How to Revive Online AdvertisingEverybody has heard by now that online advertising is dead. And everybody has their pet theories about what killed it, from the dot-com implosion to the microscopic click-through rates to the failed online advertising mega-deals.
They are all right, except for one thing. Online advertising is not dead. It just needs a dose of rigorous thinking mixed with responsible selling and patience to restore it to health.
Online advertising was created from the hyper growth and hyper hyping of the Internet. Every press release from the Alley to the Valley screamed: "Advertising as we know it is over; TV is dead!" The result: multimillion-dollar online spends and exclusive partner deals with jaw-dropping budgets.
First came the promise, then the pain. Online advertising failed to deliver on the lofty predictions that drove its revenue growth. Instead, we got direct response sales campaigns that couldn't turn a profit or weren't scalable; lead-generation campaigns with qualified leads costing more than twice the lifetime value of the products being sold; and image advertisers who couldn't make financial sense out of driving people to their Web sites in the name of "experience."
Perhaps it's best to think of online advertising as dead. Let what it once was die. Online advertising needs to reach the next level of enlightenment. So do those who buy and sell it. Let's purge ourselves of our sins. How do we get this house back in order? Let's start with a few truths.
First, the eyeballs are there. And they're the ones we like: upscale, intelligent people with curiosity who buy stuff. The Internet might not, as promised, be the only way we gather information or shop. It has, however, become an essential tool, and that means it provides powerful advertising opportunities.
Next, we will get those eyeballs to consume our ads. Two things other than death and taxes are certain: Consumers try to avoid seeing ads (except maybe during the Super Bowl), and advertisers develop new ways to not let them. It's always been the job of agencies and the media to ensure our client's customers and prospects consume our ads and respond.
We've taken bold steps in the past two years with new online formats that make real use of the medium: animations that take over the page and actually entertain; access to pop-up sites that give the viewer a door to deep information right on the site they were browsing; and streaming video presentations. These are steps in the right direction.
Are they all great? No. Will some abuse the power to take over the user's experience? Yes. (Don't you hate those Eyeblasters and Superstitials without close boxes?) But will we get there? Absolutely. If we are going to get "everyone" talking about online advertising's revival, here is what it will take from publishers, agencies and advertisers:
Clearly defined objectives. If we want advertisers to use this medium, we need to show them specifically how it will move their business -- the key word being "specifically." It takes an intimate view into a client's business to define how online advertising can be meaningful. The medium is too new and untested for us to provide cookie-cutter solutions. And do the math, because if you can't make the math work, neither can they.
Responsible and responsive selling. We need to recognize that smart marketers will want to test their way into spending real money. And though sales and service in the online ad world are much improved, we have a way to go. Clients like predictability, simplicity and, most of all, working with people who understand testing and can do it right.
Measuring against objectives. Though a program might have clear objectives, we don't always have an easy way to measure that they've been met. This is especially true when we discuss the value of online advertising; i.e., whether it influences consumer attitudes and purchase behavior like offline advertising. Though the medium always has been touted as the most easily measured, it has been punished by those same measures. If the objective is not click-through and site visits, then we can't make counting click-throughs the primary measurement methodology.
The industry is making progress in creating reasonably solid research to assess advertising value. In addition, let's start using other key data points to assess non-click-through sales impact such as correlations of online impressions with information such as sales, phone inquiries, Web site visits and performance of other media. A deeper look will reveal that direct marketers with substantial online ad programs will have substantial "white mail" response.
Flexibility and ingenuity. The online ad industry has already shown great willingness to change -- at least since revenue went south. Publishers a few years ago would never have even considered the formats in use today. Publishers and agencies now are constrained only by the limits of their imagination. The onus is on us to show advertisers how they can connect with consumers in a new way. That's why I'm not a big fan of some in the online ad industry who say the answer is broadband because "then we can put TV commercials on the Web."
Brilliant creative. Like anywhere else, most ads on the Web are simply bad. How many online ads have you talked about? Perhaps the real reason advertisers don't believe in Web advertising is because they hate it. It's too easy to ignore or too difficult to escape. The industry needs to continue creating new ad platforms that permit more dramatic messaging. Then it's up to the creative folks. Create ads or experiences that get talked about at the water cooler.
Online advertising is being reborn. But beyond perseverance, the key for everyone in the industry is a virtue that few publishers and agency profit and loss statements can accommodate: patience. We are just beginning this journey.