On October 27th, 1994, something happened that would change the course of advertising, the internet and the way brands interacted with consumers forever: the banner ad was born. In those pioneer days, newspapers, billboards, television and even radio were still the ruling monarchs of the marketing world but with this technological innovation the age of digital had begun. Needless to say, at the time few could have predicted that a cheeky and pixelated AT&T ad on Hotwired (the world’s first commercial online magazine) asking “Have you ever clicked right here? You will!” would go on to fundamentally redraw the battle lines of the advertising world.
But it did. The rest, as they say, was history.
Fast forward to the present day and online advertising has grown to become the defining story of marketing in the 21st century with $2.6 billion in annual revenue in Canada by 2011 and well over that per quarter in the US by 2012. Suddenly, for the first time ever, advertisers could retroactively track how many times an ad had been viewed (impressions) and engaged with (click through rates) in a way no billboard or television spot could dream of matching. It was a dramatic transformation that seemed to suggest further, almost unimaginable innovations were looming expectantly on the horizon.
Despite these explosive beginnings, however, as of 2013 the online advertising industry in practice has fallen somewhat short of its theoretical potential. The industry predominantly relies on CPM (cost per thousand impressions) pricing and click through rates that were the novel breakthroughs of its mid-nineties origins. At the same time, engagement and performance (typically measured in CTRs) for the average display campaign have fallen below 1%. This has lead some advertisers to look to alternate metrics and opportunities – a sign that sentiment and understanding of the online space is in a productive state of flux.
To make this transformation a reality, however, there is a great deal that can be done. Ultimately it is asking the right (read: tough) questions that will transform online advertising beyond basic ads and into territory that is more engaging, more capable and more intelligent. Advertisers in particular have a great deal of power to promote this kind of shift, and with all that in mind, here’s what every media buyer should know in order to help move the online advertising industry forward.
1. It’s Time to Rethink Metrics and Embrace Technology
In reality, internet advertising need not be the realm of .1% performance and engagement. Better tracking, targeting and real time control of ad placements are key components of more effective advertising. The way to achieve all three is with technology.
As dramatic examples, conversion tracking, micro-targeting, programmatic buying and focused ROI measurement are increasingly important concepts for savvy advertisers. These powerful capabilities are not futuristic ideals taken from some futuristic science fiction novel (platforms like Yahoo!, Google and Facebook, to name but a few, have been offering them for years) and by making use of them, it’s likely more advertisers and media buyers would find significant increases in their ROI and overall campaign impact.
Technology like programmatic buying and real time bidding give media buyers and marketing managers the unprecedented (prior to online advertising) opportunity to choose who, when and how consumers see their advertising. Better still, ads can be micro-optimized on the fly as data and performance metrics pour in. Bids and budgets can be adjusted, targeting keywords refined, and creatives rotated as needed. If a particular ad, site, or publisher isn’t showing results – it can be easily weeded out. On a fundamental level the very value of a click itself can be reconsidered. At the end of the day, after all, there is far more value to an online advertisement than just whether or not someone clicks and the CTR metric in general doesn’t do justice to that impact.
2. Context Matters More Than Ever
Rethinking the way ads are purchased, monitored and executed, though, is just the tip of the iceberg. What also holds back online marketing is that too little is understood, even at this stage, about the power of context and placement in determining the impact of a digital ad.
In a recent Yahoo! report, for example, research found that consumer opinions about (and reactions to) identical creatives varied dramatically depending on the nature of the site they were viewed on. Nearly half of the research’s respondents were able to recall seeing an ad when browsing a publisher they ranked as “high quality” (The Globe & Mail, Yahoo!, TSN) versus 30% who could recall seeing the same ad on a lower quality site (Reddit, The Sun UK, Hockey Buzz). Furthermore, those who saw the ad on a site consistently ranked as high quality were far more likely to accurately recall (and react favourably to) the brands and products that were being advertised – compelling evidence that, when all is said and done, an impression “isn’t just an impression.”
What’s critical about revelations like these is that they contradict the line of thinking that, for well over a decade, has put value in the pageview and the impression above all else when it comes to the online advertising game. It’s become more and more evident that the age of pages with low quality content, packed to the brim with ad after ad, are not the answer. Fewer ads, but placed in the right places (both contextually and in close proximity to high quality, trusted content) is where the impact advertisers desire rests.
3. Online, the Creative Possibilities are Infinite
Making the most of online advertising technology and understanding contextual value is not all that advertisers need to do in order to get the industry back on track however. As a case in point Nick Drew, Research Manager at Yahoo! Canada, believes that the creativity behind an online ad is also of paramount importance. “You can’t solve a bad ad experience by just changing the environment. The same goes for technology. Programmatic buying is a step in the right direction but it’s not a panacea.”
As examples of advertising that made engagement and interactivity (not just clicks and impressions) the focus, Drew cited the viral Chipotle ”Back to the Start” Ad and the revolutionary Tipp-Ex “A Hunter Shoots a Bear” campaign among others. “You watch ads like these and you think to yourself ‘ that was so compelling, I could watch that again’ and ultimately that is the kind of advertising people will share and pass on to their friends. It is also the kind of experience that makes you remember both it and the brand in question years later. The best internet advertising makes you realize that the internet isn’t just a newspaper online.
Needless to say, it’s the best examples of what can be done online that demonstrate just how much the platform has to offer advertisers willing to go beyond the limitations of its origins.
Media buyers, brands and advertisers of the world, online advertising is more than the sum of its parts. When it comes to advertising online more compellingly and effectively, the technology, research wisdom and innovative capacity at your disposal is immense. And though you may not know it, the power to push the industry forward from the outdated solutions and metrics of the nineties rests in your hands. Asking the right questions and demanding more transparency, control and creativity out of your advertising will inspire change. We need no longer be satisfied with the .1% or the static banner image – not in 2013 and certainly not on a frontier that offers the limitless possibility to astonish and amaze.
The online frontier is out there waiting and a new breed of media buyer is poised to make the most of it.
To reserve a seat for this highly anticipated session, click here.