Six months ago, we waxed philosophical, poetical, nostalgic, and quixotic about trends that had emerged during the first half of the year that appeared poised to dominate the advertising and marketing landscape. It's now time to take a look back at the year in whole to see which of those trends we reviewed previously have held, and examine those that have made their way into view since then.
Following are the biggest trends that have influenced digital advertising in 2011. Let's look at what they are, their perceived value, and whether or not they are fads or foundational.
Facebook as the current darling -- for now
Facebook will gain an even larger portion of advertising spending, even as doubts about its efficacy increases. Facebook is today's darling -- as Google was before it, Amazon before it, Yahoo before it, Microsoft before it, and IBM before it.
But while Facebook is being credited with making all sorts of things possible, it's really no more than the latest version of email -- which was really just the latest version of the fax, which was really just the latest version of the teletype. It simply has more features and is more accessible than each of those things were in each of their iteration. That makes it terribly powerful. And like all things powerful, it is also frightening.
Facebook will eventually become part of what philosopher Martin Heidegger would call the background of everydayness -- something that simply "is." And some people will really like it, and it will provide them with the kind of social interaction they are incapable of getting from the three-dimensional world around them. And some people will turn it off, never to bask in its glow again.
The number of people who will remain actively engaged with the "average brand" in the social arena is infinitesimally small versus those who might be exposed to that brand in other media. Re-engaging those who have unengaged and maintaining engagement with those who have made contact are going to become increasingly expensive activities -- and difficult to justify. This is not to say that there isn't power in social media marketing. But its value is far from universal, far from constant, and far from predictable.
Here are the biggest reasons why:
Not every product and service is well suited for the platform (though services more so than products). As I say frequently, not everyone is looking for a deeper relationship with his or her mayonnaise. The number of people willing to "friend" a toilet paper is minuscule when compared to the number of people who use it. There is a reason that the top "liked" pages on Facebook are entertainment products or brands (e.g., No. 1 is Texas Hold 'Em Poker). These are things that people have emotional affinity for; they are not subject to rationalization. The "if you build it, they will come" approach didn't work for websites; it's not going to work as a social media strategy.
No value to provide
There is little value exchange. Being "friends" with Miracle Whip doesn't really give back anything -- except maybe for the ironic smirk one gets to wear when he or she tells others, "Yes, I am Miracle Whip, and I will not tone it down." In an attention-challenged environment, it's hard to maintain relationships with brands that don't offer an individual something emotionally (see above) or practically (like incentive). If you have to provide material incentive to keep people engaged socially, I'd argue you're already losing the battle. That's like paying people to be your friend.
We simply don't have the bandwidth. As eluded to above, we are seriously attention-challenged. Truth of the matter is there are limitations to our ability to multitask -- I'd argue it's something most people don't do successfully.
I'm sure there are lots of you who think your kids are geniuses who can do homework, text friends, play FarmVille, and watch TV, all while listening to Rebecca Black and writing concertos. But the truth is, by and large, instead of multitasking, most of us are really attention-splitting. And like slicing a tomato, there are only so many cuts you can make at the fruit before it's out of juice. It's hard enough to maintain the 600-plus fake relationships we have with actual human beings via social networking platforms. Working brands into the mix that are ultimately on a quest to sell us something -- not that there is anything wrong with that -- might simply be an exercise with unreasonable expectations of outcome.
I've both said and written that there are some product and service categories that simply don't lend themselves well to the social media platform. Look, I like mayonnaise -- but I'm not looking to have a deeper relationship with it. I spend just as much time in the bathroom as the next guy, but that doesn't translate into me belonging to an "enjoy the go" community. Trust me, what happens in the bathroom should stay in the bathroom.
Facebook's no failure, but the consistent enthusiastic belief in its capacity for growth and its power as a marketing tool remains a matter of faith for most product advertisers. There are several inalienable truths about this business, our world, and the universe: Prices rise, politicians will lie, your vision will get worse as you get older, and whatever seems like the greatest thing since sliced bread will eventually be considered no more interesting than sliced bread.
For most product and service categories, Facebook might be slightly better than email and search when it comes to catching the eye of the casual observer, but it's nowhere near as good when it comes to capitalizing on expressed intent. Facebook for now is just the Googleification of advertising based on assumed interests, which is probably not as good as print advertising used to be when people read magazines. Basically, it is bringing a lot of technology and data and privacy violations and engineering to bear on a premise we recognized generations ago: People are interested in things they are interested in, and they are interested in things that the people they know are interested in.
Brands will continue to spend on "social media," which will largely take the form of adverting on Facebook. The platform will continue to improve its offering in display advertising, but it will tread carefully when it comes to targeting, and its effectiveness as a tool for persuasion will remain iffy at best. Facebook's ability to incrementally capitalize on demand satisfaction a la SEM while struggling to find a way to create demand will continue. And it will find a $100 billion valuation when it goes public.
The gross rating point (GRP) and, better still, the targeted rating point (TRP) have long been used in media as a means to quantify audience and predict the impact of advertising. In other words, some X number of TRPs means that some Y number of people have been reached, which means some Z number of units will sell.
In online, we've been saddled with the impression. Not a bad thing -- it provides a countable unit of the number of times your ad has been shown. But it is not, by itself, relatable to people. There is no sense of audience that can be drawn from it.
This year, Facebook and Nielsen announced that Nielsen will now start being able to report, post facto, GRPs for online advertising campaigns. Given the width and breadth of Facebook's penetration into the online community, its profiles can be used to match up with online advertising exposures and confirm -- or deny -- that the audiences advertisers are intending to reach are actually being reached.
This doesn't really solve for a GRP or TRP predictive planning model, but it does start reshaping how we think about how online advertising should be evaluated and, thus, bought and sold.
I have been asked to calculate, and have calculated, GRPs for online, and I've even gone so far as TRPs when possible. While the means exist to more accurately establish actual ratings a posteriori, which in turn will help to present to the market more realistic expectations for delivery of a media schedule a priori, nothing right now can actually predict delivery.
The GRP, and where possible the TRP, would be far superior to impressions for a whole host of reasons, not the least of which would be that the currency for exchange would be on equal footing with broadcast. Another strong reason for preferring GRPs over impressions is that they are relatable directly to audiences (i.e., human beings). I always say, "Impressions don't buy things, people do." As an advertiser, I shouldn't care about how many impressions are served. I should care about how many people I reach.
Speaking of reach, the GRP helps a marketer quantify potential product movement. Since impressions don't buy things but people do, knowing how many people I might prompt to action helps me to manage supply.
Finally, think of how much better it would be for publishers if they were selling audience rather than page views. I know this flips the analogy a bit from broadcast to print, but online is a hybrid (both a text medium and a sound, motion, and image medium). Imagine if People magazine had to sell every page exposure. Accounting for every doctor's office, every hair salon, and every visit to the bathroom when monetizing page views is a nightmare. It's also nice but unnecessary if you are selling audience.
Imagine instead a publisher selling the equivalent of a guaranteed rate base. Guaranteed, verifiable audience? Yes, the ratio of impressions will be more than one-to-one, but it was a fool's quest to think that every impression could be monetized to begin with. (That said, this doesn't preclude being able to do that. Just marry some of the data currently available from the myriad sources out there to the impressions you generate, and you can package them for specific audiences, thereby monetizing them).
Focusing on impressions has brought us to a place where an enormous amount of work is done to figure out that infinitesimally small fraction of impressions that actually inspire action. It's focusing on the mouse trap without spending any time contemplating the mouse or the bait that attracts it. GRPs would get us back to thinking about mice instead of traps.
How often are the zillions of impressions agencies are buying a function of an appropriate amount of audience needing to be reached in order to move a client's business goal? Usually, the number of impressions being purchased is a direct function of the amount of money a planner has to spend, divided by the CPM, multiplied by 1,000.
The buying and selling of impressions only, seen or unseen, has led the industry to a place of paradox. That is, extremely lazy planning and buying, but back-breaking labor assigned to collecting data, torturing it until it confesses whatever crime we've accused it of, and then using that confession to change our trap in the hopes of catching the next impression so we can subject that one to an inquisition -- and start the process again.
GRPs would go a long way to freeing us from the tyranny of the impression.
Until there is a better way to predict delivery on a GRP and TRP basis, the model's use as a media currency will be small. But it is possible now to model GRPs and sell them. And it would be better for brand advertisers than the current system. So who's going to be the first to make it a mandate? Once someone breaks the water, a baby won't be far behind.
Privacy concerns will continue to be an important issue, and solutions will be increasingly a matter of focus not only for the industry, but also for the population at large. The industry itself actually spends a great deal of time talking about privacy. It has even made some earnest attempts to do something to protect it.
But in the last six months since I brought this issue up, change has been slow, steady, and largely behind the scenes. The Network Advertising Initiative (NAI) recently appointed Marc Groman, the chief privacy officer for the Federal Trade Commission, as its next executive director and general counsel. The NAI is on the board of directors of the Digital Advertising Alliance (DAA), a group that has drawn up two lists of beatitudes for industry self-regulation regarding privacy. They are the "Self-Regulatory Principles for Online Behavioral Advertising" (there are even eight of them, like the Beatitudes in the Bible) and the subsequent "Self-Regulatory Principles for Multi-Site Data." All this suggests an interest in addressing concerns about privacy. But so far, it doesn't really make any material headway.
Will the industry do something material regarding privacy? It wants to, and it says repeatedly that it is going to. A recent study conducted by McCann Worldgroup found that the second biggest fear behind another global financial meltdown was the erosion of personal privacy.
The problem is that there is no incentive -- neither positive nor negative -- for businesses to do more to protect user privacy than is already being done. It is in the best interests of the data marketplace to continue to advocate the collection of data. And it is in the best interest of the data marketplace to extol the virtues of that data; however, that needs to get done. Businesses will change their ways if there is a compelling business reason to do so -- say, users being so pissed off that they go somewhere else, or the government making a move to force their hands.
That said, the government has no real incentive to do anything about privacy other than what it already has, either. Heck, the Electronic Communications Privacy Act (ECPA) celebrated its 25th birthday the other day. That was the last time real media privacy issues have been addressed by the government. In those days, mobile phones were the size of a newborn baby; there was no texting, fax machines were still an office curiosity, and only 45.6 percent of the U.S. had cable (according to the U.S. Census Office).
Neither business nor government will be compelled to act on the issue of personal privacy until either of them are, well, compelled to act.
The best solution would be to give consumers true control over their own data. I don't mean complicated opt-in and opt-out controls. I mean letting them own their data packet and allow access to it in exchange for the access they seek to content or other things they seek on the web. Or even allow them to benefit from it financially on the data exchange from which so many others currently reap rewards. For an industry that has spent so much energy espousing the virtues of consumer control, when it comes to privacy and personal data, everyone gets quiet.
Status quo: The industry will continue to do what it's already doing, but a lot is being done behind the scenes. What you will likely see is an effort on the part of the government and business groups to more actively promote their efforts and educate the masses about them.
Hyper-targeting and the cookie slowly become enemies of the people -- until we give them something in return.
We are buried under a deluge of data borne on the ubiquitous cookie. And the media likes to take up the mantle of cookie bashing from time to time, as it did earlier this year, with both The New York Times and The Wall Street Journal running stories about how businesses can follow your every online move.
The reason for the stalking is to try and find out as much about you as possible without having to ask you questions. Observed behavior has proven time and again to be a better source of what people like and do than survey responses. The universes of data being collected, we are told, are necessary to facilitate the kind of targeting necessary to get in front of an intended audience. There is some improvement when good messaging finds the right people in the right place, but we've always known that. Whether the gazillions of points of data instigate material improvement that outweighs the effort to collect and distill them still remains to be seen.
I am not saying that I do not benefit from the marvels of online advertising technology. But, consider some of the following ideas:
Targeting doesn't make an ad better
There is currently no value exchange between an individual and an advertiser based solely on the advertiser's message being relevant. When you ask someone if having more relevant advertising is good or bad and they say good, it does not mean the advertising is good. They are just saying they dislike something less, which is not the same thing as saying they like something more. It remains to be seen if the legion of data being brought to the targeting tango really results in a better dance.
Protecting the masses
What we, as an industry, think about privacy and what the masses think about privacy are not the same; they are, at best, a Venn diagram, with a bit of overlap, but plenty of area outside the zone of intersect. But this does not mean that we should not be concerned about it. Sometimes, doing something that is good for the many regardless of what the many might know about it is the right thing to do -- like adding fluoride to the water supply.
Can vs. should
I always like to tell newbies to advertising to at least read three books: "Ogilvy on Advertising," "The Cluetrain Manifesto," and "Frankenstein." The last one I assign just to illustrate the moral that just because you can do something doesn't mean it's a good idea.
Data lockers -- companies that become storage houses for your personal data and let you put that data on the market -- are starting to emerge, and we will see more of them before we see fewer. Companies like Personal and Singly are just the first of their kind. The challenges these kinds of companies will have are the same challenges that behavioral targeting already has, and that's scale. It's one thing to target oxygen breathers; it's another to target club-footed home-office radiologists.
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