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Archive for September, 2009

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Newspapers: Go Offensive!

Wednesday, September 16th, 2009

A recent article in Advertising Age, Good Newspapers Can Survive if They Break Their Old Culture, raises the point that the future of daily newspapers is one where they exist but on a smaller capital base and the key is to cut costs, “We can certainly save newspapers, but only if we continue to cut costs,” says Mr. Klein. While cutting fixed costs is important, the present dialogue surrounding newspaper seems to be lacking in the idea of increasing revenues as well. Further, where ideas are being sprung with regards to revenue generation, he focus seems to be reserved to two options: 1) to charge higher subscription fees, and 2) produce a model of micro-payments on content articles (see Google suggestion at Harvard’s Neiman lab here). While each of these strategies are an important, what seems to be left behind is the simple fact: charge more for digital inventories.

Our data suggests that performance of traffic from either major publisher (i.e. nytimes.com, or wsj.com), or hyper-local/hyper-niche publications can produce at or better rates of conversion and action than even search based traffic for many different companies. Further, display ads to audiences is an especially critical piece of marketing for companies, especially those with new products, where product/service lexicons are too young to produce viable search terms. There the best option is to educate through clever display campaigns in a specific demographic.

The barrier to publishers’ abilities to charge more and increase revenues per impression or click (even action), have two distinct barriers that we see. These two barriers are uniquely linked and we are seeing some models that are evolving that suggest that these is true opportunity to revolutionize the unsustainable digital display content status quo. The main culprit hurting publishers are the ad networks which control content display ads. In the basics of this model a publisher pays for a 3rd party network to serve ads on the content of its pages. At this point there is a revenue split for the ad servicing, so the publisher is already losing revenue. Secondly, the publisher loses because there does not exist a relationship between the advertiser and the publisher. Further, because the advertiser is in negotiations with the Ad Network to produce as many impressions as possible, often times the advertiser never receives a list of results broken down by individual publishers. So publihsers whose content and inventory widly outperforms others – which is more likely than not – where the content is better, and generally more expensive to produce, the Ad Network reporting systems put the publisher at the mercy of their reporting. Do we see this often in print?

Yet, where this model really gets nasty is with the actual fact that the creative – and the research that could result – suffers. The present industry standard click through rate (clicks from a served ad) is .02%. In our experience, where we have designed ads specific for a publisher (like the nytimes.com) we open with click trough rates at .12% sometimes higher – that is over a 600% improvement in visitors, which is especially important if the advertiser purchased the inventory on a CPM model. Instead, in much of today’s model, the publisher’s ENTIRE inventory gets devalued because ads are either irrelevant to the demographic, or cheapen the publisher’s valued content by cheap-o creative (have you ever seen one of those “click the monkey” ads on the New York Times?)

Publishers: Take Control of Your Inventories, Own Your Clients, and Help them get more out of your inventory.

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How Online Advertisers Can Save Money and Learn from the Publishing Industry

Wednesday, September 16th, 2009

“When I was fourteen years old, my father was so ignorant I hated to have the old man around. But when I was 21, I was surprised to see how much he had learned in seven years.” -Mark Twain

We are in the midst of a revolution, we’re constantly told. The Internet has radically altered the ways we entertain ourselves and how we shop, write and think. It has fomented a “groundswell,” and the “long tail,” and it has both engendered and mortally wounded scores of industries.

Few can dispute that the Internet has reshaped the world, but it is a mistake to think that the Internet is completely distinct from traditional media — and that those who advertise via the Internet are relegated to constantly plowing new ground. The truth is that there really is nothing completely new under the sun because everyone and every thing has an ancestor — and that’s particularly relevant when we’re talking about audience reactions to sales pitches. No matter how fresh and sparkly the new medium, reaching human beings is still the ultimate goal of online advertisers, and human beings haven’t changed that much in the past 20 years. They still have hands, organs, affections, and passions, and they still weep and laugh. And they still react to advertising in pretty much the same way their parents did 50 years ago, even though the transportation of that advertising has changed.

And this is where Conversion Associates and I converge. For 20 years I have conducted advertising-effectiveness research and consulted with companies in a wide range of industries to improve the power their print, television, and Internet advertising. And I became attracted to Conversion Associates in a very early conversation when it became clear that they were interested in, as they’ve said “building bridges between the traditional and the digital media.” You don’t hear that expressed very often.

If you believe that the online world is so vastly different from, say, the traditional print world, consider these points, demonstrated through rigorous research on both print and online advertising:

* A weak response to advertising is almost invariably a product of the creative execution of the ad and not the medium in which it appears. If your ad isn’t generating sales or calls or engagement, don’t automatically blame the publisher or site. It’s usually the ad that needs to be overhauled.
* The most common mistake that advertisers make is to assume that the audience is as interested in the subject of the ad as the advertiser and thus is happy to embrace the most complex presentation of the material. Complexity is the enemy of advertising; simplicity is an online and offline ad’s best friend.
* Those who combine simplicity with a clear, powerful, and concise statement about product benefits almost invariably attract and hold the viewer’s attention — and eventually sell product.

These are time-tested principals, and, yet, consider how many advertisers pack their ads with unimportant, extraneous information, and how few advertisers explicitly and concisely spell out a benefit. If you look at online and offline advertising with just those last two principles in mind (and there are many more important ones), you’ll quickly see how rare really effective advertising is.

One quick story about advertising. About 10 years ago I spotted a small-space ad in The Wall Street Journal. It featured four drawings of different styles of dress shirts and the headline, “Great Shirts. Great Prices.” The body copy of approximately 75 words expanded on the “great shirts” theme — by describing in full how well-made they were so that they were light, but extremely sturdy and would last a long time — and gave the price, $29.95. The ad fulfilled my requirements for a successful ad: a four-word headline with simple pictures, combined with a clear statement of product benefits. And the description fulfilled my requirements for a great shirt. I called the 800-number, and the owner of the company answered. I placed an order for three shirts and then asked, “By the way, how’s the ad working for you?” He answered, “That’s the last time you’re going to see that ad for a long time.” Stunned, I said, “I’m amazed. I”ve worked for a long time in advertising research, and I thought your ad is one of the most effective print ads I’ve ever seen. Why are you pulling it?” He said, “Because I’ve gotten so many orders that I don’t have time to fulfill them all.”

Great advertising works — but very few advertisers have the luxury of being able to directly tie their sales to one discrete ad or campaign in order to gauge the ad’s effectiveness. Goals for an advertisement vary, and the most useful system for advertisers is one in which the client defines the goal and then uses a system that accurately and concisely measures the extent to which the ad met the goal. That’s what attracts me to CAP.

While the Internet is revolutionary, the path through the Internet was paved decades, and even centuries, ago. The really powerful advertising-effectiveness program, I’m convinced, is one that has immersed itself in history so that it can guide its clients away from the mistakes of the past, master the art of advertising, and triumph in a world that may be in the midst of a revolution, but that still offers generous rewards when energy, intelligence, and knowledge converge.

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