Team One likes to do things first. The associate communications director for the agency explains what some of those firsts have been in the interactive space.
Arthur Chan is the associate communications director at Team One Advertising, a full-service agency that billed $427 million last year. Chan oversees all planning for Interactive and New Media for the company's largest client, Lexus, as well as for other Lexus divisions and Team One clients including Dealer Association, Certified Pre-Owned and Infonet. The agency's work on Lexus has earned it a "Best Use of Rich Media" award by Business 2.0 magazine, an Effie Award and a Cannes Media Lion for "Best Use of the Internet" in 2000. Here, Chan talks about the launch of the ES300, and about new pricing models he sees in the future.
Meet Chan at the iMedia Summit in New Mexico, May 13th through 16th. Click here for an invitation.
iMedia Connection: What's one of the most successful campaigns you've executed recently?
Chan: Our recent ES300 campaign was a huge success. We're still tabbing all the data but the client way over exceeded its sales goals and expectations. Anecdotally, the president of Lexus the other day, when talking about something else, said, "Whatever you guys did for ES300, do the same thing for this other model launch coming up in the fall, because it was just so successful." And qualitatively speaking, it was a success from a full agency standpoint because we had so many different areas that we touched upon in terms of the launch -- everything from your traditional advertising, print and broadcast and so forth, to in-theatre displays, partnerships with Neiman Marcus, and DVDs sent to potential customers.
iMedia Connection: What was the online element of the campaign:
Chan: The base was the site. For every launch we try to do something pretty clever or something beyond what you would normally expect and the launch site was an incredible traffic builder. The month of November was the highest traffic month ever, then that was superceded by December's traffic. It just kept on building momentum. What we did in there was what we called the ES300 interior experience. It was a flash site and instead of just providing a 360 of the car in which you could pan around and look at the interior, we provided the ability to also touch the buttons and push the seats back and forth or play with the stereo. Essentially we provided a demonstration of all the functionality of the inside of the car. We always like to say we do things first, or the first in this arena, and that again was another first. Beyond the site, we used banners, rich media -- we used a lot of Enliven-and rich media e-mails.
Another thing we're pretty proud of here from a new media standpoint is what we did with TiVo. Everyone, including our client and our agency, was kind of fearful about commercials going away with technology like TiVo. So we set out to learn how we could turn it into a marketing medium. What we did was we developed a sweepstakes. TiVo users would get little pop-ups or a message within the listings that said, "Win an all new ES300." What they had to do was go and look for ES300 commercials within programming that they digitally recorded. We even sent out a listing of what all the programs would be when there would be a commercial. They would go in, watch the commercial, and find answers to questions we asked. Then they would go online and answer the questions and have a chance to win the car. So essentially what we did was we literally took a medium that was supposed to allow users to skip commercials and made them intently watch them instead. We have a lot of good measurements on that as well that we're still putting together.
iMedia Connection: What measurements do you use in deeming campaigns like this a success?
Chan: Working with our third-party ad serving we ping a lot of the pages on the back-end of Lexus.com, couple that with our strategies in terms of our buying on auto sites, and content sites and search engines, and with the creative, and put together different success metrics, like what we like to call action rates on the back-end where we can tell the rate or number of people in any given period who are coming to build their Lexus or e-mailing a dealer or requesting a test drive or ordering a brochure, etc. and measuring those in comparison and relation to each other. And a lot of those quantitative measurements we've set with Lexus and we've had a lot of success with them understanding the benefit and the strengths of interactive. But at the same time, a lot of measurements are more from an aesthetic point of view, like when we do sponsorships and so forth where we measure things based upon impression delivery and we don't really care about click rates and so forth because we're just trying to brand. So it's all about the real estate share of voice on those sites and how aesthetically pleasing it is in the design of the site and all those things that you can't really put a number to.
iMedia Connection: What's the best integrated campaign you've seen this year?
Chan: I really like how Absolut is taking its award winning "bottle" creative to the next level on its Website. That site is amazing. The company has always been pretty savvy with its outdoor creative as well.
Also, BMW's Mini campaign is really coming along with its look, feel and message across print, outdoor and interactive ... though I haven't seen any broadcast yet. I'm sure that's going to kick some butt too.
iMedia Connection: What sort of new models can we expect in the future?
Chan: The larger box units, the 336 size IMU units, we'll see a lot more of those. Not just the size but different technologies going within that size. Right now, for example, we're doing streaming video within that box that fills up the whole screen. That's been extremely successful from a branding aspect. The great thing about it is it's pretty instant, especially if you're on a DSL or up and it's embedded so you don't get an annoying pop up. But seeing video like that within those spaces is going to be a lot more prevalent. I don't know about Eyeblasters and those types of floating ads. I think we're going to see them more, but I think it's a fine balance between advertisers using them and sites accepting them vs. consumers seeing them and liking them. If a floating ad comes up for a product completely irrelevant to what someone is searching for, the person is only go to be annoyed. So it's really up to advertisers to use things in context to see what new units or models will come out.
Pricingwise, I think the cost-per-action might go away. I hear a lot of sites being burned by those models because agencies will negotiate so hard with the sites for a cost-per-action model that the sites will finally agree to it because they want the advertising, then the agency goes back and creates some really awful piece of creative, sends it to the site, nobody ever clicks on it because of the creative, or nobody takes any action, and then the site gets burned. So I don't necessarily know if that's going to grow.
The traditional model of CPM for guaranteed impressions and so forth is going to dominate. However there is another way and it's actually something we're working on for October forward -- which is our new model year -- in terms of the way we're going to buy, since we're such a branding-oriented advertiser. We're finding different ways to equate dollars spent to branding equity vs. just giving our client new, over-delivered impressions by 200% or whatever that may be, but I don't know if I want to share that yet.
iMedia Connection: Is there a same way to do CPA so everyone wins?
Chan: I'm sure that if we had a Steven Hawking or someone working on it that they would find some sort of formula that fits everyone. However, I'm a strong believer that every advertiser has different goals and because they have different goals the metric is going to vary. So there almost shouldn't be a standard. Because how would you standardize something like that for a branding advertiser like a car company, which doesn't sell anything online, vs. an Amazon.com which just wants people to buy its products online?
iMedia Connection: Is there enough branding research to satisfy clients? If not, what needs to be done?
Chan: There definitely isn't enough. I think the industry is moving more toward doing a lot of that. We just completed one with Rex Briggs and MSN, it's the same branding research that they did with Unilever. In fact we did it alongside but we have been drilling down on the data more. And they're doing, I think, another six of those studies over the next year. There are a lot more. I think there hasn't been enough. But I'm not sure if even that will convince clients the Internet is a good branding medium. It just has to be a see-it-to-believe-it type thing in which you just have to prove it to your clients individually. And that's the one thing they'll believe in the most vs. if they see a study about somebody else.
iMedia Connection: What remains the industry's biggest stumbling block?
Chan: The whole reach and frequency thing. That alone has been the bane of my existence over the last six months. And I know that has been one of the number one issues when it comes to the iMedia groups and the things they're trying to tackle. I saw on your Web site that the ARF has now come to some sort of conclusion or universal methodology to be used, so hopefully that will work out. I really hope we can figure out a way. But it's going to be really tough. Because with our buys now, no matter how much you spend, you can't really go back to your client and say that you had X% reach of your target audience. You can, but it's not based on something like a Nielsen or a JD Powers like in the traditional sense. So your clients don't believe it anyway. The frequency model, looking across all your buys, is also very difficult now. The methodology for calculating that is shaky and not universal. And those are the basic planning perimeters that traditional marketers have.
iMedia Connection: What should agencies do to help overcome these stumbling blocks?
Chan: We answer the question by the way we purchase our media and the way we plan. Since we know we can't maximize efficiencies from a reach standpoint and from a frequency standpoint, just by sheer numbers, and using research data, what we can do and we can control is using more psycho graphic targeting. And this is kind of alluding to our new buying or planning model that we're going to roll out. But if we can control that -- and let's just take content sites, for example, like a golfonline or a MarketWatch -- we know that basically their demographics fit our demographic audience. The power of the Internet that TV and print lack is that it's very much a psycho graphic-based medium. People can go wherever they want to find the information they want regardless of their background. So if we own a certain section, and we do something really good there and we have complete ownership of it, then we're basically maximizing our reach of our target audience within that site and over the course of time you can completely cume your audience because you assume that everyone who is interested in that is going to go there, and the longer you have that sponsorship up or whatever it may be, the higher your frequency goes. So if you move more toward a psycho graphic-based targeting plan, targeting the highest composition of audience you can find, then you solve those problems.
iMedia Connection: What are your clients' reservations about spending more money for interactive media?
Chan: What I see a lot is that our clients, when they buy a TV commercial, they see it on "Friends" when they buy into "Friends." They buy a print ad, like cover-four in "Newsweek," they'll see it on the newsstand and they can hold it in their hands. But the clients don't see interactive unless they're really tech-savvy, Internet-savvy clients, and most of them being older aren't. They don't see it, there's nothing tangible there for them. And then you throw them a tracking report with numbers they don't understand. And because of that, they have hesitancy because they don't see it and they fear what they don't understand so they just revert back to traditional. They think, "If I put this much more money into print, I'm going to see that many more magazines with my ad in it," vs. incremental 50 million impressions. They can't consume that; they don't understand that.
iMedia Connection: How can agencies encourage their clients to keep up with the reported increase in consumer media consumption?
It's a very simple thing to do. We show them on a regular basis up-to-date news from reliable sources of how large their audience is online. You show them that, they look at it, they understand it, you make sure they understand how relevant that is, and then you walk away from it knowing that they understand they can't ignore interactive and that it's essentially a traditional media now.
The second way to do that is from the back end. Have their people in-house go and do surveys or take a look and comb through their data base of users or buyers or hand raisers or whatever it may be and see how many of them use the Internet and how they use it. If they're hearing it internally, in-house, it's really hard to ignore that.