Interactive advertising backslapping not warranted?
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CEO at Econsultancy
06 August 2004 11:42am
The recent IAB / PwC figures show online advertising spend up 80% for 2003, compared to 2002, and worth £353.6m. This has been cause of much media coverage and backslapping in the new media advertising world.
I’m pleased if this helps raise the profile of online as an advertising medium but I do wonder whether in fact this ’good’ news isn’t, in fact, a little disappointing, for a number of reasons:
1. Paid Search
By far the biggest area of growth in online ad spend is paid search, taking over 40% of online ad spend, more than any other area. Now I know that paid search is a form of advertising but I can’t help wondering whether this isn’t quite ’advertising’ as we traditionally understand it and therefore shouldn’t really count towards the success of online advertising?
When I think of direct marketing I think of marketing that is pushed / directed at an individual. When I think of advertising I think of messaging that is pushed at a variously-tightly-targeted customer segment(s). In my mind ’advertising’ is also something that typically involves a degree of ’creativity’ and complexity and production requirements - which is why agencies are so often used.
Paid search marketing is based on the pull (i.e. search) of an individual; it does not (yet) require high levels of creativity; there aren’t barriers to entry in terms of ad production requirements. Yes, it is advertising, but I think needs to be considered separately.
If anything, the rise of paid search points to a comparative failing in ’online advertising’ as we usually think of it (i.e. banners, rich media, sponsorships, classifieds etc.). Perhaps the rise in paid search is because people know this works whereas they don’t have faith in other forms of online advertising?
2. Ad agencies attitude
It continues to disappoint and frustrate me that ’traditional’ ad agencies aren’t taking up online more seriously. Paid search is sure to continue to grow, but as is widely recognised, if other forms of online advertising are to continue to grow then online needs to win over brand spend that is largely in the hands of these agencies. So why aren’t they more active?
It is, of course, impossible to generalise about these things but in my experience the ’new media’ types are all in favour of learning about other media, and buy into the "multi-channel marketing mix" argument. Although they are passionate about online, they are prepared to recognise it is only one channel among many and so are eager to learn from those with ’traditional’ skills. It doesn’t seem to be the case the other way round though? Are the majority of ’traditional’ advertising folk out there hungry to embrace this exciting new medium? It doesn’t seem so. But why not?
3. New media - is it different or not?
Reading the new media trade press (for example Michael Nutley’s NMA Leaders), it seems that one week it is important that we in new media talk of ourselves, and what we do, in as similar a way as possible to other media so that other people can understand what on earth we’re talking about; the next week we should be extolling how much better, and how different, new media is.
Well, which is it? Is it time that we stopped trying to "dumb down" and go hell for leather in championing our medium as the best? Perhaps a bit of competition, and a bit of pride in our medium, wouldn’t be a bad thing? If the ad world can’t understand it then tough, they’ll have to learn one day when no-one's watching TV ads any more?
OK, so I’m being deliberately provocative, but it seems to me that underneath all the latest figures there really hasn’t been that much progress in online advertising if you exclude paid search.
The way that the latest cross-media studies are peddled (usually an FMCG brand as they’re the ones with the big ad money to spend) feels somehow faintly desperate? A little like those case studies about how great interactive TV is when all around are abandoning their iTV sites through lack of take up?
My sense is that big brands, and their ad agencies, still just aren’t that convinced by online. To be fair, passionate as I may be about online, I’m not entirely convinced by what the web could do for my toothpaste brand so perhaps those planners know what they’re doing after all?
CEO at Web Diversity Limited
07 August 2004 13:17pm
Look at an onion, it has many layers, peel back one and the onion looks different.
Take crime figures. It's not very re-assuring to someone who has just been held at knifepoint and robbed that the figures for violent crime last year are down.
Square pegs and round holes.
If you visit Google and type http://www.google.com/search?hl=en&lr=&ie=UTF-8&oi=defmore&q=define:advertising you get various definitions of "advertising".
Most of them indicate that it is the "non-personal" communication of advertising so by definition you are right that paid search is pull technology and not push so shouldn't be classed as advertising.
I do take slight umbrage to your statement that paid search doesn't take much creativity. If anything due to it's transparency and accountability it needs far more creativity because there are few hiding places if you get it wrong. Plus you try to get a fantastic message about great products and services across in 95 characters or less, as you do in Google Adwords.
I've sat in many a meeting historically with an ad exec. where they are trying to explain poor numbers and saying how good it had been for the "brand". That is baloney. Paid search is doing so well because there is that transparency and accountability.
It's because the way people do things is changing that search is benefitting. More people want to communicate on the move, and those agencies that adopt and adapt will be the one's justified to slap backs and whoop and holler. It's not about spending less, it's about spending more sensibly.
My paper based Yellow Pages went straight in the bin when it arrived this year because I have broadband at home, leased line at work, a Vodafone Connect card for my laptop and if I am desperate 118500 stored in my mobile. Why would I want to look at something that is out of date before it arrives with me? (Hundreds of business go bust every day).
The definition of insanity is to do the same thing over and over and expect to get different results.
If you look at mobile, the sale of the 3G licenses was on the face of it the biggest white elephant out there, but slowly the adoption rate is picking up. It's not the industries that the pundits expected that have driven the new demand, it is the younger, B2C, web savvy people and not businesses that are driving the take-up.
SMS, picture messaging, local search will be the services demanded of mobile in the years to come. iTV dead? I don't think so, but the way in which it is used will need to change. The concept is still sound.
I can't wait to press my red button for the BBC interactive for the upcoming Olympics, I will watch what I want, when I want. Makes me sound egotistical, but ultimately we all know what we like and dislike, and paid search gives people the choice to pull what they want, at a time to suit them. That has been instrumental in the success and I am surprised how few big agencies actually "got" that and didn't dine out on it.
I think you nailed the ad agencies attitude on the head.
Clients don't know what they don't know. If they rely on the agency to tell or advise where they should spend their money for the best bang for the buck, then if search doesn't figure in that mix then they are ill advised.
You can't argue the growth figures. With the transparency of paid search results if it wasn't working you wouldn't continue to spend money on it.
Almost every client we have is spending and making proportionately more month on month inspite of it becoming a more competitive arena. Some can't spend more even though they see the benefit because they have committed to other less successful media spends, but that will change.
Are you asking is there money in it for the agency or the client?
If the agency is looking at it from WIIFM then that tells you why it's not working. The margins are tighter than other forms of "creative" advertising, but success breeds success and there is plenty of money to be made (client/agency/supplier/publisher) for those that understand how everyone can get their just rewards.
Kudos and awards would be good, but we are looking after our clients, and kudos from them is much more rewarding. I can't pay my staff with crystal awards.
Ad agencies really don't "get" search. Sweeping statement..... maybe. This is because there is no historical reference, few case studies and unless you are in it all the time, why would you get it.
The numbers are not that surprising. The figures for 2004 should be even more impressive, so at what point do we put the pillow down our back so the back slaps don't hurt?
iTV will have it's day. When the payment method and delivery mechanism changes, and it dovetails with other new media (I hate that term), it will have arrived. Think back to the very first fax machine or telephone. It wasn't until it was interactive that the demand took off.
Jim Banks
CEO
Web Diversity
http://www.webdiversity.co.uk
MD at Textor Webmasters Ltd
10 August 2004 10:24am
10 years ago if you wanted to find a printer or something, you looked in the yellow pages. People knew that, so they paid for various ways of highlighing their entry - bold type or a box or even some graphics. I am not sure that the big ad agencies made much money out of placing people in the yellow pages but it was nevertheless a reliable way of generating business.
Now if you wanted to find a printer or something, you look in Google. People know that, so they pay for various ways of highlighing their entry - sponsored entry, or adwords. I am not sure that the big ad agencies make much money out of placing people in Google but it is nevertheless a reliable way of generating business
Bob
MD at Textor Webmasters Ltd
10 August 2004 10:27am
Having re-read that posting it sounds a bit trite. I must have been in Smug mode.
Ashley has done a valuable service by pointing out that the big figures disguise a lot, and I for one didn't realise how big a deal paid search is. Great job Ashley.
Bob