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Online Advertising 3.0

Bill Gossman
Online Advertising 3.0 Bill Gossman

Online advertising’s growth in 2004 has the industry thinking optimistically about 2005. However, recent moves by Google and Microsoft have online advertising poised for much more than continued growth. Wider adoption of the advertising-subsidy model and the expansion of IP-enabled devices heralds a third era of online advertising.

Over the past few months, I’ve watched the actions of Google and Microsoft with a mixture of excitement and apprehension. Excitement because recent moves by these two giants signal a new era of online advertising, supplanting the age of banners and the age of search (these are internet ages, remember, so they only last a few years). Apprehension because advertisers have been slow to adopt the technologies and strategy that will be necessary for success in this new age.

The first step in understanding that online advertising is in line for a major change is to understand what kind of company Google really is. Some people think of Google as a search engine or a website, some as a media company selling ads, and some as a technology company. Maybe it’s an amalgamation of all three. In light of the company’s recent activities, I think of Google as a software company that gets paid through a different model than we’re used to.

When you buy a Microsoft software application, you write them a check. Google, on the other hand, gives you a free application -- whether it’s a web search engine, translation, hard drive search, photo organizer, blog software or something else -- and gets paid by selling advertising that runs “on” the application.

“That’s nice,” you say, “but why is it so important?” It’s important because Google has blurred the line between media and desktop applications. The company’s application of the advertising-based model to desktop applications creates an entirely new type of content to carry advertising online. Now, if this were limited just to Google, it would be one thing. But Microsoft is now entering the picture and is the only company that may have even more muscle than Google to drive this change.

Microsoft reports their sales are about $37 billion a year while Google reports a little more than $3 billion. Let’s say a third of Microsoft’s sales -- about $12 billion -- come from the monetization of consumer software. Google has “taken” a quarter of that market over the past year. Microsoft is not going to sit back and watch Google or anyone else take billions of dollars worth of business away from it -- regardless of the model. Rather, as it has done countless times before, Microsoft will be second to market and use its reach and clout to dominate. The company’s recent improvement of its own web search capability and its media center are clear indicators that the battle in this arena is just beginning.

So why the apprehension when advertisers are suddenly presented with the possibility of advertising on the software applications used by millions of people every day? Because a hard-to-reach internet audience just became exponentially more fragmented. Advertisers have enough problems as it is connecting with their key audiences through major online media. Now they must do it across an equally diverse number of applications.

The good news is that it can be done. Behavioral targeting, which gained major momentum among Fortune 1,000 brand advertisers in 2004, will be critical to success in the third age of online advertising. Through key behavioral targeting innovations, brand advertisers will be able to reaggregate a quality audience across all types of digital content and deliver the right message to that audience. What is still, for most a new, promising service is quickly becoming indispensable.

Not quite convinced? What if we throw television into the mix? Microsoft’s new Foundation software puts a version of Windows CE on television set-top boxes. It’s no secret that the broadcast model is dying. What’s replacing it is digital media delivered via -- you guessed it -- Internet Protocol. Advertising will follow suit. Why send a TV ad to millions of the wrong people when, with the same method you’re using to buy ads online, you can specifically target millions of the right ones and agencies can reaggregate those millions into effective media buys?

The members of the online ecosystem (publishers, agencies and advertisers) who embrace this new age and the technology and services built to maximize its opportunity will reap the benefits. As for those who delay and cling to the old ways, they may survive for a while, but it’s doubtful they’ll be a factor when version 4.0 comes along.

Additional resources:

SearchTHIS: Google on New Listing Guidelines

Arbitrage Affiliates Punk’d by Google

What Traffic Google Giveth, AutoLink Taketh

Bill Gossman is CEO of Revenue Science, a leading provider of behavioral targeting to Web publishers. Please send comments to [email protected].

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Seek out the information
I know, easier said than done. Regardless, it is the job of field offices and agencies to request this information from their Tier 1 counterparts and occasionally seek it out themselves. If you find yourself thinking, "Gosh, this data must be available somewhere," it probably is. The eMarketer RSS feed is a great place to start.

Identify your place in the funnel
Two marketing epidemics are currently infiltrating Tier 2 offices around the country. The first is the "if it's measurable it should be used as direct response." The second is that everything should be measured by sales. Tier 2 is not supposed to be Tier 1 or Tier 3. It's supposed to be Tier 2! If the funnel's four phases are awareness, consideration, intent and purchase, Tier 2's role is somewhere within or between consideration and intent. Purchase (i.e., sales) is a Tier 3 function, not Tier 2. But as media becomes more measurable the path of least resistance is to try and hold each medium accountable for the ultimate success metric: sales. Don't get me wrong; Tier 2 efforts should absolutely drive consumers down to funnel with the goal of creating sales. It will simply be a case of one stage in the funnel improving the success in the subsequent phase. Start by identifying and agreeing on your place in the funnel with your regional clients and the dealers. Then, based on this agreement, identify the metrics you'll use to define your success and how you'll report on them. For instance, local Allison-Fisher consideration and intent data is an option. Simply having this baseline puts you leaps and bounds ahead of where you were.

Identify the tools and budget you'll need to measure your success
Many, many associations spend $10 million or more annually. Almost none set aside even $1 to consistently measure their efforts. That just doesn't make sense. Spending $100,000 on data and superior abilities to measure efforts only requires a 1 percent improvement in a $10MM media budget's efficiency to pay for itself. I've found free data that can make more of a difference than that! 

But, commissioning effective research to measure your specific campaigns won't be free. It will be worth spending the money. Once you know where your place is within the funnel, and what you're measuring, you'll need to measure it consistently to see where you're succeeding and what needs refining.

Work with a research expert
If you don't have a background in or experience doing research, work with someone who does. It's critical to make sure the methodology is completely unbiased and that the research isn't created with a desired outcome in mind. For instance, research should always be phrased as "Determine consideration levels of metro-area buyers for vehicle 'x'."  It should not be "Determine how much we've increased consideration levels of metro-area buyers for vehicle 'x'." The latter creates the mindset that consideration will go up and leaves no possibility for any other outcome. Small change, gigantic difference.

Building consensus around a plan that positions a brand at a specific point in the funnel may seem insurmountable. Add to this the challenge of identifying and measuring success while remaining disciplined enough to achieve continuous improvement and it's understandable why it's easier to just buy as much TV as possible. But if you're an "A" player at an "A" agency, buying as much TV as possible isn't what you do. Your regional client and dealers are counting on you to build their business with the most effective and efficient use of their money.

Jay Friedman is president of Goodway 2.0. Read full bio.

From map to mindset
What's your relationship to the GPS unit in your car? Do you lament the loss of serendipity that resulted from depending on the tinny voice on your dash? More likely, you've learned to lean on your satellite siren and have blissfully embraced paperless travel.

This adjustment to technology represents a step toward artificial intelligence, in which machines can learn our behavior and improve the way we live. Adopting GPS not only saves us time in our travels, it lets us clear our mental palette to make space for other thoughts, a "prethinking" process mirrored in augmented reality. Still in its nascent form until the majority of the public owns enabled smartphones, AR's ability to layer 3-D images on a phone's screen in the context of a person's actual location makes it the touchstone technology galvanizing artificial intelligence and the promise of social marketing.
The tech you shouldn't see
The trailer for Microsoft's Xbox Project Natal announcement provides a key insight into the future of augmented reality, human behavior, and commerce. Noting from the outset that "no controller is required," a typical family runs through a set of game scenarios based on their varying interests. A teenage boy karate-kicks an avatar, his older sister video chats with a friend who recommends a virtual dress to wear, and so on.

Although facial and voice recognition enhance the game, we're reminded that to enjoy the Xbox, "the only experience you need is life experience." This idea is key -- like your GPS, you forget about the tech and focus on the benefits. You augment your reality in the context of what you're presented.


Skewing social
Augmented reality assigns relevance for users of the "outernet" via AR applications like Yelp's Monocle that allow you to see location-specific user reviews on the screen of your iPhone by simply pointing your camera and clicking on links. The process is faster than looking online, especially once users search via multiple AR services that aggregate relevant data for their location. The result is crowd-sourced commerce and a prethinking reliance of users to make purchasing decisions once they're nearing their destination rather than at home. Social networks take on a new and more immediate relevance when posts are seen in the context of physical space.

Tagging taxonomies
Geo-tagging lets you create text, audio, or video you can assign a physical location to via AR-enabled smartphones. When others come to that spot in the future, they'll be able to experience the content you've left behind. This communal prethinking in relation to location will become commonplace, as will the virtual offers pushed our way when we're in the vicinity of local stores. Prethinking via dating services like Match.com combined with geo-enabled tweets will alter cultural behavior as well.

The sublime search
Prethinking also applies to how we tag ourselves, an act that has direct repercussions on semantic search. Instead of relying on keywords that have multiple meanings depending on context and native language, search powered by augmented reality assigned to specific geo-locations will have the relevance of our physical actions. Taxonomies relating to our actual locations will transform reliance on clumsy search algorithms in lieu of actual behavior. This aggregated data will provide a wealth of information to marketers in terms of when to deliver key messaging and relevance to geography. And as identity standards like Open ID continue to evolve, consumers can set their geo-privacy preferences to avoid unwanted airvertising to create standards for outernet etiquette as well.

Augmented reality becomes a transformative technology when campaigns move beyond Flash to demonstrate utility. Gimmicks can be useful to attract user attention, but AR needs to lead to relevant social or commercial connections.

Georgia Tech's zombie game provides an example of flash and function that can move the needle for commercial adoption of AR. We all enjoy slaughtering the undead, and moving around a placemat-like game board to see 3-D action via our smartphone screens is sweet. But when an actual Skittles candy is placed on the game board and game characters react to its presence, the applications for marketing become readily apparent. Virtual aisles in retail environments can be festooned with interactive characters or videos. Beer goggles take on a literal angle, and placemats will provide games that respond to various bottles or cans maximized for AR.

Other services like Zugara's Webcam Social Shopper let people virtually try on clothes, and users can take pictures of themselves to send to their friends on Facebook. Combining the AR app with crowd-sourced opinions from social networks provides utility along with the benefit of collaborative shopping.

USAA has also proven that non-sexy AR applications can gain more traction than gimmicky campaigns. Its iPhone app allows people to take a picture of their checks for instant deposits, a simple yet profound action inasmuch as it engenders ease of financial transaction. As reported by eWeek in an article about the application, "USAA's customers have conducted more than 13.3 million mobile transactions in 2009." Prethinking leads to profits via AR-enabled utility.

Jamais Cascio, the popular ethical futurist that regularly writes for Fast Company and other publications, dovetails the notions of prethinking combined with AR in his notion of "focus assistants," or filtering tools that screen content you don't want to receive. In his article for the Atlantic, "Get Smarter," he notes that, "as our capacity to provide that filter gets faster and richer, it increasingly becomes something akin to collaborative intuition -- in which everyone is effectively augmenting everyone else.

This process of collective intuition is amplified by AR applications like Pelago's visual storytelling tool, Whrrl. The service, according to CEO Jeff Holden, is a "real-time storytelling product for people's daily lives," which aggregates multiple tweets, posts, and updates to form a kind of visual Twitter. These communal events are also shared to the larger community, which can comment while stories take place. This process creates a form of public prethinking known as group awareness. And it's the data culled from these multiple communal stories that will form the basis of future interactions in commerce and culture at large.

More stories at Pike Place Fish Market

Powered by Whrrl

Augmented reality offers multiple touchpoints to interact with consumers in an intimate and impactful virtual landscape. When commercial experiences in the outernet honor consumer privacy, are relevant to location, and embrace communal group experience, marketers will benefit. But like GPS and our Xbox family demonstrated, AR is just a few steps away from being invisible. No experience is required and prethinking will become a habit without our realizing its taken place.

Just remember that, like the mom at the end of the video, you can always turn the AR technology off. And unless marketers collaborate with consumers on their virtual sojourns, they're likely to do the same to us.

John C. Havens is vice president of social media at Porter Novelli and the author of "Tactical Transparency: How Leaders Can Leverage Social Media to Maximize Value and Build Their Brand." He is co-founder (along with Jack Mason of IBM) of the Outernet Guidelines Initiative, a program created to help understand the nature of emerging technologies and culture.

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Welcome Motorola

With Apple and Samsung sharing the smartphone crown, that once again leaves room for another brand to come in and play the underdog in its marketing. In September, it was Motorola that stepped up to the plate and started to poke fun at both Apple and Samsung.

Motorola made its debut on the Chart at No. 5 with a True Reach of 18.1 million views.

The brand's "Lazy Phone" campaign stars a hippy-looking dude who stands in for a smartphone that relies on touch-screen applications to work and -- spoiler alert -- it doesn't work well. Motorola's Moto X phone, on the other hand, lets users play music and use other applications with its voice-recognition software, which makes users' lives exponentially easier.

The campaign subtly hints that the "lazy phone" represents the smartphone top dogs -- Apple and Samsung -- which seem a little behind the times compared to Motorola's new phone.

The campaign has garnered a True Reach of more than 22.4 million views to date. That makes it Motorola's most-viewed campaign ever. "DROID RAZR MAXX HD" is Motorola's next most-viewed campaign. It was released in March and has acquired more than 10.9 million views.

Not only is the campaign racking up the views, but also the phone is getting great reviews. In October, Consumer Reports recommended Motorola's Droid phones over either of the new iPhones.

If Motorola can continue to shake things up like this (similar to how Samsung did last year), the smartphone market might start to look very different come next September.

Mallory Russell is content editor at Visible Measures.

iMedia's Top 10 Brands in Video chart, powered by Visible Measures, focuses on aggregated brand view counts across related social video ad campaigns. Each brand and campaign is measured on a True Reach basis, which includes viewership of both brand-syndicated and audience-driven video clips. The data are compiled using the patented Visible Measures platform, a constantly growing repository of analytic data on close to 400 million videos tracked across more than 300 online video destinations.

Note: This analysis does not include Visible Measures' paid-placement (e.g., overlays; pre-, mid-, and post-roll) performance data or video views on private sites. This chart does not include movie trailers, video game campaigns, TV show, or media network promotions. View counts are incremental by month.

Learn more here.


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