Good News… Online Will Win!

A few weeks ago I spoke at the Search Engine Strategies conference in New York. I was struck at the conference that people in our industry had their heads down. I recognize the economy is tough and that jobs can be hard to find and keep. But guess what… online advertising will win!

Like you, I have friends in traditional media. Newspapers and print in general have been hammered. Radio and outdoor is fading and television is showing signs of weakness. The dollars are shifting to online and with good reason. In my preparation for the presentation (which can be found here) I spoke to senior executives at digital agencies and leading online advertisers. While the title of my presentation was, “Measurement Matters” the focus was on change.

There is no doubt that the world of online advertising is at a crossroads. According to a recent IBM survey, over 60% of all advertisers are cutting budgets… 80% of them are trimming more than 15% of the spending. This urgency was clear in this quote from the report,

“Advertisers are aggressively shifting their spend to even more interactive, measurable formats, as providers struggle to move "beyond advertising" to new forms of communication that combine the ROI characteristics of direct marketing with the brand characteristics of traditional advertising.”

The tone I heard when speaking to advertisers and agencies was consistent… “Now more than ever, we need to be sure we get what we pay for”. Jobs are on the line, performance is not optional and measurement matters.

Where can advertisers get better value and solid analytics for performance advertising? Online of course! I’ve identified five specific attitudes that need to be addressed to fully capitalize on the shifting dollars…

1) Stand on our strengths – Online advertising is measureable, has a growing reach and new and creative ways to deliver meaningful ad impressions to consumers. These are meaningful strengths that need to be communicated.
2) Tout the targeting –Saying that television advertising can target is like saying you can tell what kind of fish are in the water from the boat. Targeting (behavioral, demographic and geographic) is a strong suit of online advertising that is unmatched in traditional advertising.
3) Get creative with compensation - Advertisers need to (and will) hold agencies feet to the fire. Agencies that embrace this and are open to new models of compensation, will win.
4) Measure, measure and measure – Performance standards, benchmarking and goals are critical for success. The good news is that online holds that as a competitive advantage over traditional media. More tools are available to help with this and insight into campaigns makes a major difference in success.
5) Look beyond the “Big Two” – Yahoo and Google hold a lot of the cards when it comes to online. However, there is a growing community of quality ad networks and publishers that can deliver strong results. I’ll talk more about how to find them in a future post.

My presentation included the chart below highlighting a SWOT (strengths, weaknesses, opportunities, threats) analysis I did on our space.



The current economic conditions create an opportunity for those of us in the digital world. Now is not the time to complain… it is the time to aggressively promote the benefits that online holds over traditional media.

Tom Cuthbert

The Future of Newspapers

A few weeks ago I noticed that the Business section was missing form my Sunday paper.  I vented by posting a tweet and followed up by sending an email to the business editor of the paper.  After a few days I received a well written reply. It stated, 

Unfortunately, we have discontinued the Sunday and Monday Business sections. We are not happy about it, but at the end of the day it was an action that had to be taken for the good of the institution. I am sure you are aware that we are on the cusp of technological, cultural and generational forces that are reshaping the information landscape. Add to that the most corrosive financial environment since the Great Depression and you can see the perfect storm that has slammed into the traditional business model for the general circulation newspaper.

First of all, I appreciate him taking time to respond.  I enjoy reading actual newspapers and read several of them every day.  I recognize that the industry is changing and in deep turmoil, but it seems to me there are lots of other areas to cut besides the Business section.  Maybe I'm not a typical reader since my favorite publication is the Wall St. Journal.      

My response was, in part...

Thank you for writing me back.  I recognize the difficulties all print publications have as people change habits to online.  I have followed the Seattle PI switch with interest and you are right, it is a changing world.  I know you guys are in a tough spot.  I certainly don't have the answers.  I can tell you as a technology person in this community I rely on your paper to keep me informed.  I will also tell you that  dropping Sunday and Monday will cause me to consider my subscription.    I encourage you to think of ways to enhance the coverage, more deeply engage readers, pull in more regional information and create new ways to rebuild, not retrench.  (Twitter and other social media outlets may hold some answers)

So what is the future for papers like mine?  Henry Blodget wrote and interesting article titled, "Our Plan to Fix the New York Times".  In it he discusses several options for papers.  In the end, the business model is flawed given the access to data that people have.  Blogs, micro papers and online publications are pulling readership away from print.  Classified ads are less effective than ever now that they compete with Craigslist and EBay.  Even searching for homes has moved from print to Zillow and other online sites.

At the end of the day I do believe I predicted the future correctly when I wrote, 'Future conversation with my son (circa 2034) "Really Pop?  Someone actually 'threw' a PAPER copy of the news on our driveway?  No way!".  

Too bad, but that is the direction we are heading.

Tom Cuthbert

SES New York 2009

I attended the Search Engine Strategies conference in New York this week.  It was a very different show than last year.  The crowds were down, keynotes were less engaging and more people that ever are dressing up.  

One other notable change, there was no click fraud panel.  It was just a year ago that the Search Engine Watch said the top story coming out of SES Day 1 was "Yahoo cozies up its click fraud critics".  Too bad, because click fraud is certainly a topic on the minds of advertisers, agencies and publishers.  One blogger noted, " In these hard times, it's more fun to talk about silly tweets than evil cheats."  Maybe true but "silly tweets" are only wasting time, not advertising dollars...

I did enjoy participating on my panel titled, “Pay-for-Performance: Winning Strategies for Advertisers and Agencies.”   I've posted my presentation below.  Additionally, a video recap can be found here.
[slideshare id=1195434&doc=sesnyc090324-090325080029-phpapp01]

 

Tom Cuthbert

How Botnets Take Control

The problem of botnets is getting worse, not better.  In fact, over 30% of all click fraud comes from botnets, maybe even YOUR computer!  Ever wonder how botnets work?  The BBC has acquired control of 22,000 computers and have been demonstrating how it works.  The videos are easy to understand and  very interesting.

Cyber crime risk exposed
How cyber criminals attack websites
Is your PC doing a hacker's dirty work?

Click fraud is costing advertisers millions of dollars a year.  So how can you protect your computer from becoming a party to the crime?  Again the BBC site has an excellent article with practical steps called, "How to keep your computer secure".  Take time to read it and be sure you are doing your part to reduce click fraud.  

Tom Cuthbert

The Click Quality Council invites you...

Last week I wrote about the Interactive Advertising Bureau's release of the Click Measurement Guidelines.  This document is extremely important for advertisers, agencies and ad providers.  It defines the process that will be used to measure and deliver clicks to advertisers.  The Click Quality Council is hosting a call to discuss the guidelines, describe the process used to develop them and the impact for the industry.

The call will be Wednesday March 18th at 4 PM ET/ 1 PM PT and is open to all members of the online advertising ecosystem.  We will have  George Ivie of the Media Rating Council as our speaker.  George worked directly with the IAB in facilitating discussion and building the guidelines.  Registration is available by clicking here.

Tom Cuthbert

Saying Hello to Rascal Flatts

Several years ago I was in New York City on business staying in Times Square.  I woke up early and wandered toward a Starbucks for my caffeine fix.  I ended up in front of ABC's Good Morning America studio on Broadway.  There was a guy out front trying desparately to get people in the studio which was less than half full.  At that time apparently no one cared that Rascal Flatts was about to perform.  I certainly didn't... in fact I had no clue who they were.  On top of that, even though I am a lifelong Texan, I don't particularly like country music.

Having a full cup of coffee and a little time on my hands I wandered in to listen.  While waiting I remembered that my daughter had mentioned Rascal Flatts before.  I called her at college, woke her up and explained where I was.  She went from a bleary eyed hello to screaming "OMG you are with Rascal Flatts?!"  She was a fan I so I promised to have my picture made with them.  I stayed to listen and did in fact get my picture made (feeling like an idiot!).

Jump ahead to today and I admit, I am a big fan!  I have since gone out of my way to see Rascal Flatts at GMA again when they premiered an album and taken my daughters to a concert.  So needless to say, I am looking forward to the new album coming out April 7th.  They were nice guys, the lyrics are compelling and the music is exceptionally good.  Their new song, "Here Comes Goodbye" is another hit waiting to happen.

So take a listen.  Maybe you'll get hooked like I did!

Tom

The Lens We Look Through

On a recent trip to New York, I was asked by an ad provider executive, “Which side are you on?”  At first I didn’t know what he meant, but he clarified it for me by saying that in the world of advertisers, ad networks, publishers, and ad providers, it’s important to know whose side you’re on.

When I told him that we are on the side of the advertiser he paused, thought about it and then the light bulb went off.  What’s good for the advertiser is good for our entire industry.  100% of the over $24B spent on search advertising comes from advertisers.  They pay the bills for search engines, ad providers, parked domain companies publishers as well as those of us that are working to provide tools to improve traffic quality.

Despite our diverse client base, the lens Click Forensics looks through for every decision we make is that of the advertiser.  While Click Forensics works with a number of advertisers and agencies, we also have many clients that are ad providers.  This list includes search engines, ad networks, publishers and even parked domain companies.  The reason these companies choose to work with us is that we provide insight into the traffic quality they are selling to advertisers.  They are able to use this information to route, block, price and value the traffic to help advertisers get a better return on their ad spend.

Smart sellers look through this lens too.  Companies like Yahoo that asked advertisers how they could improve communication. The result was the cooperative development of the FACTr system enabling advertisers to communicate concerns to Yahoo.  Companies like Lycos, who realized early on that “quality matters” and began working to enhance their quality using traffic insight tools.  And industry organizations including the Click Quality Council, while made of all parts of the ecosystem, is always advertiser focused.

Advertisers drive our industry and that reality will become even clearer in the future as mobile grows more important and display begins to look like search.  We are proud of our involvement and the work of the Click Quality Council.   The CQC is an example of an industry organization that is not dominated by one constituency.  The over 100 members include companies from every corner and every perspective of the eco-system.  They sit around the virtual table as equals, all understanding it is the lens of the advertiser that matters. 

So as the IAB releases the Click Measurement Working Group Guidelines, it is important that they are reviewed through the lens that matters, that of the advertiser.  We should be asking, are these guidelines fair?  Do they have enough substance to improve traffic quality and help ensure advertisers get what they pay for?  Do the guidelines improve transparency and enhance trust between buyers and sellers?

I attended the IAB’s annual conference in Orlando last week and have a clear picture of their lens .  We applaud the IAB’s leadership and the work of the Media Rating Council and task force members who produced a foundational document.  Our hope now is that we can work together to build on this foundation to build trust, enhance transparency and accelerate the growth of online advertising.

Tom Cuthbert