A Chief Brand Officer’s Perspective
Advertising accountability: Everyone wants it, needs it, demands it, yet few of us have complete command over the process. And with good reason, I would say.
Advertising is the business of persuasion, and as long as the individual needs, wants and desires, advertising will remain both an art and a science. Algorithms alone will not lead us to the promised land of complete and transparent advertising accountability.
However, we as marketers and senior business leaders with bottom-line responsibilities must identify ways to gauge advertising effectiveness by measuring, testing and repeating our way to better marketing efficiency. More on balancing art and science in a moment.
As the Chief Brand Officer of a media company devoted to meeting the information needs of affluent business decision makers around the world, I see strong corollaries between what we do in terms of content creation—across multiple media platforms—and what you do as marketers to create effective advertising messages. We both seek to inform, entertain and delight. The goal is to persuade your target audiences to learn more about your company and products, create an affinity toward your brands through dialogue, and ultimately, to buy something.
Yes, we market through traditional advertising venues, but mostly our minute-by-minute content creation is our form of "advertising," if you will, and we are maniacally careful to measure all aspects of this process to know what works so that we can do more of it.
Fortunately, we've been pretty successful at it—creating a media brand that touches in aggregate some 50 million people around the world every month, with our digital properties accounting for close to 33 million of that total.
Our web analytics have been a huge help in that regard as we developed a culture of accountability across all of our disciplines—editorial, audience development, web engineering and, of course, marketing.
So science is a big part of our success. But I can tell you that no analytics tool can replace the considered judgment of a good editor—one who anticipates and leads our audiences to explore information or services they never knew existed—nor could our audience articulate their interests if you asked them. There's an old story about Henry Ford. He said that marketing research would have led to the development of a faster horse, not a better automobile. This statement was never more true than in the content business.
Like the content business, the impact of advertising messaging needs to be measured—but we cannot lose sight of the non-linear and often irrational process of creating brilliant advertising that works.
The State of Advertising
The advertising business is in crisis.
The digitization of all forms of media and the power of networks has fragmented audiences, increased media outlets, shifted control of messaging to consumers and driven up impressions while driving down price. Add in the continuing recession and you have the makings for a perfect marketing/media storm.
"So other than that, Mrs. Lincoln, how did you like the play?"
I predict the next phase in marketing will center on creating trust between marketers and all of their constituents: customers, employees and the investment community.
Without a trusted brand, measuring advertising effectiveness is meaningless.
The recession and financial meltdown have left a huge deficit in the trust account for many companies.
Here is where the media can be of huge help. Advertisers need to temper the need for cheap impressions by aligning themselves with trusted media brands that help confer the "trust" halo by means of contextual editorial environments.
This notion of brand alignment and marketing science is very different from the discussion of "Brand" advertising (or really just advertising) vs Direct Response marketing.
The two not only do not necessarily work together they often work at odds with each other. DR suggests lower frequency and behavior change suggests higher frequency. Getting someone to identify a need and then add a brand to a consideration set is a radically different process than point of purchase displays to make the lower funnel transitions easier.
In the digital media space the two tactics are often confused –because you have a "transactional" measurement process in the form of a "click" and hence a performance rating based on CTRs.
So we get the unfortunate circumstance of marketers measuring brand advertising with CTRs and in some cases DR programs measured with brand metrics.
However, the idea that you can create "demand" (DR) without "inspiration" (Brand Advertising) defies logic. Recent research from iProspect confirms the value of online display to drive lower funnel response advertising tactics like search.
The study suggests that while 31% of people click on display ads, nearly as many -- 27% -- go to search engines to provide a search. More than 20% type the company Web address into their browser and directly navigate to the Web site, and 9% respond by investigating the product, brand, or company through social media.
So you need to develop programs that combine display and search in a very strategic way.
What Marketers Think
Forbes recently conducted research among its CMO community to better understand senior marketers’ behaviors and beliefs with regard to digital marketing and to forecast where the major areas of growth—and weakness—will be over the next six months. Here is what we found for those with digital ad budgets above $1 million:
- Higher budgets equate to greater use of all digital marketing tactics. Advertisers like HP are now spending upwards of 40% of their total ad expenditures on digital platforms, according to HP CMO Mike Mendenhal.
- While "CPW" (cost per whatever) lower funnel activities are ascendant right now, 23% of the larger budget marketers state that CPM-based programs on digital publications exceeded their expectations or marketing goals, just below PPC search at 25%.
- Only 17% of these top marketers found behavioral targeting to exceed their success goals .
- Surprisingly, ad networks were found to be at the bottom of the list at 15%—well, not surprising to us, but surprising because of the growth in ad network advertising over the past 18 months.
How are marketers measuring success?
- 82% say they are using conversions or sales data
- 55% use registrations
- 51% use click-throughs
- 51% use impressions
- 39% use search rank
- 31% use brand perception
- 16% use customer feedback
- 14% use reach to target
Amazingly enough, less than one third are using brand perception metrics—despite that fact that the digital world makes brand perception research readily available and measurable. In fact, five years ago, Forbes.com instituted a brand increase guarantee for advertisers who met certain spend and impression minimums. We thought the industry would adopt this across the board as a way to drive more brand dollars to the Web. So far, Forbes remains the only media company to do so.
Obviously, we still have our work cut out for us.
With all the talk of creating highly personalized and trackable digital campaigns based on behavioral parameters, we asked these marketers if they had concerns around the practice. We found that:
- 77% had some concerns with consumer privacy
- 81% were concerned about customer backlash and losing the positive opinion of customers concerned about privacy issues
- The largest segment (82%) said they had concerns over the effectiveness of BT
How about the most effective tactics for generating conversions?
- 53% pointed to SEO
- 43% to paid search
- 39% to email
- 27% to BT
- And only 10% to ad networks
What about brand building tactics?
- The leading tactics by far were site sponsorships and CPM programs on digital publications, at 66%
- 29% chose SEO
- 27% viral marketing
- 24% video
- BT came in at 22%
- Ad networks were again down the list at 14%
Where do these marketers plan to increase their digital media allocation over the next six months?
- Viral marketing came in first at 54%
- SEO at 50%
- Digital publications at 36%
- 32% for video
- 28% for paid search
- Only 19% for ad networks
So, what should we make of all this?
It would appear that ad networks and behavioral targeting tactics will slow or decline as advertisers fail to get the expected results promised. The need to build a trusted relationship with customers as part of an overall reputation management strategy will increase the need for contextual ad environments that align the advertiser’s message with trusted, branded media.
To borrow a term used by Reagan during the cold war—Trust, but verify.
Marketers must create advertising messaging that engenders trust and inspires customers to act and transact in an environment of openness and transparency. And we must all continue to find better ways to measure the impact of our marketing and media channels in a way that does not focus on the lowest-value transaction activity—just because it’s the easiest place to measure.
I'll explore these issues in more depth during my Masters in Marketing session at ad:tech San Francisco with other great speakers including Brian Quinn from The Wall Street Journal; Chris Tolles, CEO of Topix; Drew Lipner, EVP and Group Director at InsightExpress and Patrick Crane, V.P. of Marketing at LinkedIn . I hope you'll join us.