Alan quotes a Fred Wilson post on the “return of the banner” as a significant force due to Google’s DoubleClick purchase.
I had pretty much the opposite reaction – this is a chance for Google to prove what banners are really worth and replace a lot of that banner inventory with more targeted avails, aka Adsense or some variant based on DoubleClick tracking data.
For example, I think the much touted “view-through” metric that really helped out the banner business is up for grabs here. The unresolved problem (to my knowledge) with tracking view-through is the lack of cross-cookie tracking.
Let’s say you are in search mode, you search and arrive at a site that has banners. Even though you really were scanning the text on the page and ignoring the banners, you are counted as being “exposed” to the banners. You continue searching and land at the site the same banners are linked to, and complete an action.
The banners will get credit for the “view through” on this action, even though you were searching and / or clicking on PPC ads. To make matters worse, you will probably also credit SEO or PPC for the conversion – so you’re double-counting.
If you are Google with DoubleClick, you can reconcile and sequence all this activity if Google is the search engine being used, and figure out what the real value of a banner is. Branding value aside, of course..;)
Would you be surprised if the true value of a banner ad is a lot closer to an AdSense avail than an AdWords avail? I wouldn’t be; in fact, I bet banners are worth less that AdSense avails – at least for generating conversions.
I guess there will always be Branding folks who buy impressions and perceive value in them, without any further measurement. You could measure the success of this tactic using Engagement with the Brand site – overall Engagement should rise, no banner click required. Failing any improvement in Engagement, you could always say “the benefits all accrue offline” and be done with it.
Those interested in a more technical discussion of this view-through tracking issue, try here.
Hi Jim!
You wrote and smilied: “Branding value aside, of course.”
And
“I guess there will always be Branding folks who buy impressions and perceive value in them, without any further measurement.”
Yup — and those Branding advertisers are IMHO the key to the acquisition.
According to the Jeffries investment bank, the breakdown between online search and online banners is about 50/50, roughly $15b apiece.
Link:
http://publications.mediapost.com/index.cfm?fuseaction=Articles.showArticleHomePage&art_aid=56363
Very crudely, lets say that $15b in search is primarily direct marketing (ROI based), and the banners are primarily branding (awareness based).
But online today is only 6% of total advertising (stat from same article).
Of the other 94%, I’d guess 90% of that is about brand (CPG, TV, billboards, mag display ads, etc), and only 10% about direct (catalogs, direct mail).
So while direct vs. brand might be roughly 50/50 in 2007, as big ad budgets flow online, the lion’s share of new growth is going to be the traditional advertisers doing their branding stuff.
Page & Brin & Google will certainly rewrite the entire media buying landscape — auctions make good economic sense to price space. And P&B will encourage more marketers to think quantitatively. But P&B won’t turn every advertiser into a direct marketer… that isn’t going to happen.
So as online grows, the additional growth opportunity IMHO is online branding.
Google’s stock price @ $470 is pretty much back to where it was in October… Wall Street is voracious for growth. Direct marketing ad sales aren’t enough to keep GOOG climbing — they need to conquer the brand budgets.
Cheers —
Alan
One thought on this – i don’t think Google are going to “conquer” the branding budget any time soon – at least not in years 1-3. The deal done in the US with Walmart and others to buy TV airtime and resell it via the auction process is a great experiment and will prove whether other media can be commoditized in the same way as online. However the same argument about impressions not equalling value applies offline as well as online. Unfortunately for Google they can’t measure exposures to TV / Press / Radio in the same way as they can for banners / adsense.
Until 2005, I’d never done a study into advertising effectiveness which showed online banners achieving any amazing returns. In the last couple of years, a couple of pieces of research I did showed some limited impacts in some technology categories but returns weren’t anything to write home about. Online search can achieve quite a lot for a small to mid-size business but it’s often doing little more than conversion moving people to purchase online rather than via a different channel.
I think the most interesting deal out there for Google will be one which combines advertising, mobile phones, RFID technology and set top boxes. That would give Google access to each stage of the marketing process for online, TV, Radio and outdoor channels since Google could work out who was exposed to which message and when. That’s got to be at least 5-10 years away!
I’m interested in seeing how all this plays out too. The reasons
behind the double click purchase? I’d like to know as I never
got banner advertising to work too well for the price paid.
All, thanks for the comments.
Alan, I understand the “market size” argument, but I’m not sure that a dollar spent offline on “Branding” when it moves over to online is still a dollar spent on Branding. It may be spent on the “space” that was once devoted to Branding (banners), but used in a different way.
One of the challenges in talking about this area is a lack of consistent definitions, and perhaps I’ll try to post something of a model on this topic later on for you all to tear apart. For example, a dollar spent on TV is not necessarily a “branding” dollar (it depends on the message, right?) and so to equate strategy with media outlet can be misleading.
Seems to me this is where we are headed: when a piece of media is sold at auction instead of for some “implied value”, the buyer must have a fairly clear notion of what that piece of media is worth to them; how else to they determine a bid? Whether the measurement lens you view the media buying through is branding or direct or hybrid, comparisons of “performance” are going to be a lot easier to make than before and we will begin to get a hierarchy of value for different media “jobs” – introducing new products, awareness of existing products, driving purchase, etc.