Commentary
The Future of Online Advertising: What Do Traditional Advertisers Want? The Media Debate
- by June 13, 2002
Keith Gomes, account strategist, FastBridge, a division of Initiative Media: Primarily, I think it’s viewed as a DR medium, and advertisers aren’t seeing the kind of returns that a.) were promised or b.) they were expecting to see from their media dollars.
Cari Weissberg, VP, interactive media director, Hill, Holliday: I also think it’s just a familiarity or comfort level with the medium. You’re dealing with a lot of hardcore traditional advertisers that have seen a lot of growth and profitability from offline vehicles. And since this medium is new and different to them, there seems to be a bit of hesitation or concern.
Joe Kyriakoza, group account director, Beyond Interactive: It’s the same thing that happened with direct marketing back in the Sixties, until it proved itself as a viable medium for generating leads, sales, etc. Whereas this industry is, what, five years old, and really hasn’t had a chance to prove itself.
Andi Poch, SVP national sales, Phase2Media: I think we as a medium haven’t taught advertisers how to use this properly as part of their media mix. Because we drove it so much toward a response medium and we were all touting how it was a response medium, as opposed to a branding medium, I think that advertisers were scared away because of the big portal deals that were being cut, and really no means of measuring those results except for click-throughs and traffic driving. And I think part of the biggest problem has been that we haven’t taught them how to use this as part of the media mix. And every day when I go out and talk about that, I’m finding that more and more traditional advertisers are understanding that.
Weissberg: To your point, we have to focus on their objectives, and there are certain ways to use the medium. If your objective is to generate leads or acquisition, then we’re seeing great results with opt-in emails. But there are also a lot of studies being conducted that are working to show how it is also a branding vehicle.
Graham: How receptive are traditional advertisers to seeing the Internet as a branding medium?
Poch: I can answer from being on the sales side. Of our new business, literally in the past six months, 72 percent of our business comes from traditional advertisers, which is amazing. And just from last fourth quarter to now, we’ve seen 250 percent growth in the automotive spending. And what they’re spending is not just on automotive sites, but on branded sites across the board. So we’re finding the advertisers are being very responsive. And I think, again, to Cari’s point, what the sellers need to do is provide the buying community with a combination of branding and some results-oriented programs. And if that happens, there’s going to be more of a comfort in buying into the medium. Last week, we closed Mercedes and Kraft; I don’t think you get any more traditional than that.
Media: A recent news story headlined “Established brands now rule the web, push aside dot-coms and high-tech advertisers” noted that offline companies now constitute 56 percent of the top 100 online advertisers. Is it more a dollar issue, or that traditional advertisers are holding back altogether?
Graham: Some traditional advertisers understand the power of the web to build their brands and also to build relationships with their customers. But others are taking a wait-and-see attitude. And I’m wondering, what are they waiting to see? And what do we need to show them in order to bring them onboard? Gomes: The day-to-day people I deal with at, say, Maybelline, get it; the interactive people get it; even some of the offline brand managers understand the medium and the power that you can harness from it. But it’s at higher levels in these organizations where they don’t see the value and the worth in the web.
Weissberg: My technology-focused clients seem to be more hesitant than the others, which is interesting when the core of their business is online, and their products or services stem from the Internet. And yet they’re so much more comfortable with TV or print.
Kyriakoza: We have to make these marketing people aware of the fact that because this medium is so innovative and technologically advanced, we’re able to do brand-awareness studies, copy testing, and focus groups that can be done quickly, effectively, cost-effectively, and efficiently. Because there are strong ways to do this through the technology that’s available. And, yeah, people are doing it now in the offline world, but it’s much more tedious and a longer process. And we’re able to do it now in a matter of days. Weissberg: With TV advertising, they never ask themselves the question, “Is this an effective means of advertising?” Now that we can prove it to clients with hardcore numbers, that should be giving us an advantage.
Gomes: To add to Cari’s point, not only is this an effective way to advertise, but is this an effective partner for us? So if I were to wear that advertiser’s or category oHelvand director’s hat for a moment, I’d want to be certain that I’m going to position or align my brand with a network that’s going to be there tomorrow. And the same can be said for the web: I don’t want to be or have a site’s audience that’s not going to be there tomorrow or in two days because the company went out of business.
Poch: That’s a really valid point. We built a business model with the feeling and the foresight that brands would want to be associated with brands. And instead of the network concept, Phase2Media built a business based on individual site sales, so the Brittanica.coms, and the NHL, and the Sporting News, and Car and Driver, Road and Track, Elle—brand names, because we felt certain that if there was going to be growth in this industry, traditional advertisers would feel comfortable with brand names they knew and had advertised with in the past. I can tell you that doing business with people who plan to stay in business has come up often.
The other point I wanted to make is that I was around when cable was just launching, and part of what we as an industry did and supported was evangelize for the industry, where top industry executives went out and spoke to the advertising community and at as many conferences with brand folk as they could, to really talk about this as a viable part of the media mix. And I don’t think our business has necessarily done that to the extent we should, because we spent all of our time talking about numbers-crunching issues as opposed to the medium itself. I think that’s something we should all think about—really in some way, shape, or form further evangelizing this business and not segregating it so much.
Graham: Regarding media integration—allowing traditional advertisers to integrate online with the rest of their media spend: What is the Internet good at, and what isn’t it good at, compared to other media? What are its strengths and weaknesses, and how should it fit into an integrated marketing campaign?
Kyriakoza: Definitely one of the things the Internet is excellent at is brand engagement, allowing your consumer to engage with your brand through not just the ad units, but through your website. It’s another platform and a place for your consumer to experience what you have to offer, whether it’s a service or a product. There’s no question that there’s a huge value in being able to do that at your leisure, at your convenience, without a salesperson haggling you. All those things make the web effective.
Poch: The web enables us to blur the lines a little bit between commercialization and information. And if done tastefully, the information available on a particular site or within a particular group of sites is probably pertinent to that consumer, because it is so targeted. And the information can be really integrated—it’s a buzzword, contextual integration, but it really works. Maybelline lives on Elle.com, and the information surrounding Maybelline fits perfectly into the Elle content. We did a big program for Vidal Sassoon and instead of just putting banners on Elle.com, we created a “Hot Hair Trends” microsite that featured hairstyles from the runways in London and Milan, showcasing Vidal hair stylists and then how to achieve the look. So I think that we can blur the lines. And if we do it tastefully, it’s consumer-friendly and advertiser-friendly.
Graham: How do you convince a traditional advertiser to take money from television, which is a proven (or perceived as a proven) medium, and spend it on online advertising? What arguments do you make?
Weissberg: The proof is in the numbers. This is a direct-marketing vehicle and we should be using it as such. And we have history to forecast projections; we have other advertisers we’re working with that are trying to accomplish or achieve the same goals; and this is the only medium in which we’re able to put the numbers in front of them and have them project the growth potential.
Gomes: I agree with Cari. Simply put, they’re not doing themselves, their brands, or their companies justice by not even at least considering this medium. And that’s what we run into in a lot of cases. I work for Initiative Media, one of the biggest media companies in the world, and just from my interactions here with some “traditional” advertisers, they really can’t be bothered, in some cases.
Media: Jeffrey, you moderated a panel with some traditional advertisers. What did they say they were looking for?
Graham: What I heard mainly was that the whole online industry doesn’t speak their language. They think mainly about brand awareness and building their brand. And they have certain metrics for judging traditional media to build those numbers, and we don’t speak that language. And I think that the language of click-through and traffic and cost-per-click and even cost-per-action isn’t really completely understandable and certainly doesn’t plug into the way that they look at a success.
Gomes: Impression should be an understandable concept, though. I was an offline planner for several years and I’m familiar with a lot of those terms and concepts and to some degree I agree, yes, and that’s a function of the infancy of this industry. We’re not there with the research yet. Offline there’s IMS or MRI, research that every advertiser understands and trusts. And there’s Nielsen data, Arbitron for radio, and the list goes on. For this industry, for plans we literally can pull from as many as six or seven different research sources to prove viability for components in our media plan.
Graham: If they’re planning offline media with reach and frequency and GRPs, how do you translate that online? And how do you fit in the way that they’re planning across media, when we don’t actually use those metrics?
Gomes: That’s exactly the point. All of the offline terms and quantifiables don’t translate to this medium, necessarily.
Poch: I think we need to make them consistent. We as an industry have to standardize the research and the terms. And we probably should look to migrate more of the terms from traditional media planning into the Internet. I mean, why do we not talk about GRPs or day-parts or frequency or any of the other words that are comfortable and understandable to an advertiser toward their goal of reaching a mass audience? We’ve made up our own terms, and if there’s a way for us to really...just understand that this is about advertising and not just Internet advertising.
Gomes: I completely agree. But I think a lot of those terms that we’re talking about, which is what traditional advertisers don’t know or don’t keep in mind—and I know this because I was a planner and I’ve worked on that side of business—a lot of that stuff is based on statistical modeling, and in many cases it’s a projection or a prediction. I can tell you pretty precisely how many people saw your ad, how many people interacted with your ad. To me, that’s even more powerful than a reach-frequency number.
Kyriakoza: I completely agree.
Weissberg: I think these advertisers have to understand that we can’t be measuring it against reach-frequency or GRPs. It’s a different medium; it’s part of the mix, and it should be viewed as such.
Graham: How do they mix it in if they can’t compare it to the other media? And if we’re not using the same metrics to plan it and judge ROI?
Weissberg: Isn’t the point that you can measure ROI, but not necessarily with the same metrics as the other vehicles?
Graham: That’s a good question. What do you think are appropriate metrics for measuring online advertising?
Weissberg: Effectiveness, though that certainly depends on your goal, whether it’s on a cost-per-acquisition or a cost-per-transaction basis, depending on what your ultimate bottom-line goal is. Whether it fits within your allowable or you’re getting a better return-on-investment.
Graham: How would those metrics be relevant to the objectives of a brand like Coca-Cola or Planters Peanuts?
Weissberg: Clearly, there definitely would be branding on the web. And if they’re selling more peanuts, then they’re accomplishing their goal. You’d have to obviously isolate each medium, whether on a timing basis—if you’re running TV and the web, or you’re just running the web—that’s really the only way that you could gauge which medium is more effective than the other.
Kyriakoza: If your goals are branding or brand awareness, it’s really important when using the web to create the kind of environment that allows you to have a positive brand experience with your brand. And that comes from your content on your website or how you communicate your brand online. If you do that effectively, you’re really extending your brand across different media, and you’re able to interact with those people at different levels—when they’re online, when they’re driving down the street, when they’re watching television, whatever. It really depends on how you surround them with your brand and how they feel about it after they have experienced it.
Weissberg: Ultimately, you want to change people’s behavior, or you want to keep them brand-loyal.
Kyriakoza: It’s Coca-Cola doing some kind of promotion that has some relevance to their brand that is interesting and intriguing to this audience they’re trying to reach. It’s making sure that the experience is positive.
Graham: Andi, how did you measure ROI for the Vidal program?
Poch: Their measurement was a combination of branding and names collected. There’s no way to actually put a metrics on branding, but they felt it was the right environment, and they got 25,000 registrants that they would talk to later on. So they felt it was successful and they’re looking to do it again.
Media: Jeff, isn’t there a way now to measure the branding effect?
Graham: There is. As the moderator, I don’t want to go into a sales pitch for my company. But traditional advertisers do measure the branding success of their offline advertising through various media tools, and those tools are available online, and they can be quantified. As the final question, it seems like we are making some steps in terms of attracting traditional advertisers, but we still have a long way to go, having really only attracted 1 to 1.5 percent of their media spend. Beyond just waiting and letting time go by, what are the steps—and I’d ask everybody to give three—that we as an industry should do to respond to the needs of traditional advertisers? [Silence]
Weissberg: No one’s jumping at that that one? [Laughter]
Poch: I actually have a suggestion, and I’m wondering what the buying side thinks about this. We’ve crafted programs that incorporate event sponsorships and then have an overlay to the web. So we almost went about it backwards. How do you guys feel about offline driving online, in terms of promotions and events?
Gomes: That’s one of the points that I was running down. To make it a little more palatable for traditional advertisers, definitely integration with offline components is a way to go. That’ll ease them into it. Also, a point that we’ve discussed is the terms and the understandability of the medium. Maybe our job is to make it more advertiser-friendly and usable in those ways. A third point would be to be as competitive as we can—not only from an agency but from a media company perspective—as far as rates go, at least in the short term, to make it more palatable for advertisers to entertain thoughts of testing this new medium.
Weissberg: An important point is really to just take some time to educate our clients and our partners, and review with them the flexibility of the web and how turnkey it can be. If you explain the ease of implementation and the broad array of advertising opportunities that would be at their disposal and how they could be used effectively to achieve their goals, that’s probably the most important point to make.
Poch: I totally agree. The ease and delivering a complete package—we gave Vidal and the others I mentioned all creative control and approval, but they didn’t have the physical people to piece it together. So we did every inch of it for them and with them. And I think that’s something a lot of advertisers have been afraid of: “How do I actually make that happen; how do I get the data?” So make it easy for them to ease into it. I like that phrase, “ease into it.” That’s what we’re trying to do every day.
Kyriakoza: Let’s take the techie out of Internet advertising and turn it into just another advertising medium, another way to reach your audience and communicate with them.
