AniBlurbs (Column)

“The truth is, advertisers and brand marketers are entering a brave new world — one where code is on par with content. The 21st-century ad isn’t something to be looked at, it’s something to be used… …”Consumers” are now “Users.” So are “Marketers” now “Developers”?”

“…having someone who at least can help a creative team understanding how the software should look is very helpful. “I think having somebody like that, even if they are not the ones coding the app, helps bridge the gap between the technical and the creative…”

Source: AdAge – Agencies Need to Think Like Software Companies

Business Value = Subscribers * Demographics
Business Value = Eyeballs + relevance * intent

Last week’s talk of the town among media in crowd and digerati was that spending on Online Marketing in the UK finally has taken pole position from Offline Advertising.

Make no mistake: this is significant. (Remember this is BBC territory!)

For years eyeballs, attention and now -as predicted and long overdue- budget weight have shifted from TV, Radio and Print to Interactive Media, culminating in this milestone.

Why this change from spending budget on Offline Advertising to investing in Online Marketing Strategies?

And why this plea to repurpose the inner workings of agencies (and ASAP at that)?

Well, to answer the first question, here’s a list of activities people in general are currently undertaking (online) instead of massively tuning in on prime-time (or, indeed, instead of buying and reading newspapers) like they used to:

• Checking news anytime, online, for free;
• Discovering and consuming online content, via “Social Distribution”, for free;
• Shopping online, any time they like;
• Spending days on end playing videogames;
• Spending evenings (cocooning with friends or family) watching TiVo or DVD’s;
• Leaving comments and reviewing products on that very same e-commerce site;
• Discussing and reviewing artists, movies, products and brands on niche online communities;
• Logging in daily to update their status in social networks like LinkedIn and Facebook (or even several times a day – thanks to mobile flat-rate data plans and apt mobile devices and smart phones such as Apple’s iPhone, RIM’s BlackBerry and the Nokia N series, to name but a few).

Okay, I’m bound to have missed many, many more, yet even the online media consumption / activities I’ve inevitably missed, share core characteristics with the ones mentioned above, which, when indentified and aligned next to each other, should underline my statement that agencies need some unadulterated tech DNA should they hope to help their clients connect online with their audience.

“Creatives need to be specialists in the spaces where consumers live that are defined by new technology.”

“If agencies are to continue to offer the highest value to their clients, and realize the full potential of new media on behalf of their clients, they need to make sure every department is as technology literate as consumers” -Simon Mainwaring

So, why the need for new fresh Silicon Valley Blood for agencies in this post-Madison Avenue MarCom ecosystem? Well, for starters, all the activities mentioned above:

- are On Demand;
- are personalized;
- are ubiquitous;
- are interactive (vs. passive content consumption);
- put the user in control;

-And… they’ve become a habit.

Habits slowly but steadily ingraining themselves in modern culture on a global scale.

All of these activities have replaced, or are in the process of replacing, the habit of, say, going home after school or work, watching the same mass orientated, one-size-fits-all TV shows like the rest of the populous, within timeslots deemed fit by a few network coordinators, all the while zapping away the interruption marketed ads…

(On a side note, what has also been replaced is blindly following the opinion of a select few elitists, or opinion leaders, so you will. You don’t need (trust?) one or more reporters from the New York Times to tell you that The Dark Knight or District 9 are movies worth an evening out to the multiplex, what book is a must-read or which restaurant should be on your shortlist, as even more so than usual, nowadays people are forming their own opinion by reading online peer reviews or discussing their customer care experience online, no holds barred.

Internet killed the middleman.

And the platforms facilitating this have a reach of millions and sometimes even billions, globally.

This continuous two-way online dialogue is another reason why the one-way message sending, branding specialists need to acquire interactive skill- and mindsets…)

It’s The Internet, Stupid

“Why doesn’t the traditional model work online? In short, the web is too fragmented (millions of videos, millions of web sites), too loosely coupled (countless hyperlinks, embed codes, APIs), and too nascent (too few revenue models, too little clarity about the future) to fit comfortably into a media conglomerate as they exist today.”

“The challenge is that the scarce resources are different: while the media business continues to rely on “talent,” today’s talent may be writing code rather than screenplays. Distribution still creates value, but it can mean a quickly passed link on Twitter or Facebook instead of an 8 p.m. slot on a broadcast network”.

Source: Giga Om – New Media Demands a New Kind of Media Company

But these factors are not the only causes for this disruptive re-allocating of budget.

Sure, everyone agrees that you should “fish where the fish are”, but the main reason that budgets are finally being freed up from political unwillingness or irrational conservatism, is that in these times of crises, true accountability in marketing and advertising has finally become key.

There’s no need for (hiding behind) second guessing or causality in MarCom anymore: Plausible effective advertising maybe was “fine” yesterday, today proven effectiveness by conversion is vast becoming the golden standard.

The current recession has acted as a catalyst for this silk media revolution, merely accelerating the inevitable.

Now the marketer finally knows which half of her marketing euro, dollar, yen or what have you, is wasted on naught and which half is an investment; generating leads or spurring your core hyper targeted audience into action. All in real-time, if necessary, meaning you can act real-time.

“It’s to no fault that many account teams have no concept of what web development entails in terms of budget and time. Too many times there are promises made that cannot be fulfilled. Having a cross functional, technically savvy professional on hand to lay out accurate budget and time frames in real time ensures that the client is not mislead by a traditional account person reliant on third party estimates.”

It’s no longer about the clever award winning Creative Director and his team of witty art-director/copywriter duo’s.

This also means that the sole focus in marketing and advertising isn’t about “sending content” anymore, but it’s about the underlying technologies that facilitate dialogue between brand and stakeholders, and empowers them both.

It’s about, for example, creating branded tools that might prove useful in everyday mundane tasks for the user: Apps-as-a-Brand-Utility. Eyeballs. Attention.

Now it’s about the pragmatic award winning Managing Director and her team of developers and creative technologists.

“Code” and “(meta)data” have earned their rightful place next to “design” and “gut-feeling”, thus switching the demand from pure creative output to actionable insights based on real-time data; apps and open platforms for effective communication, feedback and co-creation. All of this fundamentally challenging the very raison d’être and modus operandi of traditional agencies.

“Various models have evolved over the years but the successful ones have at their core a few talented individuals who “get it” when it comes to the nuts and bolts of technology, the subtleties of strategic brand building and the figures that justify an ROI…

…the more multidisciplinary people an agency can employ without forcing generalists into specialized silos, the better equipped they’ll be to provide true integration.”

As it is becoming increasingly clear that consumers are changing their daily work-, leisure- and decision-making(!) systematic from Analogue- to Digital based; brands/advertisers and traditional MarCom specialists will have to adapt & change their Tech know-how (what vs. why), their thought patterns (creative top-down factories vs. embracing digital natives and co-creating), and their priorities (branding vs. true empirical accountability) to match this new reality or ultimately end up like that frog in the slow-boiling pan.

The long-term solution however, is not going to be purely a technological one, but rather an anthropological and sociological one; the real challenge lies in the cultural change and organizational restructuring needed to save traditional agencies from the same dark fate (or worse) as the music industry and newspaper & magazine publishers. Out with the old…

[Yes, the very fact that it’s 2009 and I’m posting this rant as being new(s), means that somehow there’s still a need for summaries and musings like this, however obvious and stale it might seem to fellow digital natives and digerati in-crowd alike. Yet, I believe that this needs to be heard and echoed. I’m merely trying to add a drip in the quite -possible very pretentious- hope all the accumulated drips will eventually flood the ivory tower of cognitive dissonance that some board rooms and CEO’s (across all traditional agencies and entertainment outlets) dwell in.]

Read more thoughts about Apps-as-a-Brand-Utility, the future of advertising, “Creative Technologists” and the ideal DNA composition for successful marketers and agencies in the 21st Century in this excellent article by Allison Mooney on Advertising Age.

“…many advertisers in the past gave most of the credit for a sale or conversion — which in the web world could include anything from visiting a website to printing an online coupon — to the last ad clicked on or seen by a consumer. But that means brand-focused sites such as NYTimes.com and MarthaStewart.com and even social-media sites such as Facebook and MySpace lose credit because they are often not where a consumer will see that last ad. And when they lose credit, they lose advertisers, and when they lose ad revenue, well, you’ve read that story.

“Publishers have a lot to gain,” said Steve Kerho, VP-analytics, media and marketing optimization at Organic. Mr. Kerho has been doing lots of analysis on how online-display ads affect search and conversions and found that in some cases, a display ad can increase a search ad’s click-through rate 25% to 30%. If he had simply measured the clicks from search, he would have missed the display ads’ influence.”

Source: Adage

So… If we’d translate the above model to, say, a real world situation; that’d mean that the sales guy in the local electronics store should get a piece of the provision pie, and maybe you’re neighbourhood whiz kid should be offered a small fee too, since they were the ones that influenced you before you decided to shell out on a new bleeding-edge desktop and order it directly by mail-order, no?

Of course, the conclusion presented above is preposterous to say the least. Not giving full credit to the last click shows a lack of common sense and of everyday reality:

If we’d were to apply this model to the offline advertising industry we’d might as well start charging less for TV ads during the Super Bowl or advertisements in general, since it has never been empirically proven that said ads actually sell significantly more cars, to name but an example.

(Actually I hereby challenge thee naysayers to tell me why the fledgling automotive industry in the US can’t be saved by throwing more money against Interruption Campaigns now that the going is though… Odds are it’s because it just doesn’t work that way nowadays…)

Publishers would of course love to use such a model, since suddenly those abysmally low Click Through Rates on social networks ´d become a license to print money, yet that’s not where the problem lies: it’s about engaging with the visitors of the Facebook’s of this world if and when they feel like it, adding value to the community, giving them something to talk about or a good reason to get rid of their friends. The engagement model is a far more viable one since it makes it very clear for all stakeholders what the true value of those brand interactions are for everyone.

Conjuring op schemes to charge more for a product -display banner- that, on it’s own, has failed to truly deliver on its promise up until this very moment, is not the way forward out of this recession. The research budget would be well better spent on innovation, adding value to the visitors, strategic alliances -you name it, just do not waste it on taking undercover pot-shots at “Go -Emperor CPC- Gle” et all.

There is one thing that does ring true about the statement that a conversion shouldn’t be attributed to just the Last Click alone; and that’s the reoccurring coincidence that carefully crafted, creative Crossmedia campaigns drive word-of-mouth & website traffic, allowing for a tighter control on conversion, ánd they also have the uncanny ability to tip the Attitude scale in your Brands’ favour. A little…

It’s common sense and it’s what marketing should be all about: influencing as many factors as you can to get the prospect to turn into a consumer, making her loyal, spurring her on to buy more and in the end becoming a brand-ambassador.

The communication mix as well as the quality of your product combined with the customer centricity level of your organization all contribute to that end.

As well as a million other tiny factors (does the sun shine, did THAT girl on the train give you a smile, do you have enough money to spare, etc., etc..)

Yet, if we’d follow the philosophy of Mr. Kerho to it’s conclusion, it’d mean we’d have to split the Cost-per-Click revenue and spread the wealth over all communication channels and creatives -and not just the display banner- in order to get a somewhat “fairer” representation of value/conversion for money.

[The Adage article starts with this quote: "The great paradox of the web is that it's an interactive medium and everything can be measured. And that's wonderful -- unless you're measuring the wrong thing."

I'd think what they should be stating is: The single greatest asset of the web is that it's an interactive medium, perpetuously capable of reinventing itself. And that's wonderful -- Unless you don't keep your feet firmly on the ground and try to look at opportunities with a positive mindset!]

Cutting deep in your Marketing budget (and thereby seeing it on default as a cost instead of an investment) is a short term tactic that isn’t going to help your company weather these uncertain times ahead of all of us. Instead it would be more sustainable to take a long term approach; a more critical look at what channels your spending this budget on and whether the story you’re telling is in line with the quality of your services or products.

And though your Marketing Department may stop talking about your company, products or service, the consumers are not: Au contraire; their conversations (in the Social Media space) are increasing exponentially!

Furthermore don’t forget to also take into account that most of your competitors are probably not as comfortable with such a progressive world view and will focus instead on the short term outcome. This means that by keeping your budget stable, but spending it more wisely, you could seriously gain competitive advantage.

“So, then since online has the reputation for being measurable, we’ll just cut back in our offline efforts.”

Contrary to popular belief among some of my peers, right now is NOT the time to cut in offline Ad spending: If there’s one thing we’ve learned so far, it’s that in times of Crisis there is a peak in the amount of readers, visitors, viewers and listeners to (in this particular case financial) news papers & websites, TV and radio. People are looking for guidance and a steady rock to cling on to. This means that if you have a relevant story to tell there’s never been a better time to reach out to your customers and core audiences than right now!

The core thing to keep in mind here is of course that the Old Media are by their very nature geared towards Branding, and thus, -though it’s not really scientifically-rock solid-proven-effective in generating revenue- it is a perfect instrument to instill customer thrust in your brand, if handled the right way and in conjunction with Social Media Marketing and other forms of Online Marketing.

The key challenge would be timing, as you wouldn’t want to have a multi-million dollar tagline -Here Today, Where Tomorrow?- proven meaningless overnight…

One way to manage your Marketing budget would be to higher or lower it every Financial Quarter, in a wave as it were, analyzing the results and reacting accordingly. Moreover reallocate the money spent on different channels based on campaign directive. So, depending on the field or sector your operating in, decrease the amount of money spend on Branding through offline channels and shift the resulting saved money towards Online Results Based Marketing, such as SEA and in optimizing the Task Completion Rate by Primary Purpose on your website…

Yep, I’m not advising you to plainly look at Conversion Rates, I’m suggesting to take a more holistic approach ;) Back in 2006 Google’s visionairy Web Analytics Evangelist Avinash Kaushik already foresaw that the Focus (should be) Shifting from Conversion to Task Completion Rate by Primary Purpose.

Upcoming Interactive Channels that haven´t quite fully lived up to their potential yet like Social Media and Mobile are likely to be confronted with closed wallets and plummeting ad spending, not just because of advertisers cutting back in costs and investments, but also because the consumers themselves are being hesitant to spend money on luxury products and services including Mobile Internet and Mobile Wireless Internet Devices.

Yet again here it would be wise to be wary of and avoid the FUD; for example here in the Netherlands the mobile version of the largest news website Nu.nl (translated: Now.nl) is also the largest mobile news site. It is known that CTR’s in mobile enhanced sites are up to 7% or even higher, putting Display efforts on the desktop internet to shame; so though it’s understandable to make a Pavlov Reaction and eschew Mobile altogether, the contrary might be a better move. Whether your campaign is geared towards gaining a high CTR in the first place is of course a different thing altogether (I’d beg to differ, basing a campaign on CTR alone isn’t the most cost-effective way of spending your Marketing Euro).

As for Social Media, as I’ve pointed out at the beginning of this post: Your target audience, consumers and people in general aren’t going to be less critical, or dependent of peer advice and ratings and they’ll definitely be looking for bargain deals on price comparison communities, so keep joining that conversation!

It’ll be very interesting to see which path mr. Zuckerberg is going to walk with Facebook in the coming months.

ReadWriteWeb has flashed out the implications of the F8 Announcements and the thread has some very valid points floating back and forth, all making for an interesting read. For all its intents and purposes the Facebook Connect initiative is, like the DataPortability Project, a big step forward towards a framework for the semantic web, as long as they manage to keep the trust of their users, communicate openly with them and put the community before the interest of the advertisers.

Should they fail to do this, than the implications shall be larger than the Beacon backlash.