Problem 1
Lack of brand advertiser value
I'm almost certain to get some flak for this topic area. It seems to be an indictment of direct response (DR) advertising, and an endorsement of brand advertising from a philosophical standpoint. So let me address this issue immediately.
I believe that both DR and brand methodologies have immense value. I also believe that advertisers should use DR methodologies in order to drive the consumer from the middle to the end of the purchase funnel with gusto and relish. However, I also happen to believe that advertising should be sold to the right advertiser for the right purpose based specifically on the goal they are trying to achieve, and based on the effectiveness of the methodology for where the consumer exists within the purchase funnel at the moment of ad exposure.
But in online advertising, we've focused an immense amount on the requirements of DR, and much less so on brand advertising. This wasn't so much a mistake, as either an over (or under) focus issue (depending on your perspective). With so much of the revenue coming from paid search in our industry, and the huge focus we've had on remnant inventory and contextual, we have lost out on the upper-left quadrant of the chart below, which really would enable us to monetize the audience that exists at the broad opening of the purchase funnel.
In a perfect world, we'd have the ability to be intentional about how we approach potential and existing customers, with the strong opportunity to move the customer through the purchase funnel and to bring them back for more purchases. In this ideal world, the ability to reach desired target audiences with powerful brand messages to increase awareness and drive consideration and purchase intent is a critical requirement.
But rather than thoughtful and appropriate focus on building high-scale, high-throughput, highly automated brand advertising mechanisms, we end up with seemingly never-ending discussions about cost-per-acquisition (CPA) pricing and performance-based metrics. While this is very important stuff for DR advertisers -- and maximizing the way we handle about half the current ad dollars spent online is a smart thing -- we've neglected the brand advertisers. Focus in this area has trended toward so-called "branded entertainment," fairly custom ad experiences like page takeovers, and some rich media advertising.
What are some of the things that brand advertisers care about when they look to buy ad space? They care about creating brand awareness, getting consumers to form positive opinions of their brands, and driving the customer's intentions toward a purchase. They typically buy advertising based on their ability to reach a targeted audience that is more likely to purchase their products or services. And publishers should be excited about selling ads to brand advertisers because they buy ad space -- not clicks, not conversions. They buy impressions. They care primarily about reach -- they want to get a message in front of a consumer.
I placed this item first in my list, because much of my commentary for the other three items should take this starting point into account -- none more so than my next item dealing with ineffective creative formats.
