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Online Becomes Meat and Potatoes

Nancy Wong Bryan
Online Becomes Meat and Potatoes Nancy Wong Bryan

"The challenge for advertisers is that the equation is additive," said one respondent to a survey by the American Advertising Federation. "You can't eliminate a medium; you really need to be everywhere the consumer is."

This remark helps explain the organization's finding that online advertising continues to grow at a slow and steady clip. Released last week, the "AAF Survey of Industry Leaders on Advertising Trends 2004"reports online's primary function in the ad mix has clearly materialized: It plays a supporting role in broader, integrated campaigns.

The conclusion -- though not a new idea -- reflects a vital adjustment over the past decade thanks to an increasingly fragmented audience that can no longer be reached through one single medium. Although the effects have not emerged overnight, factors such as digital video recorders (DVRs) and perhaps the Internet itself have created a landscape where television and print ads are not enough, depending on the demographics an advertiser seeks. More than three-quarters of the survey's respondents believe DVRs' capability to skip television ads will make a significant impact on the dominance of the 30-second spot, thus leaving the door open for progressive growth among non-traditional ads.

Anticipated Impact of DVR Technology on the 30-Second TV Spot

Source: AAF Survey of Industry Leaders on Advertising Trends 2004

As recently as last year, many respondents believed the DVR "threat" was limited at best -- or even a load of hype -- but more industry pros have become believers over the past 12 months. Now that many advertisers see the need for expanding the breadth of their reach, Web-based ads potentially play a sizeable role in the strategy.

"Online is an area that has gained a lot of respectability with the respondents, and there seems to be more confidence in it," says Mary Hilton, a spokesperson for the AAF. "They say online advertising has made significant inroads, and many consider it part of the traditional media mix now. It is now outside the norm to have a plan without an online component to it.”

A bigger slice

The proof is in the spending. In 2004, respondents reported that online media spending accounted for an average 8.35 percent of the total media budget, up 5 percent from 2001. That amount is expected to increase to 17 percent in the next three years.

Percentage of Media Budget Allocated to Online Ads

Source: AAF Survey of Industry Leaders on Advertising Trends 2004

Because online media buys are taking a growing chunk of the budget, and because the online ad industry has become more seasoned, many survey respondents questioned the longstanding definition of online as a "non-traditional" format.

"Most of the people who responded to the survey are leaders who have been in the industry for more than 15 years," Hilton notes. "They've seen cycles of what's been hot over a great length of time. If they are saying online is considered a significant way of reaching the audience, I think that speaks to its level of acceptance.”

The survey attributes the increasing value of online media to its manner of complementing traditional ad counterparts and its ability to target audiences. Working with these distinctions in mind can reinforce online's strengths.

"What we're finding is that industry leaders find online advertising complements and enhances the overall media mission," Hilton explains. "People are finding it's a great way to bolster traditional marketing. Much like any other media, if you have a broad-reaching campaign using newspaper, magazines and TV, online is yet another place you're going to reinforce that branding.”

Benefits of Online Advertising

Source: AAF Survey of Industry Leaders on Advertising Trends 2004

Creativity is king

As advertisers have become more optimistic about online marketing's abilities -- and as consumers have grown more accustomed to it -- agencies are able to shift focus from defense to offense. ROI and justifying the expense of advertising will always influence decisions come budget time, but the survey shows renewed interest among industry leaders in "developing ideas that break through the clutter" and "using creative to change consumer behavior."

"I help clients make leaps of faith that research and traditional marketing practices can't bridge," replied one respondent, a brand consultant. "There is a genuine lack of courage out there. Confining agency activities to what is ‘safe' or ‘easily measurable' through focus groups is to guarantee over time the development of perfectly unremarkable advertising that is invisible, irrelevant, bland and meaningless.”

As marketers seek fresh, effective approaches online and offline, online ad agencies have an opportunity to really shine. Hilton cites Burger King's "Subservient Chicken" viral promotion as one fun, clever, advertainment-oriented idea that fits the bill. Ads like this advance online's value by flaunting its greatest asset: the freedom to experiment with interactivity and off-the-wall ideas -- sometimes with fantastic success.

Return to Page 1

General search dilemma
As users continue to get non-relevant results, their confidence in organic listings can evaporate. In turn, this may cause users to rely more on sponsored listings and/or vertical search engines. The potential dominance of sponsored listings in the SERPs was touched upon before by Kevin Lee, who reasoned that the relevance and popularity of sponsored links would nudge search engines into including more sponsored links in the SERPs at the expense of organic links. 

On the other hand, the threat of user abandonment may propel general search engines into improving their SEO algorithms, particularly the over-reliance on inbound links. They know that if they don't, users will migrate to the verticals.

Verticals can deliver
Verticals are a pure capital play. We all know the marketplace will ultimately decide for itself. However, it's my belief that paid search on verticals is one of the best forms of capitalism. By the process of elimination, companies with the best products and services will always be able to outbid competitors that offer lesser value.

Let me elaborate. Say you are trying to be top dog by buying high-traffic keywords. However, the No. 3 bidder has better products. Your No. 1 listing will have its budget zapped and get good response, while No. 3 works its way to the top of the bid, also getting a good response from the user audience. No. 3 will never quit that bid due to the excellent ROI. It's the best of all worlds.

Verticals protect your listings
A vertical search engine will have human editors screening listings and keywords. We will not let a company like Amazon purchase the keyword "wholesale jewelry," as Google does. If you don't sell the product, you can't buy the keyword. All listing statements must be directed to a landing page that displays the product. Deceit is not allowed.

Equally important, the management of most verticals has experience in the industry they represent and they know the customer. I can't begin to tell you how huge that factor is when it comes to the resulting customer loyalty and trust

Verticals do more
A vertical search engine can easily adapt as the industry changes because content is focused on one industry, not the entire universe. That allows it to address the concerns of the marketplace quickly.

Vertical search engines offer promotional products and services that are highly relevant to the users and customers they serve. They also offer content, blogs that users can contribute to, along with news that is relevant to the industry.

Vertical search engines have a sales staff pounding the phones all day, very aggressively, pursuing new business. This creates relevant content in the SERPs for the users.

Vertical search engines can form partnerships at the drop of a dime and tailor products to the precise needs of their industry's customers. VSE can attract highly qualified traffic though niche branding initiatives, marketing efforts and partnerships. A VSE can partner with trade shows and magazine publishers, encouraging its customers to cross-promote them by letting their customers know they can be found on the VSE and are rated as a Top Ten Super Supplier on the VSE.

In other words, VSEs dedicate all their resources toward procuring niche traffic for their users. Verticals don't want to take over the world; they just want to monopolize one industry and make it the best it can be.

Battle for dominance
Who will be the ultimate winner in the SERP turf battle? Right now, organic links still dominate. When search marketing first debuted, organic SEO was the only show in town. When sponsored links came into the fold, they were treated like the neglected stepchild.

Paid search has come a long way since, surpassing SEO in search marketing revenue. What we really need in the SERPs, general or vertical, is quality organic and sponsored links. Let's hope Google comes up with an SEO algorithm that produces quality organic links to match its quality sponsored links.

Jason Prescott is CEO of JP Communications. Read full bio.

Sponsored post and articles

Facebook: The sponsored post
In January 2011, Facebook began offering promoted posts in the form of Sponsored Stories, which look like status updates and are displayed directly in the social streams of friends of page followers. Although the Facebook Exchange's ads in the right rail dominate the "last cookie wins" war, they fall short in driving CTR anywhere near the industry average. Sponsored posts are a great alternative on Facebook because they are consumed within the flow of organic user engagement, and the program is built for scale on mobile and desktop. Sponsored posts are seeing significantly higher engagement rates, and half of the program's revenue comes from mobile usage.

BuzzFeed: Sponsored articles, never banners
BuzzFeed has never run a banner advertisement. Instead it allows companies to sponsor stories on the site that match the content and editorial style of its usual posts. BuzzFeed focuses on delivering viral content that reaches more than 60 million monthly unique visitors. It has set up native advertising agency training through which it works with brands to identify relevant, trending, on-message content that has the potential to spread socially. It is known for posting a wide variety of sponsored content, from fluffy animal GIF features to more niche B2B campaigns.

Sponsored video

Sharethrough: Native advertising platform
Sharethrough is an advertising platform that distributes brand content in native ad placements across the web. It focused originally on sponsored video and has expanded into sponsored posts -- ones that work on both desktop and mobile. Sharethrough Mobile Sponsored Stories allow brands to promote their original content, such as videos, articles, posts, and reviews, across mobile sites in a scalable platform that respects and enhances the unique user experience of each site. Mobile Sponsored Stories appear as part of the stream of content within a publisher's mobile site experience and are automatically updated to match the look and feel of the organic site content, albeit with indication that the stories are sponsored.

YouTube: Video-sharing for all
When YouTube was acquired by Google, it was inevitable that there would be a scalable, self-service monetization platform. Any Google account holder can promote his or her videos to the right viewers. These videos appear as promoted videos across the platform. Users pay only when a viewer chooses to watch their videos. Depending on whether one considers pre-roll ads to be native, TrueView video ads have also been available since December 2008.

Sponsored images

Imgur: The simple image sharer
Imgur is a free image-hosting provider that makes sharing images simple. The site also features the Imgur Gallery, a real-time collection of the most popular images being circulated on the internet. Imgur runs sponsored images in the gallery, which appear in the same stream as user-posted content but are marked as sponsored. The company notes on its blog, "The integrity of the gallery is important to us, so the sponsored image is an advertisement that we have approved and found to be relevant to our community. It will be highlighted to let you know it's sponsored."

TripleLift: Advertising for the visual web
(Editor's note: The author of this article is the CEO of TripleLift, a technology provider that turns brands' images into native ads.) With the advent of image-driven platforms like Pinterest and Instagram, consumers are engaging with and sharing brands' visual content more than ever. Websites are becoming increasingly, if not entirely, image driven across every vertical. Brands can work with TripleLift to identify and promote their best images based on real-time consumer engagement, while publishers can partner with TripleLift to create native ad experiences with sponsored images on their sites. These advertisements are scalable and formatted to run on both desktop and mobile.

Sponsored playlists

Pandora: Custom radio stations
Pandora allows users to create custom radio stations based on artists, songs, or genres they enjoy on any connected device. Pandora has more than 100 branded stations where advertisers can sponsor a certain musical theme that works for their products and target demographics.

Sponsored links

Disqus is an online discussion and commenting service for websites and online communities that uses a networked platform. Promoted Discovery points users to content that marketers are looking to promote to your audience. As a publisher, you earn a revenue share from Disqus for each click on a promoted content link. Advertisers agree to pay Disqus to distribute their content in relevant places across the web.

Zemanta is plugin that adds related links and images to one's WordPress blog as it is written. This allows advertisers to increase their SEO and "link love" through evergreen links that live in a publisher's organic content. Zemanta indexes the advertisers' content and recommends it to bloggers when they create semantically related articles. Zemanta offers a channel where content marketers can reach 500,000 active bloggers.

Sponsored listings

Uncrate is a digital magazine for men that features content regarding several new products daily. Uncrate runs sponsored product or gear campaigns that fit into its stream of content. All the products are clearly marked as sponsored or featured, but they are generally of the same nature as the publication's organic content. Uncrate features products for all price ranges, including ridiculously priced inspirational products.

Yelp provides a local business directory service and reviews to help visitors find the best matched business for their needs. Yelpers have written more than 11 million local reviews, which makes Yelp the leading U.S. local guide for real word-of-mouth on everything from boutiques and mechanics to restaurants and dentists. Yelp offers the opportunity for businesses to pay to have their companies displayed in the sponsored section of the search results page for specific targeted searches.

Eric Berry is CEO and co-founder of TripleLift.

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