Archive for March, 2006

Pressure Points

Movement towards more relevant ads with a resulting higher response rate over television and mobile (i.e., targeted ads) has to be driven by the advertisers and not the carriers. The advertisers need to carve out a portion of their budgets to play in this new world of personal marketing, thus creating pressure points for the carriers and intermediate players to speed up their delivery capabilities. I find taking a real-deal to the table changes the answers of the carriers from the theoretical sure we can do that or We’re doing that already to the realistic No, we can’t do that in April! or We have no idea how to do that. Almost like you’re talking to two different people. Yet, the pressure points of the ad dollars will cause breakdowns of normal processes, a re-shifting of priorities and an acceleration of the ability to get the right ad to the right person. Technically the ability to do this is here. Cable boxes have unique and addressable Id’s, and mobile phones are the closest thing to a direct one-to-one market. The supporting technologies such as ad serving, analytics and campaign management are being built. The barriers are the old, traditional business models that were built around broadcast advertising. Dedicated ad dollars, led by the advertisers will provide the pressure to remove these barriers.


Less Confidence in TV Advertising

More than three out of four advertisers — 78% to be exact — said they have less confidence today in the effectiveness of TV advertising than they did two years ago, according to a survey released at today’s Association of National Advertisers TV Ad Forum. Click for AdAge/MediaWorks Article. But, there has been little real change. Advertisers via an instant electronic polling system were asked what they believed would be the most promising video advertising vehicle of the future, 22% thought it was regular TV, making it the second most popular choice. Interactive TV was the leader, with 31%, and in third place with 21% was Internet video. Cable VOD was fourth with 16%.

There is still great concern about the impact of video-on-demand and digital-video-recorders on the effectiveness of their advertising, yet the thinking and lack of movement to other platforms indicates that options with more accountability, higher response rates and higher relevance are still not viable. I’m surprised that VOD over cable still hasn’t gotten the attention. It’s really starting to rev-up and the addressability possibilities should be intriguing for advertisers. I suspect the big money is playing a “wait and see” game. As the CMO for Kia Motors said, “Prove to us they really are watching them and we’ll pay for it,”.

Let me know your perception of the mindset out there.


Ads over IPTV

IPTV – short for Internet Protocol TV is an emerging technology that has significant and positive implications on targeted advertising and personalization. A recent study by Accenture talks about IPTV and the lack of public understanding of what is to come. The article does state “The under 25 set is used to personalization”.

I’ve been privy to some of the early work by Verizon and SBC/AT&T in rolling out commercial IPTV. While the traditional model of channels might apply in the early phases, ultimately the door is open to an on-demand environment. Conceptually, instead of having all of the channels available on the box, a consumer would pull the desired content through one channel whenever they want it. This opens up nearly limitless possibilities in terms of programming and options. In this scenario, the advertiser would buy ad-space at a consumer or device level rather than buying at a program/day – time part level. It really changes the whole dynamic of the advertising and could allow more direct interaction and feedback from the consumer.


Article on Engagement

There was an interesting article in the NY Times today called New Rules of Engagement that talks about advertisers wanting to move to a metric of levels of engagement. Several on the panel cited examples of engagement, but the most interesting to me was an effort by Pepsi to roll out a promotional campaign that will offer consumers customized ring tones for cellphones, which can be downloaded from the Internet with codes found under soft drink bottle caps.

Engagement in this sense is the result of relationship-based marketing that is most effective in targeted marketing. Randy Falco, president and chief operating officer at the NBC Universal Television Group said that “an industry built on its ability to reach large groups of people at once” is striving “to expand and transform itself by reaching one consumer at a time.”

Giovanni Fabris, vice president and international media director at McDonald’s said Ads delivered by cellphone to those who request them will stand out because of their “contextuality,” that is, their ability “to deliver the right message to the right person at the right time, which is not provided by the traditional media.”

Two great concepts: Engagement and Contextuality. The first is difficult to get our hands around and the second, difficult, but not impossible to execute. The two go hand-in-hand and may turn traditional advertising on its head.


Political Ads – Chapter 2

In my previous post “Let’s Talk Politics”, I stated two primary principles:

* First, one of my main principles is “targeted ads when done well have a high content value for the consumer” or in politics – they directly translate to votes.

* Second, we should never have to see a political ad for someone or some issue for which we can’t vote. This is a waste of money and a waste of my time. If I have to see ads, show me something that is relevant. This relevancy is most clear in the political campaign arena.

Addressing the second one first, because of the broadcast nature of current political advertising over television, reach and price make it difficult for all but the bigger campaigns with deep pockets. These include major metro races, county races, state races and national races. Otherwise, all of the other candidates don’t use this medium because of the cost and inherent waste attributed to broadcast. But, what if we could only send the ads to those who had the ability to vote for in a particular race? What if the candidates or issue supporters could talk directly to particular demographic and psycographic groups of people? What if in a primary, the Republican candidate could talk only to Republican voters? What if voters in older areas of town were addressed with different topics and issues than those in the newer areas? There is the potential for a granularity that has only been possible through direct mail and canvassing in the past.

I refer to a quote attributed to the late Speaker of the House, Tip O’Neill who said All politics is local. This really is true and we see it in campaigns at every level including Presidential races where candidates go to the local fish frys, coffee shops, pancake breakfasts, Rotary Clubs and so forth. The face time in these venues with the appropriate message and image is critical for connecting with the voters. With targeting over electronic media, even more voters can be approached in the appropriate manner.

Who are the winners and the losers in an electronic targeting world of political campaigns? I think the voters win because the “noise” is reduced and only the ads that are relevant are shown. They also get a more relevant and appropriate message which could be great content value for them as they go to the polls. Campaigns win because they are using their money more wisely and hopefully are talking directly to their voters. Cable companies might win in that more campaigns can afford to advertise because of the targeting and segmenting of the viewer base.

What If??? Part 1

What if television ads could be targeted so that the ad would be seen regardless of what channel was being watched?
This would break down the whole time-spot, program dependent ad buying environment! Instead of a program being targeted, the consumer is directly targeted.

The Value of Advertising

As I conceived Finity Technologies, there were some underlying principles regarding the value of advertising. First, advertising has a content value to the consumer when properly targeted or addressed. Second, advertising has a high entertainment value to the consumer when well developed.

Content Value: Say you’re in the market for a new car. You begin to focus on ads, cars you pass on the road, websites that discuss and compare cars, or the Auto Show in your area. You want to learn as much as you can about what you like and don’t like before you make the purchase. Ads can be very valuable to you in this process and thus can have a high content value. These same ads have very little content value for someone who is not in the market for a car or who just bought a car. Traditional advertising methods don’t discern these situations and thus send their ads to everyone. Targeted ads have the opportunity to focus in on the most likely consumers – creating high content value for them and hopefully a sale for the advertiser. For those consumers who are not likely to buy, this is just noise in the background. We all know there is a lot of noise out there right now.

Entertainment Value: Two words; Super Bowl. There is great anticipation every year for the ads that run during the Super Bowl. Most viewers can wax eloquently about the ads, what they liked, didn’t like and how outrageous they are, but cannot tell you the score of the game or who made a great play. There are online polls that allow you to vote for your favorite commercial and many articles before and after the event talking about the “Show” which is not the game itself, but the commercials. Advertisers and their agencies pull out the stops to make their ads entertaining and compelling during this event. It’s easy to remember scenes from the past that were rendered in commercials. Remember; I can’t believe I ate the whole thing, or Mikey will eat it, he likes everything!, or Two all beef patties, special sauce, lettuce, cheese, pickles, onions on a sesame seed bun? I think you get my point. People are entertained by ads, sometimes more than the programs they watch. So when the industry gets worried about ad-skipping technologies, ultimately I think they miss the point.

Advertising is entertainment and coupled with proper targeting can have a high content value for the consumer. Ads are here to stay because they not only pay the bill for the media in which they reside, but they are fun and informative.

Post your Thoughts!


Who’s Ready?!

Who’s ready for targeted advertising? Apparently nobody is yet. At least in TV advertising and mobile advertising. There is so much money in the traditional, broadcast advertising methods that the change to a more streamlined, more efficient method is a slow and earth shaking event. The problem is that the ad money will shift to mediums that produce better responses and accountability. We’re already seeing a shift to Internet advertising. Traditional media needs to move to a better model or face the loss of significant ad revenues.

Carriers from the cable and mobile industries just don’t seem to have their ducks in a line to deliver ads to a specific household or mobile device. Wonder how far away they really are from doing this? If you follow the press releases and company promos, it’s easy to get the impression that these engines are up and running. Recent experience has shown differently.

I predict that the carriers are not going to be the drivers for targeted advertising. They need the advertisers coming to them, demanding the capability to effectively and efficiently reach only their targeted audience, with analytics on the back-end that are timely and reliable.

Let me know what you’re seeing and hearing out there.


It’s Time for The Third Screen!

One of the hot subjects now is mobile advertising. According to the Mobile Marketing Association MMA there are over 195 million wireless subscribers in the U.S. Compare that to approximately 111 million television households. The possibility for a one-on-one marketing relationship is huge! All of the major wireless carriers are in the midst of exploring mobile advertising. Many applications have been developed that would include advertising. Applications that not only deliver ads, but ads that are location sensitive based on the subscriber’s current location are promising. As video feeds are delivered over mobile, ads are embedded much like those on television.

The real value proposition is targeted advertising. Most people don’t share their phones like they do televisions or print media. Through good campaign planning and management and targeted ad insertion, the response rate should be very high.

And there has to be inherent value for the consumer in receiving ads on their phones. I’m not sure most carriers understand the best way to balance subscription revenues with ad revenues. But, I think they have to move in this direction. Much like cable TV did some years ago, we are now afforded a large range of choices for a price within our reach. Advertising by in large pays the bill. As the options spiral up in the mobile world, there will be a ceiling of how much people are willing to pay. At this point the carriers won’t quit innovating, or at least I hope not. I think they’ll supplement with ad revenue and allow prices to settle in a more comfortable place.

Another issue involves how the ads are actually placed over mobile. The current landscape shows tons of vendors with mobile applications, each with an ad component on the front end. Carriers are also trying to get in the game with their own ad front-ends. Advertisers, in the big picture, don’t care who subscribes to which carrier or what application the ad resides on. What they care about is getting the right ad to the right person, getting a positive response and tracking the success of that ad placement. They are not going to go to hundreds of applications or several different carriers to place their ads. They need a more universal solution that bridges this gap. If this doesn’t happen, middle-men will pop up and gladly charge a fee to orchestrate the dissemination of mobile ads.

ADDITION as of 3/8 at 8:51 am: Refer to article CELLPHONE ADVERTISING OFF TO SLOW START for a discussion on this topic.

Tell me what you think!


Let’s Talk Politics!

I dabble in politics holding a city council position in my city. I’ve gained an appreciation for the approach of political campaigns towards reaching their voters. We are able to obtain lists of voters by household, their ages, party affiliation and the past elections in which they voted. From these list we are able to determine how to best reach the most likely voters. Maybe even the most likely voters who will vote for me! You have to get your people to the polls. Primary ways to reach these voters are through direct mail, telephone (yes, this is still viable even with the do not call registry), and door-to-door canvassing. I might do a multiple mailings to those voters who have voted at least 80 percent of the time over the last three to five years because I know they are going to vote and I want them to vote for me. I might do a lesser number of mailings to those who have voted at least 60 percent of the time but less than 80%. These voters may vote and I want them to remember me if they do. Also, my mailing might encourage or remind them to vote. I might do one mailing to those under the 60% threshold just in case. I’ll tend to canvass in a very similar way, giving most of the attention to those who will definitely go to the polls. Regardless of how noble my intentions are, knocking on every door in the district is extremely difficult and I like to focus my energy on locking down the definites and most likelys.

This is relayed above to talk about the condition of local campaigning, minus the electronic media. I know who I want to target and I have manual means in which to do so. I have a limited amount of money from which to work so I need to use it wisely. Metrics are simple in politics. If I get more votes than the other guy or gal, I win! Otherwise I lose. Close doesn’t count.

Advancements in technologies such as digital TV, the Internet and mobile devices open up new possibilities to reach this targeted list of voters. In the last presidential election cycle we saw effective use as the Internet and email as a tool for fundraising, signing up volunteers, yard-sign placements and get-out-the-vote campaigns. Now we see candidates at every level using websites, blogging, email and instant messenger applications to communicate with their supporters and volunteers.

Digital TV requires a receiver of some sort that has a unique ID much like the IP address of a computer on a network. This allows us to interact with our cable company through our TV to order movies, check out bills, play games and numerous other applications. It’s no longer a one way pipe. This allows for personalization in many forms, one possibly being advertising. The cable providers are moving this way and it is perfect for the IPTV installations hitting the national scene. Mobile is similar, but actually easier because most people don’t share a mobile phone. There is a clearer one-to-one relationship in mobile, making the targeting or addressing of content much better. The problem with phones is that people are not used to using them this way. Advertising is not an acceptable norm for mobile,,,, yet.

Back to politics. My company, Finity Technologies is working with an national political media consultant to place ads over cable TV to only a specifically targeted audience. We’re out to prove a point that this can be done and by doing it, we can make the messages more effective and economically viable for more campaigns. Keep your eyes open over the next couple of months for results of this test. We may try to flip this to mobile as well.

I’ll leave you with a couple of thoughts.

  • First, one of my main principles is “targeted ads when done well have a high content value for the consumer” or in politics – they directly translate to votes.
  • Second, we should never have to see a political ad for someone or some issue for which we can’t vote. This is a waste of money and a waste of my time. If I have to see ads, show me something that is relevant. This relevancy is most clear in the political campaign arena.

Added 3/4/06: Check out the article Zeroing In from the January 2nd edition of Government Technology for more information on Microtargeting.

Let me know your thoughts. I’ll probably post again on this subject since I’m immersed in it.


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