*DMers Shouldn't Ignore Online Branding, DoubleClick CEO Says
"The question I always get asked is, 'Is this an advertising medium or a direct marketing medium.' The answer is yes, yes it's both," said Kevin O'Connor, chairman/CEO of online ad network DoubleClick Inc.
O'Connor acknowledged that he's sometimes criticized for that stance by people who accuse him of wanting to have his cake and eat it too. No online ad network in its right mind is going to exclude an entire group of possible advertisers.
But the Web is perfect for satisfying the needs of both types of marketers, he said, arguing that businesses interested in direct response versus those interested in fixing awareness of their brand into as many peoples' minds as possible have been polar opposites only because of the different media they use.
The voices touting branding on the Web are getting louder and speaking from a number of quarters - a phenomenon that has coincided with click-through rates on banner ads plunging into sub-one percent territory. Now the value of mouse-clicks increasingly is being downplayed, most recently by Web ad management firm AdKnowledge Inc., Palo Alto, CA, which released a report this week indicating there is little correlation between click rates and conversion rates.
But O'Connor argued that the Web is still a uniquely powerful marketing and advertising medium. Obviously, direct marketers want to target only the right people and sell as profitably as possible to those people in a measurable way. So they use things like mail, which has poor reach, and is of little value to brand marketers.
"On the other hand, the Web is actually quite good for all these things. The fact that you can reach a hundred and fifty million consumers today, you do have a very, very broad reach," O'Connor said. "The fact that you can micro-target gives you what direct marketers want." He added that the Net is "extraordinarily measurable."
The jury is still out on just how valuable the Web is for brand advertisers, the executive admitted, though he said "every study that's been done on branding on the Web [shows] it does work."
"One message I want to send to everybody is that … as direct marketers, you can't value brand at zero. And I think that's a real struggle with direct marketers. They put no value whatsoever on branding, and it's a big mistake," he said.
On the other hand, advertisers often fail to understand the science and fundamentals of direct marketing - testing creative, product, offer and audience - and end up failing. O'Connor noted that New York-based DoubleClick has worked with traditional direct marketers who have entered the Web fray only to fail because they became Net-happy and threw all the fundamentals of their practice out the window.
O'Connor and other speakers spent much time going over basic concepts of direct marketing for their audience, a recurring mantra at various Web marketing conferences often filled with listeners who are more familiar with brand advertising or the technology of the Web itself.
"Most organizations are structured for traditional marketing, which is about polishing a single message and getting it out there, as opposed to doing direct marketing, which is about an evolutionary way of testing things," said Seth Godin, the "Permission Marketing Yahoo" at Net giant Yahoo! Inc.
Industry watchers have been trying to decide over the last four years when results-based pricing becomes direct marketing, said Peter Storck, Jupiter's senior vice president for research. The debate isn't over, of course, but advertising and direct marketing are slowly merging online, he said.