Tag Archives: Marketing and Advertising

April 16, 2014 · 8:39 am

Digital’s Dirty Little Secret

A few days ago, the media trades (especially the digital media trades) were filled with self-congratulatory fervor over  the

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achievement of a milestone.  This story from Cynopsis is typical:

For the first time, digital ad revenue is surpassing traditional TV revenue. According to new research from Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers, online advertising revenue climbed 17 percent to $42.8 billion in the U.S. last year, compared to the $40.1 billion generated from TV advertising. Although mobile ad spending increased by 17 percent to $7.1 billion, it was still just about 10% of the $74.5 billion cable and broadcast spending reached last year. Variety reports that digital video alone produced $3 billion in ad rev, while search reeled in 43 percent of the total online rev at $18.4 billion.

Woo hoo!  Way to go digital ad sellers – even you robotic ones.  The folks at Venture Beat did a really good overview of what has occurred and I’d encourage you to spend a minute and check it out.  Of course, there was one thing at the end that intrigued me:

Interestingly, performance-based pricing models are down slightly from the previous year. CPM, or cost per thousand views, was up slightly to 33 percent, while performance-based models like CPA (cost per acquisition) dipped slightly to 65 percent. CPM pricing is at its highest point since 2010, the IAB said.

Why is that of interest?  CPM pricing is impression based.  Now let’s look at digital advertising’s dirty little secret.  This is from the Wall Street Journal:

About 36% of all Web traffic is considered fake, the product of computers hijacked by viruses and programmed to visit sites, according to estimates cited recently by the Interactive Advertising Bureau trade group. So-called bot traffic cheats advertisers because marketers typically pay for ads whenever they are loaded in response to users visiting Web pages—regardless of whether the users are actual people.  The fraudsters erect sites with phony traffic and collect payments from advertisers through the middlemen who aggregate space across many sites and resell the space for most Web publishers.

In other words, between $6 billion and $18 billion is stolen every year in the US  because of ad fraud.  So while there is no question about the impact digital has had in the advertising landscape, it probably has a ways to go to catch broadcast TV.  The bad news is that a lot of that catching up involves breaking up criminal enterprises. The good news is that imagine how much better off the legitimate business will become with those ill-gotten gains redistributed to the legitimate players.

It’s always good news, bad news, isn’t it?

 

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April 7, 2014 · 9:59 am

Don’t Be An Idiot

Over the weekend, CBS and Turner tried an interesting experiment around the Final Four broadcast. They set up “homer” channels which have nothing to do with The Simpsons and everything to do with a particular team. Called TeamCasts, the channel would have announcers who openly rooted for a particular team and called them “us.” There was also a traditional, play it right down the middle broadcast available.
Apparently, not everyone got the message (or managed to decipher what the on-screen graphic meant that said it was a TeamCast) and Twitter filled up with complaints. Leave it to Charles Barkley to explain the problem:


Maybe a little harsh, but Chuck makes an excellent point, one we should remember.  People ARE idiots.  OK, not you and not me.  But there are idiots in the world.  Ever notice when you buy a cup of coffee that it says “this cup is filled with very hot liquid”?  That’s thanks to an idiot.  Ever see a piece of wrapped food that instructs the purchaser to “remove wrapper before consuming”?  Another idiot.

I don’t raise this to degrade my fellow humans.  I’m pointing it out because many of us assume the consumers are a lot smarter than they often demonstrate.  I am very aware of David Ogilvy‘s famous quote – “the consumer is not an idiot; she is your wife” and I agree with his point.  You can’t treat people like idiots.  You also cannot, however, assume that they’re a lot smarter than they are. They may not realize they have a problem that your product solves.  They may believe a competitor’s silly claim  that has no basis in fact because most people are too lazy to seek out the facts (just turn on one of the many news channels and you’ll be able to see hours of undocumented “facts”).

Don’t be an idiot.  As a marketer, strike the balance between respecting consumers and treating them as if they’re not really very bright.  As a consumer yourself, pay attention to facts and don’t go jumping on social media to proclaim your outrage when in fact you’re demonstrating ignorance.    Simple enough, right?

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April 3, 2014 · 11:51 am

You’re Already Behind

The IBM folks have been surveying Chief Marketing Officers for quite some time and the latest results of that survey have come out.

Image representing IBM as depicted in CrunchBase

Image via CrunchBase

You can read the study yourself by clicking through but I’d like to point out one data point that really got my attention.  It was this:

It’s questionable whether CMOs are moving fast enough to keep up with the speed at which the commercial landscape is evolving, or whether they need something akin to a turbo boost…The situation is, if anything, worse than it was when we completed our last Global CMO Study.  In 2011, 71 percent of the CMOs we interviewed told us they felt underprepared to deal with the data explosion. Today, a full 82 percent feel that way. Two-thirds of all CMOs also report that they’re not ready to cope with social media, which is only marginally less than was the case three years ago.

This is scary.  It used to be that marketers would pay for tons of research better to understand their customers.  The dream was a 360 degree view of the customer’s purchasing and media habits.  Today, that dream is very viable – it’s within a marketers grasp – but only if the marketers have structured their organizations and daily routines to include analytics.  I’m not just talking about web analytics but also point of sale information, real-time data from social media, and any other font of information which can be integrated to round out that view.  That seems to me to be common sense and yet less than a fifth of CMO’s feel ready to deal with all of this.  Put that in the context of over two-thirds of them acknowledging that digital channels will play a bigger role in their interactions with customers in the next three to five years and one concludes that the vast majority of companies are far behind where they need to be.

I’m not sure why this is.  Maybe it’s an investment issue – it’s hard to find dollars to invest on new things in almost every organization.  It might be a priority issue but the folks in charge seem to acknowledge the need.  Maybe it’s the life-cycle of the CMO, which has always been one of the shortest tenured positions in the “C” suite.  No matter what it is, it’s a tremendous opportunity for anyone who can get their company’s stuff together and leap ahead of their competitors.  Will that be you?

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