two together). If they were only partially complimentary (some redundancy, as in page views), then we would expect something less than 58%.

But, that is not what happens. In the case of search + display, 43% + 15% = a 90% lift in incremental in-store dollars. This is a classic case of the value of the whole being greater than the sum of it’s parts. The other off-line metrics show similar, though not as strong, synergy between the two.

So, there are two conclusions here:
1)    Where ever possible, measure every effort / campaign all the way to the sale. Stopping short (like page views) does not tell the real story. In this case it short-changed the program, in others, it may exaggerate it’s impact. Get to the sale.
2)    As I have said, search and display work together. SEMs need to learn, understand and partner with display advertising / marketers to optimize the programs.

To provide some sense of why these two things may work together, I turned to the second study. It was done by Enqurio this past July. Simply put, brands appearing in organic and paid listings earned a considerable lift in Brand awareness. The results for branded and non branded terms directionally were the same. I’ll just briefly hit on the non-branded.

“Fuel Efficient Cars” top organic and top paid listing combined helped Honda achieve a 16% lift in un-aided brand awareness (Roughly 50% up to 66%). One would think that Honda should be at the top of everyone’s list in this category, yet they had exceptional improvement with organic and paid top spots in search. Now, before you go and get discouraged thinking you have to get top in both, either one (paid or organic) on it’s own demonstrated very good lift, with paid doing marginally better.

I always say bring it to the sale, or as close as you can. Brand recognition is great, but almost meaningless if it does not encourage purchase. The study showed an 8% lift in intent to purchase with top spot in both organic and paid. This study had to stop at intent, but it is closer, and demonstrates the benefit of search on the brand and sales.

Both studies show that search marketers need to expand. Drop the blinders, embrace search not only for its direct marketing prowess, but also it’s brand building ability. Recognize, learn and leverage the synergy between search and display. Our world has changed, you need to stay ahead of the curve to maintain the value to your company or clients.

I truly appreciate the road AOL and others are trying to travel. As I wrote before, search never has been a stand alone, and we are quickly approaching the time when folks will no longer be able to pretend otherwise. As AOL and others seek to enhance their properties through technological integrations such as Tacoda’s BT network, or Revenue Sciences remarketing abilities, they have an even bigger hurdle to meet: Getting their account service teams well versed in the different verticals, and more importantly, how they work together (I dislike even using the term ‘vertical’… gives credence to the idea that these are separate when they are not.)

While the media properties are spending a great deal of time creating these opportunities, and heavily promoting them in the press, they are simultaneously allowing their account services team to remain woefully ignorant. I can tell you, I hear the frustration in their voices when they have to admit that I know as much or more about these things as they do. So, here is my suggestion to the ‘powers that be’ in the AOL’s of the world: Stop treating account / client service teams as conduits and start treating them as consultants, giving them the corresponding education to back it up.

I can not tell how much money they have lost because they forced the CS teams into situations where they are simply meeting makers trying to connect our team with someone, somewhere who knows something about the 10% of their media that happens to be the subject of our interest. Compound that with the fact that, no matter how closely related another ‘product’ may be, should you bring it up, they have to say that you need to speak to someone else (and then they have a conversation between themselves as to who that person might be). I think this is a tremendous waste of talent.

I’m not here to help the media properties make more money. But, if they do, then that means my team found a great opportunity for our business. The bottom line is, as long as the media continue to silo these opportunities, we, the advertisers, lose money (or make less money, however you want to view it).