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Last year, the Interactive Advertising Bureau and Bain & Co. released the findings of a shocking study showing the commoditizing effects the burgeoning marketplace of online display advertising, and new secondary sales channels such as ad networks and exchanges were having on the value of online advertising inventory. Today, they will begin to fight back. In a meeting with nearly 100 top industry executives, including many of the largest brand marketers, the IAB and Bain will release the findings of a new report they believe will provide a "roadmap" to rebuilding the industry's perceptions about the brand-building value of online advertising.
The report, "Building Brands Online: An Interactive Advertising Action Plan," a preview of which was given Online Media Daily on Wednesday, is based on an in depth survey or 700 brand marketers, as well as anecdotal research with ad agencies and publishers that has identified five key obstacles that have deterred marketers from shifting more of their brand advertising online, and the five key areas the industry can focus on to overcome them.
The heart of the findings are that online sales organizations have lacked the "sophistication" necessary to turn the perceptions advertisers and agencies have about the value of online advertising from an either/or proposition of "branding" vs. direct response-like "transactions" to one that is far more holistic and deals with higher order elements of branding such as "engagement."
"It's a pretty big rethink about the way [online] sales organizations work," IAB President Randall Rothenberg explained to OMD, adding that the end goal is what he described as a "triple play offering" that combines brand reach, transactions and "brand engagement."
Brand engagement, of course, has been a Holy Grail of sorts for Madison Avenue for some time now, and while it still defies and explicit definition, Rothenberg said the new study identifies ways that publishers and marketers can work together to develop effective campaigns that generate engaging results based on the combination of online's selling power, great creative, and stories that create long-lasting bonds with consumers.
The key, he said, will be transforming the perceptions and behavior of all the stakeholders in the online advertising marketplace, especially the sales organizations of big publishers that have been conditions to pitch the brand reach power of online display advertising and the transactions-oriented focus of search and click response models.
The five key obstacles that need to be overcome to achieve that, the report concludes, include:
1 - Ad formats and creative are not innovating with the medium.
2 - We are awash in undifferentiated, low-cost inventory.
3 - Metrics, metrics everywhere... but not the ones that brand marketers really need.
4 - Media companies lack ideas, strategic expertise and engage too late in the planning process.
5 - Marketers want cross-platform campaigns; instead they get a model rooted in platform-specific silos.
The report does not explicitly lay blame at anyone constituency, but paints a picture of a highly dysfunctional marketplace that grew up spontaneously, and opportunistically in a way that has reinforced those market perceptions. Online sales organizations talk about brand value, but pitch and convert business based on their performance. Agencies continue to operate in a highly "siloed" way with an organizational culture that keeps online advertising in a performance box. And marketers want to focus on the brand-building aspects of online media, but are given sales pitches and plans that focus on shorter term, transactional results.
Rothenberg says there are plenty of examples on all sides - publishers, marketers and agencies - that are breaking the norm, and that the IAB and Bain plan to use them as examples to convince others about the upside of changing their cultures and organizations.
He points to the "integrated," cross-platform selling approach of publishers such as ESPN.com and the Newyorktimes.com, and marketers such as Fidelity and American Express that can see the simultaneous transactional and brand value of online display advertising.
"This is the roadmap," he asserted, pointing to the final page of the report, which identifies the five steps the industry needs to break its silos, including:
1 - Measurement: Work with other associations to establish clear standards for measurement of brand impact and reach/frequency.
2 - Targeting: Address current scale and data limitations for targeting. Identify ways to adjust for overlapping audience in reach buys.
3 - Automated process: Help develop low-cost and/or automated buying processes for brand reach and response buys. Establish common technical standards for the industry.
4 - Online creative: Identify and communicate success factors for marketers, agencies, and publishers in executing cross-platform creative.
5 - Engaging marketers: Create ongoing forums with marketers for discussion of branding approach, limitations, and key developments.
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Let's stop pandering to entrenched interests and start talking truth...
First, the only real reason to introduce new metrics is because the agency and technology intermediaries that currently suck the value out of the media food chain and drive up costs can no longer sell the old ones to protect and promote their own interests. Metrics never truly describe what works as much as they describe what can be sold.
Second, the call for better targeting is entirely counterproductive, a fool's errand in an on-demand media universe. No one wants more ads, no matter how well targeted.
Third, big advertisers already have access to low-cost/automated processes for brand reach and response buys. It's called a telephone, and the guy at the other end is a twenty-something agency minion. The more emphasis we put on automating the low end, the more everything will begin to resemble the low end. In terms of digital scale, we are very much -- per Thoreau's prescient observation -- tools of our tools. The more we automate the sales pipeline, the less we negotiate, and the less we negotiate, the more money we leave on the table. Hence the quixotic reality of technology/expertise-driven media sales in the digital age: the more we sell, the faster we go out of business.
Finally, I would suggest that if you take the fourth item on the proposed "roadmap to success" -- paraphrased as an investment in online creative and creative cultures -- and elevate it to the top of the roadmap hierarchy, we would rediscover why advertising used to work, understand why it doesn't work now, and all but eliminate the need to discuss the rest of this crap.
As Curly Howard of the Three Stooges once observed: "No wonder the water doesn't work, the pipes are clogged with wires," to which Moe replies, "A fine place for wires."
No wonder advertising doesn't work anymore. The pipes are clogged with wires...
Gerard Broussard Pre-Meditated Media
All the false starts we experience and all the new directions we pursue in reaction notwithstanding, we must be prepared to accept the fact that we are playing witness to the demise of advertising as intermediary and to the resurrection of advertising as destination.