How To Shift Brand Dollars Online
ADOTAS EXCLUSIVE — The Internet is badly underdeveloped as a brand advertising medium, and it’s not just “a matter of time” before those premium dollars shift online in search of anything other than cheap fill. After over 10 years in the mainstream of American life, the Internet now accounts for over 25% of U.S. adult media attention, but less than 8% of brand spending. Blue-chip brand marketers recognize this as a dangerous gap, but the Internet has presented as too fragmented, too complicated, and, ironically, even too derivative of traditional media to attract a meaningful share of brand spending.
The Internet has developed as a direct-response medium for the simple reason that interactivity, the property that distinguishes the Internet from traditional media, makes direct-response marketing easy and powerful. Interactivity allows users to indicate their interests, either through search or some other telling online behavior, and allows marketers to present offers directly to those users. Not surprisingly, the biggest ad spenders on the Internet today are direct-response marketers. What is needed to shift brand dollars online is a unique ad proposition for the medium “upstream”—in the areas of awareness building and preference shaping that account for the bulk of media spending by large, sophisticated marketers.
The question for this medium is: how do you harness interactivity, and its output data, in a way that can be put to use for brand advertisers on a mass scale? Well, even the most sophisticated, deep-pocketed marketers are limited in their ability to reach their real targets in media. Marketers like P&G, Ford, and American Express define their target consumers richly, less on the basis of undifferentiating demographics, and more on the basis of the “soft” values, the mindsets and habits, that drive demand and choice. Auto manufacturers, for example, see huge differences in the values of “SUV people” and “minivan people,” though these two critical targets are demographically identical. Marketers can refine their pitches to their target segments by developing tailored creative messages, but they have had no way to accomplish the same level of strategic targeting in media, because the media define mass targets on the basis of demographics, and little else.
Brand marketers have traditionally navigated around this shortcoming in media by “triangulating” their way to softer audience attributes via context. However, that is difficult to do in an environment where the majority of ad impressions reside in a rapidly expanding “Long Tail” and have limited scale applications. According to JP Morgan, this problem will only intensify: the number of Web pages and ad impressions are expected to grow by 15% in 2008 alone. This fragmentation presents a real challenge for brand marketers: they need a way to assemble enough inventory to effectively fill their upper funnels with the right people to become buyers at some point in the future. Marketers quickly reach a point of diminishing returns on their energy invested in assembling that inventory contextually.
Ad technology has the potential to deliver on the fundamental brand targeting need and resolve brand marketers’ issues with the fragmentation and complexity of the Internet. It can identify mass audiences that have a common set of characteristics, including psychographics – and reach them, no matter where they are on the Internet.
Ad technology is creating new and relevant handles for buying and selling Internet media. This creates a unique set of opportunities for both buyers and sellers of online media. Yet, the open question remains, one which will define the future of the online landscape: what side of the house will ad technology end up with, the buyer or the seller?
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