Let’s lift the hood and take a closer look on what all this buzz is really about…

RTB: Too complicated and expensive just to eventually figure out that you were able to increase your CPM by 100% — but only on 1% of your media. What will be done with the rest? The huge number of DTPSs just give up on 99% of the media. It will take a while until the real benefit can be extracted.

DSP: Isn’t it just another word for advertiser-centric ad network? How many of them really bring something to the table that is different from what have been doing for years? That is different from sophisticated media buying, that can’t even aggregate reporting data from more than one platform, be it in most cases, RMX.

BT: As my dear friend Damian told me two or three years ago, it is good for marketing but not for making money. Yes, I know it will eventually get there, considering it successfully crosses the PII/NPII obstacle.

LBA: How many McDonalds do we have out there that can benefit from LBA? I would again tag it under good for marketing — and maybe some parking garages in congested metropolitan area. Oh yes, Starbucks is also a potential client….

I know it is easy to say that nothing is happening and to bitch all the time about why not this and why not that and why for god’s sake? But we don’t have time to innovate and think because we are too busy making money.

All I am saying is let’s go back to reasonable proportions. Business, like life, is all about balance. Let us concentrate on delivering real value to our clients and partners and, yes, make some money, create jobs and run healthy, good-to-work-for and profitable companies.

Creating buzz and PR are very important, especially if we are building companies that are good to work for, but definitely not all are.

So after running strategic sessions and brain storming, looking at different technologies and even seriously considering investing in one of the very promising startups around us, we have decided to focus on delivering value to our partners from both ends, continuing to build and expand our organization organically and fund our technology development and expansion from our cash flow.

Still there are challenges that need to be addressed, better sooner than later,  and there are surely opportunities that need not be overlooked. Our job is to be able to do them both: first, and foremost, continue building our value offering and our profitable organizations; and second, make sure we are taking risks and capitalizing on opportunities.

Focus, focus, focus.

Not really. Localization is the key, and success in the global marketplace requires an in-depth understanding of localization that goes beyond language and linguistic nuances.

It includes cultural differences, local regulations, currencies and payment methods… and these are only the tip of a very large iceberg that involves myriad subtle distinctions and unfamiliar parameters that can make or break an international advertising campaign.

The greatest challenge for advertisers is that almost everything they have learned about their home markets — what works, what doesn’t and why; how to approach the target audience; what to offer them; how to design the call to action –– all of this hard-won knowledge is, for the most part, irrelevant in other regions of the world.

Moreover, a new layer of optimization is required which will impact on all the existing parameters and will therefore influence the entire course of the campaign. Without properly building and implementing this critical layer, it is all too easy to miss those lucrative opportunities.

Click ‘Aqui’ or Click ‘Here’

Message translations must utilize relevant jargon and appropriate buzz words — and be fine-tuned to language nuances and cultural preferences — to deliver a spot-on message that generates the sought-after response. Similarly, when selecting a prize, advertisers had better be sure that the specific model actually works in the target country!

The complexities inherent in targeting an international audience require a lot more than just reaching them with translated messages. Local regulations -– as well as creative and technical requirements of local service providers — must be taken into account. It’s not enough to prepare a great landing page that presents savvy marketing content and format; if it doesn’t comply with the technical guidelines of the local infrastructure or service provider, it may not even open when potential customers click on it!

Additional Optimization Layer for the Value Chain

To successfully lead local audiences to the desired action, smart, subtle and sophisticated optimization is required across all campaign parameters, guided every step of the way by the mantra, “Different strokes for different folks!” From promotional offers to messaging, placement, creative and conversion funnels, a perfect blend must be created that will maximize bottom-line results.

For example, an incentivized lead generation campaign is running in Germany, France and the United Kingdom. Which prize will work best?

This is, in fact, quite a complex issue. Since products have varying value and emotional associations from country to country, correct selection demands extensive knowledge of local attitudes.

In the United Kingdom, for example, an Audi might be considered the perfect draw. In France, cars can also work well, but almost any car will do. In Germany, however, an iPhone would be a stronger incentive, since winning a car sweepstakes is considered unrealistic and would therefore not attract the audience.

Rule of thumb: the selection of the promotional offer should always be region-based; in some countries, a particular product will generate high ROI, while in others, the same offer may not work at all.

The above example is a relatively simple one. Just imagine the complexities involved when dealing with multiple markets that are distant and diverse geographically, linguistically and demographically.

No less important than the prize is the selection of media and placement, a task that involves much more than locating publishers to run specific campaigns. In some regions, it is crucial to run a campaign only on “safe” websites that are seen as respectable and reliable. And in certain parts of the world, color plays a significant role, often equal to seemingly more critical issues.

Advertisers must also carefully consider their sales approach. Should a hard sell or a more sophisticated tactic be implemented?

Help Is Out There

How can advertisers overcome these multiple and seemingly insurmountable challenges? Don’t despair. Help is available.

One solution is to work with local partners in each targeted region. They know the lay of the land, understand the subtleties and are experts at fine-tuning.

The problem is that finding the right partners is a complex and time-consuming process that needs to be done separately for each target market. Though this model can work exceptionally well for some advertisers — aggregators and ad networks may be the answer for others. This channel enables you to reach diverse media, links and markets with just one click.

Like local partners, aggregators are experienced in acquiring local media and can manage the entire value chain and relevant localizations. Familiar with cultural differences, they are adept at targeting specific market segments — e.g., differentiating language and nuance between Mexican Spanish and the Spanish spoken in Spain, or among Spanish dialects across the various regions in Spain.

Whether you decide to build a network of local partners, work with aggregators or a combination of the two, these localization experts will maximize your success and minimize your risks — while you capitalize on the vast opportunities awaiting you in the international market.

A current study by the Online Publishers Association (OPA) — “Improving Ad Performance Online: The Impact of Advertising on Branded Content Sites,” determined that ads on branded-content Web sites are more effective than non-branded sites and have greater attraction and influence on audiences.

With regards to the question of advertising on branded sites, it would appear that there has been little discussion of the key criteria used to judge success. This is the ROI.

Context in this debate is critical. Branded related benefits such as favorability and purchase intent are important, but, at the end of the day, they need to contribute, or be translated into actual purchases to realize their value to the advertiser.

A Results-Based approach to online advertising would suggest that if dollars spent on advertising are not directly translated into clear and measurable sales, then nothing useful is being done. Sales and profitability is and always will be the only criteria for success, so getting the best possible ROI should be at the forefront of any business decision.

The focus on measurement, and understanding that everything is, and should be, measured, makes the results-based approach so much more powerful than conventional online advertising models – starting with clicks, leads, registrations and even offline upgrades and up sell opportunities. This way, every advertising dollar is optimized intelligently. So before, during and, of course, after the campaign, advertisers have a real handle on the value of every conversion and know how much revenue in specific market segments can be attributed to the campaign.
Armed with that, ROI objectives are clearly in sight.

This approach is based on the fundamental understanding and definition of the real value that a customer, lead or click represents, that means setting a realistic “price tag” on the desired result. At the same time, we must bear in mind that this price tag, derived from the true customer value, varies across geographical regions, market segments, media types and even promotional offers.

In this regard, the metrics for campaign success are:

1. Actual Cost (CPM / CPC rates)
2. Conversion rates (and cost of conversion)
3. Customer’s value – from the said media

Higher advertising costs on branded content sites/channels are acceptable, but only if the added value they bring is relatively or substantially higher, either in conversion rates for the same acquisition cost, or in customer value, justifying higher customer acquisition cost.

Branded related metrics such as brand favorability, affinity and a like; at the most they go is to the buying intentions of customers –- which are difficult to be tied up to measurable results.

What is absent from this debate is the data that proves how smaller amounts of investment can realize high profits when allocating them effectively to running on non-branded site, ad networks and portals. Alternatively, we need supporting data that shows spending larger amounts on branded Web properties yield higher ROI.

And while we’re preparing a wish list … Wouldn’t you like to stop shooting in the dark with banner ad campaigns that, when over, you only know approximately how many random clicks it generated? How about getting a better handle on ROI, or knowing how much revenue in certain market segments can be attributed to the campaign? Or even better yet, how would you like to be able to analyze price sensitivity in different market segments based on online information while the campaign is going on?

If you can answer the first question, I believe the rest of your wish list can come true. There’s an exciting new paradigm in the world of digital marketing: integrated results-based online advertising that is based on answering one fundamental question: how much are you willing to pay for the desired result, whatever it may be –- a new lead, customer, sale, click or registration? The definition of this “acquisition cost target,” which is derived from an overall “customer value,” is the foundation of intelligent online advertising campaigns that consistently “learn” throughout the entire conversion cycle. Integrated results-based online advertising is also flexible enough to allow the fundamental definitions themselves to change along the way, based on different customer-value data from different market segments, media types and conversion processes.

Optimize every step of the way

While the results-based information is valuable in and of itself, it really only gets us part of the way there. The trick is to be able to optimize the data and apply it intelligently based on real-time feedback that is gleaned from the conversion process itself. This kind of optimized campaign allows advertisers to measure and analyze each and every component of the conversion process on-the-fly and apply sensitivity analysis to fine-tune the matrix as they go along. This is what makes the integrated results-based approach so much more powerful than conventional online advertising models. For instance, we can alter keywords, shift ads to better-performing sites, perfect e-mail and landing page texts, and enhance banner designs as we go along – based on the measurable results received from the different advertising platforms. This is the way to effectively squeeze every possible benefit from every dollar our clients spend.

Integration: backwards and forwards

It’s important to remember that despite this robust information-gathering, results-based online advertising is only as good as the breadth of the online tools available, and how they are leveraged together. Results need to be integrated, as well as optimized, across the entire range of online advertising platforms and tools at our disposal, such as Ad networks, search engine marketing and email campaigns.
Knowledge gained in any one of these platforms must immediately be made available to current ongoing campaigns in other platforms and rapidly optimized to guarantee continuously improved results.

Integrating all your marketing assets

The next step is full integration with existing CRM system, turning the campaign into a sophisticated marketing tool that allows you to target market segments, such as discounts to first-time buyers –opening a plethora of cross-sell opportunities. Having this range of tools at your disposal gives you total control of the sales cycle -– from the very first impression all the way to the desired conversion. Control that is always focused on positive ROI.

With this dynamic monitoring, analysis and optimization, advertisers and publishers gain new insight into all their online advertising activities. Knowledge gained from any one platform is immediately made available to ongoing campaigns on the other platforms and rapidly optimized to guarantee continuously improved results.

So when you choose enter the world of online marketing, or want to test new methods in existing online campaign, think beyond siloed banner ads, SEM and e-mail campaigns. Put them all together in an integrated, result-based approach. The sum is far greater than the parts. And you will see measurable results that translate into bottom-line benefits.

So in the end, you know exactly how much it costs to sell the doggie in the window … for exactly what it’s worth. That’s simply better business.