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Viewpoint: Obsession With Click-through Rates Keeps Online Campaigns From Having Greater Impact on Sales
by Hernan Lopez
Published: June 15, 2009
Adage
One of the most persistent questions about advertising is: How does it work?
Almost 20 years ago, John Philip Jones suggested it depended on which side of the pond one was on. His paper "Advertising: Strong Force or Weak Force? Two Views an Ocean Apart" described the typical American view that advertising was "expected to work by conversion: by addressing apathetic prospects and persuading them with powerful arguments." In contrast, "weak force" described the European view: Advertising was a "nudge," acting as a reminder, reinforcing existing brand perceptions and defending the status quo.
Mr. Jones later argued that advertising was more often explained by the weak-force theory, which was appealing to admen on both sides of the Atlantic for a number of reasons, starting with modesty. Advertising cannot be expected to overcome problems with the product, competitive pricing or word-of-mouth, and that is probably truer today in countries with large online populations.
But advertising can work in subtle ways. It can boost profitability, even for large brands in developed markets, which are normally sluggish and rarely see sustained sales increases. Advertising is not as weak as it seems, just difficult to measure.
Single-source studies from Mr. Jones' own study of TV ads in the late '90s to ComScore's recent "Whither the Click" report have shown that some campaigns work, while others simply fail to defend the brand from competitors. And when a campaign does work, the first exposure often has the biggest effect on sales. Erwin Ephron found a paradox here: "If advertising is a weak force, how can a single ad have a strong effect on sales?" His answer: Consumers act on ads for products they're ready to buy and ignore the rest. That called for a shift in scheduling, from flighting to continuity; being off the air was "like being off the shelf."
Both Mr. Ephron and Mr. Jones agreed that the most important factor behind successful TV campaigns was the quality of the creative. When Mr. Jones looked at those campaigns, he found that they weren't "hard-selling in the conventional sense" but instead shared three characteristics: "They are entertaining and amusing; they are visual rather than verbal; and they say something important and meaningful about the brand being advertised." More recently, he added the expression "rational arguments enclosed in emotional envelopes."
That brings me to online advertising -- and its missed opportunities. Sad to say, it's hard to find interactive campaigns with the three characteristics Mr. Jones found among the best-performing TV creative. The industry's obsession with click-through rates, despite evidence of their small correlation with total sales, results in messages that are rarely entertaining or amusing and are overly reliant on verbal hard sell.
Randall Rothenberg, CEO of the Interactive Advertising Bureau, has called for a "creative renaissance" on the internet, which he said has been "an unthinking hostage to a direct-marketing culture and tradition that devalues creativity and its long-term effect on brands." Such thinking relies on the strong-force theory, which today looks more like the exception than the rule.
Fortunately, there is a growing body of evidence linking display advertising online with increases in sales. Gian Fulgoni of ComScore, who has seen single-source data on successful TV and online campaigns, concluded that their effects on sales are comparable. At my company we're working with some of those advertisers and their agencies to find out why and how.
Maybe online is more than making up what it lacks in creative with better targeting. Maybe it's working its magic in conjunction with TV, by letting brands with smaller budgets afford continuity, or by acting as a "reminder" of a TV ad. Maybe online is working on its own, by adding leverage to a "weak force" and making it stronger. But this much is clear: Online advertising will work even better if there is an interactive creative revolution.
ABOUT THE AUTHOR
Hernan Lopez is president of .Fox Networks and chief operating officer of Fox International Channels
Google trademarked keyword ads are here.
Be prepared with an Aquent SEM consultant.
Whether you're buying keywords or policing your brand, Google's end to the ban on trademarked terms in search ads represents a seismic shift in SEM.
Aquent's SEM experts can help you capitalize on these new opportunities. Fully screened and ready to work, they bring the added SEM capability you need--without the head count you don't.
Contact me today to find out how easy it is to engage a qualified SEM expert from Aquent.
Contact me
http://aquent.us/go/EricWaldinger
Find more information on Google trademarked keywords here:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aFUZLPqxtByQ&refer=home
A recent survey we conducted with the American Marketing Association showed that, even though most marketers are turning to online marketing for salvation in these dark times, they are finding themselves in a bind because they don't want to outsource these efforts but they don't necessarily have the in-house expertise required to get it done. Turns out that, although online marketing was a stated priority for many in 2008, few were able to actually make the online marketing hires they'd planned earlier in the year.
Lesson 1: Unfettered demand for online marketing translates into unflagging demand for interactive designers and developers.
The cultural revolution unleashed by web technology is ongoing and has produced an increasingly refined level of specialization. Whereas ten years ago we primarily distinguished between creative, front-end designers on the one hand and technically-oriented back-end coder/programmers on the other, today we see a proliferation of web-specific roles ranging from Flash gurus to user experience managers to web analytics wizards and beyond.
In addition to this morphing, expansion, and multiplication of web roles, we've witnessed an intense transformation of the way web work happens. The nature of the technology allows for teams to function without regard to geographical location and the fact that the web is always "on" means that web projects know no temporal limitations; they can and sometimes must be executed at any time, day or night.
Lesson 2: Innovation on the web isn't just about what people do, it's about where and when they do it.
The demand for interactive talent obviously means a wealth of opportunities for web professionals whether their focus is design, development, or marketing. The innovations brought about by the web mean that companies who hire web professionals have an amazing variety of options when it comes to engaging the people they need. The fact that the web and what people do with it continues to grow and change means that no one can predict exactly what new opportunities it will create in the future. However, it is undeniable that understanding these opportunities and their implications will mean the difference between success and failure for businesses and professionals alike.
Lesson 3: To take advantage of new opportunities, you need to have a grasp of the possibilities engendered by technical innovation as well as the limitations imposed by the demands of the marketplace.
On that note, if you want to get a better handle on the opportunities offered or precluded by the current interactive talent market, you ought to tune in to this webcast that Aquent is putting on in conjunction with Monster: Hiring Interactive Talent in the New World of Work .
Tell 'em, Matt sent you.
As the scope of the current economic downturn expands and evolves, marketers are responding with pragmatism rather than panic. The pragmatic view, as revealed by research conducted by The Dihedral Group (TDG) on behalf of Aquent and the American Marketing Association, is driven by three factors: new technologies; the availability of highly-skilled contractors; and the understanding that organizations must plan for the recession's inevitable end.
Last spring, Aquent and the AMA enlisted TDG to conduct a survey asking marketers about salaries, hiring plans, and their outlook on the future. We turned the results of that survey into a marketing salaries calculator. Since the initial survey asked a lot about plans for 2008, we sponsored a follow up survey to find out what had happened in the intervening six months. Of course, we found that some plans had changed (only about a third of anticipated interactive marketing hires had been completed, for example), but we also found that, despite the severity of the current economic crisis, marketers seem to responding with a forward-looking level-headedness.
1. Guess what? Technology has changed marketing!
Everybody knows that email, the web, and the rise of social media have changed and are continuing to change the practice of marketing, so naturally these are changing the way marketers respond to a downturn in the economy. Specifically, whether companies are faring well or are struggling right now, online marketing plays a key role in their plans to weather the current storm.
They are, however, using the technology for different reasons and to different ends. On the one hand, those companies that experienced growth in 2008 are concentrating on using online capabilities to deepen customer insight, analyze their behavior, and continually improve the effectiveness of their digital marketing efforts. On the other hand, the strugglers are increasing their reliance on interactive marketing for increased efficiency and cost-savings.
Great digital marketing managers have several things in common: they are passionate users of technology; they exhibit a fanatical attention to detail; they know how to connect the dots in very complex, dynamic systems; and they are skilled at translating business needs into technological reality.
At least that's what I gleaned from conversations with two Aquent talent: Terry Kong, a digital marketing manager represented by Aquent's New York office; and Becky Huber, a marketing manager with strong online experience represented by our Richmond office.
Terry currently oversees direct digital marketing (email campaigns, newsletters, etc.) and intranet management for a major financial company's corporate and institutional business. Becky has worked through Aquent at a well-known credit card company where, among other things, she was involved in their first online marketing campaign. Here's some of what they told me when I asked, "What separates the great from the good, digital marketing-wise?"
1. Passion for Technology
"Subject matter expertise is good," Terry told me, "but you really need to know the technology. Actually, it goes beyond knowledge and understanding. You have to be into technology."
"I'm looking for internet junkies and email junkies," adds Becky. "People who are not just interested in or familiar with technology, but actively engaged with it." Terry, who builds websites and explores the world of gadgets in his spare time, explains it this way, "I want the folks on my team to understand the limitations and the power of technology because they've actually used it." On that score Becky points out, "There is a lot you can learn and pick up in the execution space, but you have to start with genuine enthusiasm for the tools."
2. Attention to Detail
"Effective online marketing, whether we're talking about banner ads or SEM, requires that you compress everything you want to say into 6 to 10 words. You have to drill down to the core, the heart of what you do," says Becky, "then you have to get your hands on all the research you can and find out what it is about what you do that really engages the audience. And THEN, you have to test continually."
The ability to test continually was something that Terry really liked about e-retailing specifically. "In contrast to B-2-B online marketing," Terry points out, "with retail stuff you can see results day to day and you can tweak on the fly to get closer and closer to the pot of gold."
On January 27, Aquent and the American Marketing Association will host a webcast entitled, "Digital Marketing Staffing Trends." The featured presenter will be Eric Waldinger, who recently joined Aquent as our Online Marketing Practice Leader.
Eric cut his digital marketing teeth at CareerBuilder where he served as vice president of Interactive Marketing and Affiliate Partnerships. His message in this webcast is simple: Companies can save a lot of money by bringing their search engine marketing (SEM) efforts in-house.
Many realize that by outsourcing SEM to agencies they are incurring unnecessary costs, but they don't know exactly how to create an in-house team. What should the team look like? What tools will they need? Moreover, how should you measure their success?
These are exactly the questions that Eric will answer in this webcast, so, if you're asking them, you should tune in. Again, you can register here.
If you happen to miss this webcast, it will be along with past ones here.
If you don't know what inbound marketing is, then let the clever and, as it turns out, funny folk over at HubSpot school ya with this edutaining video:
I'm pleased to announce that Aquent is sponsoring an AMA Webcast on Multichannel Marketing on October 30, 2008 at 1:00 p.m. EST. The webcast will feature Akin Arikan, senior segment manager for internet marketing at Unica and author of the recently published, Multichannel Marketing, a book aimed at providing marketers "practical methods for integrating marketing metrics and actions across online and offline channels." We will be offering registrants a free copy of this timely and detailed study following the 'cast.
In addition to being timely, Akin's book has been very well received, especially in the web analytics community. A particularly succinct reviewer, Gary Angel, founder of Semphonic, writes that Akin's book "...delivers a worthy blend of sound technical overview, comprehensive coverage of multichannel options, and a long overdue look at the way offline and online measurement techniques can and should converge." He adds, "It is sound, clear of judgment, clean in style and admirably free of bloat."
Marketing nowadays will be multichannel or not at all. Tune in to the webcast if you want to hear an informed and pragmatic expert's advice on how to get the most from your multichannel efforts.
Also, let it be herewith known that I want my epitaph to read, "Admirably free of bloat."