Posts Tagged ‘Internet advertising’

Long live the media brand

Thursday, October 2nd, 2008

I just posted my latest article on The Industry StandardWhat The New York Times, The Wall Street Journal and CNN are doing wrong.

It has already been well-documented that online media is eating away at print revenue. Take The New York Times for example. According to Scott Karp, from “May 2006 to May 2007, print ad revenue for the News Media Group decline $19.2 million or 14.4%, dwarfing the $2.8 million increase in online ad revenue.”

Broadcast revenue is also on the decline. According to Nielsen Media Research, although National Cable TV and Spanish-Language TV were up slightly, Network TV and Spot TV Markets were down significantly in 2007.

The good news for print and TV is that they’ve moved to the Web. Now they just have to figure out how to do it right.

Print and television brands are some of the most well-known in the world. Just think of the names – The New York Times. CNN. The Washington Post. NBC. It would be difficult to find someone who doesn’t recognize at least one of those companies. And the audiences have followed the brands online. According to the data (see chart, below), many mainstream print and TV outlets have huge – and growing – online audiences.

Compete data for print media sites online

In my opinion, building an audience is the biggest challenge to overcome online. The second is producing content that anyone cares about. So these companies are more than half-way there. If they can just get their business models figured out, they just might have a shot at not only surviving, but thriving.

Online advertising moving to interactive & measurable formats

Wednesday, August 27th, 2008

MeasureJust saw a story this morning about Carat’s advertising outlook for 2009. Even though they are revising their forecast down to reflect the weak economy, they are raising their forecast for online advertising from 23.3% to 23.7% in 2008. For 2009, they are predicting that online advertising will grow 18.6%, vs. earlier estimates of 17.8% growth.

The most interesting bit in the article, however, is this:

[Jerry Buhlmann, CEO of Aegis Media] said the growth in online’s ad spending share has less to do with the growth of consumer use of online media, and more to do with a secular shift within the advertising industry that is driving marketers and agencies toward media that deliver measurable returns on advertising investments.

“With search now central to the planning and execution of any campaign, online media brings a greater level of accountability not just to itself but to TV, print and other forms of advertising,” he said. “This is why we are predicting further strong growth for internet, even when advertisers are cautious in many of the other sectors.” (bold and italics mine)

This shift to performance-based media, sometimes called ROI advertising, is going to continue until most (if not all) advertising is based on performance metrics. Not only is search advertising going to continue its phenomenal growth in leading this sector, but lead generation is going to continue to grow quickly. Joining them will be other media that traditionally have not been measured but will move in that direction, including video and even print.

Marketers have always headed in the direction of measurable media programs. Just think of the 1-800 numbers that can be traced back to specific ads. With money tight, even more dollars will be adjusted to go to these programs that can prove they are worth the money they cost to run.

Photo by aussiegall

Online video advertising – stats and status

Wednesday, April 23rd, 2008

My latest article for The Industry Standard is now up online: Three online video formats for the future. In the article, I take a look at the current state of online video advertising, and make some suggestions about where video advertising might be able to head in order to stay relevant to the medium and to move beyond traditional ad formats.

In the course of researching for the article, I came across a lot of great online video stats. These are in addition to some earlier articles about online video that I posted to this blog. Those articles are here:

Online video stats for September 07
Video is not going to kill the Internet in 2010
Some more YouTube stats

The new data covers a wide variety of information, from online video usage to online video advertising metrics. I just am going to include it here because it’s great information for anyone who is following online video. I’ll also include links to all the sources so that you can explore the information in context.

Online Publishers AssociationOnline Video Advertising, Content and Consumer Behavior (PDF)
Online publishers association logo
This report contained a great deal of useful data, particularly about audience reception to online video advertising, including the following statistics:

  • Over 40% of U.S. online video users watch online video on at least a weekly basis; over 70% at least monthly.
  • 80% of U.S. online video users have watched an advertisement in an online video. Of those people, 52% took action after watching that video; 28% looked for more information; 19% clicked a banner ad that accompanied the video; and 16% bought something as a result of the ad.
  • 56% prefer that the advertisement is related to the video content.
  • Both 15- and 30-second pre-roll ads are effective at lifting brand awareness; 30-second ads outpace 15-second ads in “likeability.”

Advertising.comBi-Annual Online Video Study: First-Half 2007 vs. Second-Half 2006 (PDF)
Advertising.com logoThis study bills itself as the “who, what, when and what works of online video consumption and advertising.” The most surprising data from this study is the age range of online video consumers.

  • 31% of 18 to 34 year olds watch streaming video; 69% stream video more than once per week
  • 69% of consumers 35 and over watch streaming video; 47% stream video more than once per week
  • 95% of those surveyed are streaming video at home (vs. 4% at the office and 1% at school); 45% of streaming takes place in the evening.
  • 42% of consumers have forwarded a video clip to a friend
  • 94% of consumers would prefer to view ads than pay to watch a video
  • 63% of consumers would prefer ads that are shorter than television ads
  • Consumers are 8% more likely to view a 15-second advertisement through to completion (vs. a 30-second advertisement)
  • The 30-second pre-roll slightly outperforms the 15- and 5-second ads when measured in terms of click-through rate

BtoBInteractive Marketing Guide

Online video advertising spending

comScoreMore than 10 billion videos viewed online in the U.S. in February (08)
comScore logoThis is the most recent data that I could find – the highlights:

  • U.S. Internet users viewed more than 10 billion videos in February; this is a 3% gain vs. January, and a 66% gain from February 2007
  • 135 million U.S. Internet users spent an average of 204 minutes watching online video in February
  • 72.8% of U.S. Internet audience viewed an online video
  • The average online video duration was 2.7 minutes
  • The average online video viewer consumed 75 videos

New online video technology launches; has a viable advertising model

Tuesday, April 15th, 2008

Online video is already huge and getting bigger all the time. At least 75% of Internet users watch videos online and 8 hours of video content being uploaded to YouTube EVERY MINUTE. But there is a problem with online video because no one has (yet) figured out a long-term viable advertising model that will work with video. Google (which owns YouTube) is certainly working on it, but all the models that have debuted so far – pre-roll, post-roll, sponsorship – have fallen short because none of the formats have taken advantage of the inherent interactivity of the Internet. That is, until now.

I just took a look at what Revision3 and VideoClix have teamed up to put together and it’s great. Not only is the ad format interesting and cool, it’s also fairly unobtrusive and seems tailor-made for the Internet’s interactive format.

The first video to debut with the new technology is Diggnation (although all of Revision3’s videos will have the technology shortly). Watchers are able to interact with the video as it’s playing. When a viewer clicks on an item in the video that has additional information included, an area is displayed to the right of the video that has the details about the item, as well as room for advertising or additional vendor information.

Diggnation screenshot

This is clever. For one thing, the information that was provided was fun and interesting. (For example, I found out that the Lloyd Hotel in Amsterdam has rooms that range from 1 to 5 stars and one of the rooms has a shower in the middle of the room.) I wanted to click every link in the video to find out more about the video that I was watching, the clothes that the hosts were wearing, and even to see what computers they were using. Since my clicks didn’t stop the video, I was able to click around when something was happening that I was less interested in watching and I didn’t have to miss anything that I didn’t want to miss.

My prediction – this online advertising format will be viable and long-lasting, particularly in the consumer market. Clickable video is here to stay.

Deceptive marketing and lead generation

Thursday, March 27th, 2008

valueclick logoMy most recent article for The Industry Standard is up on the site now: What the ValueClick settlement means for the future of lead generation. Why don’t you go read it? And hey! Why don’t you leave a comment if you have something to say.

For those of you who don’t know the background to the story, ValueClick just recently agreed to pay $2.9 million to settle the FTC allegations that they were doing bad things with their business, including:

1) Lying to consumers, advertising free offers, but then requiring consumers to pay or purchase to qualify for those “free” offers.

2) Violating federal law, specifically, the CAN-SPAM act.

3) Not securing customers’ financial data, even though they promised to secure it.

The press release from the FTC with the complete list of charges is here.

ValueClick will admit to no wrong-doing. Here’s what ValueClick says about the charges:

“The FTC alleged that the Company utilized deceptive marketing practices that violated the CAN-SPAM Act and FTC Act. In an effort to resolve this matter, ValueClick agreed to a settlement payment of $2.9 million without an admission of liability or conceding that the Company violated any laws.”

Having worked in the lead generation industry for years, I know that this is not the norm in lead generation and that most lead gen companies follow solid business practices; but yet, these types of scams do happen fairly frequently. Lead generation is a big business in the U.S. (see images below) and gettng bigger as companies realize the value of generating data that can provide specific metrics and ROI. So companies will use many different tactics – not all of them aboveboard – to generate leads for their clients.

If you’re doing lead generation through a third-party provider, make sure that you get them to explain in detail the following things:

1) What the environment looks like in which they will be generating leads. If they are creating a registration form, make sure that they show you what it looks like.

2) How they are generating the traffic that drives the leads.

3) If they are doing “co-registration” to generate their leads. Co-registration is the practice of including a check box at the end of another registration form so as consumers register for one thing, they also can “opt-in” for your thing, too. If they are doing co-registration, find out if the box is pre-checked, and if it is, run the other way.

4) Ask for a client reference – they should be willing to let you talk to someone else who has used the service and found it reputable and helpful.

Here are those lead generation numbers that I promised. This image is taken from the BtoB Magazine’s Interactive Marketing Guide for 2008, which has a lot of great online advertising data.

Lead generation statistics

Comscore's take on the Google click data: Not that surprising

Friday, February 29th, 2008

Comscore logoEarlier this week, Comscore released some data on Google paid click numbers that caused Google stock to take a nosedive, based on reports from a variety of news sources that this was a sure indicator that Google was vulnerable to a recession.

Today, in a blog post, Comscore gave its take on the data – “Why Google’s surprising paid click data are less surprising.” The main point? That the data that Comscore released may have been incorrectly analyzed by almost everyone who read it:

“The information triggered a flurry of reactions in the media and the financial community that centered on two concerns: 1) a potentially weak first quarter outlook for Google, and 2) an indication that a soft U.S. economy is beginning to drag down the online advertising market.

“While we do not claim that these concerns are unwarranted, we believe a careful analysis of our search data does not lend them direct support. More specifically, the evidence suggests that the softness in Google’s paid click metrics is primarily a result of Google’s own quality initiatives that result in a reduction in the number of paid listings and, therefore, the opportunity for paid clicks to occur.”

I continue to be of the opinion that the drop in click-through rates isn’t a negative thing and is primarily the result of Google’s ongoing efforts to combat click-fraud and accidental clicks to its ads. 

I also think that Google is likely going to have slower growth if the entire economy goes into a recession. Afterall, what media company isn’t vulnerable in a recession?

Consumers not the cause of Google's slide

Wednesday, February 27th, 2008

Google logoGoogle’s stock price is dropping, and people are freaking out. Yesterday’s stock price drop was in response to a recent report from Comscore indicating that January 2008 showed only flat growth year-over-year versus a 25% increase in Q4. This apparently is the result of lower click-through rates on paid search ads, and people are worried that this means that Google is exposed to a slowdown if there is a recession in the U.S.

The near-panic is somewhat understandable considering that the overall U.S. economy isn’t doing all that great, the tech folks are scared of another bubble, Microsoft is talking about taking over Google, Apple’s stock is dipping, and everyone is looking for someone – anyone – to believe in. Google has been the obvious choice for a long time, and no one wants the tech darling to falter.

But the thing that I take issue with is the notion that this decrease in clicks is a result of consumers clicking less because of a coming recession. These numbers from Hitwise show that there has been no decrease in overall search traffic to shopping sites – meaning that consumers are still clicking.

And if consumers are still clicking on search links, why would they suddenly not be clicking on paid search ads? Could this be because consumers suddenly have become more discerning about what is a “paid” result vs. what is a “organic” result? No way.

My question for Google would be about how much of this decline comes from the dip in clicks on AdSense partner sites. My bet is that the clickthrough rates have dipped significantly on partner pages. Why? Primarily because of the click fraud prevention that Google has been implementing, as well as the “accidental clicking” measures that Google took back in November.

Google click change

Remember, this was the second change that Google made to its ads; the company first changed the paid results on its main search pages in April, a move that many advertisers said led to a decline in the number of clicks, but not in the amount of revenue that they were earning.

And this might just be the bottom line. If there is no growth in the number of clicks, but revenue is growing, Google may have figured out a way to increase ROI for advertisers. Like this Businessweek article says, we’ll have to wait for earnings in April to find out for sure.

Internet advertising numbers for 2007 – higher than predicted

Tuesday, February 26th, 2008

In October, I posted the Internet Advertising Bureau’s estimates for U.S. online ad revenue for 2007; at the time, they were predicting $20 billion to $21 billion.

According to the numbers released today (which I saw first in TechCrunch), the IAB’s preliminary estimate for 2007 is that Internet advertising hit $21.1 billion in the U.S. – just slightly higher than they initially predicted.

TechCrunch also reports on the estimated numbers from a couple other sources:

Kelsey Group: $22.5 billion
IDC: $25.5 billion

Online ad spending to overtake TV advertising in 2008

Thursday, January 3rd, 2008

This is happening in Sweden, not the U.S., but still. This is just the beginning.

And this article from PaidContent U.K. says that Britian and Denmark will be next.

“Sweden will this year become the first country where internet ad spending will surpass that given over to TV ads, according to the This Year, Next Year 2008 forecast from WPP’s heavyweight Group M ad buying agency, released quietly last month. The UK will fall just short of the same watershed this year, finishing 2008 with online accounting for 24.8 percent of ad spend, just shy of the 26 gobbled up by TV (in Sweden, it will be 19.5 percent to the web, 19.2 percent to TV). But online will overtake telly in Britain and Denmark early in ‘09, the group predicts.”

Does audience size matter?

Monday, December 31st, 2007

I have been thinking about this post from Robert Scoble since I read it yesterday. (Go read it now.) In the post, Scoble makes three pretty strong points:

First,

“In the past few years I’ve had some success building audiences, but I found that that’s not really what’s important. It’s not what advertisers REALLY care about.”

He goes on to ask “What do they really care about?” and answers his own question by saying that advertisers care about content: that you get content that no one else does, that it causes conversations to happen, that your content gets noticed in the niche that you’re covering, and that it gets the most authoritative links back to it.

His second point:

“It’s not the size of your audience that matters. It’s WHO is in the audience that matters.”

And his third point:

“I never talk…about how large my audience will be. No, instead, we’re talking about who we want on the show for the first week. How can we make the quality better? Who is out there who is doing innovative stuff that we can learn from?…How can we take our art further? How come bloggers never obsess about THAT?”

There is a lot going on in this article, but first and foremost I have to disagree that advertisers don’t care about audience size. All you have to do is look at how advertising is sold online to know that they do, in fact, care very much about audience size. CPM (cost per thousand) is the standard measurement for online media sales. Just check out the advertising pages for CNET or PCMag.com  or CMP (all technology publishing companies). What is the first statistic that’s listed? Unique visitors per month. Second statistic? Unique page views per month.

Having worked for both Ziff Davis and IDG, two of the biggest technology publishers in the world, I know that when technology marketers are buying online advertising packages, the easiest question to ask – and the first one out of their mouths – is size of audience. They always want to know traffic stats and reach. In that market, advertisers do care about how big the audience is. And I think that this is only magnified in the consumer markets (with audiences like the one that Perez Hilton reaches), where there is no way to measure audience except by size.

And (this is still hard for me to swallow even though I’ve believed it for a long time), most advertisers do NOT care about how good the content is. I am just being honest here. Most technology marketers and advertisers do not pay attention to the content, or know how good or not good it is in and of itself. Instead, they measure content “goodness” quantitatively – by how big the audience is that is reading the content, and by who that audience is.

Which leads me to the part of Scoble’s article in which he was dead on accurate – advertisers do care about how targeted the audience is, WHO is in the audience. I believe that this is actually the statistic that matters the most to online advertisers.

Take another look at those advertising pages that I linked to earlier. There are some pretty strong arguments made by the publications that they have the specific audiences that advertisers are looking for. I believe that this trend of advertisers trying to reach the specific individual – with the right title, job function, industry and size of company – instead of reaching just a whole lot of people and hoping that the message has an impact, will continue. This desire to reach the RIGHT audience is why new models of online advertising are emerging, such as lead generation, in which a company will pay $100 PER LEAD as long as they are targeting the right person with their message. Scoble is reaching the audience that his advertisers want to reach – so the size of his audience isn’t as important. And this is why sites like Perez Hilton, which have to rely on audience size (because they are reaching a disparate consumer market) are going to have a hard time selling advertising by any measurement except audience size.

As far as content is concerned, I have already made the point that I don’t believe that advertisers care as much about quality content as Scoble claims that they do. I wish that they did, but I’ve been in this industry long enough to realize that they really just don’t. They like the latest and greatest thing – because it’s good for their brand to be associated with that innovative content – but advertisers aren’t content specialists and just really don’t have a good understanding of quality content.

HOWEVER – and this is a really big however – I think that Scoble is writing from the perspective of a content producer, not an advertiser. And his point is RIGHT ON that content producers MUST CARE MORE about their content than their audience size. Because without good, innovative, cutting-edge content, content producers will never draw the type of audience that they need to get advertisers. Scoble says that the right question is “how can we take our art further?” And I agree that is the right question for a content producer.