In this new era of digital communications, consumers are increasingly taking charge of their online experience and, in some respects, taking control out of the hands of marketers. For proof, you don't have to look any further than the phenomenal growth rate of blogs.
In 2002, about 100,000 American bloggers toiled away at their craft, reporting on everything from what they had for dinner to their pursuits, politics and the meaning of life. It was, by and large, a tech-community kind of pursuit. But corporate interest in the marketing potential of blogs -- and RSS, the technology that drives them -- soared after bloggers successfully ignited a wildfire of political discourse and debate that raged across the Internet during the 2004 U.S. elections.
In fact, the Pew Internet & American Life Project estimates that by the end of 2004, about eight million of the 120 million adult American internet users had created blogs, and 32 million -- a whopping 58 percent increase over the previous year -- were reading them.
With an estimated six million U.S. users and with more signing up daily, the rate at which individuals are adopting RSS is surpassed historically only by the pace at which they embraced the World Wide Web. Within a few years, I believe RSS will be the internet content delivery channel of choice for the majority of consumers-- and it will deliver much more than blogs and news.
Spurred by the growing ubiquity of RSS and the opportunity to unlock its potential as a marketing tool, pioneering companies are avidly exploring this promising new channel. Savvy organizations around the world are adopting RSS and putting it to a wide range of uses. Whether it is a media site distributing news or a retailer publishing promotions and specials, RSS is quickly becoming a common way for businesses to communicate with consumers.
Forrester Research, in its "RSS 101 for Marketers" report, said, "RSS is a powerful tool -- albeit for the technologically advanced today -- that marketers should test and deploy to proactively maintain relationships with their customers."
But for marketers who have spent the last decade moving away from traditional broadcast media toward the more closely targeted methods made possible by the new digital media, truly innovative applications for RSS have remained elusive-- until now.
Although it is most often associated with blogs, RSS is morphing into an individually targeted marketing channel capable of offsetting many of the downsides of other channels. New techniques are being unveiled that allow marketers to leverage the appeal and growing adoption of RSS without sacrificing their hard work of the last decade to achieve measurability, targetability and flexibility.
The newest generation of RSS technology -- individualized RSS feeds -- allows companies to target, segment and personalize communications much the way they do email messages today. Individualized RSS recipients receive text, images and promotional offers uniquely matched to their expressed interests and desires. The individualized feeds enable marketers to communicate with subscribers based on demographics, past behavior, or any other segmenting attributes.
With these next-generation solutions, each recipient gets his or her own unique feed, enabling marketers to understand exactly how many and which recipients are picking up their messages. And because each feed is unique to the individual recipient, marketers can track and measure subscriber actions all the way down to an individual, facilitating the same behavioral targeting and testing possible in other personalized media. Moreover, marketers can actually create a unique message for each user based upon demographic or behavioral data.
But best of all, these individualized RSS solutions do not require any changes on the part of recipients-- they can use the same reader they use today to get their blogs or news feeds to access a company's promotional messages.
RSS user demographics are certainly worthy of marketers' attention. According to Forrester, users frequent the internet and, at about 39, are younger than non-RSS users by about six years. Forty-six percent are college educated and -- in the three months before Forrester's survey in February 2005 -- spent, on average, $465 online compared with $333 for non-RSS users.
The advantages RSS offers make it easy to see why 57 percent of marketers told Forrester they are interested in adding RSS to their marketing mix. For example, although email has been a prime driver of online sales and is expected to continue to hold a significant presence in marketing programs, spam makes consumers leery of signing up for email messages. Those who do opt-in for emails are often frustrated when spam filters keep desirable content from reaching them.
RSS, on the other hand, delivers every message to recipients' desktops, assuring 100-percent deliverability. Consumers like RSS feeds because they are self-organizing, with each feed arriving in its own folder. Most important, however, RSS offers consumers control. RSS feeds do not require consumers to provide an email address. Instead, the consumer's RSS reader checks for new messages from the sender's website until the consumer says stop. And once opted-out, the consumer can no longer be contacted or bothered. With no email address involved, RSS makes unwanted messages all but impossible.
Expect the ubiquity of RSS to grow
Consumers can pick up RSS messages in a variety of ways-- on their computers, from popular web portals like Yahoo and even from cell phones. RSS is also at the heart of the exciting new phenomenon called "pod casting," which lets consumers automatically download audio files and play them on portable devices like Apple's iPod.
The widespread appeal and adoption of RSS are impossible to ignore. Now, with individualized RSS, new-era marketers can leave old-school mass marketing in the past where it belongs, and look to a future where RSS communications are limited only by the imagination.
Bill Nussey is the president and CEO of Silverpop, a provider of permission-based email marketing solutions, strategy and services. Ranked as having the highest business value and richest feature set by JupiterResearch in 2004, Silverpop was also acknowledged by research company Forrester as a "strong performer" that "stands out with an interface that is quite easy to use while providing strong functionality." Before joining Silverpop, Nussey was president and CEO of iXL, Inc., a publicly traded e-business consulting firm. During his three-year tenure, iXL executed its initial public offering, increased revenues from $10 million to $120 million per quarter and grew from 400 to over 2,000 employees. Nussey has also served as an investment professional with the venture capital firm Greylock Management Corporation. He co-founded and was CEO of DaVinci Systems, an award-winning email software company.
The future belongs to those who not only can develop content that attracts an audience, but who can frame that content to encourage the behavior advertisers want.
The web is constantly evolving, as we all know. It's a changing environment because people are in the process of migrating from traditional media to online. This migration will not be total -- people will still read books and watch TV -- but the emphasis is changing. Print and broadcast media will become alternatives to the new mainstream -- online.
We are passing significant markers in this migration right now. For example, people aged 17 to 25 now spend more time online than watching TV. I recently spoke to a friend whose son was starting university. He visited the student halls of residence and was surprised to see that none of the students had stereos (an essential of student life in his day) or TVs in their rooms. When he asked about this the students laughed at him -- why would they need those when they had computers and internet connections? To this younger generation the idea of a device that can only handle a single medium, and that isn't connected to the web, is laughably archaic.
It's clear that we are evolving new ways of participating in society, new ways of communicating, and new ways of disseminating information. A key dynamic in this process is the transition of the print and broadcast advertising community onto the web. As this occurs, new models of advertising become possible.
Henry Ford once said "I know only half of my advertising works. The problem is, I don't know which half."
The web solves this problem. The ability to record people's behavior online means advertising can be assessed in terms of the behavior people exhibit after being exposed to an ad. It then becomes possible to pay for the behavior instead of the mere delivery of the ad. This is called performance-based advertising.
A shift from selling audience to selling behavior
The dominating trend in the evolution of online advertising is the rise of performance-based advertising. Predictions are that there will be $40 billion in online ad sales in 2008 and that 50 percent of this will involve performance-based payment. This represents a shift from selling audience to selling behavior.
The traditional form of advertising involves selling audience. In print and broadcast, advertising rates are largely determined by the number of people who will be exposed to the ad. As traditional media employees moved online they took this model with them, selling "impressions." Banner advertising is traditionally sold this way.
Impression-based advertising simply consists of placing an ad somewhere on a reader's computer screen, in a manner similar to placing an ad somewhere on the page of a magazine. Performance-based advertising involves changing the emphasis from views to actions. Instead of paying the outlet to deliver my ad, I will pay it for delivering people.
The most common forms of performance-based advertising are PPC advertising and affiliate networks. Google's AdSense is a classic example of performance-based advertising. Advertisers pay not for exposure, but for the people Google sends to the advertisers' sites.
Even where performance-based advertising is not the obvious basis upon which the advertising is being sold, it is often the way in which it is assessed. Mark Read is director of strategy at WPP UK, one of the world's leading marketing communication organizations. According to Read, many of WPP's clients, especially in finance and automotive, convert the metrics from their ad outlets back into performance metrics.
"It doesn't matter how people sell the ad space; it's bought on a performance basis whether they realize it or not," says Read.
Read is very much in favor of this shift to performance-based advertising. "The advantage of performance-based advertising is that it converts ad spend from a line expense to a cost of goods sold. As such, the expenditure is potentially infinite… The secret of Google's success was to convert ad spend from line of business to cost of sale," Read says.
In other words, the potential income from an ad outlet is much greater than is possible with impression-based advertising. Performance-based advertising obviously represents better value for the advertiser, but it can also represent better value for the seller.
Ben Regensburger, president of DoubleClick Germany, agrees. "If you know your audience and your inventory well you can make more money from performance-based ads than simple impressions, especially in finance," he says.
The drawbacks of performance-based metrics
Christoph Schuh is CMO of Tomorrow Focus AG, one of Germany's leading digital content providers. Tomorrow Focus is the largest supplier of German-language content on the web. As a media owner, someone whose income is based on selling advertising, Schuh can see issues with performance-based advertising.
"The danger in buying performance is that it ignores the value of repeated exposure and of time-delayed responses," he says. "I think performance buying to a single-response dimension will become insufficient; we need to develop behavioral targeting."
Notice that Schuh is not opposed to performance-based advertising. He simply wants to see performance assessment become more sophisticated.
One of the most common problems encountered when dealing with performance-based advertising is disagreement between the advertiser and the publisher over the numbers. Web metrics systems are still fairly primitive, and the web analytics community has yet to establish clear procedures for measurement. As a result, advertiser and publisher systems can often disagree about exactly how many people have been delivered.
"Currently, ad people don't understand the metrics," says Schuh. "This makes resolving disputes extremely difficult."
Addressing this issue requires training advertising sales people in web analytics so they have a language in which to communicate and so they understand what it is their web analytics systems are telling them.
In addition, resolving discrepancies between the advertiser's and the publisher's numbers usually involves a technical conversation about how the data is processed on both systems. The field of web analytics lacks standards, and the few standards that do exist are rarely implemented consistently within analytics software. If both systems are measuring the same thing in the same way, the numbers will match to within a few percentage points.
But discrepancies occur because the two systems are measuring things differently or using the same terms for different things. If the respective technicians explain to each other what their systems are measuring, and how, it is usually possible to adjust the numbers to match. This requires that advertising and marketing people have access to their web analytics technicians, and have the training to be able to communicate with them.
Much of this can be avoided if the methodology for performance assessment is agreed upon before the deal is signed. Once again, this requires that sales staff have sufficient training to participate in such conversations, and that, where necessary, they can call on their technicians for assistance.
The publisher dilemma
As a publisher, performance-based advertising represents both an opportunity and a threat. As Christoph Schuh says, "You have to understand your website better than your client… You have to understand the behavior of your readers in the conversion funnel… You need an ecommerce unit within your editorial team."
Once, the editorial focus was purely on producing content that would appeal to a large swath of the population -- appeal to enough readers and the advertisers would follow. In the early days of the internet, we thought this was all we needed to do. Jim Barksdale, president and CEO of Netscape until the company merged with AOL, said in 1995: "Don't worry about how to earn money online. Simply get a big enough audience and the money will come to you."
This was true for a while, but advertisers are wising up. They're not interested in mere numbers; they want behavior. This presents publishers with a dilemma. We all know you can't make money selling content to readers -- they won't pay for it. The presence of huge quantities of free information on the web has devalued the perceived value of all information in the eyes of the online community.
The main way to make money as a content publisher at present, then, is via advertising. If advertisers become completely focused on performance, editors become confronted with the need to design content in order to get the acquisitions their advertisers want. Should editors, then, write to make sales, or do they write to gather audience and hope the sales just happen because they got the right audience?
In the long term, the future surely belongs to those who can develop content that attracts an audience and, at the same time, frame that content in a manner that encourages the behavior advertisers want.
1. Hijacked mail servers
It's not uncommon to run software on our personal devices to keep malware, spyware, bots, etc., off our machines. Most of us do a good job of it, but some don't, increasing the chances of their device becoming part of a bot network. One commonly overlooked resource is your internal mail server.
Mail servers typically do not see routine check-ups unless there is an issue with increased spam, slower processing speeds, or down email systems. This creates the ideal breeding ground for fraudulent activity. Recently, government agencies, colleges, and local small businesses were found to be infected with botnets. Fraudulent activity sees no boundaries and will attach itself to any size network with an exposed loophole.
2. Commandeering big brand URLs
Plugins are an attractive solution to help manage daily tasks succinctly and efficiently. However, they're also particularly attractive to fraudsters. Many big brands' efforts were thwarted with the introduction of plugins designed to swap the click URL on the returning search page.
These brands offer affiliate programs that anyone can sign up for. Their affiliate programs drive traffic to their specific affiliate URL, and the affiliate makes money off of purchases made from their unique URL. Amazon offers one such affiliate program that gives you a unique code to track users, and a commission payout as high as 10 percent.
How does it work? Say you do a search on Google and an Amazon listing shows up. These plugins can read the source code of the page, find the Amazon links, and alter them to contain the affiliate code. Now, a user won't see anything different, but if they click on that Amazon link, the plugin owner will get credit for that visitor instead of Amazon crediting their own marketing efforts. This version of fraud has the potential to line pockets with millions of dollars in revenue across several affiliate programs.
Big brands took note of failing search engine marketing efforts, noting larger than ever affiliate checks, leading to the discovery of these plugins. Today, they're easier to spot and aren't as prevalent, albeit they historically attract spammers and fraudsters.
3. You'll communicate with the dead
Catfish is a term popularized by an MTV series of the same name. It's a clever way to describe a person pretending to be someone they're not. Popular with online romances, catfishing has started to cross over into the ad fraud space. We recently saw this firsthand with a young lady named Rebecca Astley. She was looking to provide a Yahoo shopping feed to our business development team.
After a few Skype conversations, something seemed off. The spelling of Astley's last name on LinkedIn changed slightly, and she repeatedly asked the same questions. Sure enough, suspicions were confirmed with a reverse lookup of the image provided on the Skype and LinkedIn profiles. Astley was using an image of someone else: Allison Owens, a young lady who had passed away several years ago.
In order for publishers to communicate with ad networks and their advertisers, they have to prove their identity. Publishers create user profiles to talk to networks about account creation, support, and payments. It's typical of both legitimate and illegitimate publishers.
But if you're an unlawful publisher, that won't work. So how else do you connect with businesses? By hiding your reputation. Fake profiles aren't new, and identity theft is not uncommon. Be that as it may, many do not stoop as low as using images of the deceased.
4. Turn up the volume and it will click-click
Approximately 36 percent of all web traffic is considered to be bot-traffic. Ad fraud protection companies know to look for certain metrics, including mouse movements, and sneaky publishers know to make their fraud look natural.
Years ago, I discovered a publisher that had no conversion value, but had traffic results that showed normal human movement until it clicked -- literally. While navigating through their website I heard "click-click" whenever I clicked my mouse. I surely wasn't double clicking, so unless my ears were deceiving me, I was certain some foul play was involved. I prompted my team to help me take a closer look at the publisher's site, and to no surprise, the publisher was fraudulent.
Hidden under the mouse cursor was a 1x1 pixel iFrame invisible to the naked eye. Each time a user clicked on a webpage, it was intelligent enough also to click on links hidden under this iFrame. The hidden webpage would have zero conversion value since it couldn't be seen, but still had all the characteristics of natural user movement.
It's imperative to practice due diligence when advertising online. It's the internet, so be cognizant that not everyone's being honest or has honest intentions. The internet is a dark and scary place. If advertisers aren't careful, they'll find themselves constantly getting ripped off by these sneaky tricks.
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"Suspicious Young Man" image via Shutterstock.