Floggers and fakevertisers becoming friendless

1
428

chain.jpgDM CONFIDENTIAL — In some ways we lament the recent decision by Yahoo to ban all ads that either directly or indirectly point to non-branded diet and teeth continuity programs, which means this could be the beginning of the end for the various Rachel Ray’s diet blogs and Mom’s Teeth Journal.

So serious is Yahoo that when a network snuck in by accident or on purpose an ad for a blog, Yahoo responded by pulling their ad tags completely. As we mentioned in another article, Yahoo may not have a huge role in search, but they do have one in display, both on their own inventory and their operated sites. Floggers and other fakevertisers survived when Google and Facebook pulled the plug, but the decision by Yahoo could have far ranging impacts as others who service display inventory feel pressured to follow suit. Even in the worst case scenrio, though, this will certainly not signal the end, but it will mean a permanent downward adjustment in the overall revenues of the sector.

We could argue many factors led to this decision by Yahoo. Chances are, though, that it happened by accident, that a friend or relative of someone very senior signed up for the one of the programs. That’s usually how it happens, because those with the power to create such change rarely see the high volume underbelly. But they are decisive people and no doubt became outraged when they saw the ad in question.

This is the same person that generally sees the world in black or white, for whom almost any type of direct marketing is bad, the same type of person that doesn’t understand the area of gray they use when needed for their own spin. But, life is full of gray, and it either is obvious or working behind the scenes. In our world, it involves the tactics use to entice a user to do what you want. It’s too bad that there is no money to be made in world peace, because if the floggers got together to user their skills for social change, almost anything could happen. Instead we end up in a cat and mouse game of pushing the lines. Direct marketing isn’t bad. It just isn’t cheap.

Pay to Play

One of the questions that remains hypothetical for now is can you make an offer that doesn’t deceive somewhat and scales. It’s hypothetical for now because in our business it costs money to make money. The focus on how much did I make off of this spend quickly changes how one thinks. It’s no longer about is this really good and what they might need; it becomes all about what we need to make it work.

That doesn’t mean a bad user experience is necessary, but it often implies one that wouldn’t pass the friend test. Quite simply, would you recommend the product / service / site to a friend. It’s not the same as recommending your business “friends” become fans of the offer on Facebook. Floggers are far from the only ones here. Other much more benign (no credit card, no continuity programs) examples exist. They get less attention because they use more subtle methods (no implied celebrity endorsment, blog format, news format, etc). They pay to play but they tend to promote things not as emotional, like refinance.

Very few people actively think about refinancing their home. As a classic run of network campaign, lots of people are potential targets and that they don’t need to be in-market to convert. It also means that companies must do the equivalent of the digital paparazzi and try to get their attention. And when they get their attention they can’t say, “Hey fill out a form so you can be bombarded by calls.”

Instead, they talk about rates being low and how much people can save. People who go through the process think that the end of the form will give them the information they want, i.e. their new payment. It doesn’t…only phone calls to sell them on one. This isn’t all bad, but for the average user who was just window shopping it will be a bad experience. Given what we know now about the mortgage market, perhaps refinance isn’t the best example, but the process of using a hook and delivering an experience not quite up to the initial expectation applies across so many areas where pay to play is necessary. People just don’t really want what is being offered, but with some encouragement they can be led into the process.

Pay for Play

The alternative in all of this is to try and create something that users like and grows organically. What has yet to be reconciled is how to do that with the same cost infrastructure of the direct marketers. So many of the sites that have gained a lot of attention and loyal users without spending money on advertising have had to raise money to do it. They are a long-term gamble.

The reason people enter our space is to avoid that long-term gamble. And while the traffic might be free, the leaders in this free traffic, like Zillow, have either raised an enormous amount of money and/or spent a tremendous amount on PR. As enticing as they are, these models are not just not for the average or even above average performance marketer. They produce the biggest exits, often solve some real problems, and make easy descriptions when telling others what you do. In that sense they are great, but it is amazing to see just how little overlap we see between the world of performance marketing and the world of property creation. The only exception are some of the Facebook apps. They are direct response and direct payment machines. It still meant trying to craft a consumer facing entity first and most began before anyone had figured out the monetization. It’s a different type of risk but still risk.

Happy Medium

There does seem to be an achievable balance for those looking to not quite go into an area that could easily get banned yet not start something whose prospects of making money are distant and indirect. The bad news, some work is required. It won’t be as easy as just copying a site and going. It will require a combination of disciplines – page creation and buying, not just one or the other.

What it entails is not a particular vertical or method. It works for lead gen just as it can work for continuity. And, the concept itself is nothing new – add value. You don’t have to add a lot but you will need to combine to sets of data that don’t exist on their own. Zillow is a map with immense data. You don’t have to do that much data, but you would be surprised and how many data sets aren’t connected. You wouldn’t have thought there could be room in online education, but for one company it meant focusing on a type of schools that others had overlooked.

There are more than enough ways to monetize traffic, but there aren’t a lot of people willing to do a little research and put pieces together to make it more usable. The money won’t be as quick but it will last a lot longer. Best of all you won’t have to worry about a friend or relative accidentally signing-up.

Courtesy of DM Confidential editor

1 COMMENT

  1. Great article. We have been having this very discussion internally at AdReady. I think Classmates.com fits your “Happy Medium” scenario. They were a VC funded company, building a website that drove value, while using scalable marketing techniques that drove significant revenue. They will spend millions on marketing in a year and generate hundreds of millions of dollars in subscription revenue.

    I think this oppotunity is available to thousands of businesses. And I think getting marketers into this Happy Medium is one of the things that will allow display advertising to outgrow search advertising in the next 5 years.

    Take for example (this completely made up scenario) where an advertiser, say Jenny Craig, marketed their blog and their monthly subscription using some of the same (within reason) best practices these other diet affiliates have been doing. My guess is that ad would perform signicantly better than the average Jenny Craig ad and Yahoo! would be extremely excited to have them as a long-term advertiser.

    If we as marketers can continue to identify best practices (no matter who the advertiser), keep an open mind when testing, believe in the data the tests produce and sincerely optimize to real goals we will be able to create campaigns at scale in display.

LEAVE A REPLY

Please enter your comment!
Please enter your name here