How Can Onlline Publishers Capture More (Brand) Ad Dollars

Why Advertisers (& their agencies) Will Destroy Us Tiger Global 2008 Internet Conference New York City • October 2, 2008 Greg Stuart Former CEO, Interactive Advertising Bureau Co-author: What Sticks … And What We (Online Publishers) Can Do to Stop Them

Problem Is That They Don’t Know What Works, Nor Do They Care
Donny Deutsch speaking to 500 Marketers…
“ We did a wonderful spot…on the Superbowl… for Mitsubishi Gallant...that stops at the end and [says] go to “seewhathappens.com.”
We got about 600,000 clicks.
Was that great or that not great?
We told the client it was great, so it was great.”
[nervous laughter]
Deutsch is the 14 largest agency in the US

Today’s Intent
Review of the Research & Topline Insights
To What Degree Can Online Garner Branding Dollars?
Review of Best Practices For At Least Trying to Capture Brand Dollars

$1 Billion Ad Spending Researched 1.1 million consumers surveyed

What Did Learn From the Research? 36% Media Motivations Messaging

ING’s 4 Year Campaign
Fresh Thinking

Today’s Ads for ING Simplifies a Complicated Financial World

More, What Do We Know? 36% 31% Media Motivations Messaging

How Big A Difference Can Creative Make? Source: IAB Cross Media Study B A

Creative Makes a BIG Difference Better creative can make the difference between success and absolute failure Ad A Source: IAB Cross Media Study

And Just to See It Again Source: IAB Cross Media Study B A

Yes, It’s That Bad, and Worse 36% 31% 83% Media Motivations Messaging

Why Were Marketers So Slow… When the Data is So Compelling?
Online CPM was lowest in 50% of studies
Online “Cost Effectiveness” was lowest in changing brand metrics for 75% of studies

The Truth Is…Marketing is Hard
Suppose you have 5 options:
5 Brand Positionings
5 Customer Segmentations
5 Ad Creative Approaches
5 Magazine Schedules/Plans
5 Online Plans
3,125 combinations 10 to 10 th = 1 billion combinations

What Sticks was Written to Be…
A Clarion Call* to Marketers
for Change
* A clarion call is a powerful request for action or an irresistible mandate. Frequently used in a religious context, or in a political context, in that a politician issues a challenge for action from the public.

But What If They Don’t Take the Call? Used with permission Cartoonbank.com

What is Online Media’s Destiny for Getting Brand Dollars?

Let’s Examine One Model for Online Advertising Success
What did they do right?
Focused on effectiveness!

What is That Worth to Google?
$68 eCPM
$0.54 CPC x 17% click thru x 74% sell thru
Source: Jordan Rohan, Analyst at RBC

Some of What Google Figured Out (& the other Media still don’t get)
Know thy Customer (‘s needs)
If Consumer Wins, So Does Media
Algorithms beat Humans
Effectiveness (& mostly cost effectiveness) matters

So Why Bother? 2 Data Points
What Sticks research suggests that U.S. online would be at $40 to $50 billion , if there was rational decision-making
Another data point…
If Internet matched overall ad spending’s Brand vs. direct response mix, then U.S. Online Brand spending would be $12 billion
or 50% of the $25 billion (U.S.),
And not the current paltry +/- $5 billion

What Will Be Our Future?
Destiny...is not a matter of chance, it is a matter of choice; it is not a thing to be waited for, it is a thing to be achieved
William Jennings Bryan (1860 - 1925)
US lawyer, orator, & politician

If Advertisers Don’t Take Responsibility, What Should We Do?

What Sticks 3 Step Action Plan Publishers & Ad Sellers
Get Your Own House In Order
Help Them…Help Themselves
Package it Well

Can publishers impact brand effectiveness themselves?
Own House in Order..

Stop Selling International Impressions to Domestic Advertisers
International users comprise 15% to 30% of a site’s ad inventory
Removing International increases effectiveness by 18% to 43%

Respect Diminishing Returns It’s a Law of Physics in Media % of Brand Impact Awareness, Image or Purchase Intent 0 10 20 30 40 50 60 70 80 90 100 0 1 2 3 4 5 6 7 8 9 10 Frequency Diminishing returns 1 2 3 4 5

Heaviest Online Quintile Garners Half the Ad Imps Percent of Total Impressions Light Users All other quintiles Heavy Users Avg Freq: 1.0 2.1 3.2 5.5 25.0

One Solution: Website Frequency Caps Can Really Help Frequency of 3 Per Week per Site Dramatically Increases Reach & Thus Performance Light Users All other quintiles Heavy Users Increased reach by 72% +50% to 70% in Ad Effectiveness

Many Things can Affect Effectiveness (e.g., Time of Day) +10% to 15% in Ad Effective-ness Average If Marketer had focused impressions on the 6hours around lunch time, impact would have been significantly better % Purchase Intent Lunch

Results: Size Matters 1 Aggregated results for three brands tested 2 The average of four brand measures tested The 336x280 resulted in an average +54% increase in brand impact vs. 468 x 60 2 +20% to 54% in Ad Effective-ness IAB, DoubleClick Ad Effectiveness Research 2001 Banner Small Rectangle Small Skyscraper Large Rectangle

Improving Publisher Ad Effectiveness Insights from the What Sticks Research
Low High
Cut out International impressions 18% to 43%
Manage Frequency 50% to 70%
Capitalize on Time of Day/DoW 10% to 15%
Ad Size matters 20% to 54%
Page Placement really matters 6% to 350%
Creative is “mission critical” 0% to 400%
Total Gain Possible: 0% 2910%
+0% to INFINITY in Ad Effectiveness

Some Companies That Can Help
Double Verify
AdGent007
Vizu
Dynamic Logic
Insight Express
Anchor Intelligence
Ad Servers:
DoubleClick / Google
Atlas / Microsoft

There is so much that marketers don’t know and we could help them
Help Them…

Of Course, Context Matters +~10 Pts

But Behavior Targeting Is Better
Brand: Panasonic Plasma TV
Target: Interested in high-end Consumer Electronics
Performance:
+12.2 % pts, or +75%
ROI on CPM = +192%
Purchase Intent

Next Generation Targeting
But what if Cookies continue to go away?
Current estimate IS 50% cookies deleted monthly
Semantic targeting is likely next gen
Scans page and categorizes contextual potentials
That is matched to consumer intent
Weeds out negative places to advertise
Waiting in the wings-DPI based targeting
Sits on the ISP “pipe” collecting insights on consumer interests
DPI = Deep Packet Inspection technology

Optimizing Each Campaign Is High Value Same Media Budget  310% Increase Source: InsightExpress

Optimizing Online Ad Inventory Yield is Becoming Critical Today
Managing publisher inventory complexity is impossible on Excel:
Est. TV Ad Units Annually by Network: 220,000
Est. Yahoo Ad Units Annually: 3,500,000,000,000
Publisher Inventory Optimization tools are becoming critical:
Manage / direct sales team performance
Predict ad inventory avails
Maximize yield and price to market demand
Reported revenue increases of 10%-20% immediately

However, Biggest Gains Where In The Marketing Mix Introducing New Menu Item: Grilled Chicken Flatbread Sandwich Ad Frequency (or Budget) % Aided Awareness 20% of Broadcast Budget Reinvested 13.6% in Online Point of Diminished Returns 5pt Gain! Cut 6.4% TV & Radio 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 0.0%

Tacoda (AOL)
Revenue Science
Peer 39
Rapt, Inc. (Microsoft)
Pubmatic
Media Geeks
Media6º
KindSight
Solbright
Networked Insights
Eyeblaster / Other RM
Some Companies That Can Help

Forbes.com Brand Effectiveness Guarantee
Yahoo! Consumer Direct
Package It Well

Forbes.com Brand Effectiveness Guarantee
Minimum of $150,000 campaign - Over 60 days
No statistically significant increase in brand metrics, advertiser gets their money back
Aided Awareness, Message Assoc, Brand Favorability, Purchase Consideration
Alternatively, Forbes.com Challenge
Guarantee ad dollars on Forbes.com work harder than WSJ
Increase Brand Ad Effectiveness, Or your money back!

Yahoo!’s Consumer Direct
Maps Online Users/activity to their buying habits
Using Nielsen Homescan (tracks all product buying)
50% - 80% probability Yahoo can match Online User activity to their brand preferences using algorithms
Categories: CPG, Pharma, Retail, Finance
Brands can:
Buy ads against their loyal consumers
Buy ads against competitors’ users
Reportedly, sales lifts of +/- 20%
ROI reported to be +100% to +300%
Greatly increased Yahoo Ad share of market

In Summary, Unlike the Other Media, Online Has Many Effectiveness Levers
Creative
Message, Format, Tactics
Targeting
Audience, Content, Historical
Message Management/Frequency Control
Pricing Arbitrage
Attentiveness / Intrusiveness
Optimization systems
… and more

So, Why Bother?

“ Most Important Launch In History Of Ford” - Bill Ford F150 Truck is #1 selling vehicle in U.S.

The F-150 Online Ads

How Big a Difference Can Little Changes Make? Roadblock 43% One Day Reach

Cost Effectiveness of Each Medium Cost to Increase Purchase Consideration Interpretation: If it cost Roadblock $1 (indexed at 100) to increase purchase consideration, then it cost $1.35 for Online, $4.56 for magazine and $11.04 to TV to achieve the same increase. $1.35 $1.00 $4.56 $11.04 Relative Cost 100 Roadblock 456 Magazine 1104 TV 135 Online Relative Cost Index Brand Metric: Purchase Consideration (top 2 box)

What’s the CPM for This!?
Cost of Portal Home Page Take- Over ad in study: $500,000
Cost of Portal Home Page Take-Over ad today: $2,500,000
Priceless!
Ford Media Mix * Traditional Media (TV, Magazines) * Approx. $200 Million Budget Equal to $750,000,000 in U.S. Truck sales Equal to +$1,350,000,000 in U.S. Truck sales

Ford Put It Best
It isn't the incompetent who destroy an organization. It is those who have achieved something and want to rest upon their achievements who are forever clogging things up.
Charles Sorenson
Ford Motor Car

So What Is Your Destiny?
I cannot say whether things will get better if we change; what I can say is they must change if they are to get better.
Georg Christoph Lichtenberg
18th-century German scientist, satirist and Anglophile

Greg Stuart +1.631.702.0682 New York City [email_address] Want a copy? email me. Thank You

If You Don’t Like The Way Things are NOW…
"Efficiency is doing things right; effectiveness is doing the right things."
Peter F Ducker

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How Can Onlline Publishers Capture More (Brand) Ad Dollars

by Greg Stuart on Oct 05, 2008

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How Can Onlline Publishers Capture More (Brand) Ad Dollars — Presentation Transcript