Is Traditional Advertising Dying Online?
September 10, 2008 by OA Group · Leave a Comment
As everyone discusses the state of old world media such as TV, Radio and Print advertising being in the midst of a transitional period, I would like to talk about how old world online advertising is also on the way out.
As I talk with companies that are looking to run marketing campaigns to spotlight their brands, products or services, I’m hearing some very interesting perspectives from our clients, and I live by the #1 Business rule that the customer is always right. So what am I hearing from clients? CEO’s and CMO’s are no longer satisfied with simply running banner campaigns that drive brand recognition, they are now pushing for us to help them attain a ubiquitous Internet presence. And because of this evolved mindset, comes my favorite part: companies are not looking for agencies to simply create ad campaigns anymore, they are looking for us to be their business development partner.
A good example of this is what we are doing for a health and wellness client we have. As opposed to simply developing a marketing strategy for them, we formed several strategic partnerships with gyms around the country to market this particular companies services. And because the relationship was mutually beneficial for both parties, we were able to get the client a far wider and more targeted reach then they would have gotten by a ad buy, and it was able to be accomplished for pennies on the dollar. The result was that the client got the highest return on their marketing investment that they had ever gotten, and we’re working on something pretty cool for them right now.
Each quarter it seems as though fewer and fewer clients are wanting to buy the traditional forms of online marketing, however I don’t believe that it is due to the economy since the majority of our clients have been increasing their overall marketing budgets that we manage. Instead, these clients are asking how they can take advantage of the social media mechanisms that are currently in place. They hear all about outlets such as Twitter and Youtube, and they want to be at the forefront of these online activites. And they know that simply buying banner ads on an ad network is the closest thing you can do to burning money.
A great example of what I’m talking about is illustrated perfectly by some of the most innovative shows in the online world, Diggnation. Diggnation was founded by the the CEO and Founder of Digg.com, the popular online new aggregator, Kevin Rose. The show is extremely popular in the online community with tens of millions of views. And as opposed to trying to run pre rolls to monetize the show, Diggnation actually sells product placements in the show. This past Friday they actually talked about their beer sponsor for about 3 and a half minutes (all positive things to say of course). This type of marketing is the closest an advertiser can get to true word-of-mouth marketing. I understand that these types of ads are not scalable, however they give the online advertiser the best return on investment since they are talking with a highly engaged viewer.
So when you’re listening to people talking about how the old mediums of media are dying, just know the online world, in it’s current state, is not the future either.
A New Age of Advertising
August 20, 2008 by OA Group · Leave a Comment
The Missing Piece(s)
For industry insiders, I think you will enjoy the inside joke with the title of this post. Last year, the Founder and CEO of Facebook, Mark Zuckeberg, was highly criticized for telling a group of media ad agency executives that every 100 years media changes (coverage), and that Facebook was bringing everyone else into this new ‘age’. Great statement, except for the fact that he was talking to a group of media executives who have forgotten more than Zuckeberg will ever know about online marketing.
One of my favorite guilty pleasures, Valleywag, posted an article yesterday with some great tips on how the online social networking space could actually appeal to the ad agency marketing dollars. The tips from the ad exec are below:
Build a toll booth.
Everyone knows banner ads don’t do it for big-budget advertisers anymore— not even ones that allow users to comment on them and share with their friends, like Facebook’s new ads. Instead of creating gimmicky features that users don’t want, Facebook needs to come up with ways for advertisers to be seen as providing new functionality on Facebook itself. By way of analogy, my source told me to imagine American Express sponsoring a normally congested toll road for a day. Drivers approaching the toll booths would see them empty and maybe billboard that read: “No toll today. Drive on through and see what it’s like to be an American Express cardholder.” That’s the kind of branded experiences Facebook needs to create for users and advertisers, my source told me. Not gimmicky ones like asking users to design Mazda’s new cars or come up with new Ben and Jerry’s flavors. Facebook should encourage users to feel like a site improvement was brought to them by a brand. Maybe Facebook’s Video application should have been sponsored by Sony’s CyberShot line, for example. The challenge: Facebook’s site developers work separately from the group which comes up with ad products, a divide Facebook needs to erase.
Facebook needs to stop imagining it will ever reach Google’s size.
One reason Facebook hasn’t come up with these kinds of advertising arrangements already is that they require lots of creativity, planning and customization. They’re one-offs, and Mark Zuckerberg can’t simply program a computer to sell them over and over. It’s a terrifying reality for Facebook because its investors put money into it expecting it would become the next Google, which is an automated moneymaking machine. (Only 3,000 out of its 18,000 employees are required to run its advertising operations.) The sooner Facebook management and its investors realize that the company will not be the next Google — which, let’s face it, lucked into a ridiculously simple way of making money — the sooner it can take advantage of its massive, desirable user base.
Zuckerberg and Sandberg need to hire Madison Avenue insiders.
My source says Madison Avenue avoids spending money on MySpace because no one in New York knows its ad salespeople. Facebook needs to put Madison Avenue insiders in positions where they have Mark Zuckerberg’s ear. For example: Zuckerberg could have used someone with advertising experience to challenge him with the baby-name test before the company went forward with its Beacon ads. The baby-name test? “You know,” he said, “The one where you take the name and think of all the terrible things it rhymes with and then decide if you still like it.”
The Deadly Quick Dollar
August 18, 2008 by OA Group · Leave a Comment
I was reading Advertising Age this morning as usual and saw that Chipotle, the healthy fast-food mexican chain, has put their marketing account up for review. Companies switch between agencies on a regular basis for a myriad of reasons, however Chipotle made an interesting remark when they announced the event. Chipotle’s CEO Steve Ells said
“We are looking for an agency that wants to develop a long-term relationship with Chipotle and our current marketing partners.”
Notice his subtle phraseology, they are looking for someone that wants to develop a “long-term” partnership, reading between the lines of the release Ells is saying that their current agency is not interested in a long term partnership. One of the most frustrating components of being in the advertising agency ecosystem is when I see other agencies going after the quick dollar as opposed to focusing on developing a solid business relationship. With every client that I work with directly, my first priority is helping to create marketing vision for the next 3-5 years.
The majority of agencies do not have deep social media experience, and lack the fundamental knowledge of how to execute digital advertising campaigns. I can’t tell you how many times I’ve encountered a client who showed me the pricing their former agency was charging for certain campaigns, where I’ve discovered they were paying 2 to 10 times too much! This means that if the firm had performed a full due diligence process they could have gotten 2 to 10 times the exposure for their client. I can’t say the exact reasons why Chipotle left their old agency, but I can tell you that the top goal for any business relationship needs to be developing a long-term, mutually beneficial partnership. Working hard and lean in the beginning will pay both parties great results for years to come.
Obsessive Agency Group Companies
