Lotame

With all of the latest advances in digital media, we are still in the infancy stage when it comes to data intelligence and informative decision making. Consider what is currently happening in the display advertising space. Data and media are continuing to diverge as two separate commodities. On one hand there are data exchanges making cookie files or user information available for purchase. On the other hand, there are media exchanges that make media available for purchase letting businesses use primary or secondary cookie files from other sources to make the ad decision.

This new divergence between data and media, coupled with the notion that bigger is better when it comes to data, makes for an interesting dynamic in today’s industry. Companies are looking to build their own, large cookie pools. In some cases, these are companies with no real technology or mathematical expertise. The natural assumption is that by having large data sets, it would allow for informative ad decision making and that assumption is absolutely warranted. But again, we are only in the infancy stage when it comes to data intelligence and information decision making so it is important to understand all layers involved while pursuing the “data” path.

There is an entire meta-layer between data and media, and that layer is around delivery and optimization. It’s the ability to marry delivery, performance, and backend metrics with data collection and custom audiences. Without this connection, data is meaningless. Imagine for a second you spent $5,000 on the latest and greatest Flat Screen High Definition TV, $600 on the latest Blue Ray DVD drive, but decided to use old audio/video composite cables instead of investing the extra $150 on some good HDMI cables. Your investments in the television and the Blue Ray drive aren’t even close to maximized unless an additional investment is made in the “connection.”

This is unquestionably one of the most important, yet most overlooked aspects of today’s ecosystem. Data is only as valuable as the intelligence or “connection” behind it. In the coming months, the companies that are positioned to efficiently collect and segment data and, more importantly, are able to tie that data in a meaningful way to media through enhanced delivery and optimization techniques, will see an increase in sales, margins, and ROI. By valuing audiences and media separately, there is also a new arbitrage opportunity available to those that truly understand the three aspects of data, media, and delivery.

At the end of the day, companies will need to make smart investments on technology vendors and third party solutions in order to help achieve their goals. As the economy continues to shake out, as costs and expenses continue to be cut, and as resources continue to be reallocated, it is all that more critical for companies to make sound investments that contribute to increased efficiency and productivity. In order to do this, companies will continue to turn towards “data” in order to make informative decisions, to both business and literal ad serving.

It is no secret that the ad economy is currently weak. Even the rosiest of estimates have paired back general ad spending, from anywhere to up a small % year over year to down. There is no question that as we head into the 2nd Quarter of 2009, CPM rates will continue to come under pressure.

Premium content sites have begun to surface some evidence on their strategy on how to weather the storm, by introducing “paid for” services. In the last 24 hours, The Wall Street Journal announced their Niche content subscription plans, and the Washington Post announced their “paid for” image service. There is precedent for this corporate behavior, this very same cycle (ad market collapse / increase in paid services) happened in back in the 1999-2000.

But what are sites doing that don’t have a premium offering that is compelling enough to bundle into a “paid for” service?

These are the advertising revenue pure play sites, which represent the vast majority of web publishers today. This is especially true within the social media/community/blogger category.

It is widely believed that these pure play sites are coping by simply adding more advertising placements and ad inventory. Short term, the net effect is that if you add an ad placement, you can generate extra revenue against that page/site. The formula is quite simple, let’s say a site had two placements before the downturn which dropped their CPM’s by 33%, without any traffic growth by adding a 3rd ad placement the site could generate 33% more revenue (than just allowing for 2 ad placements) which would equalize the raw ad revenue generation that the site delivers. Seems simple right? Not exactly.

If every site simply added an additional ad placement, the pool of available inventory would grow and the laws of supply and demand would take hold and CPM pressure would drive rates down, hypothetically by the same % that supply increased. The ad revenue flowing into the online ad economy is a constant in the equation.

So what is the answer? TIME

The answer is for publishers is to look at the value of the ad placements in terms of time that the ad was exposed to a consumer. We released some great data about the average exposure time of three of the most popular ad placements; the rectangle, the skyscraper, and the leaderboard. The results of the study showed that the rectangle sized ad had a clear advantage staying visible on a consumers screen for 13 seconds, 2.5 times more than leaderboards (5.4 seconds), and 6.8 times more than skyscrappers (1.9 Seconds).

From a marketers perspective, these are big findings. If the basic premise of online marketing is to drive brand imagery, create consumer demand, and propel purchase intent, then the ad that stays visible for longer in front of a consumer is more valuable.

If  a publisher were to plan ad placements based on the data that we released, then theoretically a publisher might actually be able to reduce the number of ads served on a page, and get an increased effectiveness of the ones that remained. To illustrate, if a web site currently has an equal mix of rectangle, skyscrapper, and leaderboard ads on every page, and they move to two rectangle ads, the time that those two ads would be visible to a consumer would be 26 seconds, up 28% from 20.3 total exposure seconds with the current three ad placements per page.

By looking at the time spent metrics, a publisher can drive value for marketers (and marketers will reward publishers with higher CPMs), remove clutter from current web page designs, and drive greater and more efficient revenue. It is a win, win, win, scenario.

If you are a publisher that would like to understand more about what Lotame does, and how we can help you grow your revenue in a smart way email me at scott@lotame.com

Chatter is growing around the idea that Direct Marketing metrics (primarily Click Thru Rate) are unfairly discrediting the results of Branding Campaigns. Abbey Klaassen, at Ad Age, just wrote a great piece (First in a series) about “Why the Click is the Wrong Metric for Online Ads” In her own words:

“Simply put, many advertisers in the past gave most of the credit for a sale or conversion — which in the web world could include anything from visiting a website to printing an online coupon — to the last ad clicked on or seen by a consumer. But that means brand-focused sites such as NYTimes.com and MarthaStewart.com and even social-media sites such as Facebook and MySpace lose credit because they are often not where a consumer will see that last ad. And when they lose credit, they lose advertisers, and when they lose ad revenue, well, you’ve read that story.”

Last night I was listening to one of my favorite podcasts, CNET’s Buzz Out Loud, and in episode 915 (orginally produced on 2/20/09) they did a story about cable companies limiting online streaming video to paying cable subscribers (about 11 minutes in the podcast). In a conversation between Tom Merritt and Rafe Needleman they attribute the cable companies scheme, to the idea that the advertising industry can’t monetize online ads like they can broadcast ads. Online ads are unfairly compared to broadcast and magazine advertisements because online ads effectiveness is infinitely more measurable, especially on the click. In their own words:

Tom: The problem is the advertisers, though…the person with the two eyeballs is the same if they are watching the advertisement from their TV or on their screen on a Mac.
Rafe: No they are not, they are sold and measured on a different basis.
Tom: The advertising agencies haven’t figured out web yet, and they are greedy, they want more out of the web advertising then they get out of the TV advertising, TV advertising is based on 5,000 homes, across america, you don’t get click thrus, you don’t really know if someone was paying attention or not, on the web suddenly because you can click, because there is better tracking, better than a 5,000 home sample, suddenly they don’t want to buy it anymore.
Rafe: Right, because the difference of the measurablity of the internet and the wavy pie in the sky, vague metrics you get from a TV measurement, somehow the TV is more valuable because of the lack of information, and makes TV easier to sell at a higher mark-up. When you actually know what an eyeball is worth…

And I have waxed on about the idea that the “click thru economy” was damaging branding campaigns in my now infamous post “The Click Regime Kills Brands (an online Manifesto for online marketers to reach the Elusive Majority)” An excerpt from that post:

Simply put…just like Pavlov’s dog, if you train marketing industry professionals that a click is “good” for long enough…they will salivate when one occurs, and we have some drooling media and marketing executives these days. The click has become the great arbitrator of value of a media campaign. Effectiveness of entire online media schedule’s are judged on the great and mighty click. One of the biggest online media companies in the world, Google, has built vast wealth based on the click. We have all become really good at delivering a click…

At Lotame, we welcome this dialog, and we have been preparing to get in front the short comings of measuring the effectiveness of a  campaign that is solely judged on the value of the click. At Lotame we commonly use multiple different metrics to measure the success of a campaign. We look at up to 11 different attributes of a campaigns performance to gauge effectiveness; Time Spent with Ad, Intent to View, Brand Favorability, Brand Buzz, Buzz Worthiness, Click to Conversion Rate, Brand Awareness, Ad Recall, Intent to Buy, Interaction Rate, and Micro Site Pages Consumed. The chart below defines each of the metrics that we examine. As reported in MediaPost, we have partnered with Vizu and Amplify, to help us facilitate some of these metrics and measurements in near real time, so that we can report back the health of a campaign, while the campaign is running to make adjustments.

As you can see, Click Thru is not the only indicator of success. The 11 different metrics listed above, are ingredients to measuring the effectiveness of an online advertising campaign. Think about what you are doing in your own online ad campaigns, are you looking at different metrics, or are you solely judging success based on a click?

Let’s face it, the “Social Media” buzz word has been used a bit much these days doing two things:

1. Validating its importance and relevance in an evolving communications landscape. As the usage statistics for these social sites and platforms continue to grow, the constant referencing of the term “social media” or “social web” will only continue to rise (Warning: The web is becoming social).
2. Making it extremely difficult for marketers to navigate through the hundreds of “Social Media” marketing solutions. It’s not that there are not too many “social media sites/platforms”, but too many social media marketing solutions. For example, Facebook is a social media site with, as of now, a relatively weak marketing solution given their decision to remain extremely focused on increasing the overall user experience. Lotame and the other companies mentioned in this list do not have social media sites (most mentioned), they have social media marketing solutions. Until the Facebooks and Twitters of the world figure out a coherent marketing solution for advertisers, marketers will continue to need help.

After being immersed in the “Social Media” industry for over a year now and speaking to a wide variety of industry professionals, I’d like to present my list of who I think are the Kings of Social Media marketing (not to be confused with social media sites or platforms). These are companies that have established a necessary product or service capable of delivering cost effective and successful marketing campaigns within “Social Media”, regardless of company size, revenue, public visibility or public relations, funding and support.

(In no particular order…after 1)

1.

Lotame’s technology called Crowd Control gives marketers, agencies and advertisers the ability to not only reach users that fit their target profile, but also arms marketers with the ability to reach the Influencers. These are the users that are most engaged with the social media platform or website. Additionally, Crowd Control allows agencies to build their own custom audience around specific brands or products, and expose those users to a campaign based on a set amount of time (think 30 second tv commercial) instead of traditional ad serving impressions.

2.

Buddy Media builds custom branded applications that can be integrated within social media platforms. Instead of trying to monetize the space around a social media site, buddy media creates an environment where users engage with the brand itself. Using their technology called BuddyBrain, Buddy Media can track usage statistics for their clients demonstrating how valuable it is to integrate a brand with a social media application.

3.

AdNectar takes the viral approach to a new level by building light, integrated social campaigns. AdNectar enables marketers with the ability to create their own e-gifts that can be inserted directly into the conversation. Once the brand becomes a part of the conversation, brand awareness increases exponentially as users spread the word by sharing the gifts among their friends.

4.

BzzAgent takes on the word-of-mouth marketing approach. Users voluntarily sign up as BzzAgents in their Frogpond and get first access to new products they demonstrate an interest in.  Since the product is meaningful and relevant to the individual, they are inclined to spread the word amongst their friends. In exchange for getting a first look at new products, the marketers get completed surveys around the product or brand.

5.

LinkedIn POLLS:  LinkedIn has a feature called LinkedIn Polls. This feature is powerful as it enables marketers to ask, in real time, survey questions to a very specific type of audience either based on occupation or their social graph. Since users very specifically declare attributes about their professional life, marketers looking to reach decision makers or executives can do so in an easy interface.

6.

Spongecell takes the traditional IAB ad unit and turns it into a social asset. By integrating social components such as “add to calendar”, “email to friend”, “add to Facebook”, Spongecell helps marketers take a standard creative asset and turn it into a potentially viral element.

7.

OggifFinogi makes User Generated Content available within standard, but flashy and engaging ad units. By dynamically inserting videos into the ad unit, marketers can easily and cost effectively build rich media creatives that can be served as standard IAB ad units. Furthermore, these ad units can open up whereas the user is exposed to a marketer’s micro site or video commercial without having to leave the publishing site.

8.

Clearspring enables marketers to build and virally spread their lightweight widgets across the internet. Marketers can build their widgets through their program called WidgetMedia, and additionally spread and track distribution with their program/product called LaunchPad.

9.

Amplify provides a way for marketers to track the buzz and conversation between users across social media. Although there are many solutions out there that look at keywords and context, Amplify takes it a step further offering sentiment around a particular product or brand.

There are many other great social media marketing solutions out there. What kind of experiences have you had with social media marketing in general?

Next Wednesday, Lotame will be hosting 40 marketing industry leaders representing Pharmaceutical companies, Advertising Agencies, and Social Media Marketing Innovators. The session, which will be held in MidTown New York, will explore how big the Social Media Marketing opportunity is, some effective ways that other brands from other industries have participated. Joseph Jaffe from Crayon, who wrote the book “Join the Conversation” will be our Keynote speaker. The summit will conclude with a panel designed to unearth the real world obstacles (and maybe solutions) that need to be addressed before Pharmaceutical companies are comfortable with Social Media as a marketing platform.

I would like to invite you to submit some questions (and maybe some solutions) for the panel; here is a great question that we already got from an agency executive at UniversalMcCann:

“how do I justify the cost of a social media monitoring campaign and how do I calculate ROI for money spent of social media?”

If you have any questions that you would like submitted to the panel, please email them to me at scott @ lotame.com or you can twitter them to me at @lotame