Ad Sales Blog

Profit on the web is about audience not traffic

At the recent Digital Magazine Symposium, Gordon Borell astonished the audience by blowing up the notion that building that largest base of online readers is the key to ad revenue. 

   After surveying the financial results from thousands of local media Web operations for the past eight years Borrell concludes there is no direct correlation between large amounts of traffic and large amounts of money.

For example, Borrell tracked a wedding Web site in one of the top media ten media markets making nearly as much money in Internet advertising (in millions of dollars) as the #1 ranked TV station website in that market. The TV site gets about 600,000 unique visitors per month, the wedding site gets about 60,000, or 1/10th of that traffic. How can this happen?

Borrell says that online, the best advertising is content. There was a time before the Internet (my kids are shocked at this statement) when the top way consumers learned about products was through advertising. But the Internet has become a far more efficient educator. Many of the most profitable websites make money because their content functions like advertising did years ago, as a customer educator for product sales. According to Borrell, visitors of these sites are “leaning forward” to read the content while probably ignoring the banner ads. 

Some print publishers are still trying to win the print circulation/CPM battles online. But that battle is over. They lost. Online, search, which now accounts for over half of all online advertising dollars spent, has won. A media buyer can always buy more clicks per dollar buying search. 

While the online CPM battle is lost, the war for publisher profit can be won. Borrell shows us how with an example: “Compare radio, a $15 billion media segment, with the yellow pages, a $9.8 billion segment. About twice as many people listen to radio compared with those who use the printed yellow pages. So those ad dollars seem just a little out of whack, right?  Now consider this:  For radio, average weekly time spent listening is about 20 hours.  For the yellow pages, it’s about a minute.  An industry that reaches less than half the audience of radio and gets about 60 seconds of quality time with them every week – compared with radio’s 20 hours a week – can still attract about 65% of the ad dollars as radio?  That’s because the yellow pages, like the Internet, are a lean-forward medium where people see the advertising because the advertising is the content."

At the Digital Magazine Symposium, when Borrell laid this out, everyone in the audience was taking furious notes.

To further support Borrell's points, the chart below illustrates the dollar value of a unique visitor at some of the best known websites. To estimate these numbers, Silicon Alley Insider took the full year revenue for 2009 for each of the companies below and divided them by the number of their average monthly worldwide unique visitors.

As per Borrell, the more "wallet ready" the unique visitor is, the more dollars generated. Search gets the most per visitor, then display, and then social. 

Google's uniques (search) are the most valuable: $18 of revenue per monthly unique per year. Facebook's uniques, meanwhile (social networking) are worth a paltry $3.50. Twitter's uniques are worth almost nothing.

Understanding this, publishers, even small ones, can compete. For example, check out HD Camera Guide which attracts  a relatively small but valuable "wallet ready" audience.

"Online media is bought on religion or politics"

Susan Bratton’s “DishyMix” podcast came up with up one of the funniest and succinct descriptions of how media gets bought during her interview with media metrics guru, Jim Sterne (photo at left). Sterne is the founder of the eMetrics Marketing Optimization Summits where online wizards gather to interpret data from online programs and ad campaigns.

In the world on online ad metrics you would think that the numbers would speak for themselves and there be little room for the human element. Wrong. When Sterne talks about how media decisions get made, metrics and all, the human element is still very much present.  

According to Sterne media is bought on either "religion or politics." According to Sterne, “If it’s religion, your CMO 15 years ago was good at buying television. So television gets all the money ‘cause that’s what he knows. Or, she really was a brilliant “search” marketing person, so search gets the focus. She’s the hammer and everything looks like a nail.”

“Politics is where the corporate search guy is going to get more money because he has known the CMO longer or has more power.”

Sterne summarizes, "You know it’s religion if they say, 'You know I’ve always done it this way and it’s worked for me.' It's politics when they say, 'Gees, we don’t have enough resources and this seems like the best way to go."

Click to listen to or download the DishyMix podcast featuring Jim Sterne here

Is the Golden Age of "web as direct response" over?

The "Internet advertising as direct mail" model, with click throughs the only meaningful metric, has been dealt a blow. This is great news for content publishers, whose advertising sell is based more on relevance and engagement, and less on delivering boat loads of click troughs. 

As I have said many times on this blog, if you are staking your continued online media sales on delivering click thoughs alone you are toast. For online media buyers, there is always a cheaper way to get more click throughs. But media relevancy is making a comeback. The driver? Social media that engages more and more visitors while giving them the power to  block advertising.     

According to recent post on the Harvard Business Review:  

"Early in the Internet era, it looked as if successful online marketing would follow the model of direct marketing. Data profiling and digital media would allow for deeper targeting and more intrusion into consumers’ lives than broadcast marketing. At last, it seemed, marketing would become a branch of social engineering with the marketer firmly in control. Ten years later that view looks to have been quite wrong. What we did not anticipate was that the technology that enabled intrusion would also enable defense against intrusion. From Tivo to Caller ID to social media, consumers have found ways to keep the invaders at bay. Marketers no longer rule the market. They are invited guests. If they are provocative, pertinent and entertaining they get to stay. If they are overbearing there are ways to shut them out."

The article goes on the give a terrific example of how this approach is being used to sell soap. Yup, Dove soap! 

"But some brands are cracking the code of social media and discovering how to thrive in the disenchanted environment of Web 2.0. Consider Unilever’s Dove, which has added $1.2 billion to its brand value over the past three years...

The principle made plain by Dove’s success is that in social networks brands must seek to provoke conversation not to dominate it. The locus of control in the marketplace shifts from marketer to consumer, and success is built on a model of co-created meaning. In Web 2.0, marketers accept that it is enough to rouse, to stimulate, to stir.

Dove's strategy was to move away from functional claims and to present itself as a brand with a point of view. It advocated that the beauty industry was contributing to the destruction of self-esteem in girls and young women by propagating unrealistic standards. With its Self-Esteem Fund and The Campaign for Real Beauty, Dove placed itself at odds with its competitors. Consumers loved the conflict. They lit up the digital media, generating millions of pass-along clips for YouTube, clips like Evolution and Hates Her Freckles."

See the Dove campaign website: http://www.dove.us/#/cfrb/

Read the whole post on the Harvard Business Review, "How to Build a Brand on the Web? Ask Unilever"

Should content publishers compete with search?

Maybe not. When David Churbuck, Vice President, Global Web Marketing, at Lenovo spoke at the Folio show earlier this week he showed the audience this slide showing how this major PC maker spends its ad dollars. As with many marketers these days, "search" is the largest spend.  

All magazine publishers have felt the impact of marketers’ moving their dollars online and most magazines have online products to sell. But the 800 pound gorilla online is search.

After the speech I asked Churbuck how the content publishers in the audience should pursue his online ad dollars in light of the big spend on search.

His advice was for content publishers not try to compete with search but to develop their offerings in a different direction. He uses content based media, both online and print, to brand his company while using search to drive sales. He is more interested in doing business with content publishers who offer him media to help his branding efforts than just lead generating.

"The Online Objection Bible (abridged)" free for download

At the City and Regional Magazine Association's annual meeting I released the first edition of "The  Online Objection Bible(abridged)." This 23 page document shares specific strategies that integrated media salespeople can use to over come the following objections:

"All our online $ goes to search”
“Not enough clicks”
“Print is dead”
“We don’t buy integrated packages”

Download it for free:

Download online_objection_bible.doc

 

"Dear NBC your ad stinks"

As an interactive evangelist you have to get tough with advertisers who send you lousy ad copy. In interactive media there is no place to hide when an ad does not perform. If an ad tanks on your blog, or website the advertiser will more often blame your media than their message.

B.L. Ochman, publisher of What's Next Blog, was faced with this situation and posts about the tough love she dished out to NBC who submitted poor ad creative for her blog: 

"Dear NBC - Please don't get me wrong: I love you for advertising on my blog. But I want you to get results so you'll keep coming back, and this ad sucks...

So I'd like to give you a little free advice about how to make your blog advertising more effective.

- The job of a blog ad is not to tell your story. Blog ads need to be intriguing, interesting or entertaining enough to get us to a convincing landing page where you have lots of room to tell us what you've got for us.

- Talk about us, not about you. Don't take this personally, but we don't care about you. All we care about is what you can do for us.

- What's the ROI? Tell us about what advertisers got in the last Olympics. All advertisers care about is ROI, either in orders or awareness. Give us stats. We don't care how many days are left before your Olympic coverage starts. We want you to tell us, in the headline, why we should care.

- Be topical, timely, edgy, and fun. Blog readers are inured to traditional advertising. They're here, and on other top blogs, looking for something new and interesting.

- Be clear! You want to get brands to advertise on NBC during the Olympics. Tell me in the headline why I should bring my clients to you

- Don't make your ad a black hole. When that dreadful flashing stops in the ad, you're left with what is basically a black hole.

- White space is your friend in blog ads. You're competing with lots of copy that my readers came here - by choice - to get. What you have is basically a blob of copy, and since it's not easy to read at a glance, it's pretty much invisible. Less is more in blog ads.

- Don't scream in blog ads. You need to be clever.- Have a sense of humor.

- Don't be boring.

Read all of B.L. Ochman's story on her blog

What is a click worth? Why Nielsen's new metric is good news for you

Here is a great selling tool for battling the "not enough clicks" objection so common when selling publication branded online media.

The whole argument for our online advertising, as opposed to the search or general online media you compete with, is that while our clicks or page views may be fewer, they are based on more relevant content and deliver a more involved reader. Last week, Nielsen, arguably the most credible media monitoring service, just told the world that page views are not enough. Their web site monitoring service will refocus on TIME SPENT on a site as the primary metric, deemphasizing page views.

Reacting to the Nielsen announcement, The Wall Street Journal reported,

"Page views have been a major barometer of a Web site’s popularity and help set advertising rates, but the measure is becoming less relevant. Online publishers and advertisers say page views don’t capture consumer loyalty to a site or reflect the increasing popularity of online video and new technology that automatically refreshes Web sites, thereby depressing page views.”

Here is how you use this on a call.

"Time spent" on a site is measurement of involvement. Talk up the Nielsen policy shift and, if appropriate, remind them these are the same people doing the famous Nielsen TV ratings. Now, show them the story, "Nielsen to focus on time spent, not page views, in measuring Web site popularity."

They don't have to read the article, the headline says it all. If your advertiser can see the point that "time spent" and "involvement" are better metrics than "click throughs" and "page views" then go on to explain why your media will deliver greater involvement per visit by talking about your  unique reader and why they are important to the advertiser's business. 

This is also a great news item for selling accounts were search is gobbling up a disproportionate slice of the ad budget. Search tends to get short "time spent" ratings because as they are designed to quickly move users to desired destinations.

This angle covered on the Read/Write Web blog

Original announcement from Nielsen

What is a click worth?

While making the transition from being an all print salesperson to selling Web products, I looked forward to selling media that had accountability. "How 'bout those click throughs!" I would proclaim, like my home team had just won the World Series.

But after a few months I realized the click reports didn't make the sales job easier. While they ended the tiresome objection that asks, "Does anyone actually read this stuff?" it fired up a huge new one: "Your web product didn't generate enough clicks for the money." It turns out there is always  a cheaper way to get more clicks than the one any of us sell. How did I not see this coming?

If all clicks are the same, and all clicks are a commodity, then your advertisers should buy the cheapest clicks they can find. To fight this, you have to sell the unique value of your audience. Not all clicks are created equal. You need to point out, given the unique nature of your audience, why your clicks mean more.  But there are some rules:

1. You have to sell the value of your unique audience as you make the initial sale, NOT after the click report comes out. "After" is too late! If the numbers are low, you sound like a used car salesman pushing the next lemon. As you make the sale, take time to explain how your audience is unique, what they mean to the sale of your client's product, and just why a click from your audience means more.

2. Share category predictions. I find that after I see a few click reports go by my desk that I can pretty much tell a prospective advertiser what to expect in response. If financial advertisers on your website do not pull big numbers but tech advertiser do, tell them upfront. Here your job is to be a consultant advising them on the behavior of something you need to know about; your readers. This is also a great time to slip in stories, facts, ideas and anecdotes about how important your readers are to the sale of their products.

3. When necessary, talk about ad creative in self defense. Recently an advertiser placed an online branding campaign with me. Banners featured a well know industry figure, nice graphics, and a testimonial. I told the client, "Great ad, but don't expect any click throughs." Why not? Because there was no benefit or reason for a reader to click on the ad. Online ads that invite response are simply going to get more clicks than ads that do not.

Simple, right? But at the end of the quarter, when my clients evaluate the click reports, they often forget which banner creative ran where. Then they see the low scores. But if I brought it up before, I can say, "Remember we talked about that, it was that testimonial ad" then ask about about renewing their schedule...

The big blunder I made early in my online conversion was to sell clicks into the great online "blue sky," "Hey, some of our advertisers have gotten thousands of click throughs, you could toooooooo.!"

Don't do this. Be a consultant. Sell the value of your reader, and help your advertiser understand  the response they will get, before they get it.