• by OMMA Magazine Writers , October 1, 2007

We asked some of the participants in the OMMA New York: Worlds Collide conference for their opinions on interactive advertising’s most critical issues, ranging from the state of metrics to the future of pre-roll ads to the best use of user-generated content. Our experts included David Carson, co-CEO of Heavy.com; Sarah Fay, CEO of Isobar, U.S. and Carat; Pam Horan, president of the Online Publishers Association; Max Kalehoff, vice president of marketing for Nielsen BuzzMetrics; Alan Schulman, executive creative director of imc2; and David Smith, CEO of Mediasmith. Here’s what they had to say.

What’s so different about digital

Fay: There will always be more complexity to managing digital marketing campaigns. There are hundreds, perhaps thousands of digital creative formats (as compared to the 30-second spot, the print page unit, etc.)  Digital marketing also requires technology and data expertise.

Schulman: Right now, a CMO knows that he or she should be spending in digital media. What their agencies — and, in fact, us as an industry — have not done well enough is tell them how to use it. The result of that is they try a little of this, a little of that.

Smith: We need to develop real tools for predicting the GRPs that we run with Internet campaigns. And we have to, overall, standardize Internet metrics so that they can be combined with traditional metrics. There are some advertisers who will never wrap their minds around digital unless we do that.

No Web campaign runs exactly as you bought it, so there is a lot of reconciliation to do on the back end, and that’s one of the reasons why it costs more — two to three times as much — to launch and run a Web effort than most traditional media. Clients will pay this because they see the value of the Internet.

A need for metrics across media

Carson: ComScore and Nielsen are still panel-based systems and the numbers are still in fairyland — they’re not based in reality. And yet the industry tends to look at those as if they’re the real numbers.

Fay:  We believe that time spent with brands improves all forms of brand favorability as well as customer lifetime value. If other mediums such as TV, radio, print and outdoor drive awareness and understanding of a brand or product, online can capitalize on that by creating involvement and activation with that brand or product.

The challenge that brands face is breaking through to consumers in ways that matter to them. Getting consumers to give their time to us helps to achieve that. 

Horan: Ultimately, advertisers are looking for a way to measure audience, to figure out whether they were exposed to ads online as well as in broadcast or print. As the industry evolves and we look at the ROI, the opportunity becomes a way of looking at metrics so we can look across media. With the Web, we do have the ability through third-party ad servers to determine precisely how many impressions were actually served.

Schulman: It’s all about time spent. If we continue to look at the banner business and what frequency of banners will increase purchase intent by a certain percentage, we’re just applying a metrics model for television into a medium it wasn’t intended for.

Smith: Typical metrics are unique visitors, time spent, page views. As buyers, we don’t really care about those metrics as much as the composition of the audience and how much the sites are charging us for the impressions they’re going to sell us. The major metrics companies measure sites, not advertising. But we don’t buy the whole site. We buy some impressions on each site.

We’ve got a standard impression definition. We need a standard for post-impression metrics, like view-through.

Format follies

Carson: We’re starting to see a lot of success around the sequencing of video, where you can watch one video and then go on to the next. If you put commercials within the stream, consumers don’t reject it as with pre-rolls.

Fay: Video is a highly effective advertising format. As long as consumers continue to accept pre-roll advertising, you can be sure that inventory will sell. Video performs on the direct marketing front as well as branding.

CPMs are driven by supply and demand.  If inventory goes up and demand relaxes, we may see those prices go down. For now, we justify the CPMs we pay based on our ability to target messages efficiently, and garner superior audienceresponsiveness (as compared to other forms of display).

Horan: We’ve been tracking online video for the last three years, specifically examining what type of online content consumers are looking for and what type of action they take after seeing an ad. Pre-roll had the greatest impact in terms of moving the needle on lifting awareness. A 30-second ad gives you more time to tell a story; that’s not to say that people preferred 30-second ads.

Kalehoff: It’s almost embarrassing just how arcane we still are in terms of mashing up video with advertising. When publishers or content owners don’t have a monopoly on good content, the threshold on the interruptive, coercive techniques don’t play out that well.

Schulman: Banners are more discouraging than encouraging to consumers. We’ve created this sort of ghetto landscape around an HTML publishing grid, which we place ads in, and sometimes those ads expand out over the content we want to read, and we have to ask ourselves, “Is this really compelling for consumers?”

Smith: There are so many forms of online video that are superior to pre-roll. But pre-roll is the proxy right now because it’s where the inventory is.

On the horizon

Carson: The ability to make commercials interactive will be key. You’ll see a lot of experimentation this year.

Fay: User-initiated will have to become a dominant form of video message delivery. We have to acknowledge that this is a better user experience, and it should also allow for broader message distribution (beyond pre-roll, which has become so dear). 

We are experimenting with the new You Tube/VideoEgg format, where a teaser ad pops up and the viewer can interrupt the video she is watching to watch the marketer’s video. The trick here is that the marketing video has to be worth watching. It needs to contend with the pure content that is being watched.

Kalehoff: Ads will be information rich. Advertising is going to offer really useful information and content.

Schulman: We’ll see overlays and other activation mechanisms that can take us from short-form to long-form messaging. There’s a general category of overlays that can be dynamically served over content, much the way TV networks right now use overlays to promote their shows.

Smith: A lot of experiments are going on with in-banner video, which is less expensive than pre-roll and more consumer-friendly. There are companies that embed banners over videos; also, there are overlays so if you’re watching a video, a banner will come up over the bottom that will give you opportunity to watch a commercial break.

Users and their content

Carson: A lot of advertisers want to be around premium quality experiences and there aren’t enough of those. There’s tons of inventory around user-generated content — which not a lot of advertisers want to be around, unless it’s packaged in a way that’s appropriate for them. Think of how vh1 would tackle “Best Week Ever.” We’ve been taking a lot of content from different places and presenting it with a view.

Schulman: I’m an advocate of mining social networks for insights. Toyota did this, with a site devoted to the reasons why people bought hybrids. Toyota mined social networks for conversations, then created the site for impact. That’s the smart way to participate in social networks.

News Corp. rushed to drop an ad model into MySpace that polluted the experience for users, whereas I see places like Facebook doing a much more thoughtful job about how brand marketers should appear.

I wouldn’t advise any company to be in Second Life, when 66 percent of the activity is sex. That being said, I would say that virtual worlds are definitely something to consider.

Smith: There’s a lot of different ways to get in a dialogue with consumers. They’re generating advertising and advertising ideas, whether through outsourcing, or just through contests like the Doritos Super Bowl ad. Also, consumer-generated content from companies like Current TV are proving to be successful.

Since Facebook has opened up their API, they’ve permitted companies like Slide (a widget-maker) to put apps up there and make money on their own apps. It’s taken a while for us to figure out how to make social networks work from an advertising standpoint because pure banners on MySpace don’t work as well as a sponsored page.