Between Warring Ad Trends, Targeting Prevails
Published by Matt March 25th, 2008 in Media
I’ve been thinking about two competing online ad trends:
1) Advertisers/publishers are getting better and better at targeting ads.
2) Consumers are getting better and better at ignoring ads.
Targeting improvements have come on multiple fronts. Advertisers have an increasing understanding of who is consuming content, in what context, and what exactly is being consumed. The behavioral ad engines (Tacoda, Aggregate Knowledge, Wunderloop, amongst others) are amassing massive datasets on user behavior to figure out consumer preferences. Meanwhile, Facebook and other social networks literally hold such information under their nose, embedded in the profile of each of their members. Content itself is better understood. Think about the metadata around images or video. Titles, tags, and comments largely drive ad targeting for these media today, but companies like Digitalsmiths (full disclosure: a Chrysalis portfolio company) are figuring out how to generate improved metadata for advertisers.
At the same time, though, consumers are tuning out. Tivo/DVR usage is the obvious example, but there are plenty of others. One can download browser extensions that block advertising while you surf the web. Eyetracking research indicates that folks ignore banner advertising anyway. And Starcom, Tacoda, and comScore say that 50% of display ad clicks come from only 6% of the Internet’s users, folks that aren’t “representative of the general public” and don’t seem to be a particularly lucrative set.
This “sky is falling” backdrop abuts a pretty exciting long-term macro view, though. Content consumption share continues to shift online (increasing as % of total consumption by medium) and there’s a massive discrepancy between that share and the medium’s share of ad dollars. Presuming that online engagement can be monetized effectively through advertising, there’s lots of growth potential. And sure, things could slow down in the short-term as a result of the economic environment, but again, a long-term look at ad spend equilibrium lends a bullish view.
One would think that as advertisers and publishers get better and better at targeting a point is reached at which consumers stop ignoring. I’d guess that this outcome requires a more integrated understanding of the consumer. It requires not just gathering preferences but improved predictive analysis of upcoming consumption decisions. Let’s call it “implicit search advertising.” Traditional search advertising works because it catches the consumer with relevant information at the point of a consumption decision. Surely advertisers will get better at doing this without needing an explicit search (i.e. entering a search into Google). That future’s coming, and the privacy hounds will be barking at its heels. Hopefully, “hyper-targeted” meets “opt-in” somewhere along the way.
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Photo credit: duly ignored, originally uploaded by niznoz
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Ads can still be dramatically improved. Go to a popular site (not search engine). Look at the actual ads in the wild.
Might you even remotely be interested in any of this stuff? They’ve no idea who you are or what you’re into.
Consumers click on good ads placed so that they can see them and ignore bad poorly placed ads. But they do the same with navigation elements — confusing, irrelevant, and out-of-the-way doesn’t get clicks.
Funny how people are developing these high-tech methods of targeting ads on the web where people don’t generally look at ads in the first place. But in media where people do look at ads, these high-tech methods are non-existent.
Why doesn’t Fortune Magazine give me a password to use on their website, track what I view (maybe a business software article), then follow-up with my magazine next month with an extra ad or two for business software?
If Sports Illustrated knew that I check out golf scores frequently on their cnnsi.com website, they could send me my magazine next month filled with golf and Arizona/Florida travel ads.
Why don’t the cable companies who offer DVR track the programming I watch (e.g. HGTV), then provide targeted ads for local advertisers that fit with the programming (hardware and lawn care stores)?
The answer is probably “That old media advertising isn’t sexy.” Which is probably why it would be massively successful.
When discussing ads and ad trends it is important to separate advertising from marketing and strategy from tactics. Advertising is only a single catagory of tactics.
If you fail to make this distinction the discussion fails.
The “geewhiz” gizmo geekiness of new tactics, many times, overwhelms the need of the marketer to produce an acceptable ROI. Testing and careful measurement of results, of any marketing campaign, is the only way to determine the effectiveness of any medium or tactic. The same is true of the particular chosen strategy. However, if the strategy is wrong, no tactic will provide acceptable results. And by the same token, if the tactic is wrong, the strategy will have no effect. And beyond that the strategy and the tactic must “match.”
Even before that is analyzed, the product or service must meet the buyers need, the strategy must speak to the buyers preception of the need, and the tactic(s) must meet the buyers preference for collecting information about that particular problem or need. In the end all of this comprises the task of marketing. You can’t leave off the wheels, or the brakes, or the steering wheel and the car will fail to meet the expectations of the buyer. Of course, the same goes for any marketing campaign.
> folks ignore banner advertising anyway
If you just measure this by click-through rates, you’re right - the most awesome targeted search advertising gets 100x the click-through of a badly targeted banner.
What i’m surprised by over and over is the measures that people use to decide what media spend to have, and the utter lack of creativity in the banner ads themselves. If you believe that people make purchase decisions due to search, why not use the banner ad to prompt a search? Make the media work together.
What about targeting systems that eavesdrop the conversations among users then expose relevant ads.
I can’t think of a better way to alienate propsects and clients than to “eavesdrop” on their conversations. But, then as Americans we don’t seem all that worked up over the Patriot act that is already eavsdropping on every conversation, bank transfer, withdraw and who knows how n=many other actions.
Privacy has become a term with a definition but no expression or reality. Buyers and prospects will greatly dispse any program that is percieved as destroying whatever privacy they have left.