Broken Online Model Endcap

I’m going to leave the Requirements / Model issue to simmer for a while; thanks for all your help exploring it.  I get the feeling people might want to connect with more practical ideas right now and not take on the windmills of the Tech / Marketing Interface.

So I’ll wrap up with a few relevant links to what others have recently said about this model / requirements problem.

Facebook COO

Yesterday, Ad Age tells us that Facebook’s Chief Operating Officer Sheryl Sandberg said this:

“Google and its competitors have made answering demands for information very profitable by selling ads attached to search requests, or demand fulfillment, Ms. Sandberg a former Google executive herself, noted.  “What no one’s figured out how to do is demand generation,” she said.  “We need to find a new model and new metrics,” she added.

It’s the Serendipity problem, right?  You can’t Search for what you don’t know about already?

 

You say Demand Generation and Demand Fulfillment, I say Awareness and Interest.  Same thing; Demand generation happens when people are made Aware of something, as opposed to having Interest already and Searching for it.  So we agree there.

I think where we might differ is I’m saying the web is simply too expensive for the Awareness it delivers because it’s intentionally decentralized.  I’m saying the very essence of the web, what makes the web the web, is a fundamentally poor structure for generating Awareness / Demand when compared with centralized media.

So while there may be a “new model” for Awareness / Demand out there somewhere, it will be inefficient compared to current media alternatives.  To keep trying to build a general purpose Awareness / Demand generation model on the web is Repeating the Past.  Why don’t we just move on and create “Interest Platforms” instead of “Awareness Platforms”?

Just to be perfectly clear, I am not saying Display “doesn’t work”.  What I am saying is that it doesn’t work well enough for the cost when compared to other Awareness media to be used for the purpose of generating Awareness.

Search as Display, or Display as Search?

Google-Click, if they feel generous, may provide some much needed data on what actually goes on between Display and Search that will boost the value of Display.  After all, AdSense is really a (not very good) Interest platform, isn’t it?  But just to show I’m not a total wonk, some people are working on what might be a better Interest Platform. 

Jonathan Mendez in Display Becomes Us talks about Lookery and the idea that Search could become “display advertising’s operating principle”.  I’m not exactly sure what this technology is up to, but it sounds like an “implied Interest” approach with higher quality than AdSense.  Personally, I doubt a database of search referrers can be as universally relevant as Search but it probably could work for some categories, and it absolutely has the promise to be much better than Display or AdSense, which both suffer from the lean forward problem.  Ar least you can fix this problem with AdSense.

Facebook Search Ads

I’ve said for some time that if Social Media wants a monetization model that works (is relevant) they should try Search.  But the Socials have repeatedly resisted going that way for some reason.  Now we have Facebook announcing that Search-driven monetization is up and running with Microsoft.

I tried some searches and found not only relevant Facebook groups but also (shazzaam!) relevant ads.  It’s not Demand Generation, but it will probably make money, don’t you think?

Recursive Navel Gazing

Finally, I would simply like to make the point again that just because certain highly specialized online Display promotions can be forced to work does not mean they are “Marketing Breakthroughs”, it just means they are so highly targeted they can’t fail (um, like Search?), which also means they cannot be rolled out in any volume – that old “Awareness problem” for the web again.

Selling Facebook widgets on Facebook or HP Notebooks to people reading specific tech blogs is not Marketing Genius, it’s shooting fish in a barrel.  There’s no Reach, and these efforts don’t Scale – elements critical to generating tangible Awareness.

The fact this kind of promotion works is simply evidence that hyper-contextual targeting works on the web, which supports the general argument against an Awareness / Display platform on the web and for Search / Interest as the right model to be pursued.

Hey, at least some folks on the Tech side are moving forward!

9 thoughts on “Broken Online Model Endcap

  1. Jonathan Mendez

    Jim,

    This is an outstanding post and thanks for the link. You fired me up to add my .02 here.

    I’m not sure there are inefficiencies in the demand gen of the web. I think there are technical solutions to this problem emerging and tactical approaches as well (I’ve discussed some here).

    Why can’t demand work by being contextual? Or targeted? That Mercedes-Benz add costs $1m to make and another $2m for media. Give me $3m and I guarantee I can get a greater or equal % or awareness online, not to mention the ability to pay-it-forward to interest. Works even better if that spend is distributed cross-media effectively.

    Implied interest is the approach that I think will be successful as display migrates to search however WHY I think this will be successful is because of semantic technology. I think this fuels an emergent platform that will rely on content and user control. This OS is both “Behaviorist” and a “Slider” to borrow your terminology, and to leverage the medium in the way it was meant to be used – going all the way back to Mr. Berners-Lee himself – it’s useful content and information that people crave, sometimes that ads!

    Search is limited by the very demand gen that we love about it. There are no more people searching for “Honda” now then 4 years ago. What we know is other mediums can drive demand very well and yes, so can display. For $10k I can get 20mm impressions for people that like music! That’s reach — and there’s hundreds millions more impression I can have EVERY DAY too.

    I’m confident we will solve these problems. We are already. We’ve just been stuck with a broken system in display for ten years. People are getting that now. I don’t think in five years display will be anything like it is today. It will be relevant, useful & helpful everywhere within the context of what people are doing. That’s scale.

    Jonathan

  2. Jim Novo Post author

    Jonathan thanks for the comment!

    I’d like to drive home a sharp point on this if I can, because I think it would be helpful if the Marketing and Tech sides could agree on the nature of the problems so they end up with the right solutions!

    Clearly, the space currently occupied by Display is not optimized for Advertising, and we need to fix that. Google-Click might provide an interesting bridge solution, swapping AdWords and AdSense back and forth in those Display spaces, and looking to optimize by brute force.

    The Search referrer solution (if I understand it) is quite interesting and could greatly expand the available Search-like inventory, but since it is based on Search, it can’t really Generate Awareness / Demand, by definition. You have to be Aware of something to Search for it .

    Here is the problem with contextual Demand Generation on the web.

    It can work, but I would argue – and this is the Marketing point – that if the ad is truly contextual, Awareness already exists, otherwise the visitor would not be in the contextual environment. So we’re really talking about visitors who are past Awareness at some level and down into Interest.

    Now, we can argue back and forth about the definition of Contextual and Interest – how targeted the context has to be to be contextual, e.g. for Mercedes Benz, the difference between being on Edmunds.com and being on a MB enthusiast site – I think you’d agree there is a difference between these two environments. Which is more contextual, how is that level of context measured? That’s a whole other discussion…

    So that’s ads in context. Now, what’s not clear is if these new Search referrer (or any new technology) ads chase people around the web like BT does, showing up out of context, will they be any more effective than the current Display offerings?

    Offline, for ads in print media, the answer to this question is no.

    And from my perspective, it’s likely the answer is the same online with Display on the typical web page. Which circles back to my original point about generating Awareness / Demand on the web:

    1. If the ads are in context, the visitor is beyond Awareness, at Interest – they are already immersed in the context. So the Search referral ads will work much better than vanilla Display to push Interest along, but Awareness already happened.

    2. If the ads are out of context, they will be ignored – just like Display is now.

    Net, using Search referrals for targeting Display is a great idea, and will blow the current Display and BT out of the water, but doesn’t solve the Awareness / Demand problem. And due to the nature of the web and how it is used, I don’t think this problem can be solved in a way that will scale and deliver the same economies that offline can for the Awareness job.

    Welcome to any discussion / tear down of any and all of the above, from Jonathan or any reader!

  3. Jacques Warren

    Hi Jim,

    I think you are making a very strong point. I,m not a mass media specialist, so here’s a question: does TV works so well as an Awareness medium because it actually interrupts the experience to put an ad in our faces? Sure, we can decide to zap, but we still often don’t if the ad catches our interest.

    On the Web, a Dsiplay ad does not catch our entire attention, it’s not of the “in your face” type of advertising. Actually, those who try to be in that category tend to annoy us a lot more than on TV, maybe because our intentionality on a Web site is more intense, more focus; we just don’t want to be disturbed.

    Are you saying then that the Web can not be an Awareness creation medium within any economic rationale?

  4. Jim Novo Post author

    You hit the nail on the head, my friend. There were many paths left open in the above comment, but it was getting so long I decided to see if anybody was still listening…

    There’s two kinds of media, let’s call them “adjacent” and “in-line”. Print media is usually “adjacent”, which would include most web pages. You can easily avoid the advertising and concentrate on the content, so the key to successful campaigns in adjacent media is Context, the tighter the context, the more likely the audience is to view the ads as “Content”, which makes them more effective.

    This is why, for example, that CPM’s in vertical magazines tend to be much higher than broad audience newspapers. This is also why newspaper have “sections” – Finance, Sports, etc. – because they can get higher CPM’s for the context.

    Why does this stratification by context exist in adjacent media? Um, it’s been tested. Thousands, maybe millions of times.

    And it makes sense, no?

    Most electronic media tend to be “in-line” – radio, TV – maybe stretching a bit, RSS feeds? (Until RSS gets filters / blockers, that is). In-line media *forces* exposure to the advertising – as much as it can, anyway.

    Radio is often background to other activity so it not as powerful a force as TV, but tends to have higher context due to station segmentation. So radio is kind of a “Tweener” in-line media: OK context and OK force.

    But TV is formatted – and used – in a “Lean Back” way that has the audience paying attention to the advertising. So, yes, it’s interruptive, which is want you want to generate maximum “Awareness”. But the audience (generally) tolerates the interruption, so you have maximum force and weak context other than loose demographics, which is all some products need.

    We have tried to simulate in-line on the web: Pop-ups.

    The web audience at large completely rejected this idea – too intrusive, interruptive of Lean-Forward task. The utter rejection of Pop-ups by the web at large is simply the best evidence we have that “Awareness” / out of context is not in the web’s DNA.

    This is what I meant in the original post when I said “the very essence of the web, what makes the web the web, is a fundamentally poor structure for generating Awareness / Demand when compared with centralized media”. The structure of the web, and it’s users, cry out for personalization, individuality, customization. The web wants to be a billion segmented magazines, not USA Today, and every time people try to force it to be USA today the web fights back.

    Make sense?

    The great paradox in all this, and to circle way back to the beginning of this series, is this: how can web people jump up and down all the time about the importance of personalization, individuality, customization, customer in control, customer experience, respect, Social and then STILL defend Display?

    Either they are wrong, or Display is.

    Then, we have the cherry topping on the Social Meatball Sundae when Social relies on Display revenue as a business model. That idea is so deep in paradox it’s like a black hole.

    And people wonder why I ask if we are learning anything? Why is this happening? Wrong Model? Bad Requirements? Dumb Money? Consensus Learning / Cluelessness of Crowds?

    Epistemic Culture?

  5. Jonathan Mendez

    I reject the idea the you must be interuptive to create awareness. Awareness is based on relevance and frequency in my opinion. Both things the web is well suited for leveraging.

    How do we get there?

    From my experience profile creation, or chasing people around the web is not an effective practice. One of the key components to persuasion and targeting is timing. We have to be intelligent enough to know when the user is in a content environment where the ad is likely to generate some kind of attention from them. But this gets to creative more than almost anything else (which I’ll get to in a second).

    Previous “behavior” is a bad indicator of real-time relevance to target to. Also, as you allude to, often these segments can become sliced too thin to scale. More important, the web is a user-controlled medium and unless you leverage this in your technology it will never deliver high degrees of relevance. One only need look at search.

    On that point, as far as the search-display rules, of course display is going to be more effective with search inputs but until people fundamental change how they search success will be limited and certainly not solve the issues of scale and demand-gen we’re discussing.

    As mentioned, the role of creative needs to be addressed. Old forms of display creative are just never going to perform well. New types of display that aren’t ads in the conventional sense but helpful and useful apps or technologies that use tons of (cheap) ad inventory as content distribution systems are where I believe this space is headed. There’s simply way more value creation here for everyone in the online ad ecosystem if we stop putting up billboards and start paving roads.

    Waiting for people to notice an ad, click it and get to the site, is never going to solve the online demand-gen problem. However, if we can bring content to people in an intelligent way and then allow them to control the delivery of it (user defined relevance), I think we have a much better chance. This is in-line at its best.

  6. Jim Novo Post author

    Jonathan, I agree with everything you said except the first sentence.

    But I also believe we are on the same track, we just need to clean up the words we are using so we get the “requirements” right. We’re getting down to the “definitions”, and these are the kinds of conversations that should have taken place years ago.

    I’m not saying the web can’t create Awareness of some kind, of limited scope among specific pockets of people, the “shooting fish in a barrel” model – highly targeted messages to tightly segmented groups of people.

    But you’d need thousands of these barrels to get the weight you can get with TV, and that’s forcing inefficiency into the system. In terms of highest bang for the buck, you would integrate and sequence these two perfectly matched mediums, TV and Online, like a pitcher to a catcher. That way, each medium can focus on what it does best and you have a truly optimized system.

    To help define the situation, perhaps the following will be helpful. Let’s talk about “Awareness”, maybe find a way to be more specific so we’re really nailing down the deliverables. Let’s say there are different segments of Awareness, listed below in descending order by size of the segment:

    1. Not Aware – completely clueless. This would cover the state of the majority of people when a completely new category of product is launched, or when people have never needed this kind of product before, or did not know they needed it.

    2. Category Aware – people know “cars” exist, they know how to find information on them, but don’t know much about their purchase options

    3. Brand Aware – people are aware of the various companies making the product.

    4. Product / Feature Aware – people have some understanding of the different options among the different products, what the critical differences are

    Category, Brand, and Product / Feature Awareness all have context attached to them; some communication or exposure has occurred in the past that provides a way for people to “bucket” this information and attach it to related information. This information is already in Context.

    What I am saying is the web is better than any other media at discovering, identifying, and speaking directly to segments 2 – 4 in the Awareness model above. The web is not so good at speaking to people in segment 1, which is often the largest segment.

    And being the largest segment, this audience has the most potential to “move the needle”, and this is why packaged goods companies buy TV. It’s the most efficient way to transform people from Not Aware to Category Aware, to start the AIDAS process.

    In other words, the web’s fundamental advantage – that it is self-segmenting – creates a natural fracturing of audience that serves it very well for directly addressing a multitude of segments with the right message, the purest version of this model being Search.

    But this same fundamental advantage becomes a disadvantage when trying to achieve “Weight” – reaching a mass, undifferentiated audience, creating power and force. TV doesn’t need context to create Awareness in the Not Aware, but the web does.

    To be clear, none above discounts the value of the Lookery technology or the original discussion about improving the performance of Display. I just think that if everybody on both sides really understands what the specific task and benefits are, we’ll get faster and deeper buy in, which should be good for everybody.

    In other words, the offliners are constantly asking this question: What can I get from the web that I don’t already get offline? I think the right answer, in the specific case of Display space utilization, is something like “We can multiply your TV budget by amplifying the General Awareness you create in thousands of different contexts”. That is a message they will understand and listen to. That is something they can’t get from TV alone.

    Thoughts on this?

  7. Jonathan Mendez

    Jim,

    I agree with your segments of awareness. But I think the web can be very effective with 1) Not Aware. In fact in terms of ROI, maybe the most effective.

    How else would you describe the rise of Google, Facebook, Craigslist that have become mainstream products/services and created new categories without a penny of advertising? Did anyone advertise email? Twitter?

    Is the problem patience? Is the issue these are “digital” categories?

    How can you launch a new category these days and have it not be digital (to some degree) or do so without patience?

    Whenever we leave the traditional ideas of advertising and “campaigns” aside I think we’re fine. So I guess my big problem is feeling we have to operate within these confines. Maybe a crusade to “offliners” is in order, but then I come back to the fact that we’re still trying to fit square pegs into a round hole. I think it’s more rewarding drilling new holes.

  8. Jacques Warren

    Hi Jonathan,

    You are right to point to sites that became “famous” (i.e. a lot of Awareness) on the Web. I was actually thinking yesterday about word-of-mouth and how effective it has been, for certain sites. It’s interesting that you actually mention sites that were big beneficiaries of that dynamics. Not to mention that at some point, they all got a LOT of attention from the mass media.

    If your site has not been able to benefit from WOM, you are left with what to make it known? I recently analyzed a project where the client used banners to create traffic. The Visitor CPM got around $6,500 ! I mean, that would have been way better to do TV if the goal was to create awareness (it was mainly). Sure, there is a quality of experience online that is different, but it’s the whole point: the Web does what it does well (Lean Forward), but creating Awareness for the masses is not it; the economic fundamentals are just not there.

    I wish all site URLs would be forwarded in emails…

  9. Jim Novo Post author

    Yes Jonathan, I am taking a broader view of “Marketing”, specifically, where the big budgets are, and why those budgets are not moving more aggressively into online. Perhaps the answer is “they should not”, but if true, then we will see a lot of business models (perhaps deservedly) vaporize.

    Google, Facebook, Craigslist, and Twitter were not built by “Awareness Advertising”, they were built by word of mouth. If you want to go down that road, sure, the “web can be effective with 1) Not Aware”. But that has nothing to do with Display advertising or improving it.

    Not only are these “digital” categories, but they are part of the infrastructure they exist in, which is a rare advantage most categories will never have. This means their very existence *is* advertising, and why “marketing success stories” in many areas like Social simply do not translate outside of those infrastructure-type environments.

    In other words, just because you can sell a Facebook widget on Facebook doesn’t mean either:

    1. Facebook is any good for Marketing anything other than Facebook-related ideas, and

    2. Widgets are good for marketing anything other than being a part of the host infrastructure

    These relationships are too circular, too recursive to have any real marketing meaning outside the place they live in. It’s like saying a TV program is a great way to market a TV network and a TV Network is a great way to market a TV program.

    The real question is this: is a TV Network a good way to market a product *other than* a TV program?

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>