Can Display Advertising Survive the Web?

JONATHAN MENDEZ
Founder & CEO,RAMP Digital
• Former Chief Strategy Officer/Offermatica,
Founder/OTTO Digital. Merged strategy and
creative services with advanced marketing
technology to establish first of its kind
optimization agency
• Record of success with over 50 clients
including Amazon.com, Disney, Citibank,
H&R Block, IBM, Intuit, Microsoft,
Monster.com, Sears & T-Mobile
• Evangelist on technology driven advertising
and marketing platforms and creative
optimization

Introduction to RAMP
Founded March 2008
New York & San Francisco
•Leverage Advanced Web Technology
(APIs, Semantic Markup, Real-Time Web)
•Create Intelligent Digital Marketing Solutions
(Applications for Display, Search, Social & Mobile)
•Measure, Analyze & Optimize Performance
(Source, Behavior, Temporal, Environment, Creative)

The Medium is the Messenger
\"The laying of the telegraph around the world is the great work of the age.\"
- New York Herald, April 20, 1857

The Medium is the Messenger
The Web “Solution”
Information Management Services
•Hypertext
‣content
•Computer conferencing
‣social media
•Document retrieval
‣search
•Information management
‣cms/platform/cloud
•Project control
‣messaging

The Medium is the Messenger
Services
are not
an ad supported
medium!

The Medium is the Messenger
Advertising is a premium content biz

The Medium is the Messenger
Advertising is an impression biz

The Medium is the Messenger
what is premium on the web?
what is the value of
a web impression?

“I do not regard advertising
as entertainment or an art
form but as a medium of
information”
- David Ogilvy

The Medium is the Messenger
The web is the greatest medium
of information ever known to man!
•Speed
•Control
•Relevance

The Medium is the Messenger
Response: People will respond to advertising if
you leverage the medium of information...
•discovery & recovery
•information & content
•user control
•interest/intention based

The Publisher Dilemma
September, 2008
“The gap is widening between spending on simple search ads
and display ads. Search-ad spending is on track to reach $10.4
billion this year, double what will be spent on display ads,
according to research firm eMarketer. That divergence of
fortunes may be bad news for companies counting on a
comeback for display ads, which ruled the Web in its early days.”

The Publisher Dilemma
The Fault Line
Old content hierarchies
“information architectures”
above tools that fracture content

The Publisher Dilemma
September 2006

The Publisher Dilemma
September 2006
Only 16% of search terms aligned with NYT IA

The Publisher Dilemma
September 2006 February 2007
Top 50 Internal Search Queries !
150 days later 60% of search terms were the same

The Publisher Dilemma
1997-2007: The Good Times
✓Free traffic from search
✓Big display networks
✓High CPMs
✓PV,PV,PV

The Publisher Dilemma
2007 - 20??: The New World Order
•Google as Media Biz
•Lots of display networks
•Rise of Exchanges
•Falling CPMs
•Performance

The Publisher Dilemma
Rise of Self Publishing Tools

The Publisher Dilemma
Rise of the New Publisher
•Aggregators
•UGC
•Self-serve classified
•Amateurs

The Publisher Dilemma
The biggest value creation in web
publishing was never about the content
...but the discovery & distribution of it!

The Publisher Dilemma

The Advertiser Dilemma
“For All the New Media Spin, It's Just an 'Old' Media”
– Advertising Age story on Display Media, July 28, 2008

The Advertiser Dilemma
“8 in 10 Americans are now
online and spend as much time
on the Web as on TV”
“Most marketers allocate only
*BAH/AMA Survey 10/07
5%-10% of their ad budgets to
digital media.”*
“Are Big Ad Agencies So
Clueless That Corporations
July 26, 2007
Should Avoid Them?”

The Advertiser Dilemma
Impressions
Frequency Cap
% Served
CPM
Flight Dates
View-Through
SOV
Campaigns

The Advertiser Dilemma
Brand vs. DM worldview continuum
Why? Old habits (budgets) die hard

The Advertiser Dilemma
DM leveraged the platform
performance marketing = optimization
•testing
•targeting
•buy side & sell side

The Advertiser Dilemma
Wanna know a Direct Marketing secret?
Brand has always ruled
volume and ROI for the DM

The Advertiser Dilemma
How are we measuring brand success?
•Are we afraid to measure?
•Are we afraid to leave the silo?

The Advertiser Dilemma
Maybe, the problem is
not with our ability as
advertisers to reach
people but what we are
reaching them with?

The Advertiser Dilemma
Everybody pissed off the audience
•spyware •spam
•pop ups •phishing
•pop unders •interstitials

The Advertiser Dilemma
Messaging
•Power has shifted in the marketplace
•Consumers have an active voice in the marketing and the ultimate success of products
•Reviews, recommendations and social networks necessitate factual and helpful messages
•Marketing must quantify the benefits
Why?
Info Overload/ Authenticity
This is the only way consumers will hear you!

The Advertiser Dilemma
Creative
•irrelevance
•banner blindness
•worse

The Advertiser Dilemma
creative optimization
•Who is using advanced technology?
•Who understands analytics? testing?
optimization?

The Advertiser Dilemma
Search
•limited inventory
•click attribution
•little perceived brand value

The Advertiser Dilemma
Behavioral
BT is not the holy grail
•Volume & cost
(performance) issues
•Targeting = multiple
creatives=$
•Privacy

The Advertiser Dilemma
Where is the Transparency?

The Advertiser Dilemma
...and the delta is growing

The Advertiser Dilemma
...making our jobs harder

The Answers Lie Within
“This is the first mass
marketing medium ever that
isn't supported by ads!”
- Seth Godin, September, 2008

The Answers Lie Within
Lazy Marketing

The Answers Lie Within
$ flow to online?
Ex. A
6% year-over-year decrease in display spend
Ex. B overall in the first two quarters of 2008
-Nielsen Online

The Answers Lie Within
Imagine there’s no ads. It isn’t hard to do.

The Answers Lie Within
Google #1 Brand in the World in 8 short years
Advertising Budget 2000‐2007: $0
The 6 largest digital media/content properties grew without the use of advertising

The Answers Lie Within
“People don't read advertising,
they read what interests them...
Sometimes that's advertising.\"
-Howard Gossage

The Answers Lie Within
Ads need to be relevant!
Value added relevance
Helpful & useful parts of an experience
or
Net new relevance
Experiences interesting enough to change
the behavior

The Answers Lie Within
Why Search Ads Rock
•Real-time web
•Content Targeting – helps a lot
•User control/segmentation
•Testing & Optimization
Ads can add value to content

The Answers Lie Within
Technology Can Drive Relevance
‣Programmable Web ‣Real‐time Web
‣Semantic Web ‣Implicit Web
...with a caveat

The Answers Lie Within
WARNING!!!
Technology does not create
great marketing.
It only helps you aim better.

The Answers Lie Within
WARNING!!!
Technology does not create
great marketing.
It only helps you aim better.

The Answers
Yes!

The Answers
Display Advertising works in this medium if you:
1.Give people control
2.Deliver relevant content
3.Test, measure & optimize
4.Properly value & attribute actions

The Answers
Publishers:
What are you doing to
make your content more
relevant to the ads?
Advertisers:
What are you doing to
make your ads more
relevant to the content?

The Answers
Everyone:
What marketing technology
are you and your
organization expert at?
How are you using this
technology to create better
experiences?
How are you quantifying &
acting on that data?

Thank You!
My Blog: www.optimizeandprophesize.com
My Company: www.rampdigital.com