Advertising Online from Strategic Point of View
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Presented at SmartAds seminar, Riga, 2010.
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Advertising Online from Strategic Point of View
- 1. 1 Lost in numbers Advertising online from strategic point of view Presenter: Dainius Blynas, “Publicum Media”, Lithuania.
- 2. 2 About myself + Name is Dainius Blynas + Spent most of my 10+ y. career at media agencies + Now work at media agency “Publicum Media” as Head of Internet Department + Main responsibilities: new online business development and strategic consultancy.
- 4. 4 1.1. what works best in advertising?
- 5. 5 What works best? + We are really at the times that marketers try to deal seriously with the question of effectiveness of advertising + The trend is visible internationally and we feel that locally in the Baltics, too + ... and that’s not really about online advertising in the first place
- 6. we often don’t know 6 what’s best ...
- 7. 7 TV is the king
- 8. Emotions really 8 bring value
- 9. DIrect response is 9 different
- 10. Multi-channel 10 approach pays off ...
- 11. Longevity is VERY 11 important
- 12. Key points on 12 effectiveness + So, we seem to be looking for online advertising that is + emotional + works at a longer period (1 y.+) + combines well with other channels
- 13. 13 1.2. where is the money?
- 14. 14 Where is the money?
- 15. Why so much trust 15 in TV? + Price is big factor
- 16. So, what budget 16 split is optimal?
- 17. What split of 17 budget is now?
- 18. How to grow share of 18 online even further? + Integrate with TV: strengthen it, provide interactivity + Compete on price, especially with TV
- 19. 19 1.3. What are market dynamics?
- 20. Online is fastest growing 20 advertising medium in history!
- 21. Online is already 21 Big in some places
- 23. Audience is also 23 moving to online
- 24. Online is clearly 24 having momentum ...
- 25. 25 + Online advertising is like that much-promising student + That still haven’t realized it’s potential ... + In other words: + online is getting more and more popular medium for people + but marketers did not catch-up yet with effective ways to advertise online
- 26. So, what’s the vision 26 for the future? + We need to find online equivalent of + 30” TV spot or ... + full page print layout + these two crown jewels of traditional advertising
- 29. Online video is 29 growing very fast
- 30. Video ad formats 30 online
- 31. Video ad prices too 31 high ... ? LITHUANIA: Average price per 1 sec. GRP video ad 30 € 23 € 15 € 8 € 0 € TV Online pre-roll
- 32. Different kinds of 32 video ads online
- 33. Earned video is 33 growing the most
- 34. 34 How to go viral?
- 35. 35 Online video ads + It’s really similar to TV ads, but + it’s much more expensive + Viral video is even better than TV ad + but we are from sure how to make it
- 38. Website as 38 marketing hub
- 39. Website is always 39 there ...
- 40. But number of visitors is 40 still relatively low, isn’t it?
- 41. Not all consumers 41 are equal ...
- 42. 42
- 43. 43
- 44. Didn’t Facebook 44 change that all?
- 47. Display is next hot thing 47 and this is what happened
- 49. Some industries are much 49 more online oriented
- 50. Good old email should 50 re-discovered again
- 52. 52 Summary + Advertising online is not only about CTR or CPA - be emotional and engaging. + Copy and complement TV advertising - this is what works and where the money is. + Make and maintain brand’s website as marketing hub of everything about the brand. + Know and use technology, but don’t get involved too much. + Big ticket goods and services seem to be better suited to advertising online (since they are high involvement purchases)
Editor's Notes
- Some preliminary remarks:\n1. What’s that strategic point of view? It could be called bird’s eye view of online advertising with the goal to identify most promising online advertising formats. It’s far from concrete plan, but it certainly is very concrete recommendations on where to spend online advertising budget and how big it should be.\n2. Why “Lost in Numbers”? Such title is inspired by our personal experience of selling strategic consultations to our clients at “Publicum Media”. Clients are getting to know online better and better, but this also brings frustration since online is so very much complicated, meaning that there’s so much numbers about online advertising but it’s far from obvious which numbers should be KPIs or sometimes what these numbers mean. So online strategy, in our opinion, is very much an attempt to cut through the numbers and make online look more simple.\n3. Final remark: though majority of presentation is filled with data not specifically on Baltic markets, but we are using this data and these insights when working with our clients in Lithuania. So this is not some kind of universal strategical overview of online, but our view of online offered to clients in the Baltics. \n
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- We really believe in the power of research to determine what works best in advertising. Rise of online advertising certainly helped advertising effectiveness research, but it also brought some bad things too. For example, while clients finally seem to grasp the meaning of CTR, but now they tend to rely on it too much, even where it’s obviously not very relevant - like in branding advertisements. So, what follows is not overview of online advertising effectiveness but some findings on advertising in general, it doesn’t matter online or offline.\n
- The first to know about advertising is that people are really confused about all these effectiveness issues. Advertising is one of the most intangible sectors! Some of you may remember famous saying pronounced more that 100 years ago, that “We do know that 50% of our advertising budget is wasted, but don’t know which half ...”\nAnd please notice which is the most intangible sector after advertising ...\nSo, we must be careful and timid when saying that online advertising works. It’s not so easy.\nOne anecdote story that relate to these findings is early history of online advertising. It’s well known how quickly and easily Yahoo became number 1 internet site. What we probably know less is that prices of banners in those early days were really high on Yahoo with P&G especially investing a lot of money there. And drop of prices form those early days is really an indication of confusion how to correctly price online advertising.\n
- One of the main messages that I want to bring is importance of TV advertising. It really works, even nowadays and effectiveness of TV could be held as gold standard of advertising effectiveness.\nAgain, here we can see very clearly that ways to measure effectiveness online and on TV are really different. Online it’s CPA, conversion rate, CTR, CPC - on TV it’s different.\nAnd this brings us to another very important point: direct response online advertising is probably very different sector of advertising, having more in common with direct mail than TV. For example, indicators of effectiveness on direct mail is much more similar to traditional online indicators.\nI am from media agencies and we are not doing direct mail. And though we are doing adwords, but this presentation is about different things. it’s not about direct response advertising, which is important but still much smaller share of advertising than TV.\n
- It’s proven again and again. Branding works and people do respond to emotional messages much better than to pure rational ones. This is probably one of the main factors of success of TV.\nOn the other hand, we probably can agree how very much online fails at generating more emotional response from audience. These adwords text ads or small banners are really not good t capturing attention and getting under the skin of the people.\n
- Here’s a proof. This is important, more often than not, when are talking that online advertising is effective, we are talking about purely rational and direct response advertising. But this is only around 1/4 of advertising budget at most. Online is really missing on the other part of advertising pie.\n
- Here’s one piece of optimistic data. Online advertising could get much more TV-like by integrating closely with TV: through the message, through the video spot, etc.\n\nFor example, recent hit of Old Spice guy campaign is very much based on that: online extending and enhancing TV.\n
- Online is not so good environment for doing something for a long time. Attention span of audience is notoriously short online, it’s oh so easy to always switch to something else. But longevity is really important.\n\nAs an example, long term sponsorship agreement is exactly the way to ensure longevity. But how many of them have we seen online? Very few if not none at all.\n
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- The graph is really very obvious: TV dominates all other media.\n\nThat may seem strange or old-fashioned for people outside of media agencies. But if you are working at media agency or dealing with medium or big advertiser - it’s all about TV.\n\nSo, what does that mean? It means online must compete with TV - that’s where are.\n
- It works, but it’s also cheap ... Unbeatable combination, really ...\n\nBut that’s the benchmark that we should measure to.\n
- Opportunities are at medium and big advertiser’s camp.\n\nOf course, some very small advertisers are choosing online, but if we are talking about traditional advertisers that advertise on a regular basis, larger ones are better target.\n\nEspecially interesting budget split is that of large budgets. The sheer number of channels is high and integration could be especially useful. And if we look at the candidats for integration, online does stand-out, it’s the only truly universal medium - video, audio, text, interaction and so on.\n
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- So, our answer is “follow TV”.\n\nSure, we may say some other things. Like that online is surely taking a lot of advertising business from newspapers, but we can hit the bottom soon enough. Meaning that share of newspapers is already very small. So other venues of growth should be found.\n
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- This is really amazing. This graph surely shows how much momentum online advertising is having.\n\nOn the other hand, we are in the “boom” market, which in a lot of cases means - everything sells, don’t work on quality so very much, grow volume of your business. Which combined with complicated situation with technology tools and measure means that some of online advertising that clients are buying is far from good. \n
- So, it’s only growing like nothing before but in some places it’s already very big.\n\nAnd here’s a hint how to grow share of online advertising - prove your effectiveness. Adwords surely did that and Google is mostly responsible for this situation in UK, that online advertising is so big there. But again, it’s direct performance advertising, which can grow only so far ...\n
- This is the curse (or blessing, depends on your point of view) of internet that everything changes so fast. So, yes, online is big and growing and in few recent years that growth comes from mobile internet connections. Which is still a big headache for everyone ...\n\nOn the other hand, we see two very interesting developments in mobile advertising: 1. Google with AdMob, which is rooted in googly text ads, which means direct performance roots. 2. Apple with iAd, which is building pure branding advertising platform. If you’ve seen any iAd, you will agree they are really different. And again, don’t forget Steve Jobs is arguably one of the best advertisers in a world.\n
- Here’s the market is showing us the way to go. Young generation does not just watch TV, they use phone and internet together with TV. It really is big trend, but advertising still did not catch-up with that. There’s really an opportunity here.\n
- Online is clearly having a momentum. Of course, people just want to get to their content and not watch the ads. So, people could be even less engaging or we may get pretty negative reactions from the people, because people so very often expect everything online to be quick and suited to their needs. It’s really not like TV.\n
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- People like to watch video. We know that from TV already, but here’s more data to prove it. What’s even more attractive is that proportion of people watching video online is really high, majority watches it, it’s not some niche activity, like twitter or even facebook.\n
- And number of video ad formats is surprisingly various. Here’s four of them and more is surely coming. So called “in-player” ads are available in Lithuania and also likely in Estonia and Latvia. What’s so fascinating about this ad format is that we can just take TV ad and put it online. We should use short version of the main spot, but still there’s almost no creative work needed.\n
- The price is very high, but online video spot is shown as single, not in the big advertising break on TV. It certainly brings much more value to online tv, but is it so much ??? You tell me :)\n
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