Commentary
Scale Vs. Sizzle: The Online Ad Sales Conundrum
- by Tod Sacerdoti , August 25, 2010
Online advertising is suffering from a fundamental flaw in its sales process. Put simply, products with sizzle sell but rarely scale. So what do I mean by "sizzle"? In the early days of rich media, it was creative like Superman flying across the page or pop-up research studies, and today it is interactive pre-roll or full-page interactive ads.
I call this the scale vs. sizzle conundrum and it is causing a wide-range of problems for clients trying to reach measurable campaign objectives. Let's take a closer look at the problems inherent in this scenario.
Problem #1 - Under-Investing In What Works
I can't even count the number of times I've heard a media buyer ask, "Do you have any new products to discuss?" Yet I can count on one hand the number of times a media buyer has said to me, "Why don't you come in and tell me what actually works."
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As a result, media sales reps are trained to focus the majority of every conversation on what's new, because that's what sells, and ultimately, clients end up massively underinvested in the media and ad products that actually drive their objectives forward.
Problem #2 - Creating the Wrong Incentives For Media Vendors
A secondary effect of clients' under-investing in what works is that media vendors tend to neglect their capabilities in those same areas. There are dozens of examples of fundamental technology problems, such as the need for better support for research studies or broader support for advanced rich media delivery that could be solved by media vendors if they invested properly.
Unfortunately, media vendors know all too well that solving these problems won't increase their revenue because the buyers are focused on the next big thing. As a result, the limited portion of the clients' budget that ends up running towards media and ad units that actually perform doesn't scale as well as it could have had the media vendors invested correctly.
Problem #3 - Overall Budget Misallocation
If you look at the entire media budget allocation for a large online ad campaign, you will often see glaring examples of this problem. Sometimes a large portion of the media budget is allocated to a small group of individual publishers because they execute "custom work" that requires the client to spend a minimum amount.
While at times custom work is impactful and high value, such as the YouTube Expendables promo featuring Sylvestor Stallone, it is more often low-value, low-level creative execution that was created purely to extract ad dollars from the advertiser. Classic examples of low-value custom work include rich media ad creation, custom video content, page skinning or brand integration into a stock game / article or section of a site.
It is important to note that the scale vs. sizzle problem doesn't exist in search or any other direct-response based medium, because those media buyers don't get promoted for spending money on things that are new unless they drive sales. On the contrary, spending a lot of money on media that doesn't work will get you fired.
The solution to scale vs. sizzle problem is complicated. First, clients should clearly tell their agency partners what amount of time, money and energy should spent on products that don't measurably impact their campaign objectives. Second, clients should conduct two media plans, one with the agency-desired sizzle and one without, so that they can compare the media misallocations appearing as a result of the focus on sizzle. Lastly, clients should demand consistent campaign measurement to ensure that subsequent media plans benefit from lessons learned -- and integrate the few sizzle-based ideas that actually work.
Video = Sizzle
Ad Networks = Scale
This article = Irony.
How do you explain Tremor Media and ScanScout offering interactive pre-roll at tremendous scale?
I don't disagree with your summation of the problems, or the inherent flaw in the sales process, but I'd take umbrage with the premise that sizzle can't scale and be a worthwhile investment at the same time.
Yeah, Tod...I would have to call The Digital Hobo's 'umbrage', and raise with about 4-5 others. I'm pretty sure that is not what you intended here, being that your firm itself is on one side of that Video equation. Having followed your work, and your firm's many successes, you must have a frame of reference that perhaps is not imparted above [to at least some of us?]
Insisting that Brand ad programs be compared to Search is…interesting. Not sure why you’d do that. [Plenty of dollars are ‘wasted’ every year after all in Search, too; it’s called ‘iteration’ or ‘testing’.] And yes, Brand ads are taking on more 'performance' elements every week. But David Ogilvy comes to mind once again, with his famous "50%" maxim of old.
Also, you seem to overlook the very key point that both Agency’s [& their Clients] see how much change is taking place. Can you or anyone can actually say that ‘the new thing’ will NOT be something that works? This is a time where change, and success, can very definitely occur ‘at the margins’ which you amazingly discount here totally. By your assertion, the recent Old Spice program [as just one] would never have been done…and that's a video program!
The ‘low-value’ dismissal of yours can also be seen a few ways.
Are you REALLY saying that key sites, and key Brands, and key Agency’s, are buying/selling ‘low-cost, low-value’ Video product? Funny, I can’t imagine a Gatorade putting “junk” onto an ESPN, for example. Hardly. Isn’t that also undercutting what your company does?
If Charlie & his sales teams are going to sell these campaigns going forward, this jumps out large, and I am curious as to what the apoplexy level would be at the moment over there, the way I am reading this.
More, the “value” in a re-skin may not be in the ‘cost’ area for production, as your article implies [to me, anyway]. Rather, the dollars being ‘unwittingly extracted’ are to no doubt reach thousands or millions of visitors that are deemed to be the appropriate audience for that program.
But even so...with the many, many of these still being done, are you discounting both the clients…and their agencies…buying into these? Most that I meet, and sell to these days, are far smarter than they would be given credit for here, as I read this.
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The article is thought-provoking, to say the least, which makes it a good one. It's the type that I'd rather see more of, than less. I'd love to hear more from you about this.