Lessons learned and 2012 predictions for the ad industry
Will Price, CEO, Flite
If there's one word that best described the state of the ad industry in 2011, it was “tumultuous.” With deep agency cuts and lackluster growth, we were dealt our fair share of bad news. But tumult can be a good thing, a chance to step back, assess and reset accordingly. As the old adage goes, those who cannot remember the past are condemned to repeat it, so let's reflect on the lessons learned and take a look forward at what the future holds.
Kick the click
We've relied on the click for far too long and it's about time we saw it for what it is: a clunky, vague metric that provides often meaningless data. The click is hardly the most accurate way to measure user engagement within a display advertisement, yet we're still relying on click-through rates (CTR) to inform our media buys. Hovers, scrolls and video plays are far better measures of how well an ad is resonating with users. They are also much more telling indicators of how an ad will translate to key actions like tickets sold, new users or new fans.
In 2012, I think we'll begin to see more of an emerging class of app-like ads that incorporate rich functionality into the units themselves, providing unique metrics and engagement data. The third-party components that comprise these ads — movie lookup or ticket purchase, flight search or even live chat with a brand representative — will revolutionize display data, bringing highly attuned, accurate and actionable information to brand marketers. Being able to track and report on these metrics leads marketers to insights far beyond what they can garner from CTR or even more sensitive metrics like video plays and Facebook likes.
As ads begin to behave more like apps through the addition of these third-party components, marketers and publishers alike can gain new insights and greater value. For brands, these metrics show when high-value actions have taken place and more reliably demonstrate purchase intent. For publishers, higher cost-per-impression is ultimately gained by showing that this new class of ads brings brands more valuable user engagement.
Stay on your toes
By tuning into current trends and using the tools you have at your disposal to engage with your customers right now, your message will resonate far beyond that of the average display ad. In 2012, agility is key. In order to launch and thrive, businesses — from large corporations down to one-man-show startups — will begin ramping up their ability to quickly strategize, experiment, assess circumstances and make snap decisions in real-time when needed. The content you're putting out, the speed by which it reaches your customers and its relevance to the market matters more than you think.
In our tweet-happy, Facebook-friendly world where consumers get what they want before they even know they want it, speed matters and relevance equals resonance. Agility lets you reach your customers with your message when it's most valuable, thus making it more impactful and allowing it to stick longer. For example, think of an investment firm that switches up its campaign to include ads focusing on investing for the long-term when the market takes a wild swing or a snowboard manufacturer that promotes its custom boards after an unusually early first snowfall.
Agility will let us get creative, think quickly and “ship” ideas 24/7. Instead of kicking back after a campaign goes live and waiting for the results to roll in, we'll immediately begin tuning in, taking note of what works and tweaking what doesn't. By plugging into content that your customer cares about and constantly taking into consideration current events that will help you meet your customers' needs, there are no more excuses for campaigns that aren't speaking to your target audience.
Take little risks — and lots of ‘em
Taking calculated risks will help brands achieve success, faster. The agility I mentioned before lets you make small adjustments and introduce new ideas in real time. Take, for instance, a social media manager for a cleaning brand tweeting different content until she finds what her audience likes — one day it's tips and tricks, the next, celebrities whose images need a good scrub. Making constant tweaks gives you real-time insight into what messages stick so you can quickly discern the best ways to reach your customers.
Making smart decisions and swapping out the traditional banner ad for one with dynamic, rich components will also capture your audience's attention far more consistently than the average banner ad. And if something's not working — perhaps those uninspired tweets with company news aren't gaining much traction — then get rid of it. Using an agile model will let you swap out the tweets with a new contest or video. Substitute those in and see if they stick. If not, it's back to the drawing board.
In 2011, we saw campaigns taking weeks, sometimes months to get with it. That's not going to fly in the year ahead.
With new metrics, experimental models and a fresh mindset, we're about to see a major shift in the way online advertisers engage with their audiences. The industry has the tools to upend the way the ad world goes around, and 2012 is the year it's going to happen.
Will Price is CEO of ad tech startup Flite.