Mathew twittered about this iMedia Connection article by Robert Moskowitz the other day, and it piqued my interest. Its thesis is that because offline advertising costs a lot more than online advertising, it must be much more valuable:
According to Michael Hirschorn, for example, writing in the January/February issue of The Atlantic magazine, “Already, most readers of The [New York] Times are consuming it online. The Web site… boasted an impressive 20 million unique users for the month of October… The print product, meanwhile, is sold to a mere million readers a day and dropping….
“The conundrum, of course, is that those 1 million print readers … are worth about five figures a page to advertisers, [and] are far more profitable than the 20 million unique Web users, who… could support only 20 percent of the [newspaper's] current staff…”
The article goes on to cite a bunch of ad executives as they opine on the differences between the two landscapes. There’s a great deal of hedging of bets, lingo and hand-wringing about the state of the industry. What’s illustrative, I think, is how little discussion there is of actual measurement.
Measure, Measure, Measure
We aggressively discourage our clients from spending a cent on advertising that they can’t measure. And I’m not talking about the invented metrics of the ad industry–”brand impression” is a synonym for “might have vaguely glanced at your billboard on the subway”–but actually measuring actions that potential customers may take. This limits their offline advertising options, but if you can’t measure outcomes, why throw money at it?
I was holding forth on this measuring theme at a little brainstorming session for Hollyhock, an extraordinary retreat centre on Cortes Island. It’s the answer I always give to busy marketers who say “I’m already swamped, how do I do this social media marketing stuff, too?” I tell them that they don’t necessarily have to. They just need to analyze the value of all the work they do, add social media stuff to the mix, and see what’s most valuable. If your billboards outperform your Twitter account, then stick with what works.
Speaking of advertising, I read a couple interesting posts on TechCrunch over the past couple of days about the state of the industry. First, it’s shocking to see how rapidly the newspaper industry’s revenue base has declined. The rate of newspaper advertising decline has been accelerating for the last six quarters. Likewise, that article points out that online advertising has declined slightly over 2008.
The first time I saw an LCD display built into the back seat of a taxi cab, it was last New Years Eve in Mahattan. It mostly ran advertising, with intermittent weather reports and news clips. At the time, I wondered how long it would be before I saw them in BC. The answer, it turns out, is about four months.
This latest intrusion was in the back seat of a Vancouver Taxi cab. The company that offers them is Moving Media Group, a Vancouver-based company that specializes in digital screens in cabs. The screens have apparently been in operation since last November.
In my taxi, the screen replaced the headrest on the passenger side front seat. The unit is actually surprisingly thick (here’s a side view), and with the seat reclined, the screen really imposed itself on my field of view. In New York, the display was built into the back of the cab’s front bench seat. Its commercials had audio, which (thus far, at least) my Vancouver cab didn’t. As in New York, the content seemed like it was mostly advertising combined ‘breaking news’ headlines and weather updates.
Dumb Display Ads
Does anybody not find this development totally egregious? In an age where marketers and media companies are re-evaluating the fundamental efficacy of ‘dumb’ display ads, why introduce yet another distraction engine into the consumer’s view? Does the Moving Media Group imagine that we don’t yet have enough commercials and advertisements in our daily life?
Besides, I’m already paying the driver to take me from Point A to B. I’m not paying for the privilege of watching ads for the balance of my journey.
A couple of years ago I went to the bathroom in a pub. Stepping up to the urinal, I looked up to see a video display showing a beer commercial. Increasingly, we’re ceding space to useless, ineffectual advertising. This trend is particularly offensive where, in places like pubs, hockey arenas and taxis, we’re already paying for a service. Shouldn’t we be able to enjoy the experience of, say, riding in a cab or micturating without the intrusion of a commercial?
I touched the screen (I know, kind of gross, no?) only once. Following instructions, I touched the “Touch for Menu” button at the bottom of the screen. And I apparently broke the thing:
By fixating consumer attention on the screen, all advertisers can take advantage of this captive audience.
The next time I flag a cab that has a video monitor instead of a head rest, I’m going to wave the driver off and wait for the next one. I encourage you to do the same.
In the next couple of months, I’m giving three talks to different groups associated with post-secondary education. In preparing these speeches, I was doing research into Facebook’s market penetration among BC’s teens.
As you may know, Facebook’s advertising program lets you thin-slice your target audience in all sorts of interesting ways–gender, age, location even specific interests or workplaces. I created a query that indicated that I could reach 344,860 British Columbians between the age of 15 to 19. I take this to mean that there are 344,860 profiles matching that criteria on Facebook.
Curious to see what percentage of all BC teens this was, I checked the BC government’s stats for the current population of teens aged 15 to 19 in the province. They reported 287,444. I took screenshots of the two sources:
That means that there are 1.2 profiles on Facebook for every BC teen. Is that possible? Probably. After all, I recently read that 99% of the 2012 class at Amherst College had a Facebook profile. I suppose that if 20% of teens created two profiles, they’d generate these results.
And I remember reading some of danah boyd’s (lower case capitalization hers) research that indicates that teens discard unwanted profiles frequently, and often create several on a given social network.
In any case, isn’t this kind of false advertising from Facebook? The most teens an advertiser could possibly reach in BC is all of them: 287,444 in 2008, a few more in 2009.
For at least a year, Barracuda Networks has been running large ads in Vancouver’s airport. I think I’ve seen their ads in other airports, but can’t confirm that (anybody?). I snapped a bad photo of one of several large display ads in the baggage collection area:
I’m always puzzled when I see these ads. Barracuda makes humming boxes that companies install in their networks to protect against email spam, viruses, phishing and so forth. This one costs about CAN $650:
The Barracuda Spam Firewall is compatible with all email servers and can fit into nearly any corporate or small business environment. It is used by small organizations with as few as 10 employees and large organizations with as many as 200,000 employees. A single Barracuda Spam Firewall handles up to 100,000 active email users. Multiple units can be clustered together for even greater capacity and high availability.
According to YVR, about 4.1 million international passengers passed through their gates in 2007. What tiny fraction of those passengers are potential buyers of Barracuda’s products?
The math gets murky, but according to BC Stats, there are about 81,000 technology workers in BC. Of course, not all of those are potential Barracuda customers. Plenty of those have no interest in the IT concerns of their companies. Others work for companies that have fewer than 10 employees. Let’s be generous and imagine that one third of these tech workers might possibly be or know somebody who could become a Barracuda customer.
That works out to 6 out of 1000 British Columbians who might be the target market for these ads. That fraction is certainly lower for foreign visitors. So–best case scenario–that ad might be relevant to one out of every 200 passengers. In truth, I suspect the number is closer to one in 1000.
And yet this is a sadly commonplace scenario. Most offline ads are incredibly dumb–they’re irrelevant to 99.9% of people who see them. Barracuda runs these ads as an act of faith. That one or two out of the madding crowd of visitors grabbing their bags might take an interest, and start on the long, treacherous path towards an IT purchase. And do the folks at Barracuda Networks have an accurate sense of the return on investment of these airport ads? What do you think?
On a vaguely related note, I saw an enormous barracuda in shallow water in Panama a couple of weeks ago. It was at least three feet long, and just cruising gently by in about three feet of water.
James likes to say that advertising is an act of faith. That’s generally true, and it’s a concept that I rail against whenever I speak to marketers. The ad industry of the twentieth century was built on a house of sand: immeasurability. Most of the time, most marketers failed to measure most of their advertising spend.
How effective is that full page ad in that industry magazine? How many people actually see that billboard? How many people actually pick up and read your brochure? These are questions that, too often, assaulted the faith of ad buyers everywhere.
Of course, all of that changed with the web, where we can measure the cost of every click, every conversion, every customer. It makes the newspaper ads and movie posters seem hilariously antiquated. When we talk to ad reps on behalf of our clients, we’ve always got an exact cost-per-conversion in mind. If they can’t offer services below that cost, we don’t advertise with them.
If the local bank were offering a sale on dollar bills, ninety cents each, how many would you buy?
Most rational people would say, “I’ll take them all please.” Especially if you had thirty days to pay for them.
So, why, precisely, do you have an ad budget?
We always discourage our clients from undertaking any advertising that they can’t measure. If they’re running offline ad campaigns, we urge them to have a unique call to action (such as a specific URL) so that they can track a campaign’s effectiveness.
I’m certainly no expert in real estate marketing. However, if I’m identifying the six bullet points I want to put on my new building’s sign, should ‘fully sprinklered’ really make the list?
Let’s ignore, for the moment, that ’sprinkler’ is not a verb. Does this really matter to their buyers? I’d imagine that their target demographic would be empty-nesters and young professionals, most of whom have lived their entire lives in ‘unsprinklered’ accommodation. Is the omnipresence of sprinklers going to convert them to buyers?
I bought the latest issue of Wired magazine. Why do I only read magazines when I travel? I’m not sure why, but that’s not the point of this post.
Reading through the magazine, I encountered a full-page ad for Delta Airlines. I snapped a photo with my incredibly old and lame camera phone:
If you can’t read that (and I don’t blame you), the main text goes like this:
CHANGE IS:
NO BOGUS “BOOKING FEES”
SKIP TRAVEL WEBSITE BOOKING FEES AT DELTA.COM
First off, that’s a various dubious use of quotation marks. That usage is usually meant to imply that something is not what as it’s described, as in:
Our “free” flight that we bought using Air Miles cost $300.
It’s not like a booking fee is actually something else. It may be questionable business practice (though I don’t think it is for the big travel sites), but it’s still just a plain old fee for booking a flight.
Questionable quotes aside, I thought that was a bizarre message to feature in Delta’s ad in Wired. Booking fees usually are quite small, and they’ve actually been around forever. That’s how travel agents make (or used to make) money.
Is That Really a Differentiator?
Do they really think that Wired readers would eschew the obvious benefits of the Travelocitys (plural agreement? Arg!) and Expedias just to save a few bucks?
Other full page ads in Wired are for cigars, executive class travel with Air Canada and Hyatt hotels. I’m not implying that Wired readers are rich, but other ads suggest that they’re willing to pay for luxury goods.
I just don’t see ‘no booking fees’ as a compelling differentiator? Surely Delta has other offers that would be more compelling.
I know this is arecurringtheme on this site, but rest assured I don’t post here every time I see an artist exploiting their fame to promote products. I know I’m tilting at windmills, but I find it deeply distasteful and, often, an unprincipled decision by the artist. I’ll spare you the usual Neil Young citation.
I wonder if she dreamed of pimping printers back when she was in a little Anaheim ska band? Did visions of glossy paper float through her head when she slept in the back of the van? I found this quote from Ms. Stefani, from back in March, 2005:
“Y’know someone one time called me a cheerleader, negatively, and I’ve never been a cheerleader. So I was, like, ‘OK, fuck you. You want me to be a cheerleader? Well, I will be one then. And I’ll rule the whole world, just you watch me.’”
She’s ruling the world, one colour laser jet at a time. I wonder how much she makes for this campaign? And does she really need the money?
As a side note, I saw this ad on TSN’s video site. This is probably a secondary broadcast medium for the ad, but it’s interesting to think about whether the Gwen Stefani + HP Printers + TSN equation makes sense. Particularly when, strangely, they’re promoting Stefani-themed paper dolls. Bizarre.
Mark Evans recently articulated an issue that’s been in the back of my mind for a while. What happens to the web if ad-blocking software becomes commonplace?
Anyone using Adblock wants to eat their cake (access free content and services) and have it too (no advertising). Sorry, but you can’t have it both ways. You can’t gorge yourself at the Web buffet without paying for it in some way such as seeing advertising.
Mark wields some fairly alarmist and provocative language, but he’s generated some interesting discussion in the comments associated with that post.
Hobbyists, Beware
If things online advertising revenue goes south (and we’re talking Patagonia here) as Mark suggests they might, that would be a disaster. I’m wouldn’t be overly worried about web companies who rely on advertising revenue. I’ve talked with plenty of Web 2.0 entrepreneurs who have creative plans to make money that don’t rely on serving ads.
I’d be more concerned about the hobbyists and site owners who have enjoyed (usually small) rewards for their work through Google AdSense and the like. They’ve experienced a significant paradigm shift in recent years, and that’s probably inspired them to keep doing the often excellent work they do online. Here’s a commenter from Mark’s post:
I have provided free content on improvisational theatre [ed: wow, thorough site] for more than a decade, and Google Adwords is the first remuneration I have ever received for this labour of love. It actually helps out with the endlessly thankless task of giving your stuff away ;).
Remove the ad revenue, and you might end up back at GeoCities? Not really, but you get the idea.
Even more problematic than that, however, is the amount of commerce that web advertising enables. Surely there are far more companies using Google AdWords (et al) to generate leads than there are companies depending on advertising for revenue. We’ve had technology companies who get 90% of their leads (and therefore revenue) through their AdWords campaign.
TiVo or Newspaper?
In thinking about this potential problem, we first need to think about how the average person conceives of web advertising. Is it like ads in the newspaper or ads on television? TiVo and the mute button enable people to ignore TV ads, so the ad skipping genie is out of the bottle.
How come readers tolerate ads in newspapers? I don’t think many of them regularly think about how the ads subsidize the price of the paper. By the same token, once they discover the power of ad-blocking software, you’re never going to convince people that they should just turn it off.
If Microsoft ever decides to add (and turn on by default) ad-blocking in Internet Explorer, beware. It will have a huge impact on the economics and, therefore, the landscape of the web.
Bonus links: While looking for an appropriate photo for this post, I encountered two otheramusing billboards.
