The Internet is the information super highway. It is the backbone and infrastructure that connects the world. The WWW is the lens that we view the internet through on our browsers. So just to clarify, what Wired is declaring is that the browser is dead, and the way we will access the internet will be through apps.  With iPhone, iPad, Android, AppleTV, Samsung internet connected TV’s, IP TV from Fios and Uverse – there is no doubt that the app market is ramping way up when compared to the web.

I have included a link here to a blog post about this by  Tom Hespos on iMedia. It covers the “Really? Dead again part” well. But beyond the sound bite, what does it mean for marketers? I think the app discussions is really about the larger trend that technology changes are accelerating more rapidly than most people realize. Apps will become another digital channel like banner advertising, seo, paid search, email, and social media. Apps are used differently than web sites by consumers – marketing through them will be different too. It will not be just an extension of paid search or banner advertising. It will be a unique channel that requires banner applications to develop and deliver creative and engaging messages.

Like with anything else, the more research and preparation you put in upfront about Apps the marketing potential – the better prepared you will be just in case the web actually dies. If  the WWW does theoretically die – it will happen faster than you think.

People and companies blog for lots of reasons and one of the reasons for this blog is to share some of the insights and conversations we have with different clients. Just like people blog for lots of reasons, companies advertise for lots of reasons. When we talk to advertisers, the first (maybe second) question is usually “What are your objectives or goals for the campaign?” It seems like an obvious place to start so you can start designing a solution to meet their goals.

However, I find myself asking a new “first” question – “Are you building a Program or Running a Campaign?” The short answer difference is a program is continuous; a campaign has a start and end. Knowing the difference greatly influences your creative and media buying strategy.

If your goal is to build a program, that means you want to use banner advertising as a continual mix of your marketing and promotion system. To be effective with online banner advertising programs you should think more about your design system, your economic model, and your creative strategy. Your approach in the first 90 days should be about discovering what mix of creative and messages work best BEFORE you start spending big money on targeted or premium ad media. You should expect to pay a little “tuition” to learn what works and what does not. You are making an investment in a system to test and find the right formula for success to build your program. With a program, you put your learning and discovery at the front end of the process.

With a campaign, your view of the world is typically shorter.  You have a start and end. The campaign can be centered around an event, a promotion, a season, a new product launch, etc. Your creative strategy will be based on your best guess and you will have less time to get “creative” with your media placement. You still have an objective to achieve, and you may reach it – you may not. But your analysis and assessment of why you got the results you did typically are done post-campaign. This is useful information to help inform your decisions for your next campaign – if there is one.

I know a lot of people actually mix both of these approaches and “test” before a campaign. And that is good too. Part of the program vs campaign thinking is about execution – but also about framing you decision making process to determine how to get the best results.  This is just one of the ways that your process and approach can make you a more effective with banner advertising.

For many industry insiders in the ad inventory aggregation business, this is an old conversation.  But the technology and the marketplace seems to be coming to a head on what models are going to emerge.  The first evolution of adding buying efficiency to the market were Ad Networks. They were born to aggregate unsold inventory from publishers and give advertisers one place to go to reach a wide audience.  The main function of the ad network was administration efficiency. The market is evolving at such a pace that this simple aggregation model is not enough and new models are evolving. 

A simple comparison would be real estate brokers to real estate auctions. One helps match buyers and sellers the other adds price transparency, removes friction, and enables a transaction to occur immediately. The first evolution of ad networks was to essentially act like a broker. Now there are new models that will estentially act like an auction and go by names like Ad Exchanges, Real Time Bidding, and Demand Side Platforms.

 Nasdaq-like exchanges are developing in the market to add transparency and liquidity to the market. Large media buying shops are building trading desks to buy and sell inventory on an open market. It will be interesting to see how this develops since a market works best when there are a large number of participants. Despite Banner Advertising being a $23 Billion market, the bulk of that money is being handed from large advertisers to large publishers. 70% of the revenue is captured by the Top 100 Web Properties from the top 200 Advertisers.

 Here is a link to an article that gives a nice snapshot of the issues at hand in the market.

 http://www.adotas.com/2010/07/mcgrorys-and-right-medias-evolution-part-ii/

I know exchanges will reduce friction in the market and improve price transparency. I think this helps advertisers but publishers are going to see further pressure put on their pricing power.

With average click rates of less than 0.4%, entertainment industry ads perform somewhat worse than average. But their dwell rate of 8.7% compares with a rate of 7.1% across all industries, and average dwell time is 35% longer for the entertainment industry. This means entertainment industry ads are more likely to be interacted with—gaining branding value—but less apt to have that value measured if marketers look only to clicks.

Dwell Rates for Rich Media Display Ads

The first thing that pops up here though is you need creative that that can be “dwelled” on and interacted with. I have linked back to our post on Creative Models, (Four Creative Models For Effective Banner Advertising), but this is the category we call Wow Factor. It is using strong creative as eye candy to capture your interest and then giving you a reason to engage. It is a great strategy, but it has very high ad production costs when compared to other creative model types.

One of the great things that AdBean does is give advertisers a way to produce ads that can be interacted with and measure dwell rate themselves. If you are not launching a blockbuster movie this summer, you might not get a 53 second engagement time, but the 38 seconds for the rest of us is better feedback is still more time than the standard TV spot – which you just fast forward through anyways.

The study found that people spent significantly more on products they were fans of, compared with consumers who were not fans. In the case of many of Facebook’s most popular food and beverage marketers, fan spending was more than double that of non-fans.

The part that I find interesting is that they measured fan acquisition at $0.47 while they pegged total value at $136.38 for large corporate brands. That gives an ROI of around 290% – which I think most markets would be ok with. So that type of number, while cannot be accepted as indicative of everyone else’s ROI potential, does suggest that every marketer needs to start looking at these channels and making it part of their total strategy.

Making it part of your strategy means how do I leverage my investment? I guess the $0.47 is the one that I struggle with the most because what it does not / and cannot represent is the cost of maintaining that Facebook fanpage. You cannot drive 290% ROI out of a channel if you are not actively participating in it and responding to fan’s comments good, bad and otherwise. So there is an operating cost to it just like your web site.  

The comments and goodwill generated in that community have value but it is only being shared with people already in the community. Display advertising can be used to promote the positive feedback of the fan page to people outside the community to drive more sign ups. Leverage the content of one channel to distribute a message in another channel. After that though – it is up to you to capitalize on the fan acquisition and make it a place that offers value to the members.

OK so what else is there? Engagement time and View Through Rate are two other metrics that can be used to measure value besides clicks. Engagement time is the measurement of interaction a consumer has with your ad. The obvious prerequisite is that you have an ad that can be interacted with, like a mini-game or product slideshow or “hover here to see more” type feature. This raises your level of ad production costs, but a well designed ad can see engagement times average 30 to 60 seconds. For brand advertisers, this is a very valuable piece of information that they can’t get through traditional media channels.

The other metric is View Through Rate. This metric is measured by using cookies and tracking pixels so it does involve a little set up time. What it measures is how many people who saw your ad, but did not click, ultimately show up on your web site through another channel or search engine. While not a perfect science of lead attribution, it does help add more data points to measure influence of a campaign beyond just clicks. You will be able to see what impact your banner advertising campaigns have on your other channels like email, paid search, and organic search.

Moving your thinking beyond clicks influences your ad design decisions and vendor choices. Adding view through rate and engagement time to your list of measurements will help make display advertising a more effective channel for you.

Lesson 1. New Delivery and Service Models Need to be Created.

My favorite example of this is Salesforce.com. Before them, their product category line, sales force automation (SFA) and customer relationship management (CRM) was dominated by big companies, like Siebel Systems, with a traditional software implementation model. Expensive software to buy, expensive consultants to implement, expensive hardware to buy, and a ton of user training to go with it. And if your users did not use it because it was difficult to learn – well your ROI was just cut in half or more.

Salesforce gave people an easier way. Just create an account, login and you are up and running with your new sales management system. It was one of the pioneers in delivering Software-As-A-Service which has now become the defacto software model for just about every tech start up. No big expenses, no big barriers to sale. It seems common now – but 10 years ago – it was almost unheard of. Tracking prospects was not their invention – making the technology accessible was. The SaaS model has taken billions of dollars of expense out of the IT market. New delivery and service models will be needed in banner advertising to remove accessibility barriers that lock a lot of advertisers out. What can you do to deliver the same end product but in new efficient ways?

LESSON 2. Someone is attacking your cash cow.

The SAAS model also attacked the cash cow of systems integrators like me. The logic went “Why pay those guys an embarrassing amount of money to install and set up this software?” The software companies countered – “why go to a third party SI when you can come to the experts – we may be expensive but we wrote the software and no one knows it better.” Both arguments have a different value proposition – but they both say the same thing – don’t go to the guy in the middle.

What is your cash cow? Media Buying, Ad Design, Campaign Services? These functions form the core “infrastructure” of banner advertising and like technology a decade ago – a source of expense. Media buying / planning is basically answering the question – where should I run my ad? Ad design work is answering – what should my ad look like and what is the message? Campaign Services (account management) is answering – how are my ads performing and what changes should I make? What is really important in the future is that these questions continued to be answered – not the process in how they are answered. Are you answering these questions in fast, efficient or automated ways? If not – someone else is trying to and business history says time is on their side.

LESSON 3. You need to care about your client’s performance.

Above, I mentioned that user adoption rates of software destroyed ROI for technology investments. Software companies use to think that was not their problem. How can they control what happens at the client site? But it became their problem when the client did not get the value and they did not renew their maintenance contract. Smart companies then created new departments called “Client Success Teams” and added “Client Advisory Boards.” Tech companies had to make their client’s success part of their business model.

I think there is a real timely acquisition that has been made that illustrates this point. GSI Commerce bought the retargeter Fetchback. eCommerce is a competitive world and very mature in internet software terms. Why would an eCommerce company want someone in the banner advertising space? Because GSI wants to move beyond providing a utility platform to a we-help-you-make-money platform. Given 98% of eCommerce site visitors do not complete a transaction, retargeting is a very logical banner advertising fit.

Have you added services that extend your capabilities beyond just what a client might expect? The publishers, Ad Networks, and Agencies that grow in this industry will be the ones that stop trying to “sell ads” and take ownership for performance. If you don’t – the next guy will.

At DoubleClick’s advertiser blog, I spotted an interesting and pretty clear description of what “real-time” display advertising means.  It’s a bidding process that uses technology to continually improve the chances that the ad will be clicked using intelligence about the user’s recent history on a website.   Here’s how Neal Mohan, DoubleClick’s VP of Product Management puts it:

For example, using real time bidding, a retailer running a display ad campaign for a shoe sale can bid $5 CPM (cost per 1000 impressions) for ad impressions on a particular news website, but specify that it will bid $10 CPM and show an ad for running shoes if it knows that browser has previously visited the athletics part of its website. Details of the ad impression are passed to the retailer’s bidding platform in real time by the exchange, and the auction takes into account the retailer’s increased bid. This technology lets advertisers and agencies continuously tailor and hone their display ad campaigns, and alter their bids and ads, to reach potential customers they want to attract.

This kind of real-time bidding capability isn’t found everywhere.  You’ll notice that the blog post concerns the acquisition by DoubleClick of Invite Media, who developed a technology platform to allow this real-time bidding.  As Mohan puts it, “we’re still at the beginning” of a wave of technology innovations – including AdBean, naturally – all geared toward letting online display advertisers reach the audiences they want and leave behind the ones they don’t.

Sure we can.  In the same way that good creative advertising in other media appropriates popularconcepts, secnarios or “memes”, online display advertising can do the same thing with static or dynamic elements.

This Ad Lab post contains a great example on how this is done in television.  A scenario familiar to fans of the TV show “Lost” is leveraged to sell computer keyboards for $29.99:

We can extend the same concepts to digital display advertising.  Keep a close eye on what image assets and key colors and shapes  play key roles in popular websites.  GMail’s “Send” button.  YouTube’s “Favorite” button – or its video frame.

Familiar colors, shapes and schemes impart familiarity, raise clickthrough and conversion rates. Don’t lift wholesale – that’s confusing and serves nobody.  But do keep track of what constitutes a visually familiar experience for your audience.  Then look for clever ways to use very well-known image combinations and interactivity plots in the same way the Target ad does.  It will go a long way toward attracting interest and being remembered.

CM Summit (June 7-8):  Speakers include publishing giant Tim Batelle of Federated Media, Bob Lord, CEO of agency Razorfish and Hilary Schneider, EVP of Yahoo.  Full list here.

Fixing Advertising: The New Data-Driven Display Ecosystem: (June 8, 7PM): Panelists from the online display ad world include Yahoo VP of Ad Platforms Ramsey McGrory, Alex Hooshmand, Vivaki SVP Global Product & Operations and Victory Treyger, Travelocity’s CMO.

2nd Annual Digital Media Summit: (June Presented by investment banking concern GCA Savvian, DM Summit features speakers from all over the digital display advertising marketplace.

IAB Innovation Days:  (June 8-9)  Major league brands and agencies from all around online display are represented with speakers such as Tim Armstrong of AOL, Joanne Bradford of Demand Media, and Kevin Krim, Global Head of Bloomberg Media

Digiday: Target: (June 9) Focused on targeting and segmenting audiences,  Digiday:Target includes speaker such as Tariq Muhammad Walker, VP, AOL Black Voices, Liberty Karras, SVP Sales, CNNMoney.com, and Chuck Cordray, SVP, GM, Hearst Magazines Digital Media.

The Real-Time Web (June 11): This “unconference” uses unique framing to get the important questions asked – similar to an online discussion group, the format is created as attendees register – in real-time.

For full listings, check out Internet Week NY’s main site.