Online Ad Spend Still Projected to Grow in the UK

19 December, 2008

money

The predicted growth on online ad spend – reported by NMA and the Telegraph– in the UK is a glimmer of positive news in the light of all the other economic and credit turmoil. Even with 2009 shaping up to be a very tough year and growth predictions now lower, overall online should still be up year on year. AdViking agrees that majority of this growth will be search and performance display based (ie, a focus on DR = direct response). We also think that web video should start to pick up in the second half of ’09.

Advertisements

Online v. Offline P.R. Case Study…

2 December, 2008

CarQuake in the Press

CarQuake Online

It’s great when you have an opportunity to test the impact of PR… without even trying to.

We work with a new car deals website called CarQuake and, unexpectedly, on Sunday, it was referenced in an article in the Sunday Times Newspaper – and at the same time, it was also posted online on timesonline.co.uk

Want to know some numbers? Well, it’s not particularly surprising that direct and searched for ‘CarQuake’ visitors went up by about 600 on Sunday, and 400 on Monday which can be pretty much attributable to the newspaper article. It’s also not necessarily surprising that visitors direct from Times Online went up from 97 on Sunday to 104 on Monday – note that the figure rose at the start of the working week (get back to work!!).

And we can, sort of, put a value on these things if we know that a new visitor to CarQuake is ‘worth’ about 20p to the business (so the times mention, so far, is worth about £240 in direct attributable value, and about the same again in brand awareness).

However, we are expecting two things to happen:
a) That the timesonline.co.uk article will eventually pass the print version in terms of overall traffic generated as the ‘tail’ for online is 6 months plus (though it does deteriorate)
b) That we can see from our stats that the direct traffic (and search engine traffic from ‘CarQuake’ searches) is slightly ‘stickier’ than those from Times Online and convert better
Not to mention that the direct link from Times Online will benefit the search ranking of CarQuake in the medium to long term.

Still, it does mean that there are ways of measuring these things… it’s just whether you have the right tools in place to do the job! Ciao…


Microsoft Continues Push to Defend Value of Display

25 September, 2008

MSA - new logo

It may appear at times that the AdViking crew are a bit all over the map in terms what we blog about and what we champion – direct response, conversational marketing, ppc, branding, display, search, etc. All I can say is this is healthy – debate and dialog is a good thing, I don’t need to defend it.

This past week Microsoft continued its solid defense of the value of display advertising with a renewed push. How? Well Microsoft’s Young-Bean Song (a guru of online advertising analytics) began a speech at the MIXX conference in New York earlier in the week with a beer analogy (more here at wp)… We like beer analogies. Anyway, he talks about Corona, but we can substitute this for Guinness or Stella or Heineken, saying if they could measure that last interaction a consumer has with that brand before they buy beer well then they might “put all its marketing budget into neon signs at pubs.” Or t-shirts. We all know that this would be stupid. We know advertising works in a more holistic and less black & white way.

old school - last click wins

For example on your way to a pub you may see a sign for Guiness on the bus and you may remeber a great Guiness TV ad. And then you’ll think ahh I am going to an Irish pub so why don’t I order Guiness. You get the idea.

Well a lot of online advertising (especially paid search or CPC based models) works by just giving credit to the ‘last click’ and thus we (advertisers and marketers) are ignoring all the other touch points when calculating the overall ROI (return on investment) of our online marketing mix.

Instead, in  a nutshell, what Microsoft Advertising is saying is that advertisers should be smarter than that and look all the data they can when analysing online ad spend. Based on some studies that Microsoft has done using real data  – advertisers can be ignoring as much at 94% of the online data points and only looking at 6% of the data when calculating ROI. That sounds like a step backwards to me!

new school - engagement based ROI

Microsoft Advertising have developed an entire reporting standard to help advertisers called Engagement Mapping. Check it out.


Microhoo Fallout? Kevin Johnson Leaves Microsoft

24 July, 2008

Microsoft

In a surprise move, it was announced yesterday that Kevin Johnson has left Microsoft to become CEO of Juniper Networks.

Johnson was the driving force behind the run at Yahoo! and was head of the Platform & Services Division, the largest group at Microsoft, containing Windows, Live, Advertising (APS) and a few other things.

Debate around the why, what, etc. of this is pretty split, e.g.:

TechCrunch are positive, Microsoft Rumbles, Rearms For Online War It Can’t Win Without Yahoo

Though Kara Swisher (no surprise here) comes down on the negative side:  Microsoft’s Latest Web Stumble: Kevin Johnson Out

Why Did He Leave

AdViking believes that the run on Yahoo! is a (defensive) tactical play to ramp up the Search side of things and protect Windows and Office revenues (i.e.:  the part of the Cloud War rather than the Search Battle).

This run currently looks like it was a failure and some of the moves that were taken looked ill-conceived and the impact was that Ballmer and Microsoft currently look like they have egg on their faces.  The price to pay for this is that Kevin Johnson is leaving.

Has the Axe Fallen

The Impact

The immediate impact is that they have now split Johnson’s empire into two groups:

  • Windows/Live – Reports directly to Ballmer
  • Online Services Business – The search is on to fill this gap.  This fact is surprising and a clue to the fact this was an unplanned exit.

Picking up on the point that there is no-one in place to head up the Online Services Business, an interesting echo from the sphere is that this could possibly leave room for an acquisition CEO to fit into a key role nicely (e.g.:  Jerry Yang)

AdViking thinks this split makes a lot of sense and from looking at the Org chart before yesterday, didn’t quite understand why two such important groups rolled up under one Exec.

AdViking further likes the split as it does mean that the advertising side of the business will now have more power and therefore will be able to offer the industry an even more competitive offering.

Background Materials

Official Microsoft Press Release

News of the departure and re-org was announced in a few ways including a 2009 Strategic Update email from Ballmer.  This has had wide coverage in full text.

Some interesting tidbits to pull-out from these:

Betting on Display Advertising

Senior Vice President Brian McAndrews will continue to lead the Advertiser & Publisher Solutions Group (APS)…McAndrews will continue to focus on the display advertising opportunity for Microsoft

Google and Search

We continue to compete with Google on two fronts—in the enterprise, where we lead; and in search, where we trail. In search, our technology has come a long way in a very short time and it’s an area where we’ll continue to invest to be a market leader. Why? Because search is the key to unlocking the enormous market opportunities in advertising, and it is an area that is ripe for innovation. In the coming years, we’ll make progress against Google in search first by upping the ante in R&D through organic innovation and strategic acquisitions. Second, we will out-innovate Google in key areas—we’re already seeing this in our maps and news search. Third, we are going to reinvent the search category through user experience and business model innovation. We’ll introduce new approaches that move beyond a white page with 10 blue links to provide customers with a customized view of their world. This is a long-term battle for our company—and it’s one we’ll continue to fight with persistence and tenacity.

On the Yahoo Run

…I want to emphasize the point I’ve been making all along–Yahoo was a tactic, not a strategy. We want to accelerate our share of search queries and create a bigger pool of advertisers, and Yahoo would have helped us get there faster.


Layoffs at 2nd Tier Networks – Miva, Vibrant Media

7 July, 2008

The AdViking scouts are hearing from unofficial but reliable sources in the field of battle that both Miva and Vibrant Media have made staff layoffs in Europe during Q2 2008. This is regrettable for the employees who are getting their pink slips (or P45s) and we hope that all good people find rewarding and fulfilling employment quickly. Alas, AdViking is not hiring for our latest adventure. At least it is summer and a good time for a bar-b-q and some strong ales.

We do want to note that we believe these layoffs are a sign of the general slow down due to the economy and perhaps the natural advertising cycle. However, we do not believe that the online ad spend is going down overall, only that the spend pattern will migrate to the bigger and better quality sites (like portals) or ad networks and rich media channels (ie, video) – all while we watch online advertising out pace TV advertising in the UK. And is predicted in general to grow around 20% or a bit less depending on what report you read. Those players further down the food chain and/or offering poor products (and traffic) will suffer. We fear that many established players as well as start-ups in the ad space or with ad funded models will be forced to trim back and some will perish. This is a time when it is going to be safer at the head of the long tail of advertising.

On a related note we were reading the UK NMA this week which is touting a story titled “Portals drop ad rates to fill space” (note: paid content, best save your money) and we don’t buy it yet – the idea that spend is shifting away from portals or that their is price pressure. The article goes on to imply that display (banners, brand advertising – which matters!) are being impacted first and that as spend tightens it is shifting to ROI or direct response products. AdViking thinks this is a poor strategy by media buyers as it will only drive up the cost of media or clicks on the likes of AdWords and that then pushes ROI down. Down a rat hole of DR chasing Google’s tail… All media buyers please re-think this strategy, try to get that right mix of spend and help prove the NMA story wrong. Anyway, digital is the king of advertising now. Long live The King!

Post-script:

Miva accounded they are doing a 15% staff cut, including killing it’s Italian Media Operation


Another Reason Why Brand Ads Matter Online

11 June, 2008

I was at AdMonsters in Berlin this week. This was a very well run and enjoyable event. Thankfully they “firewall” the sponsors (vendors) at this event from the members (publishers) and I think this helps keep the conversations focused and at times very open. BTW – I was there as a sponsor (as part of Microsoft Advertising), they made me work for it as I had to run 2 workshops. Thanks to the publishers the workshops were very good and generated some valuable insights especially around the challenges of inventory management for display… I digress. The point of this short post was to outline an old but still well worth remembering reason why brand advertising is very important to content owners. I will now try to explain.

If you have a site with great content (think the Guardian or NY Times) you want your users to stay on the site and you do not want them to click away. However, you need to support your business with ads (ie, ad funded) and thus you need those brand advertisers to buy ad slots on your site (usually in the form of CPMs). It will always be a balance between how many ads and how they are displayed vs. content and editorial best practice. The higher the production value of display ads (more rich media and video please!) the better. Users get the impact, advertisers get value, the publishers get paid and we get to read great content. What we at AdViking call a virtuous cycle. I wonder if the folks over at Google AdWords ever think about this virtuous cycle? Or the smart folks who came up with the 2nd search box?

This got the AdViking crew thinking a bit more about the old “above the line” (branding) vs. “below the line” (direct reponse or DR) split or paradigm. After a few too many fine German pilsners we found ourselves asking why is everyone trying to battle Google in the DR space? Or as John Battelle says (thanks JB for keeping it real; btw – AdViking loves your blog):

Straight down a rat hole. (A direct response rathole, I might add – the majority of dollars on the web are still in DR).

We agree this could be a really bad hole to fall into. Sure DR works but the whole point is it takes traffic away from your content! Simple idea that is easily forgotten while chasing all those ad dollar$ like some sort of crazed publsihing pimps (or do I mean whores?). Maybe DR is a whore and branding is the pimp? As we board our viking ship for battle we say “long live brand advertising online!”


Vertical Zoom – Local Search Summit III in Oslo

6 June, 2008

AdViking has finally recovered (more on that later) enough from the Local Search Summit in Oslo to put finger to keyboard and round off the Vertical Zoom with a quick rundown on AdViking’s key takeaways.

As written previously Local Search Summit (LSS) is an invite-only session between various non-competitive Publishers who are at different stages of deploying a Local Search strategy.

The main points for AdViking were:

  1. Search is a Key Business Enabler
  2. Advertising Growth isn’t Just Search
  3. Paper is Dead.  Long live Digital
  4. Direct Sales Force Publishers have become SEMs

Search is an Enabler

For the LSS publishers, is maturing quickly from a destination strategy into a key infrastructure play  That is by having initially deployed a vertical strategy, people are realising that by having a broad horizontal search infrastructure it can enable Publishers to quickly build and deploy verticals, e.g.:  Search driven hyper-local algorithmic digital newspapers.

Advertising Growth isn’t Just Search

Three main points to consider about this topic.

It might be obvious to most in the industry but one important recent penny drop is that Display is still here and not going away.  There’s lots of examples out there but here’s one example from the IAB/PWC comparing 06 to 07 ad spending in the US.

One example is some current thinking that AdViking it putting into around Contextual and how it is probably going to be more effective for Contextual ads to move from the typical AdSense model of PPC and apply the inventory management algorithms of Display.

Paper is Dead.  Long live Digital

One Publisher shared the fact that driven by demand from China, the cost of stock printing paper has risen to $1000 per tonne and rising.  Until recently, it was typically established  around $600.  Obvious impact of this is that it’s getting more expensive to put anything to paper.

Another interesting point was that there is now an increasingly environmental push that is starting to have an impact.  e.g.:  The Norwegian government has banned the printing of the Yellow Pages book.

Direct Sales Force Publishers have become SEMs

It’s confirmed that Publishers are leveraging their feet on the street  to become SEMs to their advertisers.  From evidence at the LSS (e.g.:  Directories are selling video ads created through partnerships with companies like Spotzer, Spot Runner) AdViking would go as far to say that they are becoming digital media agencies with a mix of selling directly to brands, agencies and the SME advertiser.

As for recovered, that’s a comment on the night time activities.  First of all, due to excellent weather and the time of year – the sun didn’t really set and it was quickly 2am but felt like 11pm.  That matched against the fact that AdViking had organised for everyone to stay at the new design hotel Grims Grenka and the nights for LSS was the ground opening parties on the rooftop bar which to quote one of the attendees, “this is amazing, it’s a supermodel party on the roof”!

Post-Script: LSS member, Irish Times have launched their new search service.  It’s work going to have a look as they have done some great things with pushing Search forward.  A Fuller View has more on A New Local Search Site in Ireland – ireland.com relaunched