The End Of The 'Cheeseburger Diet' For Online Industry

Andre Agassi is the only player in history to win all four Grand Slam Majors and an Olympic Grand Slam. It's difficult to remember now, but in no small part due to a brash attitude and an infamous "cheeseburger" diet, Agassi had at one time slipped to the bottom of the tennis rankings. However, once at the bottom, he put in place a rigorous training regimen that not only helped him get back to the top, but also remain there for years to come.

Today, the online advertising industry can learn from Agassi's example.

Starved of options for so many years, we have deployed advertising campaigns bloated with unhealthy CPM and click-through metrics, the cheeseburgers of the advertising world. These metrics ran counter to the inherent promise of online advertising of being able to deliver lean, mean and measurable advertising campaigns.

But now that our economy has hit rock bottom, it's time we put in place measures that will not only help us survive this downturn but also help us thrive in better times. In my mind, 2009 offers the advertising industry this very opportunity. These are the top three trends for 2009 that will help us deliver on the promise of online advertising:



1.More ROI: The last economic downturn saw a significant slowdown in advertising purchased on CPM pricing models. This time around, we will see the natural progression of that slowdown and witness the actual demise of CPM advertising. In a lean economy, when marketing dollars are at a luxury, advertisers simply cannot afford to continue paying for wasted and unseen impressions. Marketing dollars will shift towards advertising that offer advertisers a higher return on investment.

CPC pricing models will undoubtedly benefit from the advertiser quest for increased ROI, but not to the degree that many of us anticipate. For one, search engine keywords are getting increasingly expensive. A 2007 Doubleclick Performics Search trends Report shows that the cost per keyword increased by 33% and the cost per click rose by as much as 55%. The rising click-fraud rate is another problem. According to Click Forensics, the overall click fraud rate for the pay-per-click (PPC) industry was up 15% over 2006 levels.

When advertisers ask themselves the question "Are my search dollars giving me the returns I need?" the answer they are most likely to come up with is "Somewhat". To get more ROI, there will be an increased investment against Cost-per-Lead (CPL) advertising--but not just any old CPL advertising.

2.The growth of transparent lead generation: Traditionally, online lead generation has largely been associated with the sales leads market. Sales leads are generic leads generated on the basis of demographic criteria such as FICO score, income, age, HHI, etc. They are often resold to multiple advertisers. In keeping with the shift with the downturn in the real estate, insurance and mortgage industries in the broader economy at large, there will be a steep decline in the sales leads market.

That said, there will be an increase in the marketing leads growth segment of the lead generation market. Marketing lead campaigns enable advertisers to generate leads that are specific and unique to their brand. Marketing leads are never resold.

Marketing lead campaigns will increase sharply in 2009 as a direct result of increased transparency in the lead generation market. Advertisers will know exactly where their leads are coming from. They will be able to run offers in environments that don't compromise their brand integrity. Lastly, they will be able to optimize campaigns by mapping leads to their sources and increase the return on investment.

What will advertisers do with these marketing leads? They will use them to deploy "a new kind of branding" campaigns.

3.A new kind of branding: The problem with traditional display campaigns is that they seldom give any real insight into branding metrics such as awareness, recognition and favorability. Nor do they leverage the unique capability of the Internet, a medium that allows consumers to express their personality through their brand preferences.

But times change. As evidenced by the recent Mercedes Benz community site, Dell Ideastorm or the Starbucks My Ideas forum, marketers are building vehicles through which they can engage their audience with relevant branding messages.

Advertisers will populate these community sites and newsletters with users from their in-house databases. To combat attrition, they will have to grow their databases in a cost-effective manner. This is where high ROI advertising (such as marketing lead campaigns) will play a prominent role.

There will undoubtedly be more tactical shifts in the industry landscape. However, the three strategic imperatives listed above will drive the changes our industry will need to make to not only survive the downturn, but also thrive during better times.

1 comment about "The End Of The 'Cheeseburger Diet' For Online Industry".
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  1. Megan Leap from MarketingProfs, February 13, 2009 at 8:43 p.m.

    Zephrin, I'm lovin' this article (I couldn't resist). There's no better time to improve the health & efficiency of online marketing results.

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