Survival Guide

Jean Halliday reported in the March 17, 2008 Digital Issue of Advertising Age that GM is shifting “fully half of its $3 billion budget into digital and one-to-one marketing within the next three years.” If there are still doubts that digital should be a substantial element of advertising and marketing plans, then let GM’s “roar” serve as a clarion call. As Halliday wrote, “as GM goes, so goes the entire automotive industry . . .” Hyundai is doubling its online spending in 2008. GM is dissuading their dealers from doing spot TV advertising and moving dealer efforts online. The Kelsey Group expects that by 2010 nearly 40% of auto advertising will be done via local online and directional media — an estimated $10.8 billion piece of the pie.

Marketers should not only take note of the dollars GM and the rest of the auto industry are shifting to digital, but the type of digital these dollars are buying. We’re not just talking banner ads here. Efforts include gaming, search, mobile and a broad array of applications.

And this trend goes beyond the automotive industry. Here is a list of facts from Jonathan Lemonnier’s March 26^th Ad Age article on alternative media spending increases. Alternative media includes online, mobile, entertainment and digital out-of-home advertising.

• Spending on alternative media hit $74.43 billion in 2007, a 22% increase over 2006
• Forecasts predict a 20.2% increase over next year, to a total of $88.24 billion
• By 2012, 26.6%, $160.82 billion, of all advertising and marketing dollars will be spent on alternative media
• Interactive marketing alone which includes e-direct marketing, word-of-mouth and e-custom publishing increased by 24.4% in 2007 to $11.9 billion

Of course, GM isn’t directing its entire $3 billion budget into digital and one-to-one. They understand that these are important communication modes in an overall, integrated marketing program. Broadcast, outdoor, direct, etc. are still and will continue to be warranted. Unlike many marketers though, GM realizes that digital must be given equal resources to have a measurable impact within a marketing-mix model.

So Google is following Amazon and providing a scalable platform for web apps and web services development and hosting http://www.techcrunch.com/2008/04/07/google-jumps-head-first-into-web-services-with-google-app-engine/. In my role I am often caught between the need to follow the latest trends/support where advertising technology takes us, and the ever present challenge to make sure that security, loss of data and service reliability are taken care of.

I often find that many IT departments are in conflict with marketing because they are bound by the requirement to maintain systems and services. And to the IT group that often means keeping everything inhouse. The trend towards hosted apps, mashup sites, open source hosted sites, web service offerings, etc. continues relentlessly. These systems can be integrated and co-exsit with our mainstream online marketing activities. In fact by using the plethora of services available, we can not only reduce our workload, but significantly improve our product offerings, reach more people and drive sales — all while looking like technology hero’s.

I’m not saying that we should follow every trend but we must recognise that there are other solutions that we may not have full control over but do present serious opportunities to lower costs, improve time to market and meet the business goals that we all strive to achieve.

In an earlier post, I sang the praises of the advertising model offered by Pandora.com. Another site that is taking an innovative approach to advertising within broadcast media content online is ABC.com.

As television networks continue to make more programming available on the web, they have taken different approaches to incorporating advertising into their online program streams. Most of the networks have basically created a video stream that mirrors their on-air model. They play a portion of the program, then switch to a 30-second advertiser’s spot, then continue on with the program.

But ABC.com has taken a different tact. Within ABC’s online video player, advertisers have the option to load in a branded web page or even a microsite during the commercial breaks. This branded page is completely under the control of the advertiser, allowing the brand to include a variety of content - video and audio streams, flash product demos, user polls, online games - whatever the brand want to provide. A countdown timer keeps viewers on the advertisers page for the length of a standard TV spot, and after that the user actually needs to click to continue with the program - it doesn’t just start again. This model is really forward thinking for a television network because of all that it offers both the advertiser and the viewer:

1. The viewer MUST have at least 30 seconds of exposure to the brand, but could have far more if she chooses. Unlike simply showing a TV spot and then moving on, the ABC model allows the user to take a break from the program and spend a little more time with the brand to learn more or to interact with whatever features have been built into the branded micro site. After 30 seconds it’s up to her - she’s in control of the time that she spends with the advertiser.

2. Advertisers can easily combine the best of several media formats. Because the viewer must remain on the ad for the length of a 30 second spot, many advertisers embed a 30 second spot on the main screen of their ads, allowing them reuse the same brand assets that they have already developed for broadcast. The microsite ad can then deliver additional content such as interactive product demos, enhanced product information, content downloads, etc. The ad can collect information from the users as well.

3. Advertisers can take advantage of longer-format messages. Some brand messages really work best when explained in a format that’s longer or more straightforward than a standard 30 second television spot. Advertisers have 30 seconds in which to grab the viewer’s interest, but unless the user clicks to continue the program, the message can keep right on playing. This allows the brand to deliver far more information than a television commercial does, and in a less hectic or hurried way. And if the viewer isn’t interested, they’ll get the first 30 seconds and move on.

4. Finally, ABC.com opens up broadcast network advertising to brands which haven’t produced television commercials. Though many advertisers replay their TV spots on the ABC.com program stream, that really isn’t necessary. Since the ad space is essentially a rich media microsite, even brands without existing TV spots can advertise during the broadcast programming, creating an engaging branding message through flash animation, interactive features and non-broadcast audio-video content. This gives ABC a larger base of advertising clients and allows far more brands to reach network audiences.

Let’s hope that more sites continue to challenge existing digital advertising models, and that advertisers demand more innovation in ad space formats. More creativity in online ad formats, like those being explored by Pandora and ABC, will help support the providers of traditional broadcast media as they continue to move their content onto the web.

Here are a few examples of great microsite-style ads displayed during commercial breaks on the ABC.com programming stream.

Juicy Juice Ad

Nissan Murano Ad

Band-Aid Ad

We’re always in search of new territory - some place that no one’s been before. The first one to stake a claim on “what’s next.” It’s in our DNA. Our culture has thrived on it. I liken it to the great western expansion of the 1800’s - the question is whether we will ever run out of land to explore - the pacific ocean of the interactive space if you will - and the answer is that we won’t. So where does that leave those that are not blazing trails and discovering new territory? How do we handle the influx of “what’s next” when some of us haven’t even figured out what to do with what’s old. The answer may surprise you. The answer is don’t worry about it. Don’t get caught up into it.

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While seated at dinner the other night, I heard my Blackberry alert for an incoming text message. I should have left it alone but wondered over to pick it up and see who the sender was. Of course it was from my 20 year old daughter who texts constantly to the entire world. The most interesting thing was that she was actually just across the table from me but chose to communicate through text messaging rather than talk. So like a good dad I asked her why she didn’t just tell me and her reply was “Oh sorry I always text when I can’t be bothered to talk to someone, I forgot it was you” one brief apology later and all was well. Its no wonder that last year in one month alone Verizon reportedly handled 10 Billion text messages http://www.reuters.com/article/companyNewsAndPR/idUSWEN958520070724

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While watching the Superbowl and the Oscars this year (www.mimieo.com), I was interested in noting how many advertisers drove to the web to continue their stories and campaigns. This, to me, seemed to be a big improvement from years past. Yet some advertisers are still not getting it–in fact, some are not even including their web address in the supers or under the tag. So for all the buzz about integration and synergy between offline and online, there are still the misses that occur in this era when most agencies tout 360-degree marketing.

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I was a little under the weather this past week and so I spent more time than usual in the Webkinz World with my six year old. A fascinating place. I was interested in the marketing model, the convergence of the on line and offline world, the user experience and the depth of things to do on the site. He was interested in the $800 football bed for his frog “Greenie.” In amongst the thoughts of how they came up with what games to push, who developed them and how they were tested, I found myself asking - “why didn’t I think of this” (along with most every other parent who has visited this place). He was wondering why he could only buy one type of truck for Greenie and thinking he would like a fourth to add to his collection. (more…)

You can’t read, listen to, or watch anything about business lately that doesn’t have to do with speculation on the economy. A lot of the speculation we in ad agencies read, not surprisingly, centers around how advertising will fare. Because ad budgets are one of the first things affected when businesses sense a downturn.

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One of the most thought provoking articles that I’ve come across in a while appeared in the January 21, 2008 issue of AdAge Magazine (http://adage.com/abstract.php?article_id=123200). Essentially the article talks about two very different worlds that are rapidly converging within the social network space.

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