Since at least 2010, when Old Spice introduced to us The Man Your Man Could Smell Like, the digital marketing industry has been obsessed with getting their content in front of as many people as possible (as cheaply as possible). In an almost collective sigh of relief, marketers effectively began repurposing the web into a broadcast medium under the flag of Content and its kingdom of “earned media”, or the paradoxically sinister banner of “going viral”. In an almost Pavlovian response, the focus shifted from “connecting with your customers” to creating as much content as possible in an attempt to tap in to the web’s capacity for distribution, like a thousand bottled messages tossed in to the ocean. Such an approach continues to embody the conventional wisdom, but it fails to recognize that unlike print, radio and TV, the web is not a passive medium.

If the web is an ecosystem, it is one comprised of many niche communities, distinct environments built upon the individual expression of ideas, emotions and opinions; it is an extension of who we are. For these environments to be sustained reciprocal self-expression is required, which in turn is contingent upon the presence of some common set of values or interests for the exchange to take root. For marketers, then, sustainability on the web is about tapping in to people’s values to facilitate that reciprocal self-expression. A vibrant, sustainable branded environment on the web doesn’t require content. It requires a brand.

The elegance of a brand lies in the fact that it makes all of the intangible qualities that distinguish a business from it’s competitors – it’s values, beliefs and attitudes - and makes them tangible. Advertisements, catalogues, slogans, logos and all of the other outputs of the marketing process are used to this end. Indeed, these are all forms of content in one way or another – but alone they are not enough to give you a brand.

Apple’s epochal “1984″ wasn’t what gave the brand it’s mythological status; it was the people who saw the ad and let their imaginations run wild. It was able to elicit such a visceral response because it spoke to people’s values and beliefs, allowing people’s relationships with the company to transcend the commercial and enter the humanistic.

Ironically enough, the best example I can think of to illustrate the facilitation of self-expression is the marketing industry itself. All of the blogs that sprung up in the early days of web marketing, the writers of which were professionals of the burgeoning industry; the hundreds of thousands of Twitter chats that occur every week, where you’ll find fervent discussion about everything from social media optimization to ‘social media manners’; the message boards, listservs, conferences, LinkedIn groups – the list goes on. The marketing environment on the web is vast, and it was built upon the reciprocal self-expression of a plethora of people passionate about a common thing.

We cannot let the web’s capacity for distribution fool us into thinking that it is just another broadcast medium; print, radio and TV are much better suited to passive consumption than the web. The web is self-sustaining, but only inasmuch as the environments that comprise it are allowed to flourish organically. The web is an extension of ourselves – collectively and individually – and so are brands. The only difference between the two is that on the web you can know what people are saying, and where they’re saying it. Listen to those people, find out what they’re saying about you – in what context – and find ways to help them keep saying it (unless, of course, it’s disparaging, in which case you would facilitate a discourse between your proponents and those who feel otherwise).

Instead of trying to build your brand’s presence online, try to cultivate it. Suddenly, we’re not so much Digital Marketers, as we are Digital Environmentalists.

“We shut down the site, and relaunched a free service with a few critical new features. The staffing problem hadn’t gotten better, so we brainstormed ideas for getting the Java community to help us solve their problems. We now have a free site with question-and-answer forums where developers answer each other directly. We added a tap into [our] software bug database and provided a means for developers to add their own notes and work-around to our bug information, as well as vote for the bugs they wanted us to fix soonest. A reverse pipeline into the company sent the bug votes to the engineers to help with prioritization…The site became a nexus for conversations about our products and services, and for conversations about other people’s solutions to our problems.”

- The Cluetrain Manifesto

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It’s January, and all the industry pundits are buzzing with their biggest and boldest predictions of what’s in store for the year. But let’s talk about what we’re not going to see in 2012: the return of user search query data from individuals signed into Google accounts.

Back in the fall, Google made a landmark announcement: in an effort to provide greater security to users of Google products, they would by default encrypt search queries entered by any individual who is signed into their Google account. All of a sudden, things got a little blurrier for digital marketers.

The search marketers’ neighborhood of the blogosphere immediately went ablaze, with the SEO community in particular crying foul over the deprivation of a significant amount of critical user data.

Research by Conductor indicated that about 9 percent of search queries were affected by the changes. Google spokespeople said single-digits were to be expected, but then HubSpot put the figure at 11 percent. Some people reported 20 percent or even higher. [For a comprehensive overview, see Jonathan Allen’s summary, “SEOs Strike Out as Google Encrypts Signed-in Search Data.”]

There are numerous implications to this announcement (and the industry repercussions that tend to follow big announcements from Mountain View), but this article isn’t intended to lament or speculate on the changes. Rather, the industry needs to think more about how to embrace the changes and move forward.

Marketers need to think more concretely about search queries as user-generated content (as we argued back in May 2010, “Estimating Word-of-Mouth Activity from Search Query Data”). As search engines and social media environments begin to look more alike, the lines will blur between these data inputs as well.

We know that Google’s strategy has been to always put users first, and this move toward encryption of search query data should be considered a long-term investment in the loyalty of Google’s user base (or, as Allen says, “an attempt by Google to barter web data in order to leverage security as a quality control factor”).

Consumers today are a savvy lot; in a short time they’ve learned how to meet most of their critical needs: hunting down obscure information, filtering content according to preference, engaging in deep exchanges of value. Privacy is not just a buzzword in Silicon Valley, Silicon Alley or Capitol Hill; it’s also one more basic human desire that consumers are smart enough to protect (or trade, for the right offer).

While it remains to be seen whether this secure data will make a comeback (perhaps in Google Webmaster Central or in the enterprise edition of Google Analytics), in the short run the brands that are able to wean themselves off this data will be the ones best positioned to forge ahead. The proactive solution is to build a comprehensive profile of the “Secured User”, to gain a better understanding of the faces who will be absent from the crowd:

Based on this sample data set, we can make a confident statement about our Secured Users on this particular website. Compared to their Unsecured counterparts, they are:

• More familiar with the website (and possibly the brand itself).
• More likely to reside in North America.
• More likely to land on a deep URL after a search query (instead of the home page).

This type of comparative insight paves the way for other executions that can help close the gap, for example:

• Reach more Secured Users in another Google environment, such as Google Plus, and then use social media monitoring tools to collect data on their interactions. It might not be search query data, but word-of-mouth data is still essential for meeting a wide range of objectives.
• Ramp up your efforts to attract more visits from Mobile devices – because for now the encryption doesn’t yet apply on phones and tablets. Create dedicated mobile-specific campaigns in AdWords, and offer mobile-optimized content for a good user experience and SEO profile, to help to make this happen.
• Adapt your destination URL strategy in AdWords paid search and/or Google Display Network. You might test for different URLs tied to branded terms. Or maybe there is a specific deep URL that skews high with Secured Users; building a retargeting campaign specifically around visits to this one URL is one way to wrestle back some influence with this crowd.
• Connect your Google Webmaster Central and Google Analytics accounts. It’s not as pretty as what we’d gotten used to, but you can still use Google Analytics to browse top daily search queries and landing pages, with the standard array of performance metrics: impressions, clicks, click-through rate (CTR), and average position.

Through all of these growing pains, remember one important thing: there’s virtually nothing about Google’s change that will impact the demand for your products and services. Users will continue to use search engines as a primary component of their online experience.

Google will continue to be the search engine of choice in the U.S. And it’s unlikely we’ll even see a change in the share of visits sourced from organic search, compared to paid search.

Let’s just take this change for what it is: a gift from Google to its users. Users will repay Google with their loyalty, which ensures their long-term status as the stable audience the digital marketers need to keep brands happy, growing… and secure in their future.

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Paul Burani - Partner, Web Liquid Group. Connect with me on Google+

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Being able to address the complete digital media technology stack will soon be the key differentiator for advertisers when thinking about which agencies to partner with over the next few years. While Real Time Bidding (RTB) has enabled more targeted and cost efficient methods of media buying through Demand Side Platforms (DSP’s) it is also important to understand the role of DSP’s in the wider context of the digital media technology stack. This post examines the different elements of the technology stack and the roles they fulfil.
 
DSP’s 

The main function of a DSP is enable automated impression level bidding and impression level evaluation across a multiple sources of inventory i.e. ad exchanges & SSP’s.  The key shift in media buying through DSP’s and enabled by RTB is the targeting and buying of audiences and a shift away from buying site specific placements. DSP’s enable the advertiser to determine the definition and targeting of a specific audience rather than relying on the ‘blackbox’ targeting of many adnetworks.

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Earlier this year, eMarketer released a report documenting the meteoric rise of Internet radio . Market leader Pandora, emerging beast Spotify, and various other players are clearly riding a wave of explosive growth… but in this and other similar research, there’s a face clearly missing from the party.

What happened to the podcast? Did it ignore any crucial items on its to-do list?

“If at first you don’t succeed, remove all evidence you ever tried.”
– David Brent, Wernham-Hogg Paper Company
(portrayed on “The Office” by British actor Ricky Gervais)

Let’s look start with the brighter days.

The 1980s and 1990s brought vast improvements in the technology used for transmitting digital audio. The dot-com crash shook out many of the earliest players, after which innovations in RSS and blogging software paved the way for improvements in aggregation and syndication of digital audio content – and the dawn of audioblogging.

British journalist Ben Hammersley, writing for the Guardian in early 2004, suggested that this revolution would pair nicely with the rising popularity of the early generation iPods – and suggested it might be called “podcasting.” Apple took the ball right to the hoop, publishing podcast directories, integrating podcasts with iTunes, and even building podcasting features into its QuickTime and Garage Band software.

Consumer interest in podcasts (as measured by search queries) exploded by late 2004, and hit its all-time high by early 2006. And “The Ricky Gervais Show”  was quickly recognized as the most successful podcast of all-time.

“Accept that some days you are the pigeon, and some days you are the statue.”
– more wisdom on losing, from Ricky Gervais via David Brent

Since 2006, however, searchers’ interest in podcasts has slowly leveled off – along with a lot of the promise originally seen by digital media enthusiasts.

In early 2011, marketing research firms Arbitron and Edison Research teamed up on Infinite Dial 2011, one of few recent studies evaluating podcasts alongside more popular digital platforms such as social media, mobile devices, e-readers and video (online & on-demand). Surveying U.S. consumers ages 12 and up, here are a few things they learned:

• Awareness of podcasting has tapered off at 43-45 percent since 2009.
• Just 25 percent of U.S. consumers had ever listened to a podcast.
• Only 12 percent listened in the past 30 days.
• In naming the most “loved” media channels, audio podcasts and video podcasts were mentioned only 9 percent and 7 percent of the time, respectively.
• Joining podcasts at the bottom of the heap: LinkedIn (how many 12-year-olds do you know on this site?) and MySpace (no comment).
• And which platforms actually inspired more love from their users, compared to podcasts? A few hot properties (Pandora, Facebook, YouTube, Hulu), traditional media heavyweights (network/cable television), and yes – even local AM/FM radio has outdone the lowly podcast. [Sadly, HAM radio seems to have missed the cut.]

Where does this leave the podcast? Once an usher of liberated 21st century communications, today it’s the Christian Laettner of digital media: all the potential in the world, but really just a big disappointment. For comfort, we can again turn to the prince of podcasting himself:

“Where there’s a will… there’s a relative!”
– Ricky Gervais, once known as David Brent

In this case, the relative is search – both search technology as well as search marketing.

How Can Search Technology Help Create a New Future for Podcasting?

Google Translate can already convert any audio into text, which means that it ought to be within the realm of possibility to apply this technology to embedded audio within a podcast – provided someone can make a strong business case. More on that in a second.

There are already plenty of podcast search engines; that light bulb went off years ago. Do a Google search and you’ll find a bunch of them (including a Search Engine Watch post, “Video and Podcast Search Engines”). But this stuff is all from six or seven years ago. Why can’t you find fresher results? It’s not like podcasting fell off the face of the earth. Again, there needs to be a justification that makes business sense.

How Can Search Engines and Podcasts Come Together to Create a New Digital Medium?

Despite losing some of its digital street cred to newer kids on the block, let’s not forget that there’s still an audience out there worth fighting for. 31 million Americans ages 12 and up listened to a podcast in the last month – and they’re likely to be a pretty digitally-savvy lot.

Google gets about 360 million search queries per day, according to comScore. If we’re to assume that these podcast listeners conduct search queries as often as as non-podcast listeners (highly likely to lowball our estimate), we’re left with a conservative guess of 43.3 million search queries conducted by this podcast-friendly audience every day. Strip out search queries that navigational or transactional in nature, and you still have at least 80 percent left over.

Here’s where it gets interesting. If Google were to add podcasts to the news, videos, maps, and other filters along the left side of search results, even a paltry click-through rate of 0.1 percent could turn into a million clicks or more per month. Isn’t that enough to persuade Google to index this content, and offer the public an alternative to searching for podcasts within via iTunes?

Quicker, more comprehensive, and blended with results of other formats… if it works for virtually every other type of format, shouldn’t podcasts be indexed in search engines the same way?

If search marketers were given the opportunity to extend their keyword lists into podcast inventory (e.g., the way keywords work in contextually-targeted Google Display Network campaigns), they could offer clients an additional reach opportunity with the same ROI-driven accountability that drove them to invest in paid search. You think that might be a compelling alternative proposition to the advertisers who pay a flat rate to sponsor a podcast that mightbe reaching the right audience?

“If you’re gonna be late, then be late and not just 2 minutes.
Make it an hour and enjoy your breakfast.”
– David Brent, master of the missed opportunity.

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Let’s face it, not every company should do a social deal like Groupon or LivingSocial. It may be the direct marketing flavor of the month, but the truth is that very often these deals prove to be a mistake for many businesses and a real issue for their customers. So while businesses need to think long and hard before they decide to run a social deal (Nate has an upcoming decision tree on this topic, stay tuned), customers also need to speak up about their experience.

We’ve prepared the following open letter to reflect the customer sentiment we’ve experienced around social deals, so that others can use it to express their own experiences with the companies they do business. Feel free to take these words and make them your own…

Dear [business, owner, marketing director name],

As a regular customer, your recent [Groupon/LivingSocial, etc name] daily deal was a raw deal for me, here’s why:

I really like your [product/service] and I’m happy to see you grow and succeed, but my experience was ruined by this [Groupon/LivingSocial/etc]. When you sell your [product/service] at 50-70% off it makes me wonder if it’s really worth what I pay everyday. I mean, can you really afford to sell your product/service for 50-70% off? If so, shouldn’t I get that deal for my loyalty instead of these noobs who probably came just for the deal and won’t ever come back? I’m committed to your success and happy to pay a fair price, these daily deal freaks on the other hand, are not.

Plus, it really hurts me to know that the people paying less than me are also making my experience worse. It seems that it’s more difficult with all these new customers, perhaps even overwhelming your ability to provide the quality I’m used to . That makes it hard for me to want to come back and continue to be your customer.

But here’s the thing, I think you’re better than this. If you need more customers I’m happy to help for a small incentive that won’t crush your bottom line. Consider how my loyalty can be your best marketing investment and I’m sure we can find a win-win. There’s a reason I and many others like what you sell, so let’s not lose sight of that.

Thanks for your consideration.

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Google has conducted some major triage on a number of its experimental Google Labs products in recent weeks. One cut in particular really pained me: “Google Sets, one of the first applications in Google Labs, allowed you to automatically create sets of items from a few examples. Sets identified groups of related items on the web and used that information to predict relationships between items.”

To understand the void that Google Sets will leave behind, let’s start by retracing its evolution.

Originally launched in 2002, Google Sets was truly an innovation in the keyword research tool landscape. Described as “an inside peek at how Google groups keywords by concept,” the initial Google Sets patent filing from April 2003 was the brainchild of two rockstar engineers from the early days at Google.  Simon Tong had pitched in on early iterations of PageRank, AdSense, and Gmail. Jeff Dean was best known for his work on crawling, indexing, and query serving systems.

In their filing, Tong and Dean outlined a system that could field a number of user-generated list items. Adding weight assignments to (presumably) a deep dive into Google’s accumulated search query data, they’d present the user with a much longer list. The product hung around for a while, and then 2009 marked the arrival of Google Squared, a multi-faceted visualization of data that built largely on Google Sets.

Lists and Data. Data and Lists.

If you’ve ever launched a paid search (PPC) marketing program, or conducted a search engine optimization (SEO) audit, or even tried to write site copy in the hopes of it being found on Google, you know how important it is to organize your data into lists.

Here are just a few examples of what Google Sets allowed search marketers to do with ease:

• Quickly and thoroughly build a competitor keyword list. You type Coke, Pepsi and 7Up, and the system reminds you of Dr. Pepper, Mountain Dew, Sprite, Fanta, Fresca, Mr. Pibb – even digging into the long tail with your occasional Good-O or Inca Kola. How long would it have taken you to come up with that list on your own?
• Fuel your ad copy brainstorms. One past client of ours was a chain of full-service auto body shops. When asked what they specialize in, the answer was, “We’re the best at everything!” Not helpful when it came time to write ad copy. But Google Sets helped us to populate ads with all kinds of auto parts that break down and require solutions: brake pads, power steering, fan belt, air filter, etc. This not only helped us deliver a more targeted AdWords program, but it also gave us more data points to test for user engagement and conversion.
• Generate extensive keyword variations. Let’s say you sell furniture, and a popular armchair is available in brown. There are many shades of brown to search for (and monitors often depict them very differently), so you would want to make sure that taupe, chestnut, russet, camel, and sepia are captured in your keyword list as well. The incremental traffic might be small compared to brown, but odds are the cost per click (CPC) would be lower, and the conversion rate might be substantially higher.

Bring Sets Back!

While some of products discontinued before and as part of Google’s announced “fall spring-clean,” will live on embedded within other ongoing projects, it doesn’t appear that Google Sets or Google Squared was so lucky.

In the nine years that Google Sets was available, I never really had a clear sense of whether this product was truly under-the-radar (and/or seasoned search marketers were simply keeping mum on one of their favorite secrets)… or if the SEO & SEM communities failed to find any value in it.

So let’s find out. If enough people from the search marketing made enough noise, we could convince Google would bring it back from the dead.

If you’d like to see Google Sets make a comeback, please leave a comment on the original SEW post and let’s rock this vote!

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This change comes as Google seeks to convince advertisers to put less value in having their ads showing on particular ranks – in the same blog post announcing the change Google forwarded readers to another post by Google’s Chief Economist, Hal Varian, who was at pains to highlight that ad rank should not be used as a measure of performance and more importantly concluded that an ad’s rank has no impact on conversion rates.

This new advice may help to counter some views on clients who enter the PPC market with a goal to have their ads ranked above their competitors. There’s certainly advantages to occupying particular ranks, the obvious one being that the higher the ad rank, the more volume an advertiser may hope to generate in clicks but also some other arguments such as Google’s earlier pieces of research suggesting that users expect to see big-name brands in the higher positions, but this change shows that Google wants instead the focus to be on efficiency – finding the performance that works for individual advertisers, regardless of ad position.

Varian drew other conclusions, including stating that ads lower on the page may perform better than those higher – especially on high volume, high competition keywords where advertisers would expect to pay a high CPC for the top ranks, but actually receive a high level of volume regardless of what position their ad appeared on the page. In this scenario the advertiser still gets exposure on important keywords, driving leads and/or conversions, but enjoying a much lower avg. CPC than competitors battling for the top of the page.

In summary Google’s pushing hard to communicate that efficiency metrics, not ad ranks, should be the principle focus of Search activity and it can be expected that any changes to AdWords utilities in the future will continue to focus on their optimisation.

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The results are in, but it appears the jury is still out.  Our audience was fairly evenly divided, with half believing that this change will bring about more investment in display media opportunities on NYTimes.com.  The other half believes that this change will usher in an attention shift among marketers, away from display media and toward more organic channels of engagement like SEO and Social Media.

A few things, however, are clear even at this early stage:

• These changes will put more pressure on the New York Times and other publishers to pre-emptively respond to the coming drop in impression volumes (Hitwise estimates a traffic decline of between 5% and 15%), before leery advertisers begin to put their money elsewhere.

• Given that the New York Times is not counting referral visits (e.g. from Facebook, Twitter, Google, etc) against each individual user’s quota, we’ll be seeing the viral side of news dissemination kicking into a higher gear.  [Though, this does beg the question: at what point does NYT's incentive to maintain a well-optimized presence in organic search begin to taper off?]

• With the ongoing privacy debates going on in the U.S. and beyond, consumers will need to face up to the reality that they cannot have it both ways.  If they don’t want to pay for content, publishers need to be more creative in how they can demonstrate ROI for marketers, and that means implementing all the behavioral targeting technologies that are under scrutiny.

One thing that won’t change with the new paywall: good journalism will always cost good money.  If being informed is indeed a priority for American consumers, in all likelihood we’ll have to pay for it one way or another.

About Paul Burani

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There appears to be an even split as both essentially have to work hand in hand. Businesses rely on building a social media persona, with the idea in mind that personalized marketing will be the most effective way to communicate to their target market. The problem always lies in deciding who your target market ONLINE is without meeting them, stressing online, as the assumption seems to be that those who buy in retail locations will purchase online. Is it really that simple? How are the needs for those who are not regular shoppers online catered for and how easy is their experience made?

When majority of businesses (of all sizes) in this day and age want to be seen as the “digital space champion” it’s no longer important to just be active in the space but generate quality of beneficial information required to reach a desired goal (at the time) . This quality comes from consumers speaking directly to the brand. Nowadays, when entering or leaving a website, at least 50% have an optional feedback survey option. More recently they can be seen to promote incentives to encourage engagement. I rarely know anyone who would actually spent the minute or two that it would actually take to fill them out… however, would have no problem voicing their opinion out loud to colleagues/ friends or on Facebook (example). It questions, what is the right thing to do in a situation?

Its important to understand what the feedback option suggests about the Organization. One perspective that most would not instantly think of, is that they care. They care to take the time to bother their target audience by asking their thoughts and experiences with the aim to improve their service. Another perspective may be that it’s the result of a recent change and are trying to measure the success. Another would be to generate conversation with their target market in order to get a clearer understanding of consumer concerns. Businesses should be smarter in engaging interaction and make it less like a form, that has the ability to out consumers off writing into them.

As marketers, we can often lose sight of being consumers ourselves and forget the value we place on this in our working roles. Is it important for us to also interact? in a word…YES. It’s more important for us to not be distracted or put off by the incentives which can make interacting look more gimmicky. The bottom line is that whether we are a regular or first time buyer online its takes less than a minute to explain the good or bad in your experience/review. If we keep in mind that a single opinion is equally as powerful as a shared voice by an online community, this shows that WE (as consumers) each have the ability to add something to a brand/ company, but need to make more time to voice this directly to them, as they can address the concern and provide a solution.

It just makes social sense.

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BP, of course

We couldn’t overlook one of the greatest disasters of our time because once you look past the vast destruction of the spill, what is unanimously cited as the root cause of the spill is an over-emphasis on cost reduction ahead of safety.

Tata

A bold new car from Tata Motors proclaimed itself the least expensive production automobile at just $2,000 to the delight of many, yet once on the road it was clear that turning the ignition could literally ignite the car. Great visual aid, that photo of the car in flames!

Toyota

Once lauded for it’s value and safety record the brand suffered significant damage with a string of massive safety recalls in 2009 and 2010.

Indeed many products cost less now than they did years ago. Technology has streamlined processes, opened up the world’s labor forces and cut the costs of doing business. At the same time comparison shopping and price transparency have turned the lowest price proposition, once a marketer’s differentiator, into a consumer addiction. This price transparency, you could say, is forcing even the brands in the premium space of each category to compete on price.  All of which has lead many to proclaim this the age of the consumer. Yet it seems consumers are in fact less satisfied across a variety of categories than they were in the past. While we’ve gained price advantages, we seem to have lost many of the consumer experiences that create satisfaction and loyalty.

Now of course we all like to save some cash, but is the lowest price model still sustainable for marketers or the world? I don’t think so, here’s why:

1. You simply can’t win on price.
   There’s always a provider of the lowest price widget, but it’s never the same provider for long. New entrants, promotional discounts, varied business models and a variety of other influences are constantly changing cost models for each company in a unique way. As a result, the lowest price position is never held by one company indefinitely.
2. Innovation is expensive.
   In virtually all businesses profit is made by delivering on a principle product or service for which there is a known consumer demand. The consistency of this revenue stream allows companies to make their fulfillment efficient, increasing profitability and then allocating a part of that profit to innovation. But downward pressure on the price of the primary product or service can affect the allocation of budget between innovation and quality.
3. Businesses are like sharks, they have to keep moving or they die.
   If a business can’t innovate its days are numbered. So when budgets are tight and it’s quality vs. innovation, it seems safety, regulatory adherence, best practices often take the cut despite the risks.
4. Loyalty is based on quality.
   Once customers believe that quality has been lost and price is the only USP, loyalty will be gone forever. We often think of quality customer service as an under-appreciated marketing channel for this very reason.
5. Without loyalty, revenue becomes inconsistent.
   Inconsistent revenues often means that the core customer has walked away and the primary revenue stream is subject to the turbulence of too many external factors, threatening investment for either quality or product innovation.
6. Tight margins turn problems into catastrophes.
   Without a focus on quality and loyalty, shortcomings become catastrophes very quickly. Catastrophes are very expensive and often insurmountable.

But that’s just my opinion.

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That was Clint Eastwood in “The Good, The Bad and The Ugly,” but how many of us ever likened the American media landscape to the Wild West?

On April 6, the Federal Communications Commission (FCC) squared off against Comcast Corp. in the United States Court of Appeals for the District of Columbia — a veritable high-noon showdown between two of the agenda-setting heavyweights in the mass communications landscape. Who’s the sheriff, and who’s the villain? We’ll leave you in suspense on that one… at least for a moment.

Let’s start with the perceived issue that led to the court battle in the first place. A few years back, as peer-to-peer (P2P) file sharing continued to gain in popularity, ISPs (internet service providers) not surprisingly began to notice a huge spike in consumption of their bandwidth. Philadelphia-based Comcast Corporation, with 15 million broadband subscribers on a leash, decided to bite back by choking that flow of traffic (specifically file transfers taking place on the BitTorrent P2P service).

With that, the Net Neutrality movement gained a widespread following. Consumers far and wide cried foul, claiming that in a free democracy, no corporation had the right to restrict access to information. The FCC agreed, and ordered Comcast to put a stop to it.

But Comcast came back fighting. They asserted that the FCC in fact had no jurisdiction over the matter, and geared up for a fight… which was apparently resolved on April 6th. According to the New York Times (“US Court Curbs FCC Authority on Web Traffic“), the court’s ruling leaves regulators with “limited power over Web traffic under current law” and “the decision will allow Internet service companies to block or slow specific sites, and charge video sites like YouTube to deliver their content faster to users.”

As is often the case, the immediate aftermath of this decision is hardly as grave as the slippery slope in its interpretation. What happens if Comcast begins to identify other streams of traffic that clash with its business interests (Hulu.com comes to mind), and begins to throw its weight around in the face of a newly under-regulated environment? What if a future candidate for governor, senator, even President proves to be more friendly to the telecom lobby than his or her opponent — can we expect fair and balanced coverage of the campaigns? If the Federal Communications Commission is not fit to arbitrate these potential conflicts of interest, who is?

The scope of power held by the FCC is defined by the United States Congress, so it’s likely that this is where the Net Neutrality movement will turn next.  On the heels of January’s Supreme Court ruling that the U.S. government cannot ban political spending by corporations in candidate elections, and with the midterm elections right around the corner, this is sure to be a gritty battle. Beyond the current battle being waged from Washington, DC to every corner of the country, it’s worth a pause to consider some of the other battles which may heat up as a result of the April 6 ruling:

1) Just another front in the war over copyright protection.

BitTorrent, the original target of Comcast’s preferential treatment of data streams, is largely used in the unregulated trade of copyrighted content. It also happens to chew up a lot of bandwidth, given the size digital audio and video content. We’ve watched the entertainment industry grapple with an outdated business model for years on end… are we paying proper attention to their role in the Net Neutrality debate? As a anonymous commenter on Broadband.gov has stated, “What this really points to is the absolute need to rigorously divorce content from transport.”

2) A halt to the progress made toward eliminating the digital divide.

We’ve made some progress on making high speed internet ubiquitous, but it’s not coming fast enough. Currently, barely half of rural households in the United States have access to broadband (see graph below, courtesy of Digital Nation). If telecoms have more power to direct traffic toward their own commercial agendas, and the FCC less authority to oversee it, will we as a country remain committed to this fight? Without access to high speed internet, rural populations in the United States will be at a major disadvantage in terms of building and maintaining resources and skill sets, and the dynamism of the American economy will suffer.

3) Consumer perceptions of the role that this ruling may play in our economic rebound.

Are your ears burning? Here’s where digital marketing could be impacted the most. If Americans begin to lose faith in the internet as a democratic medium, with free and open access to all, it won’t be long before consumer behavior follows suit. The industry already faces significant challenges, especially in terms of protecting privacy, maintaining channel loyalty, and managing perceptions of information quality. Just as consumers are beginning to feel a weight lifted off their shoulders, they may begin to feel like the internet is not to place to be spending those dollars. A company with diversified media holdings like Comcast could weather the storm pretty well, but what about the rest?

The next time around, this fight won’t necessarily be fought by the FCC. It could be fought by each and every consumer, who resorts to packing a 45 (figuratively speaking) in defense of their right to free access to information. If Americans decide to hold their elected officials accountable, and fight on their behalf, we’ll be back on our way to the innovative drive that has fueled a lot of our growth in recent memory.

Otherwise, when high noon rolls around, there will be more shootouts… but one of the cowboys will be a mean guy like Clint Eastwood, and the other a little more like Marty McFly.

Who would you bet on, in that fight?

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Why? Data & measurability, two cornerstones of the digital space, are key drivers of advertising effectiveness.  When a campaign is properly managed relative to the end objectives (such as reach, engagement, conversions or revenue) this should mitigate the impact of a single metric, specifically and especially CPM, on campaign success.

For example, he writes:

“If you pay for impressions, you get impressions. Is that, in the end, what marketers really want? How about engagement? How about impact? How about actually selling product? A glut of impressions has helped no one.”

True.  When a user is presented with several ad placements during a single-page view, the advertiser is often paying for 3 or more impressions, which, at best, can only reach, engage or convert one consumer.  If that user views several pages across the same site or network, the ratio of impressions to actual viewers continues to decrease. This potential for duplicitous & duplicative flighting of impressions, however, can easily be considered as the planner makes decisions on how to the structure a media buy.  If not, the publisher may certainly deliver tons of impressions that have little impact on an advertiser’s end objectives.

The major fallacy with this argument is that no consideration is given to campaign management.  What sets digital media apart from its traditional counterparts, is that the planners job is not complete after the creative is trafficked.  If the planner finds that placements on a site or network are receiving “junk” impressions and fail to meet any of the advertisers performance objectives, she should optimize the campaign by moving that investment to placements that perform.

If Bonnie’s contention that the columns for impressions and cost are often viewed as the most important on a performance spreadsheet is true, then there is no reason for publishers not to focus on maximizing the number of impressions sold without regard to quality.    It would also suggest a dilemma much larger than that of the CPM.

Bonnie also argues that the scale and quality of impressions available through digital channels have completely eroded the intrinsic value of the impression.  From the agency and advertiser perspective, however, this and other points outlined by Bonnie do not necessarily represent a reason to discontinue using the CPM model. This is because CPM is a pricing model and not a performance metric.  CPM or eCPM would offer very little insight and value as a lone performance metric.    While there is no one universal metric that does, marketers should look to a combination of engagement, conversion and efficiency metrics to gauge how successful their publisher and network partnerships are at achieving advertising goals.

The industry may not be prepared to deliver a coup de grace to the CPM until a better and convenient replacement is made available.  For now, the CPM model as originally and correctly intended, works just fine.  As a marketing performance metric, it’s worthless.

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Have newspapers and large publishers found a viable strategy to stave off extinction, by de-indexing their content from search engines?

After much discussion of subscription based models which would shift the commercial focus away from ad revenue, Murdoch made headlines recently with talk of an exclusive deal with Microsoft to provide Bing users with access to News Corp. content (which includes some heavyweights like The Wall Street Journal and the New York Post).  That’s right, Google (and its 65% share of search activity) would not be invited to that party.  Bing’s 10% share does not exactly represent a swing for the fences… and according to a recent New York Times article, Google estimates it provides news organizations with 100,000 clicks every minute (“Google and News Corp. Do Need Each Other“).  That’s 144 million every day.

Brushing aside raw click volumes, let’s look at the quality of this traffic.  There are a variety of proprietary data sources which would help us valuate these audiences with some accuracy, but Google Insights is free to the public and, not surprisingly, very insightful.  Here we use the Wall Street Journal as an example:

In aggregate, we see the overall quantity of search queries including the phrase “wall street journal” at its highest in 2004, sliding in 2005 and flattening for a long stretch leading up to the Fall 2008 financial crisis.  At that time there was a major spike, with far higher query volumes than observed in 2004, but this quickly tapered off.  The trend then resumed its downward slide in the second half of 2009.  At the time of this writing, we’re at an all time low.

What does all this mean?

This downward trend doesn’t necessarily mean that online readership of the Wall Street Journal is declining.  All we’re seeing is a decline in the use of this brand name in search queries.  Even casual readers of the Wall Street Journal know that it can be accessed at WSJ.com, which bypasses the need for a search engine.  Another share of these readers may not remember the domain name, but likely have it saved in their browsers’ history.  This leaves branded search activity focused largely on these kinds of queries:

• AIG chairman quoted in wall street journal
• wall street journal article about lehman bros
• geithner on wall street journal front page

This type of search activity is fading for a variety of reasons.  One perhaps overlooked explanation is that newspapers’ brands simply don’t have the same appeal as they did in the past.  If a user wants to know what exactly was said about Lehman Bros. in that article, how important is it, really, that it came from the Wall Street Journal?  Certainly we cannot assume that 100% of the purveyors of news in the marketplace will deliver that quote in the proper context, but ranking algorithms in search engines like Google make sure that the authority of news organizations like The Wall Street Journal bouys those pages in the search results, ahead of fly-by-night bloggers and other armchair journalists.

Over time, this algorithm has only gotten better.  But the search query volumes continue to decline.  It’s looking more and more like a brand issue.  If Murdoch is serious about turning his back on two-thirds of the search audience, he better have a plan for how to replace them. And if it’s merely a negotiating tactic, as the above New York Times article suggests, where on Earth does this swagger come from?

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Some may recall that this issue arose in early 2008, when Yahoo! announced submission of a patent application related to the automation of site usability reviews.

Then and now, there’s a noteworthy SEO consideration to this news, as the pursuit of a highly usable, fast-loading site will undoubtedly be added to search marketing firms’ list of tactics to conduct a proper SEO program.  However, in reality this does not fundamentally change the rules of engagement.  Search engines have always preferred pages that read cleanly and load quickly; they have a natural tendency to rise to the top of the rankings by virtue of their smart design.  The rationale is that with a smoother web-based experience, consumers are less encumbered by the operational aspects of their purchase behavior, leaving them to focus their energies on what they prefer: to spend their money on the products and services that reflect their needs and wants.

The real insight here is that in developed countries where internet adoption is starting to taper off, we’re going to see usability as a key catalyst in driving a higher level of quality in this adoption.  Demographics on the fringes of adoption, such as relatively young or old consumers, will be converted from casual users to a more engaged variety, certainly more empowered users of more advanced applications such as rich media, e-commerce, and social media (WOM).

In consumer-driven societies, we need to be paying close attention to usability as a critical engine of growth.  Google’s commitment to fast page loads in the context of search is just the first of many evolutionary steps which continue to make them key allies for marketers.

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The fight for your next customer has been heating up, and your next customer knows it. It’s no longer enough to market to people in relevant media with witty ads and expect them to buy from you when they need a widget or whatnot. Your next customer wants more – they want to be educated about the widget market, they want to hear what other people are saying about your widgets, they want to speak with a customer service rep, they want to see your widgets in action and know that it’s going to do what they need widgets to do.

For a long time we’ve talked about the nexus of persuasion and confidence as the point where someone makes the decision to make a purchase they’ve been considering. The role of building confidence in that process is a new realm for marketers, demanding that they give more to the next customer simply to make them a customer. This exchange of information, entertainment, sampling, guarantees, etc. is necessary to get true purchase consideration in return. That’s the marketing value exchange, no longer trading goods/services for money, but in advance of that, trading something of value for the time and consideration of your (potential) next customer. Some may think of this as giving the ‘milk’ away for free (so why should anyone ‘buy the cow’), but such a proprietary approach is proving to be a detriment in this modern competitive economy.

Product reviews, corporate blogs, customer service forums and support, social media, communities, white papers and unique content are all demonstrations of this effort by many marketers. Google has built a business on it and Chris Anderson wrote a book on it (and gave it away for free). And while support for this value exchange has been growing in the corporate boardroom, the struggle for many companies is their ability to measure such efforts on the same scale as their traditional advertising investments. Accountability in the value exchange, as with most other channels, is the key to evolved marketing.

So what do you think? Is the Marketing Value Exchange worthy of greater focus, or should advertisers stick to the tried and true?

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“Search engines are now so smart, that there’s no need for specialist SEO copywriting.”
- Glenn Murray, specialist SEO copywriter

I agree with a few of the fundamentals here, especially 1) SEO as a science goes far beyond the keywords appearing on the screen, and 2) the point at the end that picking keywords is an essential part of the process.  The robustness of this research foundation is often the best predictor of SEO success.

The notion of “specialist SEO copywriting” is indeed pretty baseless… as the search engines increase in sophistication, all they are doing is modeling human behavior with increasing levels of complexity and accuracy.  This inevitably means that mechanical tactics such as doubling the incidence of keywords on the page have, at best, a neutral effect on a site’s SEO profile.  They could also serve as a detriment, which we’ve been seeing for years now in the form of keyword stuffing penalties.  So in effect, with every passing day, “specialist SEO copywriting” looks more and more like just plain copywriting.

It’s for these reasons that on-page tactical SEO only gets real attention at the beginning of a project (something we alluded to in the post “Dinosaurs, Dodo Birds and Tactical SEO”).  Once the best practices are baked into the content development workflows and/or CMS, these tactics diminish in importance, deferring to the long-term editorial strategy which is so important for maintaining strong visibility in search over the long haul.

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Yahoo will save USD $425 million in operating expenses from resources invested in infrastructure technology while keeping 88% of revenue generated from search advertising. On the other hand Microsoft not only gets a larger user base to further refine Bing, but Microsoft gets a 10 year lease on the Yahoo Search blueprint; which in paper should impact market share as well as advertiser share of wallet. Will the Microsoft and Yahoo agreement have a significant impact on the current search landscape? Depends who you ask.  

Predictions aside, the search agreement between Microsoft and Yahoo is not about gaining market share, it is about owning the emerging space of real time search. Companies such as Collecta and OneRiot who have pioneered the development of real-time search will become acquisition targets for Microsoft and Google. Google and Microsoft know the existing model of aggregating and indexing search is slowly becoming obsolete.

Every users’ email, communication, IM message, comment, post, tweet has significant value as it represents knowledge of every day life that didnt exist before. In general terms,  Microsoft will leverage and aggregate this information via content (Bebo) while Google will  do it via technology (Google Wave). Having said that, Microsoft’s browser and productivity software backyard is no longer safe.  

The new real time search model is going back to the principles of the late nineties. Back in 1999 when Yahoo, Excite, Lycos and AOL where the kings of organizing the web, human editors catalogued every site worth visiting and decided which ones we should visit. While this model wrongly thought of the web as a medium, a sort of TV Guide, it was based on the principle of shared knowledge. The future of search is still closely tied to the idea of shared knowledge, the difference in that knowledge is not controlled by a few, but associated to millions of conversations, opinions, ideas and comments. The first significant test for Microsoft will come on December 2010. On December 2010, the agreement between Google and AOL to provide the search engine on AOL comes up for renewal.

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SEO: a digital cottage industry.

It’s not hard to solicit a dozen SEO proposals in the blink of an eye.  One common approach to SEO consultation is to crystallize a process and then scale it with minimal variance; armed with a “proprietary” series of workflows, the SEO tactician goes to work.  Results may come and go, but irrespective of the end game, the client is often mystified by the process.  The relationship has not necessarily empowered them to do their jobs any better.

This, like so much else in the digital marketing world, is changing.  The SEO function has evolved from a mere collection of tactics into an art and science which needs to be tightly wound within the overarching business strategy (articulated very well by Jill Whalen just a few weeks ago; “Is Most Of SEO Just A Boondoggle?”).  Jill takes aim at “useless SEO parlor tricks” and instead issues an open call for a closer, more symbiotic relationship with the client.

Tempted to tweak?

Back in the day, we always knew enough about Google’s PageRank algorithm — the set of criteria which governs how one page outranks another in search results — to know that it was good practice to build lots of inbound links to one’s website.  Our ingenuity spawned a brilliant doctrine for modern webmaster relations: “you link to my site, I’ll link to your site.”  The problem is, links between sites with no apparent relevancy to each other began springing up all over the web, and search engines squashed the practice by limiting its impact on search rankings.

By 2007, people caught on and began buying links from “reputable” sources, until Google’s crackdown on paid links.  Remember when PageRank sculpting became all the rage?  Sorry folks.  Google engineer Matt Cutts shot down misuse of the Nofollow tag just about a month ago.

Death, taxes and search evolution.

The point here is NOT that a good SEO program simply needs to stay one step ahead of these algorithmic changes.  Instead, it’s to acknowledge the fact that search engines will continually refine their algorithms ad infinitum.  Marketers and SEO’s may be compelled to react with a scalpel, making small reactive changes to their website’s markup and server configurations.  Even in the absence of an overt media cost, however, these changes still require the allocation of human resources.  This frequently makes SEO micro-management a short-sighted approach — and more often than not, breaking news from Search Engine Land or SEOmoz won’t shake the foundation of a sound content strategy.

This means, quite simply, that what we choose to publish is far more important than the way we format it.  Fusing keyword research, competitive analysis and creative development, and applying a baseline measurement platform to benchmark progress across digital and offline channels is a much more sustainable path to search engine success.

All the essential SEO best practices should be baked into the digital marketing agenda from the start.  Ultimately, however, the profitable pursuit of search visibility will live and die by the intellectual capital put forth in the website’s most apparent public-facing asset: its content.

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Google recognizes five factors when considering its relationship with Twitter:

1. The overlap between Google searchers and Twitter registered users is significant. With close to 80% of the US search market, Google can acquire and reach/monetize those same Twitter users through other more cost effective channels.

2. Google’s social media record is poor – it is unlikely Google would know what to do with Twitter despite its acquisition of YouTube. Furthermore, Google Friend Connect, at the heart of the search engine’s social media efforts, is fully integrated  with Twitter, allowing Google Friend Connect sites to integrate Twitter content and users.

3. One of Google core UPS is quality and speed of indexing. What Google wants from Twitter is a real-time feed of updates to speed indexing. At present Google must independently index each Twitter user periodically to look for updates. This process is slow and expensive.

4. Google can establish a (risky but potentially lucrative) advertising partnership with Twitter. As reported by Adage Google was testing incorporating Twitter streams in AdSense units. Google has designed special AdSense ad units that pull the five most recent Tweets from TurboTax’s Twitter stream. TurboTax anticipates that the campaign will raise people’s awareness that the brand is listening and talking to their customers. Will it work? Time will tell.

5. Google is diversifying into the VoIP and communications segment. GrandCentral, a phone management service acquired by Google for $50+ million in 2007 is at the core of their strategy. Following months of modifications Google has released Google Voice. Google Voice proposition is simple – “one phone number for all your phones, for life.”

As opposed to growing the service organically, Google will acquire Skype. eBay’s recent announcement it plans to spin-off Skype (following a $1.4 billion write-down on the deal) provides Google with a unique opportunity to quickly achieve critical mass within the P2P VoIP segment. The integration of Skype mobile into Google Android and Skype Business into Google Apps would provide a significant boost to Google’s efforts to integrate VoIP into its staple of existing services. On the other hand, what Google has in reach, Apple has in community. Apple’s iTunes is probably the only platform where an integration  of Twitter makes any sense.  

Alain Portmann, author of  ”Why Google will not acquire Twitter” is Web Liquid’s Founding Partner, Head of Strategy. Visit www.webliquidgroup.com for more thought pieces.

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Regardless of the hype behind Twitter, one its strengths is the speed at which it disseminates and shares information from the mundane to the highly relevant. Whole Foods is taking advantage of this dynamic, by catering to consumers with special interests and needs through Twitter. Another strength is the simple but effective API that has driven the development of countless third-party apps including TweetDeck, Twitteriffic and Twhirl.

Twitter is nothing more than another attempt to blend real-time communication and search within a social media context. Before Twitter there was Jaiku a Nordic social networking, micro-blogging platform launched in February 2006. Jaiku was purchased by Google on October 9, 2007 and shortly after decommissioned.

There is certainly scope for this type of integration, yet there are those that seem to have forgotten lessons from a decade away –claiming Twitter is a threat to Google and Facebook, (after all Google’s search index doesn’t keep up with conversations as quickly as Twitter and its user base is growing exponentially). As we learned during the dot-com bust, the value of technology and a user base is not in its ability to become mainstream, but the ability to be monetized. Why? Simple – profitability drives sustainability, R&D and innovation.

Twitter has four options to monetize its audience and build a profitable business model – advertising, subscription, research and apps download.

Advertising. While Federated Media recently announced an advertising revenue share program on Twitter creating programs such as ExecTweets, a collection of tweets from Microsoft executives, advertising will not be well received by Twitter users unless they are really clever about they way they engage this audience – few companies have been able to do so.

The latest attempt to build an advertising model is in the launch of The Discovery Engine brings real-time Twitter search right into the home page sidebar. When a user conducts a search, the results appear there, too, popping up in the big white box instead of on a new page. Users can also track the hottest trends on Twitter at any given moment within the same space. Think of it as Google Alerts for Twitter, built right into the site. The problem is that most people may never even bother discover it. How often do users actually use the Twitter.com interface?

Have a look at the latest Toyota ad on Twitter Japan. This model might become the norm for Twitter – make money from overseas markets while keeping the US version free.

Is there scope for search based ads, a’la Google Adwords on Twitter? There is, but while the ads would reach a large audience, their relevance would be poor. Revenue-sharing ad network Adjix has thrown its hat in, by launching an ad format that lets users embed text ads within “tweets” (Twitter posts). User can post small text link appears at the end of their tweet. As Kayte Kaye from Clickz reports “the value of search marketing lies in its ability to reach people who are seeking information, on Twitter, people are pushing out information as opposed to looking for information”.
Subscription. While successfully deployed by a handful of community sites including LinkedIn (Personal Plus and Pro), it would be challenging to justify the cost to the average consumer. With established media outlets such as the New York Times and FT.com struggling to make the “pay to consume” model work, Twitter does not stand a chance.

Research. While Twitter could be used to monitor and track the conversation and word of mouth of its user base, it would not only end up competing in a space dominated by aggregation of word of mouth (Technorati, Brandwatch) and more importantly, end up killing the spontaneous and “information promiscuousness” of its user base.

Apps Download. A promising model for Twitter based on idea of offering “power users” – mainly those in the PR industry – unique tools and applications at a cost. Case in point, CRM provider Salesforce.com recently launched a Twitter application costing $995 per month which allows its users to post and manage Twitter content. Yet, this model in itself cannibalizes the concept of equal access and influence, which is so important to social media.

Our friends in the industry have lots of different views on the future of Twitter. In an interesting exchange our friend Tim at Reactive brought up a good question – Is the question how will “Twitterers” make money from the service, or how will “Twitter” make money? What we all agree on is that the video Flutter, the next Twitter, is recommended viewing.

Sooner than later Twitter will have to choose between either remaining the Peter Pan of social media or stepping into the world of social media adulthood. The decision is likely to end up killing Twitter.

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1. They’re mouthy. The polite way to say it is “unmediated discourse.” It means that online, anyone can and will call you a dog. They also may write you love letters. Those who are passionate about your company will make it their mission to spread the word. So, thrill them.

Contrary to popular belief, most CGC/online WOM is in fact positive, but it’s the negative stuff that gets noticed and stirs fear in the minds of brand managers. And it’s actually the negative stuff that presents the most interesting brand management opportunities – transparency and genuine effort can go a long way. In today’s economy, it can go even further; righting a wronged customer can turn a detractor into a promoter and create loyalty beyond what previously existed.

2. They’d rather listen to each other than to you. When it comes to buying, the opinions of their peers carry enormous weight. According to Deloitte’s Consumer Products group, 62 percent read online reviews written by their peers, and of those who do, more than eight in 10 said they were directly influenced by these reviews.

Sense check, of course! Fortunately in addition to fueling the influence of WOM, digital media makes it more accountable. Research is showing that peer reviews on ecommerce sites increases conversion rate, and several of our clients have experienced higher customer quality when their conversion is preceeded by a relevant form of social media.

3. They’re moving targets – literally. There are now 243 million mobile phone users in the United States, sending nearly 1 billion text messages a day. They’re increasingly watching video and listening to music via their phones. These little machines are their best friends – and they could be yours, too.

This is in the US where the mobile phones per capita is slightly worse than Slovakia, now imagine the global opportunity.

4. They’re snackers, constantly scarfing down tiny chunks of media. They scan the headlines in their RSS reader, tap into video shorts at work, speed-read online news, watch TV shows in fragments on the phone as they navigate the day. Content wolfed down this fast needs to be easily digestible.

That’s what I mean by ‘nice and sound-bitey’ and condiering the recent growth of Twitter, it would seem quite logical. But it’s also important to note that at the same time people now seek and have access to more information and detail on the topics of their choosing than ever before. Doctors complain that patients are self-diagnosing too frequently because of the web, which may be a downside, but the upside is that we’re all much more educated on the subjects that matter to us most.

5. They need to be free. There’s so much free media online, it’s tough to get someone to register for your walled garden. Nor do they want to pay for content, with the exception of highly desirable movies and music. As The New York Times discovered, ads can support content better than subscription fees.

Content is just the beginning, services are the future – look what the iphone and the App Store are doing, that’s interesting. Ad supported content and services may sound like a bit too much advertising but as marketers lean more towards service and away from solicitation it may not be as bad as it sounds

6. They love gadgets, even the digital kind. Widgets – those mini-apps that display content on a Web site, blog or desktop screen – are the fastest-growing online application, reaching 40.3 percent of U.S. Internet users, according to comScore. Google’s Open Social initiative could quickly double that. Marketers will pile on.

Marketers are piling on and the battle ground is now in your hand not on your desktop. But that doesn’t mean widgets are a marketing panacea. Clutter can occur anywhere, including amongst widgets, so again the imperative is service over solicitation.

7. They’ve gotten over the whole privacy thing. After you’ve posted photos of your water birth right alongside your water bong and videos of drunken shenanigans next to the story of your appendectomy on your blog, do you really care that Google is keeping track of your search queries?

Maybe not, the Facebook TOS debacle demostrates that privacy, or at least ownership, is still a sensitive arena.

8. They’ve got game. Over 40 percent of U.S. households have a video game console system, while over 120 million people play video or computer games, according to DFC Intelligence. Increasingly, those games contain product placements and ads.

That number keeps going up and more interestingly, the image many people have of a ‘gamer’ is less representative of the gaming population. Get this, my parents have a Wii and I don’t!

9. They’re video maniacs. Every age group is tuning in online, according toadvertising.com, with an equal breakdown between men and women. The most-watched content is not music or movie trailers, surprisingly, but news (though this is tricky because Perez Hilton counts as news). While online viewers would rather not have ads at all, they’d rather watch them than pay for content.

The economy is really driving this one as people looking to cut their household costs often look at cable as a little luxury that’s easy to forgo now that most TV shows and movies are available online for free or a couple bucks – see sling.com, hulu.com and netflix.com.

10. They still haven’t found what they’re looking for. An iProspect survey found that 57 percent of consumers agree with “search is becoming more important to me.” At the same time, offline media is increasingly driving their searches, so cross-media integration is more key than ever.

Search has had explosive growth over the past couple years but the market is coming around to the idea that it’s a media made to meet demand, not create it. As such, without the support of other marketing activities that drive demand and interest, search has a ceiling. And exposure to conversion analysis indicats that it has probably been getting more credit than it deserves.

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In this post I reveal the 9 most significant factors to consider when launching or evaluating an existing Pay-per-Performance program that contributes incremental revenue and return on investment (ROI).

1. Remove conversion duplication.
Conversion duplication occurs when users are being reached by the same advertiser across multiple sites and tracked across different reporting systems. An Atlas Institute study entitled The Hidden Costs of Pay per Performance Media estimates the rate of duplication to be between 20% to 25%. The issue of conversion duplication is further magnified, given publishers typically sell their remnant inventory to multiple ad networks and by ad-networks buying, selling and trading ads from each other to maximize reach and reduce frequency. If you are working with multiple ad-networks such as Advertising.com, Blue Lithium or DrivePM, your conversion duplication increases significantly. Conversion duplication not only has a significant financial impact as advertisers over-pay for conversions but it skews media inventory optimization and investment allocation decisions.

While there is no single ad-server or site analytics solution that offers the best tracking and ad management solution across all channels, it is possible to piggy-back all third party tracking platforms into a single tracking tag. This effectively allows advertisers to utilize their preferred channel-specific platforms (e.g. BidBuddy for paid search, Trade Doubler for affiliate marketing) while having a single de-duplicated count of conversions.

2. Focus less on the buying of media and more on the optimization of media.
Early in my career I learned that the secret to sustainable and effective online media solutions what not in the buying, but in the optimization. What you buy the media inventory for is the starting point, what you do with that media inventory is what really counts.

On-going optimization is the single most important factor is the success of a Pay per Performance advertising program. In our experience, the buying model is secondary to the end return on investment (ROI) metric with CPM programs at times working more effectively than CPA based programs. One way to improve optimization is by increasing the granularity of your data send your cost per performance partner multiple tracking tags as opposed to a single tracking tag.

3. Assign credit where credit is due.
It is likely your Pay per Performance advertising program is based on payment to the publisher that drove the last click. While this is an accepted metric, it negates the value or contribution of everything that preceded that click. Imagine if the winning Track & Field Relay Team in the Beijing Summer Olympics was only given one gold medal the medal given to the last runner to carry the baton and cross the line. It would not be fair, given the other three runners contributed equally to the winning performance.

This is how conversions are attributed under the last click rule. For more on the last click rule read a previous post entitled “The last click gets to much credit”. If all credit is given to the last click action, it is only a matter of time until the media that drives that prospect down the conversion funnel is discarded (and that funnel becomes smaller and smaller). Furthermore, a study on online advertising has shown that click performance is the wrong measure of ad effectiveness in the long run. According to the study, 6% of the heavy clickers called “Natural Born Clickers account for 50% of all display ad clicks and cannot represent the total online population.

In a Pay per Performance advertising environment it is essential to understand the role of every publisher and partner in order to make informed decisions. Exposure to conversion mapping provides the information needed to potentially weigh conversion payments, depending on the role each publisher played in driving a conversion.

4. Get in the habit of re-engaging your visitors.
When you establish a new personal or business acquaintance it is customary to communicate after the first engagement. Re-targeting users that have visited, transacted, or researched your site is key to drive efficiencies from your pay per performance program. Measuring the return conversion rate of users is a useful metric to establish a pool of valued prospects. Furthermore, re-targeting provides you with the opportunity to tell your prospects and customers a story about your brand as opposed to simply broadcasting the latest offer in hope it meets their needs.

Our work in the travel sector indicates 56% of users identify “visiting a site on the past” as the most compelling reason to purchase from a specific travel provider. Furthermore, a re-targeting program for one of our travel clients has increased click rates by 73% and revenue by ad impression served by 96%.

5. Optimize your site landing pages.
Imagine receiving a beautifully crafted and targeted invitation in the post. Your expectation is that the event will mirror the craftsmanship and value of the organizers’ invitation. Upon arriving to the event your expectations are not met, you are not properly greeted, introduced or entertained. A great invite. Poor party. The same dynamic applies to your cost per performance advertising programs and the expectations of your potential customers. While you can spend substantial resources crafting a great creative and offer, you have to invest in developing landing pages that will facilitate and fulfil the mission of your potential customer. Consider the impact of increasing your site conversion rate by 5% versus increasing your marketing spend by 25%.

6. Understand your optimal conversion window.
It is essential to determine the conversion window that provides the optimal balance between volume and cost of conversion. While the temptation is to establish a uniform conversion window for all channels including paid search, email marketing, display advertising and affiliate marketing, the approach is short-sighted. The reality is that consumers interact differently with each channel; each channel plays a different role in driving the users through the conversion funnel. Determining the optimal post click and post impression window goes beyond deciding on a 7, 14, 21, 30 or 90 day parameter. A good understanding of your optimal conversion window can allow you to negotiate payment on post click conversions, as opposed to post view conversions.

7. Differentiate between conversions from existing and new customers.
In the majority of cases cost per performance advertising agreements are driven by the volume of conversion, as opposed to the quality of conversion. If your business tracks, communicates and measures the contribution of existing and new customers differently so should your Pay per Performance advertising program.

In my experience, all advertisers are greatly concerned with the incremental contribution of cost per performance advertising – am I paying for conversions that would have occurred regardless of advertising? Establishing a payment model that recognizes conversions from existing and new customers can help tie advertising investments to larger commercial imperatives such as market share, cost per customer and revenue per customer.

8. Focus on large ad-units above the fold.
Should you pay for conversions driven by a 120 x 60 display ad at the bottom of a publishers site? No, because size does count in Pay per Performance advertising. Small display ads do nothing more than “drop cookies” onto users accessing a page; with users not even viewing the ads themselves. Research indicates that larger ad formats can lift metrics such as branding awareness and message recall by as much as 25 percent, even after just one exposure. For pay per click programs such as Google AdWords set-up message groups within your campaigns; rotating different message as different times of the week.

9. Track site to call centre traffic.
Your pay per performance program needs to recognize that online is at times a tool of researching and information gathering; driving users to complete their transaction offline. Click-to-call solutions are widely used by affiliate marketing networks and offer an effective way of tracking users beyond their online interactions. Other services such as AdInsight integrate call centre data into your Google Analytics account.

Alain Portmann, author of  ”Pay per Performance Advertising – 9 Tips to Drive Incremental Revenue” is Web Liquid’s Founding Partner, Head of Strategy. Visit www.webliquidgroup.com for more thought pieces.

Click below for links to relevant agency/consulting services:

Affiliate Marketing & Pay on Performance
Securing and growing pay-on-performance investments.

Media Optimization
Ensuring your money follows the best performing sites, messages and prospects.

Conversion Optimization
Continuous improvement of conversion by focusing on dynamic landing pages, conversion optimization and site analytics.

About Alain Portmann

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A recession is here and belts are being tightened! There is no way of ignoring that fact, but that does not mean it is all doom and gloom for everyone. Yes the retail sector is taking a hit as consumers are just not willing to pay for items that are not considered necessities. Yet there are certain companies within retail that could buck the trend and build during this downturn.

Over the past six months supermarkets have changed their tact on what they are putting in front of consumers. Asda and Tesco are going head to head with the cheapest basket value, each week they come out with a new comparison showing they are more affordable than the other. So far it looks like Asda has been winning that particular fight, according to the Grocer, Asda is thought to have achieved 7% growth over the Christmas period compared to Tesco who only managed to achieve a 2.5% growth over the same period.

Sainsbury’s posted a 4.5% increase over the same period and are saying it was their best Christmas yet, this could be as a result of consumers looking for high-quality, more reasonable options to Waitrose and M&S.

However hidden away behind all of this is the interesting story of . The three ‘low cost’ supermarkets are going from strength to strength. According to King Sturge property consultants the three are looking for 150 new sites for stores between them. This is really impressive considering they have approximately 1050 stores between them. This equates to a potential growth of around 14%.

So they all have a safe position in the market and are all growing during the downturn, but is there more they could be doing. Aldi has been the first to kick off with their new offline push featuring TV chef Phil Vickery. They have developed a number of good value recipes that use ingredients from across their range and are very reminiscent of the Jamie Oliver adverts for Sainsbury’s. The campaign is a great way of bringing a new face to what people perceive as just a value supermarket. They haven’t stopped there, they have recently brought their Travel brand to the UK, it maybe new here, but they regularly take care of more that half a million holiday makers across Europe.

Well Aldi has made a number of shifts in order to develop their brand across the UK, but what about Lidl and Netto? According to IGD Analysis, Netto launched their first ever TV campaign in the UK just before Christmas with the strapline “The big difference is the price”. Lidl have slightly more experience with TV advertising having started back in 2006.

Even though they have kicked off with TV, could they have benefited from other channels, Lidl have dabbled in online and Netto doesn’t seem to have started yet. Are they missing a trick by not upping their presence in this area. They are both situated perfectly to really develop over 2009 and use new channels to drive footfall.

Lets take digital as an example. Here are four very simple suggestions that can be easily developed online.

1. Don’t waste huge amounts of money going head to head with Asda, Tesco or Sainsbury. I would advise them against buying large home page take overs on MSN or Yahoo at this stage. Yes they can get in front of a lot of people, but they should have a proven conversion model in place before embarking on this route.
2. Develop their conversion model. Are they going to be able to convert online or are they going to have to drive footfall to their offline locations. If there is no need to drive online sales, they do not need to drive consumers to their own sites. They could take some of their site functionality out to consumers and put it in their advertising
3. Work on who their target audiences are and where they can grow these. Sainsbury has benefited from consumer shifts to their brand from more expensive competitors. Lidl and Netto could start working on a similar consumer shift.
4. What about helping more consumers find their stores, something as simple as store location search functionality on all advertising can help this.

It will be interesting to see what their next move is.

About Alain Portmann

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While reduced marketing budgets are a symptom of a slow economy, I am more concerned by a disease that flourishes at times of slow economic growth – lack of decision making.

While we can prescribe and nurse our clients marketing budgets back to health, lack of decision making is a condition that can permanently damage a brand, long after economic recovery. In the best of times, most large companies struggle with decision making. Decision making by committee becomes the norm and even the most forward and progressive minds within an organization become part of the “corporate jet stream.” In times of plenty and times of scarcity decision making requires a degree of risk and vision.

The best clients I have ever worked for are those clients that can make decisions. The clients I most respect, are the clients that can make decisions. Not surprisingly, my best and most respected clients are the ones that involve me early in the process; not simply asking for solutions, but making me part of the decision making process.

Our job as consultants is to inform and inspire the decision making process, while mitigating the risks involved. While we can advice, inspire and formulate solutions; ultimately we cannot make the final decision to pull the trigger. We cannot afford not to make decisions for our clients. Every day we make decisions about our client investments; sometimes we get it wrong and learn, most of the time our decisions are right and we succeed. In an environment where decisions are not being made, our value as consultants and the value of our ideas is lost.

While decision making during an economic downturn is challenging, it is a trait worth exercising. To facilitate the process, it is worth keeping in mind a few pointers. 

• Your advertising agency is not responsible for decisions you are unwilling to take. A new agency is unlikely to help you make a decision unless you empower them to do so. Noelle Weaver in Agency Reviews During a Recession alludes to how the agency review process is being affected by the recession.
• Identify and involve the ultimate decision maker. If sign-off is required from your Financial Director pre-empt their questions and concerns, and involve them early in the process. A business case can be powerful but not as powerful as a sense of joint ownership.   
• Prioritize marketing expenditure but continue to manage a pipeline of projects that can be activated at a later time. Define decision making milestones for each individual project. 
• Involve your team in the decision making process; even the most junior members of your team will benefit from understanding how decisions are taken.
   

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Seventy-eight percent of marketing professionals polled in Coremetrics’ annual “Face of the New Marketer” survey saw that social media marketing was a way of getting an edge on their competitors. However, just 7.7 percent of their total online marketing spend was allocated to it compared to 33 percent to online advertising and 28 percent on online promotion design and implementation.

The large majority of advertising on social media sites such as Facebook, My Space and LinkedIn follows the standard model of pushing ad exposures. While providing cost effective reach and frequency, and a degree of targeting, these ads do little more than devalue display advertising. The only people benefiting from traditional display advertising in social media sites are ad networks such as Advertising.com and DrivePM which have found gigantic supplies of unsold ad exposures to package as part of their networks. 

Why does traditional advertising not work in social media? First, most consumers’ decisions on social media sites take place through the referral of friends. Second, the push marketing approach does not apply to niche, fast-moving audiences found in social media sites. Three, the mindset of social media users is driven by self promotion and community (social engagement) ” in order to connect there has to be an exchange that is of value to the user.  

Companies such as socialmedia have recognized that advertising funded applications, serve social media users better – integration works better than solicitation. These companies leverage third party applications on social media sites, running ads of these applications and splitting the revenue with developers. This approach, while more effective than traditional display advertising still seeks the endorsement of users in order to be effective.

Achieving success in social media requires commitments longer than many campaigns or creative briefs are scheduled to run. Do not allocate and spread a social media budget over some artificial timeline created by your media plan, but regard it as a methodical exercise of understanding, listening and connecting with a social media community. The reality is that social media is more than just an advertising channel.

Open Skies, British Airways new premium transatlantic airline, and our latest client, embraced this approach; choosing to place social media and a blog at the heart of the airline’s launch and conversation. Furthermore, it invited 20 members of the FlyerTalk community, as well as FlyerTalk founder, Randy Petersen to be part of the inaugural commercial flight on the 19th of June.

At Web Liquid we believe social media is about measuring, understanding and harnessing the influence of consumer generated content.  First it’s important to make clear that CGC is not a marketing medium, it’s a conversation amongst consumers about the products/services they want to buy, might buy or have bought. The fact that the conversation is about products and services presents the marketing opportunity but doesn’t grant anyone the right to crash the party with their sales pitch.
Among the many points of difference between the broadcast and online models of marketing is the notion of service over solicitation. It’s a core value that consumers have brought to the space and one which smart marketers have been quick to understand – in the world of CGC it’s an imperative for a corporate effort to succeed. But the real opportunity for corporate participation in CGC is not simply to look at the space as a tactical channel to *not* solicit (advertise), rather as the cornerstone of an entire marketing strategy.

First, CGC presents a valuable research opportunity, serving as a public record of those conversations and consumer sentiment relative to your brand and that of your competitors. A number of companies have popped up offering technology to capture those conversations for analysis but much of the application of that technology is still quite tactical – measuring the WOM around a particular event or campaign. In fact, the CGC research opportunity is to use that insight on a regular basis and with quality marketing-based analysis to derive valuable insights and identify concerns and opportunities.
Armed with this valuable research data and the insight of experienced marketing analysis, CGC presents the opportunity to engage customers and potential customers’ at the most critical time in the purchase process – right when they’re looking for the information about a product or service.

Today, CGC is WOM online, and its effect on the consumer purchase funnel is significant. Consumers discover influential discourse from peers at the most critical moments leading up to a purchase. And after the purchase, the consumer often becomes yet another creator of this content, adding their voice to the conversation and their consumer experience to the public domain.

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About 16% of UK internet users watch time shifted TV on internet or video on demand services. This figure compares with 27% using personal video recorders and 11% using in demand television services.

Video on demand offers television broadcasters a potential lifeline of revenue (via advertising and subscription) and audience share. The UK market is mainly dominated by two traditional VOD platforms, 4oD (Channel 4), iPlayer (BBC) that are distributed across multiple broadcasters including Sky and Virgin. Kangaroo, a free advertising funded platform being planned by the BBC, iTV and Channel4 is facing scrutiny from the Competition Commission due to concerns over its market power and control over content libraries. 

In the US the six largest cable operators announced “Canoe Ventures,” a project to promote interactive TV ads by standardizing the technical requirements across their systems. The group includes Cablevision, Cox Communications, Comcast, Time Warner Cable, Charter and Bright House Networks.  

Video on demand and IPTV (TV on broadband) have usually been defined as TV-centric, not PC-centric. This distinction implies a different user experience: a user experience of “lean back”, where the user takes a passive role of watching video content over a TV set with set top box; versus a “lean forward” experience of an active Internet surfer in front of his computer. With the convergence of devices, the difference between computer/monitor and set top box/TV screen will diminish over time. Mobile devices like the iPhone promise to challenge the traditional model of consumption. In fact a new version of the iPlayer service designed for Apple iPhone and iPod Touch devices was released earlier this year, already accounting for 3% of viewing requests.

Video on demand revenues and audiences will be increasingly threatened by the emergence of online VOD services such as Hulu.com, Joostand file sharing communities such as Uknova.com. These services will accelerate the shift away from the existing pay-per-view model into a free (advertising funded model) or subscription model. Hulu has quickly become the ninth most popular video site in the US, selling ad inventory at premium rates ” USD $60 to $70 CPMs.

Microsoft’s recent acquisition of Navic Networks confirms the advertising potential of video on demand.  Navic reaches some 35 million digital set-top boxes in North America via cable providers including Charter Communications, Cox and Time Warner.  Navic’s applications run on digital set-top boxes that can make TV a two-way medium. For example, a 15-second commercial can carry a graphic overlay and functions that allow the viewer to request more information about a product. Using viewership data gathered from digital set-top boxes, as well as additional demographic information, Navic can craft a more finely tuned picture of what and when people are watching, then serve relevant commercials.

But video on demand has a long way to go. In a perfect video on demand world, users would leverage their RSS reader to download any show into a subscription list whenever online for viewing later. That content could be from anywhere in the world and there would be no time limit on it. This will not be a reality until there is a proven and sustainable advertising and revenue model for video on demand.

Content owners and broadcasters/distributors will have to embrace there principles to ensure the continued growth of video on demand: 1) aggregation of content, 2) revenue collaboration 3) standardized measurement of audiences.

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The legend of Picasso is at the heart of a contemporary challenge in the advertising industry – the value and cost of ideas. There lies the problem. As an industry we are obsessed with ideas. We complain when these ideas are not accepted. We feel cheated by having to put a price tag on the enterprise of our ideas ” how can I be asked to price passion and the selfless pursuit of an idea?

When we recognize we are in the business of “worth creation” can we begin to shift our thinking from “‘What does it cost us to generate work and ideas a client wants?” to “What is the value of the services and materials we are creating for the client?”

Worth creation forces us to decentralize the idea creation process. Instead, everyone’s job must become value creation. Worth creation forces us to establish a strong personal and commercial relationship with our clients; truly understand their business as opposed to their latest brief. Worth creation demands we measure and place more value on the outcome of our work.

Our latest idea is more than a campaign concept; it is worth creation. Was the agency responsible for creating the Staples’ plastic Easy Button, a $4.99 gadget (that’s sold more than 1 million units since its launch in 2005) aware of that? Apparently not because they received no financial reward beyond their original fees.

Financial advisors are paid on the basis of worth creation. This is accepted given their decisions have a direct and measureable impact on wealth. Digital marketing, like no other channel allows us to directly measure the value created for a brand, be it revenue or perception. This is part of the problem with digital marketing, worth creation has been completely tied to quantitative metrics ” sales, revenue, ROI.

If worth creation is proven and measured every day, the degree of compensation then becomes a question of positioning. If clients regard an agency as just another operator on their marketing conveyor belt, worth creation is not possible. Worth creation requires partnership. Unfortunately most clients regard their agencies as just operators in a large conveyor belt.  In response, and to extend their control and influence, agencies try to be the “jack of all trades”, operators in all realms of digital marketing. The focus is then on depth of offering as opposed to worth creation. These new services are generally sold to clients at a discount “ lowering overall compensation levels.

Client and agency must be willing to invest in worth creation. When this occurs, the conversion of two intangibles – time and ideas ” translates into a tangible and sustainable compensation model.

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Media companies and agency networks tell people the digital space is just another media channel – it isn’t. The digital space is about participation, ecommerce and community. It can’t be sold or planned as just another channel. Agency networks tend to try to turn digital into a commodity – and lets face it, sooner or later this will not work for clients.

When digital is turned into a commodity it is managed through integration. When digital is recognized as more than a media channel it is managed through collaboration.  

Having spent my formative years in advertising working for a large global network I can appreciate the benefits of  integration. As the steward of my clients media budgets I would happily report on the cost efficiencies realized by pooling offline and online budgets. I relished the opportunity to broker cross media agreements – that elusive target audience would not stand a chance - print, outdoor, television and online. However I quickly realized the large agency that employed me, as well as my clients operated in functional silos. Without the appropriate organizational structure, internal culture and accountability, integration will turn digital into a commodity.

Dave Morgan, evp, global advertising strategy at AOL, said media shops have a faltering business model, with armies of comparatively low-paid digital media buyers propping up a layer of high-priced executives from the traditional side of the aisle. The inefficiencies created by this approach are no longer tenable, and current trends will yield “leaner” agencies well versed in using digital-buying platforms.

Sir Martin Sorrell, the chairman of WPP, one of the “cradles of integration”, points to the need of a new agency structure. “The agency of the future will reclaim upstream marketing consultancy work by delivering a seamless service; one that starts with the most fundamental of market analysis and ends with the finished creative artefacts.” 

Forrester Research paints a grim view of the current state of advertising, which it believes is in “a world of hurt” because consumers are tuning out the messages the industry is predicated on producing. Instead, it believes shops need to be organized around communities, not disciplines.

While not as sexy or grand as integration, collaboration works for us and our clients. At the heart of collaboration is the idea that digital extends beyond media. Digital becomes a “hub” at the heart of our clients organization, bringing together revenue management, customer service and marketing teams. Through collaboration we become consultants to our clients, partnering with non digital specialists of their choice. Through collaboration we have to listen as opposed to dictate an approach towards integration. 

More importantly, through collaboration, digital is not tied to media outcomes but to ideas and tangible returns.

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While positioned as a way of countering Google’s dominance in search, the Microsoft/Yahoo alliance has all to do with 1) display advertising 2) social media and 3) communication platforms (email and instant messenger). Display advertising is the second largest online ad format at 33% of total worldwide online advertising. Google currently owns less than 2% of the display market and Microsoft and Yahoo together own nearly 30% of the display market. The growth of video advertising (predicted to account for 11.5% of online advertising by 2010) and behavioral targeting will accelerate the demand for display based advertising. Yahoo and Microsoft also rank No. 1 and 2 in financial news, and No. 2 and No. 1 in instant messaging, according to comScore. In web-based email, Microsoft share would rise from 25 percent to 80 percent (Google Gmail has a 5 percent share).   

In sharp contrast,  Microsoft and Yahoo would have about 16 percent of the worldwide Internet search market ” still far behind Google’s 62 percent share, according to comScore Media Metrix. Google’s dominance in the search space was strengthened by the acquisition of Doubleclick and its search division Performics (which does create a conflict of interest at the heart of Google’s “do no evil” mantra).

Google well aware of its dominance in search is hoping to influence the outcome of the decision by offering Yahoo! an alternative to maximize shareholder value. Enter Option B for Jerry Yang – sell individuals pieces of Yahoo – under the premise that “the sum of the parts are worth more than the whole”. Yahoo Finance, for example, could be sold to a company like the News Corporation at a premium. More interesting and widely covered by the New York Times is the option of outsourcing all search advertising to Google. While it would be a true admission of defeat in the battle for the “minds and hearts of searchers”, the agreement would maximize shareholder value. Citigroup Global Markets analyst Mark Mahaney in a Friday research note estimated that Yahoo could boost its cash flow more than 25% annually by outsourcing all its search advertising to Google.

Yahoo has recently began restructuring its service offering to maximize shareholder value. Yahoo today announced it was to abandon its YMU music subscription service, and will move current subscribers to RealNetworks-MTV’s joint venture, Rhapsody America.

My bet is on Microsoft’s 50-50 cash and stock offer for Yahoo! being accepted. What about the outcome of the acquisition from a regulatory perspective? How about the challenge of integrating both corporate cultures, audiences and offerings? Stay tuned. 

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The difference boils down to consumer confidence – advertising and marketing messages are inherently persuasive and rightly perceived as biased whereas WOM messages naturally build (or diminish) confidence without perceived bias. Studying the combined influences of persuasion and confidence upon an individual consumer as she considers a purchase is critical to understanding consumer behavior and marketing effectiveness. The tipping point where there is just the right combination of confidence and persuasive influences to justify the purchase, and when she ultimately decides to buy, is the nexus of persuasion and confidence.

Rarely are the persuasive and confidence influences equal at the nexus or time of purchase because brands/products/services with high degrees of consumer confidence don’t require a lot of persuasive messaging. Inversely, those brands/products/services with low degrees of consumer confidence must be very persuasive for one to justify the purchase.

From an economic perspective, maximizing persuasion is an expensive proposition. Many of the most effective marketing campaigns are so because of the scale of investment in terms of creative production values, media investment and also price discounting. Meanwhile it can be argued that maximizing confidence is significantly less costly as the confidence building channels, such as WOM, are often free and little if any price discounting is necessary.

It’s logical then that we’re seeing a renewed interest in WOM as marketers become more savvy and cost conscious, and as the internet continues to facilitate the distribution of WOM from peer to peer via online communities, forums, blogs and review sites. The key for marketers today is to leverage these online WOM channels effectively to build confidence in their brands, without abusing the opportunities they present or alienating consumers in the process.

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Ring. Ring.

Following months of speculation, Google formally announced it is entering the mobile phone market. While the announcement did not introduce a working operating system or phone, Google’s statement it would start shipping its mobile devices by the end of 2008, set the industry in motion. Google’s much anticipated entrance into the mobile sector is based on four foundations:

1. Collaboration
Google’s mobile operating system known as Android (name taken from its acquisition of Android Inc. back in August 2005), will be a Linux-based open source platform, aimed at creating a flexible platform for developing applications, software and content. Google’s Android will compete directly with the leading mobile-phone operating systems: Symbian, partly owned by Nokia; Microsoft’s Windows Mobile; and Research In Motion’s BlackBerry. Google’s Android has an uphill battle against leading mobile operating system Symbian, which has roughly 70 percent of the market.

The reality is that fragmentation has always been the biggest barrier to the growth of mobile applications (especially in the enterprise sector); Google’s Linux based OS could drive consolidation into a common mobile platform. However, Google will have to enforce some rules, such as requiring developers to use the same type of Linux software, in order to avoid a fragmented platform. Furthermore, the freedom of the open-source license, which gives developers, handset makers and carriers a lot of freedom to add proprietary extensions and modifications, could increase technical fragmentation without established rules.  

Google collaboration strategy was further supported by the formation of the Open Handset Alliance, comprised of more than 30 technology and mobile industry companies including Motorola, Qualcomm and T-Mobile. However major smartphone vendors and carriers are missing, including: Microsoft, Vodaphone, Nokia, Palm, Verizon and Symbian. Their absence not only underscores the fact Google will have to contend with large industry gatekeepers but cements the notion that phone carriers avoid such groups because they would rather keep their networks and the devices that run on them close to their pockets.  

2. Advertising
Unlike Microsoft, Google won’t make its money from licensing (industry analysts estimate Microsoft generates license revenue of $8 to $15 per handset, depending on configuration). It will make money from the advertising that’s heading mobile. According to Opus Research, mobile advertising spending in North America and Western Europe will reach a combined US$5.08 billion by 2012, up from an estimated $106.8 million at the end of this year. This represents a compound annual growth rate of 116 percent. While these projections are tremendously optimistic they serve Google’s business plan well.

Google’s advertising funded mobile model would allow is to share revenue with mobile phone operators, allowing it to offer consumers and enterprises services for free or at a minimal cost. Three words describe Google’s advertising model for mobile. Localization.  Localization. Localization.  Google’s recent launch of AdSense for Mobile, a contextually targeted ad platform for mobile website content is not the answer. The answer is in opt-in personalized local services, applications and content that pulls relevant advertising offers.

3. Services
Unlike phone manufacturers or Apple, Google will aim to gain market share for its mobile services with software rather than hardware. The focus on services and applications combined with a Linux platform could propel Google in the lucrative mobile enterprise sector providing the company with some time to tackle the consumer market in which sleek hardware, design and usability are paramount.

4. Access
For months Google has been lobbying to enter the auction for the 700MHz spectrum in the United States, which is regarded as the last piece of real-estate left among wireless airways; extending the delivery of mobile broadband services. A review of Google’s “strategic goals”, “What is going to make the Internet most available to the broadest number of people at the lowest price possible?” makes a bid very possible and significant. Drew Clarke at GigaOM.com has an informative piece on the 700MHz spectrum.

One thing is clear from Google’s announcement. There is no gPhone, and likely won’t be a gPhone. An exclusive device branded by Google for it does not follow the company’s stated goal of getting its search, applications and software in front of as many people as possible.

While Google might have the engineering and business resources to succeed in the mobile sector, mobile phone subscribers will ultimately decide the future of Google’s mobile offering.

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The Google Best Practice Funding program requires participating agencies to have at least five clients, generate a minimum of USD $100,000 in spend for every client on a quarterly basis and two Google certified professionals in order to qualify for quarterly payments (tiered to a maximum of 12% of total spend on Google).

Conveniently Google does not consider its Best Practice Funding scheme as a direct financial incentive but rather a “best practice and training fund. The reality is that the Google Best Practice Funding scheme has perpetuated the ill driven media practice of bulk buying a phenomemum inherited from traditional media. The model, effectively a rebate, rewards bulk buying with no regard for effectiveness or performance. It rewards investment quantity as opposed to investment quality. Back in April I wrote a piece entitled “Granular vs. Tonnage Media Buying“, which addresses some of the issues with the existing approach to media buying across display and search.

The reality is that the large majority of search agencies have not used the Google Best Practice Funding scheme to train and disseminate best practices. Instead, the majority of search agencies have used the Google Best Practice Funding scheme to: 1) increase their margins 2) establishing an artificial advantage by passing the quarterly rebates directly to clients and 3) subsidize loss making accounts.

The much anticipated end of the Google Best Practice Funding scheme is positive. It should bring forward a more transparent model of billing, performance reporting (does the last click get to much credit?) and business relationships. Search agencies will have to hone their consulting skills as opposed to their billings and salesmanship skills to grow their margins. Clients will have to recognize that the value in a strong agency relationship is not a commodity purely driven by price but by the long-term sustainable return of that relationship. If you currently employ a search agency, I invite you to review one of my earlier posts entitled Ten Questions to Ask your Search Agency.

I see the following trends starting to emerge later this year as clients and agencies begin to contemplate life without the Google Best Practice Funding (BPF) scheme:

• Search specialist agencies, without much success, to venture into the display advertising seeking higher margin projects
• Third party ad-serving contracts and relationships to be renegotiated or changed in an effort to reduce serving costs and increase efficiency through technology.
• Super Affiliate PPC specialists such as Click2Customers to grow in prominence, becoming a real alternative to the traditional and established PPC agencies.
• More clients will contemplate bringing PPC search in-house as the overall value proposition of outsourcing becomes less attractive given the increase in operating and service costs.

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But in recent years the standard purchase funnel has faced some opposition as marketers become more precise with their efforts to make people customers; drafting the skills of ethnographers and anthropologists to further define and illustrate how people behave as consumers.

Forrester recently published a report eschewing the traditional funnel for a model that’s based upon engagement. Scott Weisbrod has a nice recap here with the illustrations and Forrester’s suggested model for measuring engagement. Meanwhile David Armano proposes a marketing spiral that takes the idea of engagement into consideration. It seems everyone has their own take on the the old funnel these days, including us.

Our proposed evolution of the purchase funnel comes out of our study of CGC‘s influence on consumer behavior – leading up to the purchase as it is consumed as part of the consideration and research phases, and subsequently created after the purchase when the individual consumer shares her experience with the product.

This model places a greater emphasis on the purchase funnel as the experience of an individual intertwined with the funnels of many others. It’s a critically important point, because of the ease with which the experience is shared via online WOM — and the influence that this shared experience has on another others’ purchase behavior, having reached them at a critical time in their own purchase process. It’s not enough to study a single purchase funnel without considering how that purchase funnel intertwines, is influenced and influences the individual purchase funnels of other people.

So who’s right? What is the correct 2.0 version of the purchase funnel? Is the purchase funnel an antiquated model altogether? Or are we all right, in part? Consumers, their behaviors and the new marketplace are perhaps a bit too complex for any one model.

cgc, marketing, purchase funnel

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If your brand was a person, what type of person would it be? How would it act, what it would look like? More importantly would its value be solely determined by how many people knew of it?

These questions are at the heart of branding and the value of branding.

Branding is normally defined as “activities that increase a potential customers ability to identify (recognize or recall) the brand, within the category, in sufficient detail to make a purchase” (Advertising & Promotion Management, 2007).

This standard definition would dictate that large established brands such as British Airways or Mercedes Benz, with high degrees of awareness and recognition, have little need for branding online.

The reality is that branding is not solely about awareness but association. Like a person, a brand is not defined solely by its level of recognition but defined by key attributes such as its tone of voice and character. In an environment where social networking and word of mouth are becoming increasingly influential, shaping and influencing the way brands are associated has never been so important.

The role of branding is then to associate the brand to specific emotional and cognitive attributes, leading to an increase in sentiment, interaction and purchase consideration.

Let’s put this theory to the test with one of our clients. As part of its sponsorship of the Formula One McLaren team, Hilton in partnership with Mercedes Benz, another key sponsor of the McLaren team, developed an ad featuring Lewis Hamilton and Fernando Alonso. The aim of the ad was not to create awareness of Mercedes Benz or Hilton. The purpose was to associate both brands with the attributes of Formula 1, exploiting through humor the widely publicized rivalry between both drivers. Through humor and association the ad aimed to communicate the desirability and quality of the Hilton and Mercedes product and brand. While largely a product placement for Hilton, this ad succeeds at some level as it delivers a degree of association for the brand. While the ad might not generate immediate car sales for Mercedes or room bookings for Hilton, in the long term it helps shape the way the brand is perceived, considered and associated.

As the founder of Revlon, Charles Revson, famously stated, “In the factory, we make cosmetics. In the drugstore we sell hope”.

Earlier this decade me and the other two founding partners of Web Liquid had the responsibility of developing British Airways online media strategy and capabilities. The airline aimed to become a pioneer in the online space; recognizing the commercial benefits provided by the online channel from a distribution, cost of sale and brand positioning perspective. In August 2000 the airline announced it was to change the structure of commissions paid to travel agents. Prior to that decision, British Airways gave travel agents 7% of the ticket price as commission, an expenditure of nearly £300m a year. It was a bold move considering travel agents accounted for 85% of sales, with online contributing a mere 1% of total sales. For the next three years the airline embarked in an aggressive online marketing program, aimed at driving channel shift and growing the usage of its new flagship site ba.com. At the heart of its online communications and acquisition strategy was the concept of innovation. British Airways recognized that the online channel was not purely a distribution or sales channel but a channel in which its brand would live permanently. While the airline could have focused their online marketing investment on tactical direct response programs, it invested heavily in branding online. We didn’t assume its brand heritage or high level of brand awareness would organically transfer online.

The case for online branding can sometimes be challenging in a commercial environment focused on maximizing profit and immediate return on investment from advertising investments. While the value of branding is recognized, it is usually ignored. Lets examine some of the questions raised when considering branding online.

1. My brand already has very high levels of awareness and consideration. Why should I investment in branding online? Unfortunately awareness and consideration are not perpetual, they fluctuate and become susceptible to change 1) relative to the larger environment in which the brand operates in and 2) the customer experience with the brand. Furthermore, while consumers do not view brands different online or offline, the transparency of prices and content online can challenge the baseline perception and awareness of the brand.
2. Measuring branding online is challenging. How can I demonstrate return from my investment? Measuring the qualitative impact of brand advertising can be achieved by leveraging proven traditional methodologies. To isolate the impact of online advertising an exposed/control methodology is used to measure increases in key metrics such as 1) purchase intent, 2) brand favorability, 3) message association and 4) brand awareness. Furthermore, leading research providers such as Dynamic Logic provide the opportunity to benchmark these metrics against specific industry category segment. The value of branding online can also be measured by leveraging the Net Promoter Score a metric that has become a leading indicator of our consumer generated insight programs. The Net Promoter Score (% Promoters – % of Detractors) is a metric that quantifies the likelihood a user would recommend or support a brand. Unlike the traditional model of exposed vs. controlled, the value of a consumer is not based on their stated perceptions but on his or her actions. While the Net Promoter Score can be used to measure the impact of online marketing, it should complement a larger consumer generated insight effort aimed at understanding the key brand drivers online.
3. Branding online is expensive. How can I combine branding with my sales and distribution efforts to ensure some degree of immediate return? Online branding does not have to be expensive to be effective. Unlike traditional media, the effectiveness of online branding efforts is not purely based on overall reach and coverage. Online branding can be achieved through narrowcasting of the message to specific audiences and prospect segments
4. Consumers are increasingly using online to research and transact. Are they going to take notice of non price /offer-lead messages? Research published by the Online Publishers Association indicates people are shifting their behavior and now spend nearly half their online time visiting content, a 37% increase in share of time from four years ago, compared to a 35% gain for search, a more transaction oriented channel. However, the total time spent with search remains low, accounting for just 5% of Internet users online time in 2007. While consumers are indeed transacting online, they now consume large amounts of content, which becomes an important part of their overall brand and purchase consideration process.

The nature of online branding is an evolution of traditional branding, relying more on brand personification, as people’s online behavior and brand interactions become more frequent, less transaction oriented and more personal. So, now ask yourself this question.

What is the personality of your brand online?

About Alain Portmann

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As early as 1989, advertisers and research firms such as Millward Brown, proved the value of combining multiple media and advertising programs to maximise effectiveness. The “Media Multiplier” theory emerged, stating that when two or more media are taken into account, the combined impact is more than the sum total of the two individual media. While this theory has been widely accepted and translated into Digital Marketing, most advertisers are blind to its true magnitude and impact.

Why the last click gets too much credit?

This is largely because the large majority of advertisers still subscribe to the industry standard which attributes a transaction to the last ad interaction. Furthermore, the “rule of attribution” set as a default within third party ad-servers is based on the last click.

This attribution rule has lead to what is referred as “click through tunnel vision” – focusing on the last click before a transaction ” under-estimating the value of the media that preceded that last click. From a practical perspective, the “rules of attribution” are taking precedence over the “rules of advertising” providing a skewed perspective on the optimal balance between PPC advertising and display based advertising.

Under the “last click” rule of attribution, click driven channels such as PPC search, are attributed and credited for a disproportionate amount of transactions. While PPC advertising is an effective online advertising channel, it benefits from being widely used at the start and end point of the consumer purchase cycle. By attributing 100% of a transaction to the last click, there is a danger in underestimating the contribution and value of impression based channels. After all, advertisers don’t just measure the success of a poster by how many people buy the product advertised from the nearest shop.

The evidence

A study conducted by the ATLAS Institute, titled “How Overlap Impacts Reach, Frequency and Conversions,” asserts that 90 percent of the consumers that converted were reached by placements other than the last ad clicked, and that far too often the proper credit for the sale is inappropriately given to search. The study also found that two out of three consumers who eventually took a responsive action were reached by ads across multiple sites before actually going on to make a purchase, and that consumers reached across multiple publishers were twice as likely to convert as those reached only on a single publisher.

As discussed earlier, it is not a question of display based programs being more effective than PPC Advertising or vis-versa, it is a about how both channels work together. This synergy between PPC advertising and Display based programs is confirmed by a study conducted by the ATLAS Institute indicating conversion rates from search advertising is 22% better when used in conjunction with display based programs. Further research indicates 80% of users exposed to display advertising and completed a search, completed a booking within 8 days . What is the reason for this uplift in conversion?

1. Display advertising generates brand awareness and increased purchase intent, reinforcing messages from other channels.

2. Display ads can help win over interested users who may be “on the fence” about purchasing. Display advertising “generates demand” for products and services, while search is far more efficient at “meeting demand”.

3. Search may be used as a navigational tool on a repeat visit to sites which users have previously visited via a display based ad.

Furthermore, the last click “rule of attribution” has a significant impact on the reporting of PPC advertising. The “last click” rule under-represents the contribution of generic search terms as part of the research and purchase cycle on consumers on search engines.

A study entitled “Search Before Purchase” published by Doubleclick, provides insight into the way consumers use search; supporting the importance of generic terms as part of the overall purchase funnel leading to a transaction purchase.

Travel buyers conduct an average of 6 relevant searches in the 12 weeks before purchasing a holiday, car hire, flight or hotel.

76% of keyword searches conducted by travel buyers are generic, with only 21.5% being for brand

Implications

The impact of “last click attribution” on the reporting and management of Online Media is significant.

1. Programs and sites that have a significant impact on reaching and driving purchase intent, but are not attributed credit for the transaction; are removed from campaigns and schedules based on attribution to the last click.

2. Investment and budget decisions are purely driven by the ability of the media to generate the last interaction (last click) as opposed to their impact on the entire purchase cycle.

3. Last click attribution negates the impact of overlap. Overlap being defined as users seeing ads across multiple sites or placements. Research indicates that that, while a minority of users are reached across multiple sites, they consume media at a higher rate than users exclusively reached on a single site. More importantly, this overlap group is responsible for the majority of transactions.

4. The true value of behavioral targeting programs and tenancy sponsorships is not considered; by not crediting media placements aimed at driving relevance and consideration prior to the final click.

Solutions

While it is important to identify the issues and implications related to “last click attribution”, it is more important to identify possible solutions. We have listed a series of solutions, providing a roadmap for consideration and enablement.

1. Get “under the hood” of your campaign data. Commission a research study that analyses the “exposure to attribution path” of your online campaigns. By analyzing the third party-ad server log files, including the initial interaction time stamp and conversion time stamp, it is possible to determine a path of conversion and the sites associated with it.

Complement the “exposure to attribution path” with a Time to Conversion Study, which would identify the time lag between first exposure, last click and transaction. This is a significant data point which will reveal the optimal “length of attribution” for your view and click based media. The default post impression and post click window on most ad-servers is set at 30 days. The window of conversion can be modified, ranging from minutes to days.

2. Customize the rules of attribution within your third party ad-server. Leveraging the data from your research and log file analysis customize your attribution rules. The attribution of online sales by third party ad-servers is flexible given they are rule based. Specific rules can be established, replacing the “last click” default. For example, a rule can be defined which states “last click, if exposed to less than two previous views”. This rule would ensure that a transaction was awarded to a click only if it was preceded by less than two views ” acknowledging transactions driven by more than two views have been largely driven by display based programs.

However it is important to point out the final decision on the attribution rules should be determined by your overall online media mix. An emerging trend is the weighting of attribution between click and view based media. Sophisticated advertisers, aware of the synergies between online media channels, have started attributing 50% of a conversion to the last view and 50% to the last click.

3. Complement third party ad-serving with site analytics tracking. Assign a referring ID tag to all your online marketing programs, creating a unique referring ID by channel (e.g. email marketing, PPC search, display advertising). While site analytics should never replaces third party ad-serving for the optimization and management of online marketing, it should be used as a supporting measurement tool to validate figures.

4. Assign a place in your media plan for conversion influencers. By committing investment to key sites at the start of the purchase funnel, your bottom cost of transaction and brand will benefit. However this approach requires budget holders, the client, to buy into the value of these investments. This can be challenging given the propensity to measure the value of online media on the basis of attributed revenue. Furthermore, and as discussed in What is Return on Investment, there is a propensity to view return as a mutually exclusive metric, which does not account for exposure or influence.

More importantly, a model that measures and recognizes consumption, as opposed to just interaction, is required to gain a more balanced and accurate view on the contribution of online marketing to the bottom line.

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Gord’s approach went right to the crux of the argument for many on the agency-side of online marketing:

Where’s the Money Going?
But in this case, are budgets really limited? Let me share some things I was able to dig up on Ontario Tourism’s site. First of all, the tourist bureau is doing print (lots of print) and TV (lots of TV). The goal? To drive people to its Web site. Full-page 4-color ads are running multiple times in over 70 dailies and weekly newspapers and 9 magazines. One 4-color full-page ad in the Toronto Star would run about $54,000 (there’s a certain amount of guessing here, as print rate cards are really a mathematical exercise in confusion and frustration). Circulation of the Toronto Star is 350,000 (on an average day). An excellent conversion rate for a newspaper ad would be 0.5% That means, ideally, 1,750 people would actually visit the Ontario Tourism website. Now, I have never in my life seen a newspaper ad convert this well, but even if it did, that would be a cost per visitor of $30.85. If the ad doesn’t work that well, the average cost climbs dramatically. And you pay whether or not the ad works.
What People Actually Use
Now, courtesy Yahoo Canada and a recent survey, let’s look at what actual travelers cite as the most important influencers in making travel plans. Search and Web sites are tied for number one and two, used by 51% of respondents in a recent survey. Newspapers and print? Only used by 7%. But yet, only 2.1% of Canadian ad budgets get spent on search, and 42% gets spent on newspapers and magazines. I couldn’t get any specific percentages for Ontario Tourism, but one only has to look at their campaign page to see that search is very likely getting only a fraction of what’s going to newspapers and magazines. And don’t even get me started on the TV buys.

The logic is sound and the facts have not been denied. In truth Ontario Tourism would most certainly benefit greatly by shifting more of their budget from offline to online media investments. But Gord’s assessment fails to fully understand or empathize with all the factors behind Nick Pedota’s and Ontario Tourism’s activities. As online marketing professionals it is our responsibility to be fully immersed in the details of our practice, and to do so on behalf of our clients. As such, it is unfair and unrealistic to expect that all advertisers and clients have the same appreciation and confidence we have for the medium’s abilities. Further, it’s imprudent for us to assume that the factors driving a client’s decisions are the same as ours, in most cases we’re not privvy to the politics, legacy management, and other influences that affect their ability to do online marketing well.

In fact, while many advertisers are not fully capitalizing on the Internet’s marketing potential, most are trying to do so. I was glad to see that Nick replied to the accusations with honesty and class giving us all insight to this fact.

So much of the discourse about online marketing is taking place between ‘sell-side’ professionals, (this post is a case-in-point) it’s what we do, but it’s quite refreshing to hear from the ‘buy-side’ clients who fund the work we do. After all, the coming together of priorities and perspectives on both sides defines the parameters of our joint efforts and ultimately creates the opportunity for success, don’t you think?

Ontario Tourism Toronto Star

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While unique in its design the London 2012 emblem is purely English. It resembles the style of Neville Brody, a renowned British designer and art director. Furthermore, unlike emblems of the past, it comes into its own within the digital environment ” in fact it looks almost unfulfilled when not fully animated. However I accept the emblem challenges as opposed to inspire; which brings me on to my next declaration…

I am dumbfound at the way the London 2012 Organising Committee went about the process.

In a public statement they the London 2012 Organising Committee confidently stated “London 2012 will be everyone’s Games, everyone’s 2012. This is the vision at the very heart of the new London 2012 brand.” Furthermore, the brand was designed to embody four “brand pillars” of access, participation, stimulation and inspiration.

If participation is at the heart of the London 2012 brand, why was the brand conceived in such an exclusive way? Why not harness the power of social media to inspire, challenge and share the conception of the London 2012 emblem with the people? Was Wolff Olins, the London branding agency responsible for the design, the only entity capable of providing input into the London 2012 brand?

The London 2012 Organising Committee should have leveraged the influence and power of social media to deliver on their promise London 2012 would be “Everybody’s Games”. In partnerships with the major youth and adult social networks such as Bebo and MySpace and local councils, a forum for sharing ideas, designs could have been created. While access to this forum would have been restricted to those with internet access, it would have opened up multiple commercial opportunities to bring young people online.

Far from being a public consultation, it would have been an opportunity to involve youth in the development of ideas to shape the brand. The launch of the London 2012 blog and the Create Your Own Design section on the London 2012 site is a half-hearted attempt to embrace social media.

The on-going debate and participation on the merits of the existing emblem is healthy. Exactly what the London 2012 Organising Committee should have aimed for during the process of creating the London 2012 brand.

london 2012, 2012, olympics, london olympic webliquid

About Alain Portmann

My job is simple. To inspire staff, clients and consumers.

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Wikipedia defines return on investment as 1) as rate of profit, rate of return or return and 2) the ratio of money gained or lost on an investment relative to the amount of money invested.

At Web Liquid we believe return on investment is a subset of a larger marketing imperative. That marketing imperative being RETURNS. This is not only an imperative from our clients but what leads our thinking. They give us something; we give them something of more value in return.

The challenge with assuming return on investment is the holy grail of all marketing measurement is that return on investment is a measure of investment profitability, not a measure of investment size or quality. The reality is that marketing investments need to be measured across multiple criteria, instead of a single profitability index. Why does the return of marketing investments have to be measured beyond ROI? Because marketing influences qualitative metrics as much as it influences quantitative or economic metrics.

Consumers do not make decisions to purchase or interact with a brand purely on economic factors so why should the marketing targeting those individuals, be measured on that basis? Furthermore, the value of advertising is in its ability to spark inspiration and need, emotion and thought; from those things that make up everyday life.

A lot of companies talk about their focus on return on investment. At Web Liquid we know return on investment is a subset of a larger marketing challenge. RETURNS. So how do we measure RETURNS? We measure RETURNS based on five metrics.

1.  Influence: the influence the investment yields on consumers’ attitudes and perception of a product or service. This metric will become increasingly important, as social media will trigger new attitudinal behaviors.

2.  Exposure: number of impressions and exposures the investment yields ” the “exposure value” of the investment.

3.   Efficiency: cost of sale the investment yields relative to the success metric (e.g. car rentals).

4.   Volume: total number of acquisitions or actions the investment yields

5.   Profitability: the total return on investment. ROI is simply a profitability index that expresses the relationship between investment and revenue generated. Having said that, it is important to understand the entire chain leading to ROI. I created the diagram below to provide a visual representation of the commercial elements that make up return on investment. It is important to note the role of “customer perceived value” and how it is nurtured by multiple factors including customer experience, word of mouth and advertising.

What are the benefits of the measuring RETURNS through multiple variables? Consumer behavior, like the performance of media investments, cannot be explained or predicted by merely looking at just one variable.

For example your media investment for a campaign can yield a return on investment or profitability index that is 50% higher than your competitor. However, this could have come at the expense of reduced exposure, market share and perceived value in the marketplace.

It is to easy for agencies and clients alike to measure RETURNS relative to a single variable such as return on investment. RETURNS have to be measured across multiple variables that take in consideration the influence, exposure, and efficiency of media investments.

We believe this approach to RETURNS has not only helped us become the Most Efficient Digital Marketing agency (as voted by New Media Age), but generated $133,535,453 in revenue from our clients’ investments in online media last year.

While we cannot disclose the specific influence, efficiency and volume figures due to the confidentiality of our clients data, we generated over 1.5 billion impressions in exposure for our clients last year, yielding a profitability index or return on investment of 19 to 1.

Alain Portmann, author of  ”What is return on investment” is Web Liquid’s Founding Partner, Head of Strategy. Visit www.webliquidgroup.com for more thought pieces.

return on investment, roi, media, profitability, webliquid

Click below for links to relevant agency/consulting services:

Site Conversion Optimization
Continuous improvement of conversion by focusing on dynamic landing pages, conversion optimization and site analytics.

Media Optimization
Ensuring your money follows the best performing sites, messages and prospects.

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Service Driven Marketing and Communications. Marketing communications should shift from the existing mass audience monologue approach to a service lead approach that acknowledges the active involvement of consumers in shaping a brand. While consumers have always been engaged in shaping brands through networking behaviors such as word-of-mouth, its online equivalent, consumer generated content has proliferated due to its high visibility and interconnection. Jupiter’s Consumer Created Content report found the growth of consumer-generated content has already had a disproportionately wide influence and may seriously impact on brand communications. This is despite the fact that most Europeans are “passive” surfers who don’t publish their thoughts online. In fact, 92% of European online publishers interviewed by Jupiter prompt their visitors to participate online, but the majority (53 percent) are passive, “silent” surfers and do not create content. Only 23% respond to prompted participation, such as polls and competitions, and 24% percent are unprompted contributors that maintain web logs, websites or post in online forums.

Although the number of contributors is currently small, their impact and influence can be dramatic. While reputation management programs have been widely prescribed as the solution to manage this form of interaction, it is a short term solution. 

A recent survey conducted with a representative sample of 1,500 UK adults, aged 16+, between 20 February 2007 and 27 February 2007 supports the need to move beyond reputation management programs. The survey reveals 58% of British online consumers will turn immediately to a competitor if they see negative reviews of a travel business in search engine results. A further 42% would abandon their search altogether. This dynamic will only increase in influence as consumers are increasingly exposed to more peer-produced content alongside professionally-produced copy across search engines and content sites.

The reality is that there will always be negative and positive commentary. While the temptation is to control disgruntlement and encourage loyalty (to avoid or fuel exposure to a mass audience) the key is to understand the sentiment of the commentary. On-going and proactive monitoring of consumer sentiment to trigger adjustments to product and service offerings is the solution. A perfect example of this approach is being demonstrated by our client Avis, through an extensive Consumer Generated Insight program that has taken shape in the form of their new blog platform wetryharder.co.uk.  It recognizes the content and sentiment of the message, is as important as the volume of people it reaches.

While Service Driven Marketing and Communications are essential, is it only one variable of the overall equation.

The second variable travel and hospitality companies should focus on is what we define as Engagement Usability. Engagement Usability aims to ensure an optimal user experience at point of engagement ” through all channels including online, call centre and in-store. The reality is that successful communications are about fulfilling on a brands stated promise. A positive experience within an online booking environment or call centre can lead to differentiation beyond price. As with marketing and communications, engagement should aim to provide service and support to the consumer as opposed to solicit up-sell.

The third variable dependant on the two mentioned variables is Customer Service. While customer service is often regarded as a post purchase retention exercise, dispatched from brand or media investments, it is a key element to increase conversion, repeat business, loyalty and ultimately return on investment. Once experience and service, like information, becomes practical and useful, it becomes memorable and of value. As defined by Forrester Research customer service should focus on three principles: obsess about customer needs; reinforce the brand with every interaction; and treat customer experience as a competence, not a function.

No single factor can ensure success within the travel and hospitality industry. A combination of Service Driven Marketing and Communications, Engagement Usability and Customer Service, together with price and product will ensure consumer needs are fulfilled and return on investment realized.

customer service, marketing, web liquid

About Alain Portmann

My job is simple. To inspire staff, clients and consumers.

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Considering that we are each exposed to hundreds, if not thousands, of commercial messages each day, all marketers are challenged with making attention-grabbing impressions that are also persuasive. A formidable task that drives the hiring and firing of agencies every day, and made even more difficult with continued media fragmentation and the multitasking media consumption habits of today’s consumers. It’s no wonder marketers are increasingly concerned about their traditional agency’s ability to keep pace. But with a different perspective, or perhaps mindset, one might see that this increasingly fragmented and multitasked collision of media and consumer behavior is where the future of marketing opportunity lies.

No single channel illustrates this challenge/opportunity moreso than the Internet where we are each exposed to no less than two, and often many more, commercial messages on each page-load. Online, the battle for attention is at its most extreme and our understanding of what is or is not effective is at its deepest. Further, the intersection of effectiveness and cost efficiency, identified through online technology, prioritizes the channels that marketers now find most important as illustrated in this chart:

It’s also quite interesting to note that many of these most important advertising tactics are also very service oriented. The correlation between effectiveness and importance is clear but perhaps, with a different mindset, the correlation between consumer service and effectiveness is equally so.

Service as we generally think of it is almost exclusively focused on front line staff while advertising’s remit is primarily solicitation. But in the age of on-demand access to entertainment and information in a vastly fragmented media landscape with multitasking consumers, service is the key to gaining not only attention but authority, and ultimately conversion and loyalty.

So who’s doing this well? Here are a couple good examples:
Dove’s Evolution
Avis’ wetryharder.co.uk
Nuts about Southwest

About Matthew Cronin

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First it’s important to make clear that CGC is not a marketing medium, it’s a conversation amongst consumers about the products/services they want to buy, might buy or have bought. The fact that the conversation is about products and services presents the marketing opportunity but doesn’t grant anyone the right to crash the party with their sales pitch. Indeed, participation is welcome but only when the approach adheres to the ethics of the environment.

Among the many points of difference between the broadcast and online models of marketing is the notion of service over solicitation. It’s a core value that consumers have brought to the space and one which smart marketers have been quick to understand – in the world of CGC it’s an imperative for a corporate effort to succeed. But the real opportunity for corporate participation in CGC is not simply to look at the space as a tactical channel to *not* solicit, rather as the cornerstone of an entire marketing strategy.

First, CGC presents a valuable research opportunity – as we previously discussed, CGC is Word-of-Mouth but online it’s also a public record of those conversations and consumer sentiment relative to your brand and that of your competitors. A number of companies have popped up offering technology to capture those conversations for analysis but much of the application of that technology is still quite tactical – measuring the WOM around a particular event or campaign. In fact, the CGC research opportunity is to use that insight on a regular basis and with quality marketing-based analysis to derive valuable insights and identify concerns and opportunities.

Armed with this valuable research data and the insight of experienced marketing analysis, CGC presents the opportunity to engage customers and potential customers at the most critical time in the purchase process – right when they’re looking for the information about a product or service. A significant difference between CGC and WOM is that CGC is on demand – I find what people have written about the new BlackBerry right at the time I’m researching and considering the purchase, rather than via a guerrilla/buzz tactic or whenever someone I know decides to tell me. The timing of this impression is critical to the influence of CGC.

For a brand to engage in this conversation with a strategic approach including a deep understanding of what’s being discussed online and its influence, there is a great opportunity to more effectively reach qualified consumers and position the brand as an authority on the topic. Employing a few simple CGC tactics may provide short term gains but it’s a short-sighted approach to one of the most important drivers of marketing’s evolution.

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About Matthew Cronin

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Imagine search engines to be rooms with millions of people. When a specific question is submitted, the people in the room talk among themselves, to determine the experts in the subject. Once the experts are identified these vote over who should speak first, second, third and so forth. Recently which expert speaks first is also determined by their relationship to other experts outside the room. The role of organic search (usually known as natural or search engine optimisation) is to ensure a brand and website(s) are identified as experts and allowed to speak first on a specific question and subject. The room also features a paid members section, in which a selected number of individuals are allowed to speak first based on how much their wiling to pay to be heard first, second and third. The response of these paying individuals is included as part of the expert responses. The role of commercial search (usually known as PPC search) is to ensure your brand and site is featured as commercial responses relative to a specific subject and question.

As the metaphor points out, organic search should be viewed as a long-term foundation program, which supports tactical short and mid term commercial search activities. While the benefits of search are understood, the challenge many marketers face is defining one set of common metrics to evaluate both commercial PPC search and organic search. In our experience there are eight key metrics that can be used for both commercial and organic search.

1. Rank (metric is visibility)
2. Traffic (metric is traffic to site)
3. Persuasion (metric is initiated shopping cart instances)
4. Sales Volume (metric is volume of conversions)
5. Sales Efficiency (metric is cost per conversion)
6. Net Revenue (metric is total revenue)
7. Revenue per Item (metric is revenue per conversion)
8. Return on Investment (metric is ratio of return)

The majority of advertisers measure the contribution of organic search through a web analytics solution (such as Web Trends, Google Analytics or Omniture) – by placing a referral ID on all commercial search links, the contribution of natural search is determined by subtracting all commercial search from the total search contribution to the site. While this approach is effective in the short term, it lacks the sophistication required to answer key strategic decisions such as the optimal media allocation on commercial search given the contribution of organic search. A series of technology companies including Hit Dynamics, Doublelclick and Mediaplex provide in-depth tracking for natural search and commercial search. More importantly, these solutions can allow advertisers to de-jup conversions against all other channels including PPC, display and affiliate marketing.

Following a period of consultation with a client we defined the following reporting structure, which takes in consideration the visibility, engagement and transactional impact of organic search.

Visibility Reporting: How well ranked?
- Searches that returned at least 1 result
- Searches that returned at least 1 Top Ten result
- Searches that returned a number 1 result
- % Search area occupied
- % search are occupied by top 10 results
- % search area occupied by number 1 results

Engagement Reporting: How did visibility translate into traffic, bookings and revenue?
- Actual Traffic generated (Visits)
- Actual Conversion rate (visit to sale %)
- Sales Generated
- Actual Revenue Generated
- Actual Average Booking Value

In the next few weeks we will be publishing a series of knowledge pieces on the best way to manage commercial and natural search; examining the benefits of using different remuneration models other than media commission as a way of having your search agency work harder on exploiting the search tail.

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About Alain Portmann

My job is simple. To inspire staff, clients and consumers.

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While online media planners boast loudly about the flexibility, measurability and accountability of online advertising, their planning and buying approach does the medium little justice. The average online media planner and buyer is satisified following the traditional broadcast media approach ” allocating a lion’s share of media spend to a handful of properties. The McKinsey Quarterly ” A reality check for online advertising” study supports this belief, indicating advertisers currently direct 96% of online display ad spend to just 30% of overall Web traffic. Furthermore, the U.S Interactive Advertising Bureau‘s analysis of revenue by company size indicates the top 10 companies online accounted for 72% of all interactive ad revenue last year, up from 71% in 2004.

The problem with this “tonnage approach” to planning and buying is that it does not take advantage of online´s “long tail”, an inherit benefit of the medium. The “long tail” not only provides access to more niche audiences but targets consumers in different mindsets. Furthermore, the “tonnage approach” creates an undersupply of available ‘premium’ ad space which creates bottlenecks that limit the pace of online ad growth and raises prices.
There are key drivers behind the wide use of “tonnage buying”. The first driver is risk aversion ” a natural inclination for buyers to go with the safe, mass, well-established online sites. Second, the reach of the big sites such as Yahoo, MSN makes them easy go-to places for marketers and spend their ad dollars. Third, the manpower involved in planning, buying and tracking ads across a handful of sites versus twenty or thirty makes tonnage buying more efficient. Fourth, the biggest sites have invested heavily in research and sales training – polishing and standardising their sales pitch . Fifth and most concerning is the fact the average online media buying and planning team suffers of a condition called “media inertia”.

“Media inertia” is a learned disability which limits the planning and buying decision making process, by limiting continuous improvement and experimentation beyond “proven results”.

In our experience granular buying is an absolute requirement, but it requires a more hands on approach to media planning and buying. For one, granular buying must aggregate niche sites and placements to be effective from a cost and profitability. Secondly it requires media and creative to be integrated from the start of the briefing process, given granular buying will open a wealth of bespoke ad opportunities. Third it requires a methodical approach to optimisation ” testing, rotating and changing schedules on an on-going basis. Fourth, it requires flexible out-clauses to be negotiated with media owners, in the case funds have to be transferred to other sites. Fifth and more important, it requires clients to commit to testing and experimentation ” making  ROI a sustained long term objective as opposed to a short term gain.

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About Alain Portmann

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Google’s patent application describes two distinct sets of data used to score and determine the ranking of results in a blog search. The first is a blog quality score, which is independent of the query terms used in the search. The second is a relevance score of the post, based upon the query used by a searcher. Google’s thinking can already be seen today at Google’s Blog Search, which is based on a series of positive and negative quality indicators.

Some of the positive quality indicators to consider for blogs in Google include:

Inclusion into blogrolls and blog news aggregators
Emails containing the blog URL
A high number of unique subscribers 
Popularity of the blog
The main blog or blog post’s PageRank
Use of category tags (e.g. Technorati tags)

Some of the negative quality indicators to consider for blogs in Google include:

Duplicate posts in a blog
The use phrases and words that appear in spam
Similar length across different posts within the blog
Links from the blog pointing back to one site
New posts being published in short succession (hint of automation)

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1. Google’s Ad Sense and Ad Words will become the world’s largest advertising platforms. Obviously this could only be a possibility if Google can leverage the thousands of publishers using Doubleclick’s DART technology to serve and manage ad inventory across their sites. The reality is that Ad Sense could become a powerful advertising platform combining display ads, search listings and video ads. However and as discussed in previous posts on Google, the future success of the platform is more a matter of service than reach.

2. Microsoft to purchase aQuantive, or RealMedia direct competitors of Doubleclick. 24/7 Real Media seems to be a more likely target given its’ large global footprint, advancements in mobile and large advertising network. Furthermore, a purchase of aQuantive would be complicated by aQuantive’s online advertising agency Avenue A/Razorfish. Media and advertising agencies, which buy advertising from Microsoft properties such as MSN, would view this as a conflict of interest. Having said that ATLAS has invested heavily in the development of a delivery and management platform for interactive television ” an area of growth for Microsoft.  

3. Google/Doubleclick will renew calls for stricter legislation on the use of data online to “protect consumer privacy online”. Given the combined Google/Doubleclick would account for 80% of all global ad-serving the implications are significant. Without a doubt it will spark legislators in the US and the UK into action, looking to review legislation such as the 2002 European Union Telecommunication Privacy Directive containing rules about the use of cookies. In response to pressure from the media and privacy groups, Doubleclick issued a statement with the headline “We do not own customer data”. While Google/Doubleclick might not own the data, it does own the aggregated data related to behaviour and usage patterns. A privacy complaint has already been filed by three public-interest groups with the Federal Trade Commission, asking the US Trade Commission to review Doubleclick’s data usage policies.

More significantly, Google has always defended its position on privacy by reminding the industry is does not implement cookies. The purchase of Doubleclick will force Google to modify this no cookie policy.   

However, the impact of the combined group could be short lived.

The future of online advertising is in content. YouTube if anything proves this true. Furthermore, content owners are waking from their long hibernation and embracing the opportunities at hand. One of the most promising ventures is “NewTube”. NBC Universal and Fox are developing a new platform dubbed “NewTube” offering all of the networks’s shows across multiple sites including AOL, Yahoo, MSN and MySpace. “NewTube” will reach 96% of the US online population and compete directly for the leisure time of US consumers.  

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About Alain Portmann

My job is simple. To inspire staff, clients and consumers.

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On one end, search agencies are challenged to maintain operating margins given the increased resource required to manage increasingly complex PPC campaigns. On the other hand, advertisers are demanding higher return on investment from their PPC investments.

If you outsource your commercial search to a third party take a note of the following ten questions. Sit down with your agency and ask them these ten questions. If anything, these questions will help you understand the challenges faced by your agency every day.  

1. How many non brand keywords make up 50% of 1) total expenditure, 2) total traffic and 3) total revenue? These metrics will allow you to understand if your agency is “living off” your brand terms. Ask your agency to provide you with an ROI figure which does not include brand terms – you might be surpised! Furthermore, it will help you understand the degree of “search tail” exploitation undertaken by your agency. The reality is that some search agencies fail to proactively grow the “search tail” as it is a labour intensive endeavour. 

2. How many different sets of copy are currently running through my commercial search program? It is not a question of more copy being more effective than less copy. It is more about understanding how hard your search agency is working at increasing performance through optimising copy, taking in consideration seasonality, context and consumer sentiment.

3. What is the average share of voice held across the top 20 performing keywords on Google, MSN and Yahoo? Understand the potential for investment growth across your best performing keywords. A useful exercise when deciding where to allocate your marketing budget!

4. On a monthly basis what percent of my keywords are deactivated by Google? Google deactivates keywords on a regular basis if they don’t meet certain editorial and copy requirements. However and more important, the deactivation can be driven by the ads lacking enough clicks. This is an important way of gauging how good is your agency at “farming keywords” and identifying optimal copy.

5. What is the impact on total ROI from increasing click rates by 10% and click to book by 10%? Your search agency should be able to provide you with “scenario planning” ” which should help you understand where you should allocate your marketing resources. For example an investment of £5,000 on a landing page optimisation program could have a dramatic impact on your click to book and return on investment.

6. When developing copy in foreign languages do you use freelance or full time resource? Furthermore, are those individuals’ native speakers residing in that country? The importance of local native speaking resource cannot be underestimated with PPC. Make sure your agency has the calibre of resource you require for your international campaigns.

7. If you are part of Google European Third Party Programme, what percentage of the total discount is attributed to my spending? Last year Google took the bold move to do away with agency commission. Google replaced agency commission with a Best Practice Funding scheme, which grants rebates based on overall spend and accreditation. If your agency is receiving a discount from Google, you should know what your agency is doing with the money.

8. What is the contracted cost per click rate you have with your third party ad-serving supplier? It is likely your search agency will have a contract with a tracking platform or third party ad-server such as ATLAS or Doubleclick. Ask your search agency to provide you with a copy of the contract, to ensure you are not being overcharged for measurement and tracking of clicks.

9. What is the length of the click conversion tag and why you believe this is the optimal length of attribution? When optimising and tracking your PPC campaigns through a third party ad-server such as Doubleclick or ATLAS the tag responsible for tracking conversions is assigned a click and impression window. This “post click” window measures the delayed impact of a click on a conversion. For example if your post click window is set at 30 days, clicks generated 29 days ago will still be attributed a conversion. Obviously the “length of attribution” will vary by product or service ” however it is an important consideration when reviewing the performance of your agency. If in doubt, ask your agency to deploy a Time to Conversion Study. This study will plot the percentage of conversions generated after each minute, hour or day following a click.

10. What percentage of all clicks generated through my Google Ad Words programs are considered fraud clicks? Google now provides advertisers with open click fraud figures. Although there is much discussion on the industry about the average click fraud rate, companies such as Click Forensics provide an overall click fraud measurement platform. The Click Fraud Index monitors and reports on data gathered from the Click Fraud Network(TM), which more than 3,000 online advertisers and their agencies have joined. Click Forensics claims the overall industry average click fraud rate was 14.2 percent versus 13.8 percent for Q3, 14.1 percent for Q2 and 13.7 percent for Q1.

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About Alain Portmann

My job is simple. To inspire staff, clients and consumers.

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Taking full advantage of April Fools day, Google yesterday announced the launch of Gmail Paper, a new feature through which users can request a paper copy of  any email delivered for free within 24 days. Taking the environmental high ground Google’s Gmail Paper promotional page claimed the Gmail paper was “printed on 96% post-consumer organic soybean sputum, and thus, actually helps the environment. For every Gmail Paper we produce, the environment gets incrementally healthier.”

Suprisingly, “Gmail paper” was the most searched term on Technorati during the past 48 hours with over 3,000 blogs making mention of the spoof service within 24 hours of its release. “gmail paper”  

Shadowed by Google’s April Fools Day Gmail Paper spoof, was an  important annoucement that provides a glimpse of were Google is going next. Google has emerged together with Microsoft as a contender to buy DoubleClick Inc., one of the leading third party ad-serving firms, serving over 1 billion ads a day through its DART platform. Doubleclick is currently owned by private equity company Hellman & Friedman LLC. The third party ad-serving market is going through a wave of consolidation, with ATLAS recently purchasing Accipiter and Doubleclick’s purchase of Faulk eSolutions.

The purchase of Doubleclick would cement Google’s position in ad land, providing access to thousands of potential advertising technology clients. More importantly it would bonify Google’s planned CPA (cost per action) offering through DART, a proven and trusted platform to track and manage CPA advertising agreements. The combination of DART and Google’s reach could present a serious challenge for Trade Doubler, LinkShare, Commission Junction and buy.at. However Google will continue to face the challenge of click faud under any ad model it launches. Is the launch of a CPA network an antidote for click fraud? Unlikely; given Ad Sense publishers would be paid on the basis of completed actions as opposed to clicks generated. However, the success of Google in the world of CPA will not be determined by reach but by service. The current affiliate marketing market is a perfect example – 80% of actions are driven by 20% of affiliates.

The loyalty of super affiliates, for network owners and advertisers is gold dust.

These super affiliates must be managed closely. Based on a track record of automated solutions and poor service I don’t believe Google can sustain a CPA model without acquiring a specialist affiliate network. Lastly and more importantly, advertisers are increasingly concerned with the “quality” of actions or conversions they pay for as opposed to the “quantity” of actions or conversions. Again the quality of Google audience does not come down to the sheer size of its Ad Sense network but service; to acquire and retain quality sites.  

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About Alain Portmann

My job is simple. To inspire staff, clients and consumers.

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According to E-consultancy 2007 Online Advertising Networks Buyer’s Guide, UK online ad networks now account for up to 25% of UK display advertising spend. Additionally, the guide claims that the 40-plus online ad networks operating in the UK made an estimated £120 million (approximately $236 million USD) in revenue during 2006.

While advertising networks continue to battle for total reach, the future of advertising networks in the UK will not be determined by the size of their inventory but by the quality of their inventory.

The shift in the value proposition of advertising networks will be driven by: 1) increased demand for “declared” behavioral and contextual ad inventory, 2) the growth of cost per performance based agreements 3) publishers bringing their online sales functions in-house and 4) the launch of a “piggy backing” or open container conversion tags. The combination of these four factors will undoubtedly in time, bring the demise of the large majority of ad networks in the UK.

The most recent and significant of these factors is the advent of a “piggy backing” or open container conversion tags. The term “piggy backing” refers to the ability of a single conversion tags to hold third party tags, effectively serving as a universal tracking counter providing unduplicated conversion counts from multiple sources of media inventory. In theory, for instance, if a user clicks an ad with Ad Network #1 today and then the next day clicks an ad for Network #2 and converts from the ad with Ad Network #2, the network generating the last click will get credit for that conversion, as opposed to both networks. This is especially valuable when working across cost per performance programs, where payment is based on the total number of conversions.

The ownership of ad-serving tracking technology and a media network has been a recipe of success for ad networks. Networks such as Media Brokers have benefited from the technology heritage of its’ parent company aQuantive, leveraging hundreds of customers using third party ad serving platform ATLAS DMT for tracking on-site advertising activities. This “dual play” has allowed DrivePM to offer unduplicated cost per performance agreements on their ad inventory, attracting large shares of direct response budgets. While other networks such as Blue Lithium and Adviva have joined the “dual play” offering (by adding a proprietary tracking solution to their media network), the issue of double counting and the logistical issues of implementing additional tracking tags on client sites, have limited growth. Having said that, the majority of advertisers are not aware or account for the duplication created by utilizing multiple conversion tracking technologies.

While these “dual play” entities such as aQuantitative where quick to provide unduplicated counting between display and PPC activity, they have been slow to embrace piggy-backing. On the other hand, “single play” entities (which do not own a media network) such as Doubleclick (which recently purchased Tango Zebra) have taken the lead. Doubleclick was the first ad-serving company to launch a piggy-backing open container tag – Floodlight. Doubleclick claims the Floodlight tag removes duplication of conversions across sites and ad networks.

What Doubleclick fails to clearly communicate it that Floodlight in its present form, will only remove duplication from click driven conversions. With 40% to 60% of conversions being driven from post impression activity, Floodflight fails to deliver on the promise of true unduplicated tracking across multiple media sources.

The reality is that the sources of quality media inventory for ad networks to buy from, is limited. The proliferation of ad networks in the UK has exasperated the issue of chain buying. Chain buying occurs when multiple ad networks buy inventory from the same sources. In a trading environments in which ad network inventory is purchased on a blind basis and on a cost per thousand (CPM) payment model, the success of ad networks in based on the reach and influence of their media buying and commercial teams “buy low, sell high” approach. Under this trading environment, the value of the inventory is mostly driven by the efficient reach it can deliver. However the new trading environment, lead by the adoption of “piggy backing” will force ad networks to focus on the quality of their inventory – taking a closer look at the behavior, content consumption and upstream behavior of their audience.

In the new world of piggy backing, the rules of “conversion attribution will become essential. If the “last click always wins” over an impression or a click, the value of “click elicited” media might increase significantly.

In theory piggy backing is the answer to the prayers of direct response advertisers. However it is plagued by issues such as the inability to unduplicate impression driven conversions. Another potential issue is the length of the impression and click window across multiple ad networks. Finally, another issue is the charges companies such as ATLAS DMT plan to charge third party networks for gaining access to the conversion tag on the clients site.

Ad networks that provide a more sophisticated approach to monetizing their inventory and audiences will remain in a strong position. However it is clear the UK ad network market will evolve significantly during the next few months leading to better quality inventory for those buyers savvy enough to find it.

About Alain Portmann

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Recently we posted our thoughts on the importance of understanding and differentiating between

It is important to note we define Search Engine Optimization – a subset of Search Engine Marketing (SEM), as the process of improving the volume or quality of traffic to a web site from search engines, usually in “natural” (“organic” or “algorithmic”) search results. Search results are organised and ranked in different ways. Google’s algorithm, known as Page-Rank orders links based in part on the number of times other pages link to them. On the other hand Ask.com’s algorithm ExpertRank, retrieves and ranks results based on the number of times groups identified as related to the topic reference the site. Google’s algorithm is constantly being modified to keep ahead of consumers and avoid alterations to search results driven by ”Google bombs”. A Google bomb ”is an attempt to influence the ranking of a given page in results returned by the Google search engine, often with humorous or political intentions”. On Google, a page will be ranked higher if the sites that link to that page use consistent anchor text. A Google bomb (in some respects a form of “consumer generated ranking”) is created if a large number of sites link to the page in this manner.

We define social search engines as those search engines that lets users tag Web sites in order to produce more targeted results than a general search. For example, Yahoo! introduced MyWeb 1.0 in 2004, which let users save links and Web pages in a searchable directory that could be shared. In 2005, MyWeb 2.0 expanded the concept to groups by letting users invite people to join their “community.” As more people tag favorite sites, the social search engine produces more relevant results within an area of interest to the group. The oldest and most promising social search engine, Eurekster founded Steven Marder allows users to build mini search engines, called swickis, that aggregate information on particular topics from sites they choose. In light of these new developments, will social media and social media engines change the current approach to SEO? 

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Ultimately it comes down to the distinction between ‘media’ as a channel of communication and ‘content’ being the communication itself. And ‘users’ being general participants whereas ‘consumers’ are a subset representing those who have purchased or are considering the purchase of a product or service . Here’s how we define each:

UGM – User Generated Media: A channel or platform of communication that facilitates the creation of content by the users. Examples: YouTube, Flickr, MySpace

CGM – Consumer Generated Media: A channel or platform of communication specifically related to the purchase or purchase consideration of a product or service. Example: www.consumerist.com

UGC – User Generated Content: A specific piece of communication in the form of text, audio, video, illustration, or animation created by a general user. Example: a sneezing panda on YouTube

CGC – Consumer Generated Content: A specific piece of communication in the form of text, audio, video, illustration or animation about a product or service. Example: cancelling AOL

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The growth of video has been spectacular. In 2005 video advertising accounted for a scant $121 million in spending. In 2006 that figure grew by 82%, to a respectable $410 million. In 2007, that figure is expected to reach $775 million; accounting for 4.2% of total online advertising spending. For 2010 the figure is projected to reach $2.9 billion or 11.5% of overall online advertising spending.

Many attribute the meteoric growth of video advertising to a handful of key factors including 1) the rapid adoption of broadband, 2) the coming of age of the Generation Y (those born between 1980 and 2000) and, 3) the rise of consumer generated content and the need to align advertising models closer to content and choice.

The reality is that broadband has had an important but not significant impact on video advertising. There is a significant difference between “lean forward” and “lean back” viewing habits, irrespective of the accessibility of content. These habits are rapidly changing. In a reverse of fortunes, internet browsing is becoming more “lean back” and content is consumed in a more relaxed fashion, while television is becoming more “lean forward” as consumers are engaged in digital interaction within their DVRs and enhanced tv setboxes.

The growth of “lean back” behavior online will only be fully realized when quality content is available and delivered in a meaningful context ” placing content producers such as Viacom, video distribution networks such as Brightcove and Voxant and advertisers at the centre of this change.

Furthermore, the myth video advertising is driven by teenagers and adolescents can no longer be supported.

According to Nielsen NetRatings, one-third of YouTube’s audience is more than 45 years old. This view is further supported by a Nielsen Net Ratings study entitled Who´s really searching for online video in the UK? The study indicates UK young couples without children are twice as likely to be responsible for click through/view of a video than a click-through across the Internet.

However the behavioral change being driven by a generation “born to be digital” cannot be underestimated ” the average teenagers weekly media consumption places online at the centre of their lives, spending an average of 16.7 hours online (excluding email), 13.6 hours watching TV and 12 hours listening to the radio.

More important than the current usage of online, the residual impact of online on Generation Y’s ascent into adulthood is key ” an opportunity few companies can afford to miss. Successful marketers should embrace a simple but effective truth of marketing – today’s consumer is tomorrow’s customer. Establishing a rapport with the “born to be digital” demographic today could reap substantial benefits in the long term. However this is unlikely to occur given the majority of marketing directors have a finite “mandate in office”, similar to that of a president or prime minister.

Undoubtedly, the growth and true adoption of video advertising is being plagued by the old question of choice. Choice within traditional media is almost non-existent; with networks and publishers dictating advertising schedules and ad rotations. To date online is yet to deliver on the promise of choice. Ninety percent of all video advertising is sold on a 3, 10 15 or 30 second pre-roll basis, with the advertising message being delivered before the content. This is unlikely to change and unfortunately will take us down the same slippery road as pop-ups (although options for mid roll: during content and post roll : after content exist).

Recently the IAB defined a set of guidelines for the use of On Demand Video. While these guidelines define an approach for the delivery of video advertising, they fail to establish quantitative and qualitative guidelines for the measurement of video advertising’s impact.

The challenge for video advertising is not the lack of delivery guidelines or the availability of technology to deliver it. The promise is the amount of quality content that can be directly chosen by consumers and appropriately measured by marketers.

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About Alain Portmann

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The UK commercial search accounts today for a staggering 90% of the search marketing spend or £1.26 billion whilst, natural search accounted for £147 million in the UK in 2006 (Travelution, November 2006).

Research from Nielsen/Net Ratings indicates that in 2006, 265m people used a search engine (81% of the internet population) creating 27bn search views. The average search user views 93 result pages a month and spends 27 minutes of their time on the process. Google’s dominance on the search market continues to grow, recieving almost three times the amount of traffic as nearest rival Yahoo! Search – however two-thirds of all search engine users use at least two search engines. The chart below (Hitwise, December 2006) compares the budget allocation between commercial search and organic search within the UK airline market.

Ryanair’s decision not to allocate any funding to PPC commercial search defies the industry norm. Even British Airways, the de-facto national carrier within the UK allocates 61% of its search budget to PPC commercial search (spending between £3M to £4M in PPC commercial search every year). The chart establishes an interesting relationship between brand and search channel allocation; however the more interesting relationship is the one between online revenue share and search channel allocation. The higher the contribution of online to the airlines’ overall bookings and revenue, the lower the PPC budget. One of our own airline clients allocates over 50% of its search budget to commercial search. The on-going discussion with our client is about the opportunity cost of that commercial search budget ” could that budget yield a higher return on investment somewhere else? Our statistics indicate distribution programs with leading vertical search comparison engines such as Kelkoo and Travel Supermarket, yield a click to book conversion 25% to 30% higher than non-brand based PPC campaigns. Today’s obsession with PPC search is without a doubt fueled by the channels ability to deliver effective direct response solutions. However, today’s obsession is mostly driven by the inability of many companies to 1) benchmark the results of PPC search against all other online marketing channels including organic search and 2) understand how the last click gets to much credit.

About Alain Portmann

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This change is not soley caused by the emergence of consumer generated content or a shift in consumers relationship with advertising, but the growth of free labour.

Futurists Alvin and Heidi Toffler argue a new trend is emerging within the economy, by which prosuming” or “creating what we consume” is restructuing the entire relationship between brands and consumers. The phenomenum is already taking place in our industry with the emergance of open source software such as Mozilla Firefox in which open participation and free creation determines the consumption cycle of a product. The way this free labour movement will shape the role of advertising agencies cannot be underestimated. With consumers being more involved in shaping brands and products, the existing model of advertising agencies based on execution of media, creative or strategic services will no longer be feseaible.

For decades advertising agencies have acted more as a “brand lobbyists” mandating, executing and influencing consumers in behalf of brand owners. Advertising agencies will have to become “brand ambassadors”, helping understand and grow a constituency of consumers, which in turn is empowered to shape and determine the future of a brand or product.

This shift will require advertising agencies to fill their ranks with field experts as opposed to channel experts, individuals able to understand and harness the potential of this free labour resource. However, few advertising agencies will make the change, for there will always be a market for channel specific services such as media services or creative agencies. It will be the smaller, nimble agencies that drive this trend, for their legacy, structure and corporate DNA is far more malleable.

The challenge of harnessing free labour will also fall on the shoulders of advertisers and their Marketing Directors. They will not only have to recognise the impact of free labour on their plans, but select the best “brand ambassadors” to help them.

About Alain Portmann

My job is simple. To inspire staff, clients and consumers.

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While applying a proven ad revenue model to a social network might be of benefit to the industry in the short term; a lack of innovation in advertising programs will mean the end of advertising within social media environments.  To understand the issues with the current advertising model and how they apply to social media, it is important to understand what makes social media different.

First, social media is based on the actions and perceptions of the community as opposed to its individual members. This establishes a new relationship between advertisers and users. The old model for marketing and media was one of persuasion and isolating consumers. The new model is highly interactive and communal. While new models of marketing are emerging, traditional principles such as word of mouth are essential in social media. Sean Moffitt, President of Agent Wildfire provides an ellocuent view on the importance of word-of-mouth.

Word of mouth is marketer’s oldest tool and it’s 50% more important than even 25 years ago because of 3 shortfalls – consumer trust, time and attention and 3 abundances – product choices, media clutter and connected social circles.

Second, the advertising revenue model is no longer tied to the “page paradigm” (number of pages viewed or searches consumed) but the degree of user interaction. This is causing media owners to grapple with the challenge of monetizing their sites, as their ad sales teams and rate cards do are no longer relevant in the social media environment.

Third, social network sites will reach maturity quickly, starting to fall pray to a new kind of spam email, a legacy of the current advertising model. Social media sites are more susceptive to spam given they exists as an open network, relying on referrals, networking and topic associations. The issue of email spam in social media sites is magnified by solutions such as FriendBot.com and FriendAdder.com that can automatically send mass friend requests to MySpace users. While these issues are not unique to social media sites they will have an impact on the level of consumer trust and engagement.

Case in point, both MySpace and Facebook lost visitors in September, according to Nielsen/NetRatings. The number of unique U.S. visitors at MySpace fell 4% to 47.2 million from 49.2 million in August, and the number of visitors to Facebook fell 12% to 7.8 million from 8.9 million. Although this could be attributed to seasonality, there is a recognition the current model of advertising on social networks is not sustainable. MySpace, ByeSpace, an article published in the Wall Street Journal supports this conclusion, showcasing the experience of a MySpace usersRecognising this change, YouTube has recently launched a new ad product which leverages the participatory nature of the site. The Participatory Video Ads (PVAs) is a regular video spot but with all the community features enabled, so that YouTube visitors are free to comment, share, embed and “favourite” the video. The first PVA launched on the site, promoting Paris Hilton’s new album, has been viewed nearly 80,000 times and received 415 comments. Its rating, however, is a mere two stars out of five.

Will the rise of social media bring about a revolution in online advertising? Without a doubt, more of an evolution. To embrace the challenge of advertising in social media, agencies will have to rethink their current approach to media planning and buying, publishers will have to take a more consultative role to sales and, clients will have to be brave and understand creative and media costs might will due to the bespoke nature of the communications required.

About Alain Portmann

My job is simple. To inspire staff, clients and consumers.

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Fred Reichheld, author of The Ultimate Question blogged about this email exchange between he and his son. The importance of which is best stated by Fred:

Moral of this story: It is not advertising campaigns, marketing promotions, or retention programs that determine corporate reputations and profitable growth; it is the millions of conversations and email exchanges that occur between family members, friends and colleagues every month of the year.

Fred came short of pointing out that this conversation, whilst incredibly influential amongst the Reichheld’s personal networks, it is now influencing an exponentially larger group of people including you and I simply because he decided to blog about it. This is WOM online, this is CGC and after reading Fred’s post one cannot deny its commercial importance to Chase, Commerce Bank and USAA.

I for one, had ever heard of USAA banking but now I’m not only aware and have visited their website with curiosity but I actually think somewhat favourably of them. That’s a valuable impression. Further, my mild disinterest in Chase is galvanized and I’m actually considering switching from Citibank to Commerce Bank because this story supports what I already know about the bank. Btw, I don’t particularly like their TV ads but I suspect they are effective.

Beyond widening the circle of influence this example also demonstrates the opportunity each of the brands mentioned now has to better understand their customers and perhaps even engage with them in this channel. This is what makes online WOM and CGC a valuable marketing channel. The Reichheld’s exchange is but one of thousands of conversations online about each of those banks. In aggregate and when analysed properly, these conversations yield tremendously insightful customer and competitive information unmatched by surveys and focus groups. Further, each is an invitation for the brand to connect with customers on a more personal level demonstrating their interest in the individual and their commitment to customer experiences.

This is an opportunity to close the brand gap on both sides of the equation, an opportunity to be a more effective marketer and for now, a great competitive advantage for those marketers who act and act wisely.

Chalk up one more contribution to our ever-evolving communication behaviour, and understanding thereof, courtesy of the Internet.

About Matthew Cronin

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