@d:Tech Conference, 2001, Los Angeles

We’ve seen the year of push, the year of the portal and the year of e-commerce. For LA @d:TECH, this is the year of playing it safe.

Advertising conferences may be playing it safe these days but industry representatives at this three-day show in Los Angeles last week agreed on at least one thing: Internet advertising works.  Defining how it works is the marketer’s choice.

The Year of Living (Less) Dangerously ….
by Elaine Morris Palmer  May, 2001

There was a good enough turnout at LA’s @d:TECH conference, May 2-4, considering it was rumored that there wouldn’t be another LA show, only Chicago and NY. Let’s put it this way, last December in NY there was a waiting list of companies who wished to participate. Not now.  I had a chat with conference content director, Jason Hester, the day before the show opened. “This is not just a short fall among Internet advertising companies, it’s taking place throughout the advertising industry. (an inverse reaction, perhaps?) It’s not an inherent weakness in Interactive capabilities – it’s just a business cycle the entire industry is going through. The pot of gold for conferences these days is to get the media buyers and directors of  marketing from traditional companies like Kodak, Ford, Volvo and Unilever, as well as other Fortune 1000 companies, to attend and to encourage even a small percent of their advertising budgets into online.

And with good reason. Nielsen / Netratings’ AdSpectrum report published in May of 2001, revealed that traditional offline companies made up more than half (56%) of the top 100 advertisers in March 2001, surpassing digital economy companies. They spent 44% of an estimated $280 million in online advertising.  When surveyed, (Forrester Research) bricks & clicks companies projected that by 2004, the Internet will have plateau’d as part of their mainstream media mix and expect online (anything non-traditional) spending to reach

45 % of their total advertising budgets.

So, instead of focusing on the next killer app or the  next hot new technology, “that’s always a gamble,” cautioned Hester, @d:TECH emphasized  “proven strategies”. ( I couldn’t help wondering what good proven strategies are in a universe of shifting sands. That all remains to be seen.)

For the most part, this convention was heavy on research and case studies

covering the usual topics –  measurement and metrics, targeted email, affiliate programs, syndication, and a healthy ration of mobile and wireless. And almost no panel discussions. It seems past attendees reported that they couldn’t quite catch enough value from snippets of information from panelists across industry segments. Good for perspective but not so good for fully exploring a precept, explained Jason. Maybe he just couldn’t pin any of those guy down to speak in public.

Is it any wonder that a streaming media showcase moderated by NetRatings analyst T.S. Kelly, featured an abundant array of sponsored workshops, or paid opportunities similar to  live infomercials.  Among them — RealNetworks, Microsoft, First Look, Doubleclick, Bluestreak, BURST!, Teradata, L90 and Engage.

The chef-d’oeuvre of the conference, though, had to be gauntlet laid down by keynote speakers Shelby Bonnie, CEO & Chairman of ClNet and Phase2Media’s President/CEO and Vice Chair of the Interactive Advertising Bureau (IAB), Richy Glassberg: if Internet advertising doesn’t work then where are we now? does it make sense, how does it make sense, how should we (marketers and clients) represent ourselves in industry and what sorts of problems do we need to solve to get better traction? Buyers have more free access through the Internet to more information than ever before. We heard this statistic more than once at @d:TECH: Forrester Research projects that by 2005, for every dollar spent online, there’ll be $1.40 of offline sales that were influenced by research consumers have done online.  Could you actually lose your job because you don’t recommend the Internet as a potential media outlet?

If at first you don’t succeed…change the metaphor

“We all have an interest in making this work,” coaxed Bonnie in an effort to galvanize the audience. Somewhat like a head coach to a once great but losing team, Bonnie pitched for hanging tough, pulling together and speaking with a singular voice.  For driving the medium in a positive way and investing against it consistent with what the medium allows.

And sure enough, ClNet’s got some new ad models to help win the argument for the medium. Not just because they want to sell you ad space, although I’m sure they wouldn’t mind,  but because they believe that certain tenets of advertising have been lost in the fray. User momentum for one. Why would you pull someone away from a train of thought in which he or she were heavily invested? Can you really be effective coming out of left field and distracting a user from his or her intended mission? Or worse – by using tricks to make them look at you.   Why not pull the message delivery mechanism forward to the viewer instead of pushing him away from what he’s doing to hear or see it,  Shelby asks rhetorically.  Larger palette rich media messaging with depth of information works better than tiny print in tiny boxes. “We are sitting on top of thousands and thousands of pieces of information,” he persists. Information the consumer is looking for, yet we’ve managed to reduce it down to an intruding if not insulting one liner or annoying visual that makes the bouncing ball of local TV fame, look like brilliant advertising. Consider brand preference and brand affinity. Consider redefining loyalty as a combination of behaviors and attitudes that increase revenues and decrease costs. Examine the use of advertising on the Internet as an information resource for considered purchases. In other words, efficiently move users along the buying path.  Bonnie professes that depth of advertising and information delivered in a contextual useful and relevant way does what the medium does well and gets results.

Bonnie threw a plug in for the IAB, complimenting them for the stepping up their leadership efforts.

And Richy Glassberg, picked up where Bonnie left off.  Internet advertising is advertising.  He adds, if you have the right product (read: quit looking over your shoulder and understand your own product attributes), this medium can do the branding and reach of television, the information and reach of print, the frequency of radio and the direct capabilities of direct mail. All of  which, he admits, make it incredibly complicated.

From the first AT&T banner which ran on Hot Wired produced in 1994 by Modem Media through the first IAB banner guidelines released in ’96,  until now we’ve been trying to figure this medium out.  Glassberg underscores that studies done like Meyers and the IAB/Price Waterhouse Coopers vary so much on ad dollar spending that the absence of any agreement disables agencies and clients from planning effectively how to use the Internet.  Shoppers are converting to buyers. In 1999, 31 % of people on the Net were buyers. In 2000, 40% were.

Glassberg characterizes that this is “a nice increase”.  Yet in an outpouring of finger-pointing bordering on comeuppance, Glassberg asserts that problems with the medium lie at a variety of doorsteps:  media buyers are taking the path of least resistance and that creative …isn’t…creative that is. There are no outstanding online ads he continues. There are no comprehensive metrics or ad-friendly terminology like those used in any other measured medium out there. We’ve short-changed the branding effects, conversion effects and the ads themselves. “We’ve confused short-term Wall Street valuations with what it means to be a long-term profitable company,” he importuned unreservedly. “We haven’t pulled together as an industry. Everybody is messed up.”

Glassberg deferred to Publicis President, Maurice Levy, in even stronger language when he said that we, as an industry,  without  measurable objectives as our starting point are engaging in something akin to malpractice and that it’s time for marketers and agencies to move more quickly. ****see Side Bar 1

Show Me The Marketing Application!

For those avid followers of whatever-the-next-new-thing is, there were plenty of wireless sessions at @d:TECH this time. The third day of the conference was devoted almost entirely to it.  Wireless Forum, Wireless Essentials, Making Wireless Work. Skygo, WindWire, and Ericsson’s VP Mobile Internet Solutions, Tim Connolly’s, keynote address.  Along with others, these companies are certainly making inroads as this publication has reported previously (Digitrends.net, March 22, 2001, “Advertising in a Wireless World”  ), but let’s put first things first – show me the marketing application!

Now, if you side with the researchers, the theory is that the wireless hype has accelerated at exactly the pace that the internet hype decelerated.  “It’s like cocaine”, spouts Jim Nail, Forrester Research’s e-business guru. “We couldn’t get our internet cocaine anymore so we starting taking our wireless cocaine.”  My friend Mark Miller, chairman of iMIX, has a formula for it. (Please email Mark for the deeper explanation mark@imix.tv)

Buzzword

_____________

Buzz(word) Kills   = Hype

(Value) Hype  =   Investment

© 2001 iMIX inc.

At the risk of sounding like a “terrorist”, (his alter ego) Nail went on to describe wireless now as being like Prodigy was in 1988.  “There’s no access devices, there’s no infrastructure to support it and the consumer has no idea what they would ever do if they had it.”

“Thank God the wireless folks have  stopped using the Starbucks example,”  (we both laughed) – the one where phone tugs at your sleeve when you pass a coffee store on the street. Quipped Nail, “Now we can start having logical conversations.” Email still has no marketing applications that show a lot of promise the way the unsolicited email legislation is heading – but we (Jim and me, that is) may be a minority of two.

Figuring The Medium Out: Yahoo & Pepsi’s Fusion Marketing Campaign.

Yahoo!’s got this cool measurement and guidance tool called a “buzz index”. It can show daily engagement with a brand, explain jumps in traffic and characterize use of basic demos.  It promises to evaluate brand awareness and compare brand, judge campaign effectiveness, spot consumer trends, and predict behavior in certain categories. Britney Spears skewed higher than Christina Aguilera in fan mail and in age appropriateness, for example, which, no doubt, had something to do with Pepsi’s choice to use her in recent campaign premiering on the Academy Awards.  The buzz index can even tell you how well a movie’s going to do. Not even Roger Ebert can do that and get millions of dollars from Pepsi to do it.

Sound too good to be true?  Not if you’re Murray Gaylord, Director of Fusion Marketing for Yahoo!  What is it? You take one media plan, combine online with off, and the surprise is  the Internet shows up right smack in the middle of all those other media.

Pepsi’s John Vail, Director, Digital Media and Marketing of Pepsi-Cola North America goes so far as to call this “reinventing brand marketing”. WOW, what a statement!  Pepsi invested more money in the single-serve category than ever before using the Internet as an integral tool.  With 800 billion soft drinks served a day, that’s nothing to sneeze at.  Their goals – like almost any other product around: target new consumers, product and package innovation, promotional innovation, new availability (sourcing new vendors), awareness, relevancy and taste.

In the mid-nineties Pepsi looked at how to reinvent this model. While a lot of their

aims remained the same, their consumer market had changed dramatically.

They did far-reaching, 13-29 year old  consumer testing (including 2 years of focus groups) to find out what their web-presence should be like. The key was to connect with consumers using to something that was apart of their every day lives. Lo and behold it was the Internet.

Consumers wanted to know everything about the company and their activities.  Pepsi, with Yahoo!, launched a full-blown Fusion Marketing program including online promotions and merchandising tie-ins fitting into larger marketing programs across all Yahoo!’s vertical partners. Yahoo brought Pepsi’s direct marketing programs,  like Pepsi Stuff,  into their targets’ viewstream online with partners like EA Sports, Sony and Sam Goody. The “Your Vote Counts” online sweepstakes let consumers vote for their favorite Pepsi commercial, Cindy Crawford’s 1991 spot, which was  shown at the end of the that’s year Super Bowl. Britney Spears’ Pepsi spot, for the first time in Pepsi’s history, premiered online ahead of the “big screen” TV debut.  And it all worked like a charm. They needed a way to become more a part of consumers lives, reward the heavy users for their loyalty, join with merchandising partners to enhance the Pepsi life style  and remain  ”uniquely Pepsi”.

Overall single-serve program results were that Pepsi single-serve volume rose 5%.

Across the board, significant statistically reliable results in all key performance indicators that their own chief marketing officer lives and dies by were achieved. And the bottlers were happy too.  “This is powerful,” says Vail, “and it’s got legs.” For Pepsi, it does.

Helpful Hints:

>      One of the pleasures of the internet is that, as users, we get to initiate define the experience as we like. If you are of interest to the user and offer truly beneficial services  he or she will be happy to tell you who they are and what they want.

>      Think about communicating with the consumer earlier and  later in the marketing cycle. Invest in cultivating customers through information and dialog. Plus, customer retention is not just measurable in monetary terms. Retention is part of the loyalty story of a customer. A loyal customer has a strong image of your brand, evangelizes for you and seeks you out above other competitors.  Achieve this through a series of steps or scenarios:

attitude            trust               customer’s  personal  investment              viral evangelizing = brand loyalty.

>      There may never be any pat formulas for success (like 100 GRP’s in television or a 60 reach and frequency (?)) in the online market world. Success is defined differently for each company and their relationships with their own customer base.

>      Optimize. Optimize. Optimize. Measure branding using traditional branding measurement methods: recall, attributes, associations with your brand, purchase intent. If your online objective lies solely on completing the sale right now, you’re leaving valuable communication opportunities with your customer on the table.

Consider New Ad Models:

●  Innovate with a larger palette

●  Contextual placement

●  Expandable ad units with product views, product awards,

data sheets, printable PDFs, price configurations, surveys, information

and direct links to the buy

●  The skyscraper

●  Messaging plus

●  Integrated multi-platform (ie: micro site, button, email)

Now Hear This: (Just rumors? I think not)

•       Buyers are on the Internet. Either you reach them or your competitors will.

•       iTV is a sleeper.

•       Wireless (for the advertiser) is a non-starter.

•       Digital marketing, with the power to reach deeper into the marketing cycle and reach consumers closer to the buying decision, will eclipse online advertising.

****Side Bar 1

These are the IAB’s  [http://www.iab.net/] 10 ways to make the Internet a better medium for marketers:

1.      Develop more effective media plans – put the best brains on it

2.      Demand better creative

3.      Adopt an interactive marketing unit (IMU) and support the IAB’s guidelines

4.      Develop an integrated sponsorship

5.      Use rich media

6.      Use permission-based email

7.      Make audience measurements meaningful for advertisers

8.      Support a mandatory disclosure logfile audit project

9.      Sell with day parts (as in TV) – define the web prime time

10.   Join the IAB or other industry organizations and make a contribution

Most interesting offerings:

Qwest Digital Media. At a time when  companies are cutting back on employee travel, why not Ride the Light. Qwest’s AnyTime MODsm(media-on-demand) and In Time Interactive Services™  will produce your content on site, encode it, stream it over the web and then store it.

Use your own video conferencing capabilities to capture your program, send it to Qwest and they’ll convert it into company meetings, product trainings and seminars, employee development, analyst briefings and virtual road shows, marketing events and product launches.

Microsoft – If you’re brave enough to foray onto the Net now without an agency, you can try out Microsoft’s shrink wrap (“just ad graphics and go”) enRiched Ad solutions.  Though this product has been available since 1999, new ad types focus on branding and performance outside the banner. (The product comes from Microsoft with optional realtime XML feeds, error tracking and quality assurance.) Headining what Jim Nail proposed, these ads are meant to influence attitude rather than behavior and increase customer desire and interest further “upstream” in the decision making process – specifically for highly considered purchases like a cars.

Editorial remark: I couldn’t help feeling a strong dichotomy in the call for

standardization of the Interactive industry and all it’s integral technologies while there is loud criticism for lack of innovation. It seems a tall order to support innovation while trying to define the corners of the box and make it stick.  They almost defy each other.

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