Downstream Marketing acquired by Efficient Frontier Inc.

Leading digital performance marketing provider partners with global leader in digital marketing solutions

SYDNEY, Australia – October 18th, 2011 – Downstream Marketing, Australia’s largest digital performance marketing provider, announced today that it has been fully acquired by Efficient Frontier, the global leader in digital marketing solutions. The partnership provides an opportunity to accelerate growth in existing channels as well as across emerging mediums such as social and mobile. Deal terms were not disclosed.

“The investment by Efficient Frontier represents a key milestone for Downstream Marketing as we capitalise on the huge market opportunity that exists in Australia for brands across search, social & display advertising,” said Stephen Knowles, CEO and Founder of Downstream Marketing. “By combining forces with Efficient Frontier, we have further cemented our position as market leader and will be able to deliver even better technology, insights & services to our clients.”

Downstream Marketing has been a partner of Efficient Frontier since 2006, licensing their platform and providing search, social and display marketing for its clients.  Downstream Marketing has captured significant market share, having grown twice as fast as the general market.  It serves many leading brands in the region including American Express, Wotif, Lenovo, iSelect, Avis, Suncorp, Air NZ, WeightWatchers and Westpac, delivering technology, strategy, insights and execution across digital performance media channels.

 “For the past 5 years, Downstream Marketing has successfully deployed Efficient Frontier’s platform to provide strategic advantage in digital marketing for our clients,” said Steve Knowles, CEO of Downstream Marketing. “We’re excited to officially join forces to expand our product offerings in our market as well as provide additional global reach to Efficient Frontier’s existing client base.”

“We are excited to deepen our partnership with Downstream Marketing, a true leader in this market,” said David Karnstedt, CEO, Efficient Frontier.  “We’d like to welcome the entire team to the Efficient Frontier global family.”

The Australian Interactive Advertising Bureau (IAB), reports that online advertising expenditure in Australia reached $2.45 billion, up 20% YOY in the 12 months ending June 30, 2011.   Search was up 23% YOY, and Display was up 12% YOY. The online advertising business is on track to surpass $3 billion in 2012.

About Downstream Marketing

Downstream Marketing is Australia’s leading provider of digital performance marketing solutions; managing search, social and display advertising for a range of clients across the financial services, travel, technology, telecommunications and online retail sectors. Utilising market leading optimisation technologies developed by Efficient Frontier, Downstream Marketing maximises performance from digital marketing investment by household brands in Australia & New Zealand. Headquartered in Sydney, Downstream Marketing services clients located across Australia and New Zealand.

About Efficient Frontier
Efficient Frontier is a leader in online digital marketing, managing search marketing, display and social media campaigns for advertisers and agencies around the world. Efficient Frontier currently manages more than $1 billion in annual digital marketing spend on behalf of its clients globally.

In May 2011, Efficient Frontier acquired Context Optional, the leading provider of social marketing management solutions for global brands on the leading social networks, including Facebook and Twitter. Context Optional’s Social Marketing Suite enables global enterprises to build, manage and measure their brand presence, and engage their fans to increase mindshare, word of mouth, customer loyalty and website traffic. Together, Efficient Frontier and Context Optional offer a complete solution for brands to acquire, activate and drive value from fans on Facebook and Twitter.
Efficient Frontier is headquartered in Sunnyvale, California, with offices in New York, Chicago the United Kingdom, France, Germany, and India, and technology licensing partnerships in Japan, Hong Kong and Australia. Context Optional is headquartered in San Francisco. Efficient Frontier is a privately held company with funding from Redpoint Ventures and Cambrian Ventures. For more information on Efficient Frontier, visit http://www.efrontier.com and for Context Optional visit http://www.contextoptional.com.

Media Contacts:

Stephen Knowles

CEO

Downstream Marketing

02 9295 5110

steve@downstreamonline.com.au

API Driven Ad Formats – Next Gen Storytelling

Day one of Adtech NYC 2010 kicked off with some brilliant and thought provoking presentations. One of my favorites so far centered around the performance improvements from API enabled ad formats.

One thing that rang true is that the way we engage consumers online is changing rapidly or must change rapidly, with consumers now far more interested in information and opinion than straight brand chest beating and dirty retail tactics. Familiarity with a brand is fast losing ground to brand experience and digital word of mouth, think sampling and advocacy incorporated into a traditional digital display ad format.  In simple terms now, dynamic ad formats that contain a RSS feed / XML feed on price or stock SKU, Facebook like or follow, a Tweet stream or a YouTube video are a reality and all the early evidence points to better engagement, dwell time, click through rate and intention to purchase according to the guys at IPG Media Lab, Spongecell, Socialmedia.com and Widget Box.

Companies now have the ability to bring their own structured data into an ad format, together with third party sources like Twitter and Facebook to create an experience that may not require a landing page? Think all relevant content from a landing page in one simple ad format combined with data from an individuals own social network. Everything a consumer needs to make a choice or form a firm opinion within an ad format in the site or content they chose to engage in.These API ad formats also have the ability to dynamically change, update and personalise on the fly using targeting data (cookies, behaviors etc) as the display ad gets called into a page. Ad creative and media planning are fast becoming mechanised by powerful algorithms and dynamic data feeds, meaning a considerable change to both creative processes and media planning and targeting.

Data presented today included ads with API & social media feeds:

• Increase engagement considerably – up to 33 seconds mouse over dwell time
• Engagement rates of up to 6.3% of impressions served
• Click through rates of up to 0.86% (vs 0.04% for traditional static banners)
• Brand awareness rates of up to 8.5%
• Brand preference rates of up to 14.5%
• Purchase intent rates of up to 21.7%

Key considerations:

• Change campaign KPI’s to around time spent engaged, Facebook Likes & Follows
• Brands and agencies to identify the right API’s that make sense and engage appropriately
• Capture attention with content that is dynamic, timely and relevant
• Give users clear choices to navigate to more functionality within the ad format

Justin Hind

COO Downstream Marketing

www.downstreamonline.com.au

Efficient Frontier – World’s Most Advanced DSP

Downstream Marketing is the exclusive licensee of Efficient Frontier in Australia & New Zealand. Our technology license, together with our great campaign management and strategy team have developed some of the most advanced and profitable Search campaigns for some of Australia’s biggest and most digitally advanced brands. Efficient Frontier has allowed us to develop optimise  some of the most complex campaigns and ROI models across the globe. Anyway back to Efficient Frontier.

Efficient Frontier had established itself as the world’s most advanced Search Marketing technology long ago, bringing a fundamental change to the Search technology landscape by developing advanced predictive models for Search investments based on Modern Portfolio Theory (MTP) or for the nerds among us Markowitz Theory. In the last few years though, through some serious product development, Efficient Frontier has morphed itself from a Search only platform into becoming the most advanced Demand Side Platform. Efficient Frontier is now capable of simultaneously managing Search, Performance/Biddable Display and Facebook  together. This advancement to manage, forecast and execute across multiple digital performance channels is a groundbreaking advancement for ROI focused marketers by being able to uniquely understand and attribute value in combination to all channels that lead to a conversion.

To discover more about Demand Side Platforms and Downstream’s unique technology offering here in Australia find out more here http://www.efrontier.com/

AdTech NYC 2010

Image via Wikipedia

In less than two days we are off on our annual pilgrimage to AdTech in New York City . It’s always a great time to change gear for a few days and immerse yourself in a world of digital thinking from a wide and diverse group of digital experts from across the world. This year we hope to see the momentum continue on the fast growing world of biddable / tradable  media and Demand Side Platforms (DSP’s).

Last year it was all about the rise of the Ad Exchanges, currently dominated by Google’s Ad Ex and Yahoo!’s RMX. Downstream have already been the leader across biddable exchanges in Australia launching with a seat on these exchanges in November 2009. Our extension into biddable display has been an outstanding success, with almost every client experiencing significant ROI gains across their digital display spends achieving between 40%-60% reduction in eCPM‘s and CPA’s falling around 43% across the board (compared to other blind performance networks).

Some of our key interest this year is all focused on IP TV. At Downstream we truly believe sometime in the near future, we will be planning, buying and executing IP TV / Video based campaigns through exchanges, while using an algorithmic data driven approach to targeting, adserving and optimisation. Think Search meets TV over an IP network.

Here is this years line up:

Wednesday, 3rd November

Tracks	Brand Track	Social Media Track	Digital Demographics Track	Media Strategy Track	Performance Track
9:00 AM 10:00 AM	Keynote Presentation: Redefining “Digital”—Putting Technology in its Place and Focusing Success on Your Consumers with Lauren Zalaznick, NBC Universal
10:00 AM 11:00 AM	Expo Open – No Conference
11:00 AM 12:00 PM	Virtual Goods & Virtual Worlds: Not a Passing Fad, This Is Big Brand Business	Social Media Big Picture & Technorati: State of the Blogosphere 2010	Digital Marketing to Mom: How and When to Reach Her (and What to Avoid!)	Chasing Paid Engagement: The Metrics that Matter and How to Measure Them	Improving Online Display Performance through API-fueled Real-Time Rich Media Technology
12:30 PM 1:00 PM	Keynote Presentation: Putting Real People Back Into Marketing—A New Discovery in Human Behavior Promises to Change Marketing Thinking with John Furey, MindTime
1:15 PM 2:15 PM	Premium Content & Tablets—Content Platforms of the Future	Geo-Loco@ad:tech: Keynote Presentation + Engaging the Geo-Local Consumer	Marketing to Moms: Creative Showcase of Digital Success Stories	Ad Networks, Exchanges & DSPs—Next-Gen Audiences and Media Strategy: Understanding the Opportunity	Search Marketing—Search Advertising’s Latest and Greatest
2:30 PM 3:30 PM	Premium Content & Tablets—The State of the Digital Content World	Geo-Loco@ad:tech: Local at the Bleeding Edge + Making Money with Location-Based Services	Digital Marketing to Teens and Millennials: A New Kind of Customer	Ad Networks, Exchanges & DSPs—Next-Gen Audiences and Media Strategy: Capturing the Opportunity	Search Marketing—Modern Search Engine Optimization
3:30 PM 4:00 PM	Conference Attendee Networking Break
4:00 PM 5:00 PM	Which Screen Is It Anyway? Navigating a Multi-Screen Reality (TVs, Computers, Phones, Tablets…Oh My!)	Geo-Loco@ad:tech: Location-Based Advertising—Here, Now and on the Go (Foursquare, Gowalla and Beyond)	Marketing to Teens and Millennials: Creative Showcase of Digital Success Stories	Measurable TV: Hypertracking America’s Favorite Medium and What It Means for Advertisers	Coupons + Social Media + Mobile: The Digital Future of Promotions
5:15 PM 6:00 PM	Keynote Presentation: Game Changers: NY Tech Companies to Watch & Why to Watch Them

Related Articles

• Next Week: Ad Tech New York (analytics.blogspot.com)
• The Future of Advertising: Interaction before Transaction (AdTech London) (mediafuturist.com)

The Changing Face of Performance Display – the rise of Ad Exchanges

The digital media landscape is changing rapidly. “Why” I hear you ask? Well the short and simple answer is the economics of supply and demand, meets technical and mathematical innovation. Combined this with clients increasingly demanding more accountability out of their media spend, with increased knowledge about campaign performance metrics of post click and post view conversion attribution and we have a major force driving change.

The Industry’s answer to this is the advent of digital media exchanges which is in itself a major game changer, but more on that later.

Lets start of the supply side of the digital market. Anyone in the know, understands that the amount of amount of digital impressions available, is now almost infinite. This is due to a number of factors, but principally the explosion of social media where supply is endless and behavior is sticky. Think Facebook, Twitter, Blogs, Tweet image sites like YFrog .com, Flicker, YouTube etc etc the list is endless. Secondly the major publishers struggle to have 100% impression sell through rates via their traditional sales channels and you have a considerable amount of unsold remnant impression inventory. So in simple terms over supply.

With infinite inventory and limited demand, the value of an impression is fast approaching zero. Not a fact most major publishers generally want the industry to know.

Up until now most of this low value high volume inventory has been sold at next to nothing rates to the traditional Performance Networks, that package up “Performance Solutions” where they factor the amount of impressions required to hit a client performance guarantee like a CPC pr CPA. Most of the CPA deals though are heavily weighted towards post view conversion metrics somewhere between 95% to 99%, which in itself is questionable from a true DR perspective. These buys are also “Blind” where a client has little or no choice on the sites their ads appear on and there is no transparency across higher performing parts of a network, so effectively not allowing a client the opportunity to optimize and refine their performance media buy and minimize wastage and cookie spraying.

The unfortunate fact of the matter is most of these Performance Networks are firstly focused on maximizing their yield, where they mark up the remnant inventory they buy by a significant multiple. This allows publishers to monetize their unsold inventory at albeit a very low rate, they can hide behind a performance network and not devalue their otherwise premium inventory. Further this allows a traditional media agency the opportunity to blend performance metrics with low cost inventory, claim questionable conversions and support in some cases their otherwise ineffective digital media buys that support commissions and other high yield volume rebates.

All in all, not a very pretty picture for the advertiser.

Now the demand sides of the equation. Enter DME’s or Digital Media Exchanges. Globally we are seeing the rise and rise of the DME that allows a site owner or publisher to make freely available an amount of inventory to an ad exchange (think stock market here), where advertisers can compete and bid real time for the ability to serve an impression to a user. This can be behaviorally targeted as well (Site retargeting, Search Retargeting etc). This market mechanism allows an advertiser to rationally price the cost of digital media based on what conversion value it creates for them (CPA, ROI, ROAS, CPC etc). With the right technology, business rules of post click and impression attribution and performance conversion metrics reporting an advertiser can now maximize what parts of a network or what ad format works best for them on their terms due to complete network and performance transparency.

2010 looks like it will bring major change to the digital media landscape. In the USA, Google is starting to push their DoubleClick network heavily with real-time bidding and an API due for release we believe before June. Yahoo! is starting to push RMX (Right Media Exchange) a little harder too. Early indications are the exchange based media buys are resulting in a 50% cost reduction in the eCPM advertisers have been achieving, compared with the traditional blind Performance Network buy, with increased conversion based value metrics as well. The exchange mechanism is also starting to extend beyond the traditional IAB approved ad formats with reports of video ad exchanges also launching in the USA.

Now, I’m not pretending this is the total solution in the digital media landscape. There is still a roll for premium based CPM buys as part of a digital brand campaign. I see Ad Exchanges as an extra digital DR element to compliment premium buys, drive the economics of digital performance harder and gain incremental impressions and conversions for the advertiser in a transparent, rational, data driven way. It is the power of search maths applied to display markets.

A view of the Australian Ad Market..

Any of you who know me, understand how passionate I am about this with my strongly held belief that this will be the dominant media buying mechanism across all media in the next 3 to 5 years, particularly around the burgeoning IP TV markets.

In essence the power is shifting from media and network owner to advertiser with the benefit of:

• Complete transparency across network performace
• Complete transparency across post click and post view conversion
• Rationally priced media, based on the value it actually creates – not how it supports commission deals, incentives etc
• Performance based media buys with prime media cost savings in the vicinity of 50%+

Downstream Marketing in Australia is launching the country’s first biddable display capability in conjunction with Efficient Frontier in California, using their seats on the ad exchanges to access the available inventory targeting AU based eyeballs across sites globally including AU based site inventory.

Update on Economics of TV – Article from AdAge

I’m not usually into re-publishing other peoples thoughts, of those of you who know me you will also know about my interest & thoughts on the future of TV, consumer behaviour and a migration to a new web based broadcast and ad model.

Below is an article from AdAge in the USA that I think is a telling sign of the future, regardless of what you currently believe or are paid to believe. Enjoy….

Thinking Outside the Box: Web TVs Skirt Cable Giants

Content Built Into TVs Is Big Business — but Not for Bypassed Operators

by Michael Learmonth
Published: January 18, 2010

NEW YORK (AdAge.com) — Considering cutting your Cablevision subscription? It’s not just the cable industry that would rather you didn’t; it’s also TV networks and studios that make bank off your monthly bill.

But device-makers from Samsung to Boxee to Apple TV have no such concerns — and they’re continuing to roll out products that bypass the cable box and draw content and services directly from the web, setting up what could be one of the entertainment industry’s biggest business battles of the next few years. Think: the current print-media implosion, but with much more money at stake.

“The consumer electronics makers are really the only ones who don’t have anything to lose if consumers switch,” said Forrester Research analyst James McQuivey. “Everyone else is conflicted.”

Netflix in particular is in the midst of a push to be a native application on TVs and gaming consoles. Last week it announced a deal with Nintendo’s Wii gaming console for its on-demand movie-streaming service; Netflix is already on Sony’s PS3 and Microsoft’s Xbox, not to mention TVs and Blu-ray players from Samsung, LG Electronics, Sony, Best Buy’s Insignia and Vizio.

At the annual Consumer Electronics Show in Las Vegas, cable operators got a look at a device that could start to eat into another core business: TVs with built-in Skype access. LG and Panasonic announced partnerships to start shipping the sets later this year.

Selling point
The consumer-electronics industry has a long history of over-promising; years of chatter have yet to yield a line of affordable mass-market 3-D TVs you can buy in stores, for example. “A lot of manufacturers have come out and made announcements, but I don’t think they really are in a position to erode the pay-TV subscriptions that the cable industry has today,” said Park Associates research analyst Jayant Dafari.

Yet content and features built directly into the TV have become the selling point for the next generation of high-definition sets, gaming consoles and boxes. And none of it is coming from your cable operator.

“Still no evidence of cord-cutting, but as prices spiral higher, the stresses on the system are unquestionably growing,” said Craig Moffett, senior analyst at Sanford C. Bernstein.

But customers are cutting back on cable bills: while rates go up every year, the average amount consumers are paying for digital cable dropped from $79 a month in the third quarter of 2008 to $70 in the third quarter of 2009 as they drop additional channels and services, according to research from Centris.

Cable still has the most complete reserves of TV programming, films and video-on-demand, as well as a near-lock on live sports and news. But web-based devices are getting closer to offering the full deal. Avner Ronen, CEO of startup Boxee, estimates 60% of broadcast TV is available online free in some form, and 10% of cable TV.

Waiting for clampdown
The question is: When will cable put a stop to it? So far, the industry has been relatively laissez-faire about the situation, but one tech exec, who asked not to be named, predicted that the minute cable operators start to feel the disruption, they will clamp down and use their market power to keep TV and films from seeping into next-generation devices. They’re already putting the squeeze on networks; any free distribution is an argument for lower cable distribution fees.

In the meantime, they insist that cable-cutting is more urban myth than reality. “We see some interesting stuff out there, but right now people are watching more TV than ever; cable-cutting is largely on the fringe,” said Alex Dudley, spokesman for Time Warner Cable, the nation’s No. 2 operator.

The audiences for these web-connected devices are starting to scale to the point at which marketers become interested. Parks Associates estimates that the consumer electronics industry will sell 80 million net-connected TVs by 2013, and there are already 20 million net-connected Xbox consoles in circulation. Recently, Microsoft said it had 2.2 million Xbox users online at the same time — about the audience of an episode of “Gossip Girl.” Within that experience, Xbox is selling traditional spots, branded entertainment and display advertising to brands like Sprint.

Boxee, which unveiled a set-top box at CES, first released its software on the web in 2007 and now has 850,000 registered users. It pulls video and other content from the web and displays it with an interface optimized for 10-foot viewing on TV.

By the numbers

Number of Xbox consoles connected to the web: 20 million (Microsoft) Peak number of Xbox users simultaneously online: 2.2 million (Microsoft) Percentage of U.S. households with gaming console that can stream movies: 39% (InStat) Average price consumers paid for digital cable Q3 2008: $79 a month (Centris) Average price Q3 2009: $70 a month (Centris) Number of Boxee users: 850,000 (Boxee) U.S. digital-cable subscribers: 42.1 million (NCTA) U.S. basic-cable subscribers: 62.6 million (NCTA) Number of Netflix subscribers: approximately 10 million (Netflix) Number of web-connected TVs sold by 2013: 80 million (Park Associates)

Last year Boxee added Hulu content, but was later blocked by the participating broadcasters. Boxee displays video with ads intact, but since Hulu shows TV with a fraction of the ads, putting the web version on TV is intrinsically destructive to NBC, Fox and ABC’s business model.

Snubbing the box
So what did Boxee do? It added a web browser to its box, so users can simply surf over to Hulu.com and watch as if they were on their computer, an inelegant bridge, to be sure, but another incremental snub of the cable box.

In the coming weeks, Boxee will add the ability to sell subscriptions on a pay-per-view or channel basis, much like iTunes, Netflix or Microsoft’s Zune service.

For the vast majority, devices like connected TVs, Boxee, Xbox, Roku, Netflix, etc., are additive to cable. “Personally, I think there is a style of TV viewing that is a more passive activity rather than the more active decision to use Apple TV or Xbox,” said Mike Vorhaus, president of Magid Advisors.

But more and more, people don’t care how their content is delivered, which is a scary thought for the cable industry and a key reason Comcast is acquiring its own content mill in NBC Universal, as well as pushing Comcast’s own, proprietary web-TV plans. One thing the cable operators have on their side is they are cash-rich and can make acquisitions of media or technology companies that start to disrupt their models.

“For many people, cable works just fine; the quality is great; the DVR functionality is great; the only gripe they have is that they’re paying for it,” said Boxee’s Mr. Ronen. But “there is a growing generation out there where the whole definition of entertainment is changing, and their main source of entertainment is the internet.”

For those interested in my views on an alternate ad model in a world of IP TV : http://justinhind.wordpress.com/2009/03/16/the-economics-of-tv/

Economics of the Future of Mobile

Recently I was asked to write an opinion piece for the magazine Marketing, capturing my thoughts on the future of mobile marketing which has always been touted as a large and emerging opportunity, but has yet failed to gain critical mass and more importantly material advertiser support.  Below is an extract of the article.

THE FUTURE OF MOBILE ISN’T MOBILE

Mobile Marketing has been the long-held, future of advertising. A promise that everyone has got excited about, but few delivered on. I’ve seen numerous reports from industry experts and market analysts, who’ve produced endless business cases and revenue models that never seem to gain any traction anywhere but in a spreadsheet.

Many mobile-based businesses start and fail even before they’ve worked out who they are, where they fit and more importantly what the consumer need and engagement point is. The promise of mobile has been built on a nascent industry that hasn’t really found its feet so far. It begs the question, why have so many people been so wrong for so long? In my humble opinion we’ve all been considering the problem, or opportunity in the wrong context.

The future of mobile isn’t “mobile”. Building yet another disconnected platform, which operates singularly, is the problem. The real question isn’t about what is mobile, it is more about what connectivity and ubiquitous consumer centric computing experiences hold.

The Black Swan of the mobile industry came from an outlier that radically changed the face of what we understood the market to be, Apple. Like it or not Steve Jobs and the Apple crew decided to rewrite the rulebook, grounded in a consumer truth & desire for simplicity when they launched the iPhone.

iPhone

The iPhone was one simple device that allowed consumers to do almost everything they could on a desktop or laptop, with the benefits of a compact device that had GPS functionality that could fit perfectly into your pocket at the cost of a normal mobile contract. The iPhone ran basically the same operating system as a Mac, it synced seamlessly with all your business and personal applications wirelessly and it was just easy. Combine this with creating a relatively open software platform that developers could deploy a range of consumer centric applications on, with an open software market place where developers could reach a global audience and monetize their ideas rapidly. Hey presto the face and future of mobile changed irreversibly.

The biggest change Apple brought to the mobile industry was they established and built sustainable consumer behaviour, where for the first time consumers could use mobile devices in an entertaining and meaningful way.  Almost everyone I know now uses the SAME applications and services on their desktop as they do on their mobile. Tweeting, Facebooking, Googleing, blogging, emailing, taking and sharing photos, reading PDF’s, listening to and downloading music have all become a ubiquitous experience, regardless of the device or location. The iPhone really enabled the “Social Web”, combine this with location-based mobile applications, and the face of the mobile game has changed forever, why? Because Apple rewrote the rulebook.

Apple changed the clunky face of mobile marketing and e-commerce. They did what Microsoft, Symbian, Blackberry, Nokia, Sony Ericsson, HTC et al couldn’t do. All of the previous industry incumbents were all operating based on a set of rules designed by engineers and analysts that had a vested interest in developing a disparate market, not a connected market. Apple innovated that last 10% of the mobile market and that innovation has had a 200% impact on the mobile industry as we know it.

Before you start to think this is a plug for Apple, have a look at the ripple effect across the entire mobile industry. Nokia has launched “me too” devices with their own music store, HTC have launched devices with similar interfaces and capabilities, Blackberry has started to support their developer community with a “me too” application store. The rate of change in mobile is increasing exponentially, all because an outlier rewrote the rules.

Apple's App Store

So where is the advertising world in all of this though? The advertising community both creative and media is still way behind. Ad Networks are still trying to sell on a silly impression based model (CPM) through serving non-targeted, dumb ad’s that have little relevance to a consumers experience that are at best annoying. Creative agencies and their digital heads have not yet woken up to the fact that it would be a better use of clients funds to build a simple mobile site, designed for a handheld device that delivers consumer utility rather than fight for a full flash and video site that can’t be viewed on a mobile device or indexed in a search engine. It is time to catch up people, understand the consumer and find the right intersection point.

The future isn’t mobile; it is ubiquity of experience across any device that delivers consumer utility and meaningful brand engagement.

Economics of Digital Leadership & Thinking

I’m fortunate enough to be off to NYC next week to attend AdTech NYC 2009.  I attended AdTech SFO earlier in the year and found it hugely beneficial, mainly in terms of getting a wider perspective on digital trends from the USA from both leading advertisers and major agencies.

Sessions I’m attending include:

Day 1

• Opening Keynote with Sir Martin Sorrell (WPP) 2010: What’s coming down the line
• Defining the New Media Currency—How to Bring Traditional Media Metrics Online, Or Should We?
• The Modern Agency
• Advertising Operations in the Digital Age: How to Build, Scale and Leverage a Next Generation AdOps System
• The New Consumer Funnel: Engagement Mapping and the Death of the Last Click Reporting Standard
• Marketing 3.0—Building Great Brands in the Digital Age
• TV 3.0: Reach + Targetability—The Promise of Addressable Advertising

Day 2

• Keynote: Jonathan Miller, Chief Digital Officer, Chairman and CEO, Digital Media Group, News Corporation
• The Rise of the Audience Marketplace
• Digital Branding: Measuring the Effectiveness of Online Brand Advertising
• The Twitter Effect: Leveraging Twitter to Drive Brand Engagement and Bottom-Line Results
• Creative Showcase I: Going Beyond Digital—Contagious Ideas That Change the Conversation
• Creative Showcase II: Cool Stuff—That Works!

I hope to post interesting updates and views from each day, stay tuned if you are interested or as always drop me an email & I’ll send an update or session pack if I get one.

Economics of New Media Formats – Post Click Cookie Spraying??

There is a battle royal on between the post click & post impression camps in digital advertising & media. Clients are increasingly becoming aware to the metrics that make a difference to their marketing efforts and in a time when all marketers are demanding more from their investments, it looks like the post click camp is clearly winning.

If you’ve read my blog in the past, you will know what I think of post view conversion metrics. Generally I think they are BS and trying to find any link to a conversion from post view cookies that have been sprayed indiscriminately is clearly based on trying to prove value where value does not exist. Anyway…..if you’d like to review that post you can check it out here.

Today I came to work & logged on as I usually do, part of my morning ritual is to read the news online before they day starts and demands kick in. Today I experienced a new form of ad format developed by Fairfax & the smh.com.au. The format is a home page, page surround where the advertiser owns all space that surrounds the news content. Let me say I think it’s an ok idea for digital branding purposes, especially on a high traffic home page like the SMH.com.au. My problem though is if you unintentionally click anywhere outside the main content area, you end up on the advertisers destination site / page, like I did.

Post click cookie spraying maybe?

What SMH.com.au have been able to engineer is the spraying of post click cookies ( yes hard to think really), where the site will record an inordinate amount of post click cookies and hence conversions within a reasonable cookie window. Again it raises the debate of data rules, last click attribution, consumer journey’s, cookie deduping etc. Personally I believe that post click is the ONLY way to determine online value creation, in combination with well-defined data business rules.

I see this as a way that the publisher community MAY, be fighting the post click / post view battle in a way that is attempting to build value back into online display advertising and stem the tide from display into Search. Is it right or wrong? You be the judge. My view….the only clickable area should be the ad itself.

Comments & alternate views welcome….

Economics of Advertising in helping solve the bigger problems….

I’m just back from a week’s leave, mostly spent enjoying my home and surrounding environs, but that’s another story.

As part of catching up on general industry news first day back, I stumbled across Craig Davis’s (Chief Creative Officer and Co-Chairman of Publicis Mojo Australasia) keynote address at the 2009 Caxton Awards in Noosa. For an industry that is fighting to stay relevant in the ever changing communication, marketing and economic landscape I think his take on our collective role, is incredibly insightful and relevant.

His keynote address is attached for any of you that have a good 20 minuets or so to get enlightened. Congrats Craig on a great keynote address…..

Download keynote here

Economics of site design

Today it seems every integrated campaign has a micro-site, as it should. Having a great digital experience that consumers can navigate to increases brand engagement, understanding, preference, consideration and should provide entertainment or a compelling experience that enhances a brand or products success. On-line success can be defined by a multitude of different metrics or on-line success events. The real question is how to create a disproportional impact from a creative idea, media budget or campaign mechanic.

What I find surprising though today are the number of sites that can’t be found by consumers through Search engines. The offending culprit all to often is bad site design, a lack of understanding in how the Search engines index and rank sites and more often then not a digital creative directors complete obsession with flash, justified by “creative priorities” outweighing effectiveness goals. The truth of the matter though is creativity and consumer experience does not have to preclude a sites ability to found and indexed.

Why is Search so important?

Like it or not, Search is the primary way consumers choose to navigate the web. In Australia more than 90% of consumers find new sites through Search engines, not expensive banner ads or sponsored emails with very high CPC’s and low CTR’s. Having to rely on expensive, low yielding digital media makes a campaigns life span finite and limits reaching the heights of ROI.

Search engines are also the easiest point of interaction for consumers, “I see an ad (TV, print, outdoor, on-line content, work of mouth – WOM etc) and I go straight to a query box and get exactly what I asked for. Search engines provide engaged, relevant results for engaged consumers when they are actively seeking out specific information. Search (both SEO & SEM) is also the lowest cost channel to engage consumers. Effectiveness studies, has proved time & time again that Search is 10 to 15  times more cost efficient and creates more value than digital display or other types of digital media.

Even if the channel planner has been insightful enough to include paid Search (SEM / PPC) the campaign will suffer from a low quality score as the site will not be able to be spidered, indexed etc and this leads to a poor quality scores from the Search engines. This then results in artificially high CPC’s and will burn budget very quickly. The whole quality score issue though is a topic for post, so more on that later.

The Answer

Ensure any new site build is built in a HTML with flash elements embedded within site. Also make it a mandatory for the site have a full HTML back up version for non flash users (even though flash penetration is 97%+). Also ensure all sites have HTML site maps the spiders and bots can read and index.

This will allow:

1. Site to be indexed properly for natural Search purposes, if it is full flash it NEVER will be indexed. Take advantage to the low / no cost traffic available. Remember around 70% of consumers click on natural Search rankings and 90%+ of all consumers use Search engines to navigate the web. You do the math, this is a big audience you can’t neglect through bad process, development skills, creative priorities and decision making.
2. Better SEM / Paid Search results as the site will be awarded a positive quality score – your budgets will go considerably further, resulting in larger more engaged audiences and better ROI for your total campaign. Great for effectiveness case studies and your client will think your working in their best interest, not yours or the media agency’s.
3. Take advantage of the massive trends in mobile device web surfing. As devices such as the iPhone get better and better, penetration increases and mobile data costs fall more consumers will be both Searching and visiting sites away from the desktop. Complete flash sites can’t be read on any mobile device currently. Take advantage of this huge consumer trend and don’t neglect your traffic.
4. You to justify larger creative / development budgets because your campaign will be more effective. Break the 80/20 rule where the majority of a client budget goes into costly inefficient media. The fact is you can probably do an even better job with 50% of the budget going into performance media and Search, while allocating the remainder to a better more engaging site.

Great examples of Campaign Micro-sites

Optus Broadbandmenu.com

Optus Broadband Menu

Optus Broadband Menu

What the Search Engines can see

Optus Broadband - Search Engines can index content

Macquarie Bank - Platinum Credit Card

Macquarie Bank - newformofcurrency.com

Macquarie Bank – discoverable by Search Engines

What the Search Engines can see

Room for Improvement

The Lynx Effect

Search Engine – Google Snipett (no site description)

Lynx - Googles page description

What we see

The Lynx Effect

What Search Engines can see & index

Lynx Effect - Search Engines see nothing

Rexona Million Balls

Search Engine page description

Rexona

http://millionballsmission.com.au/

What the Search Engines see

millionballsmission.com.au - Invisible to Search Engines

You be the judge on what makes more sense from a marketing ROI perspective.

The Economics of a click vs. impression

Today no one can run from the economic downturn we are all facing. As the credit crunch continues to tighten its grip on the economy we are seeing advertisers demand more from every dollar they invest. In recent years we’ve seen the rise and rise of digital marketing as an effective way for brands to invest their dollars due to two key factors; the channel is the fastest growing on the planet and perceived level of accountability it offers. What is beyond me though is the lack of transparency and understanding most clients have around their digital investments and the blind faith they place in the reports they get from their media agencies. Without wanting to be alarmist most acquisition and engagement focused clients could save upwards of 30% of their digital display budgets with little or no impact what so ever on their campaigns performance. Even worse they can in most cases reinvest this wastage into performance based media and Search for a 50% – 200% increase in campaign performance.

The problem…

The primary problem is most (not all) campaign performance reports delivered by media agencies use blended metrics of post impression vs. post click success events (CPA etc). In some cases I’ve seen this blended metric as high as 95% post impression and 5% post click. With cookie windows of up to 60 days this introduces a high level of bias into reports. But today the problem goes deeper, some digital media plans are unethically designed to introduce a cookie spraying methodology into the media plan. Cookie spraying is a deliberate tactic to buy as much low performing, low placement, cheap remnant digital inventory  as possible. This type of media strategy can ensure upwards of 70% of an available Internet population ( e.g. Australian internet users) ALWAYS have a cookie on their machine.  In some instances I’ve seen a single client drop 4 billion post impression cookies in a 12 month period, with only 13 million active  Internet users in Australia you do the math. So a user may never ever click, engage or even see a brands ad, navigate to the brands site either by direct entry of another medium ( e.g. Search) and the value is attributed on a post impression basis to an advertising / media plan that had little or no effect on consumer behavior. Think how many times a consumer may visit a social networking site (www.facebook.com and www.myspace.com), use an IM program ( Microsoft Messenger, AOL Chat etc), use a free email service ( sponsored ad email) (Yahoo mail, Hotmail etc), or check the news or stocks from their favorite site. Every time they do this a cookie is dropped on a users machine.

The economic impact:

1. Clients are relying on false or skewed data to make digital media investment decisions
   
2. Clients are double paying for performance in some instances ( i.e. paying an affiliate commission, the cost of an impression or a Search click) – lack of ability to de-dupe
   
3. Clients are missing their true value creation opportunity as their campaigns are being optimized and planned on fictitious data sets and not investing in high yielding digital media
   
4. Some media agencies are falsely claiming media rebates and commissions they are not morally entitled to
5. Some media agencies are doing this by deliberate design to meet their contract commitments to networks and publishers to gain OMI (other media income) and discounted wholesale rates that they mark up due to a group buy – all in the face of not operating in a clients best interest and not disclosing this as part of their strategy ( why would they?)

The impact on performance numbers

The impact on this practice on a clients performance numbers is significant. In some cases I’ve seen digital success metrics overstated by by to a factor of up to 20 times.

Example

Industry                              Blended Metric                                Post Click Metric(actual CPA)

Telco                                    $86 CPA                                             $679 CPA

Credit Card                         $54  CPA                                            $1894 CPA

Homeloan                          $205 CPA                                            $29,452 CPA

The Solution

1. Base all value attribution ONLY to last cookie (last cookie should win in all circumstances)
2. Understand the difference both post click & post impression metrics. A post click engagement is worth SIGNIFICANTLY more than an impression.
   
3. Have a common cookie window policy across all digital mediums (display, affiliate networks, search etc)
   
4. Understand conversion latency (time from click to conversion – they differ greatly between digital mediums)
5. De dupe conversions / cookie pools etc
   
6. Understand the consumer journey and what exposure a consumer has had to all digital advertising (what has lead to what)
   
7. In the case of post impression metrics attribute value only within a very finite window ( i.e. 6, 12, 24 hrs from LAST impression)
   
8. Apply a universal set of data business rules to digital value attribution
   
9. Break down your media buy in transparent terms. Understand what components of the digital media buy is CPM, ROS (run of site) CPC, Remnant inventory etc.  This will allow you to understand cookie spraying if it is going on. Also get all performance reports broken down on the same basis, the results may shock you.
   
10. Optimize a campaign investment on your value creation terms, not the agencies hidden objectives of OMI, media commissions, groups deals etc.

Examples of Cookie Spraying – you placement / low yield inventory

Woolworths Everyday Money - Ad at bottom of page below the fold, little or no post click value

Low yielding HSBC ad - significantly below the fold, little or chance of engagement or a click

Europcar - Display ad at bottom of page significantly below the fold

Economics of the Superbowl & Search Marketing

We all know the Superbowl is famous for advertising, it is the single biggest event or forum where the great North American ad agencies can flout their talent strategically and creatively to a reported audience of over a billion people. Clients like Pepsi, E-Trade, Sony Pictures, Budweiser and Audi (to name but a few) spend upwards of USD$3M (AUD$4.651M) a spot to engage an audience and create an impact for their brand or product. With an audience of well over 100m alone in North America, cost (think USD$3M+ for the TVC, plus media) and you’d think in today’s world of integration every brand would be seeking to leverage the event and extend the engagement potential of such an expensive and potentially high yield opportunity…yes?

Well unfortunately the answer is NO for some of the brands that took part in the Superbowl. Some major brands missed the opportunity to drive people on-line and extend the brand experience from TV to digital, one of the easiest forms of integration that delivers a significant punch for an advertiser.

A cost of entry in the “Big Ideas” business is a micro-site these days, at least a 2 second URL at the end of the TVC, or if you’ve woken up to the consumer of the 21st Century maybe even a Search program with a simple keyword that relates creatively to the idea.

The benefits:

1. Extended brand immersion / experience / time with the brand
2. Extension of the creative idea into a more personal self directed environment
3. A captured profile, conversion or viral element etc – you choose
4. A proxy for the effectiveness of the media placement / creative idea (i.e. what % of the audience did you engage within 24 / 48 / 72 hrs etc)
5. An amplified campaign with a greater ROI for a marginal increase in investment.

Adage reports only one in five (circa 20%) of advertisers directed viewers with a specific call to action in the TVC, miraculously the highest in the past five years. Conversely, Gartner reports 65% of advertisers did construct specific Search strategies to leverage the opportunity (up around 20% on last year).

The reported Search integration winners included E-Trade, Cash4Gold, Frosted Flakes, CareerBuilder, Diet Pepsi Max, GoDaddy and Pepsi. The losers; Budweiser, Chase Bank, Denny’s, Pixar, Vizio, “Year One,” “Angels & Demons,” Taco Bell, Bud Light, Bud Light Lime, Heineken, “Transformers 2″ and Coca Cola, they missed it by a mile.

Here’s how Super Bowl advertisers ranked based on the change in Daily Reach on Super Bowl Sunday.

Download the full TNS report on Superbowl effectiveness here.

In simple terms the failure to think of constructing a Search strategy around a specific creative idea / execution had a high probable  opportunity cost. Think of driving just 0.5% of your available audience on-line – 500,000 users @ est. $0.45 / click is a small additional marginal investment of $225k. Maybe less than 2.5% of the total TVC program cost.   Scale this at 1%, 1.5% and the opportunity cost is significant and the potential ROI is off the chart. The equivalent cost to generate that audience through traditional digital media would be 20 to 40 times the cost.

Here in Australia, this level of thinking hasn’t even yet started to permeate advertiser or agency thinking. Connecting Search to ATL activity is seen as bleeding edge, let alone including a specific keyword as the CTA in an execution. Google’s research indicates on average only 2% of consumers can recall a campaign URL as a CTA , vs. 55% from a specific keyword. Good news is there is a massive first mover advantage in this space.

View the winners & losers below and just think how easy it would have been to construct a great Search program & maybe even incorporate a keyword as a CTA. Lets hope we see this soon in Australia.

Brands that hit it!

Cash for Gold

E-Trade

Frosted Flakes

Careerbuilder.com

Pepsi

Brands that missed it!

Budweiser

Dennys

Movie – Angels & Demons

Bud Light

Audi

Twitter explained….consumer advocacy in real time

Simple….

UBank – Social Media & Straight Talking

Below is a brilliant example of creativity in social media. UBank is the new online banking offering of NAB in Australia. Three Drunk Monkeys have created an irreverent, straight talking TV series explaining complex economics in easy to understand terms for most people baffled by currency movements, interest rate movements, balance of trade and how it effects them. And yes it is only available to the online generation…great brave thinking UBank & Monkeys, congrats on doing something different.

The Economics of TV

Wow… hasn’t everything changed. I think  that change isn’t only constant, it is increasing at an exponentially rapid rate when it comes to marketing and consumer connections.  TV is one of those mediums that is changing at a breakneck pace, being driven primarily by the web, cheaper broadband, processor speeds and more importantly by human behaviour and the hunger to have it all now. It seems though that the only ones fighting this technological and social trend are the TV networks, somehow trying to hold back change like that boy who put his finger in the dike, trying to hold back the pressure of a tidal tsunami.

Lets define what has changed though…

Humans desire for visual entertainment hasn’t changed, we still want to see great content, be entertained, informed, learn etc. All the usual stuff we know & love in our existing inefficient model of liner TV transmission. Actually, all the stuff we do offline (Read, listen, communicate etc)  is what we NOW want to do on-line, the web has just become a faster more efficient means of content dissemination and connection.  There is a fascinating book on it it if you are really interested – Convergence Culture.  Back to TV….

So what the web has allowed us to do is no longer have to experience video content or TV in old world speak in a linear fashion (wait – start – stop – wait, repeat cycle, repeat cycle etc.) Now we can experience content in a multi-dimensional model where prime time is anytime, and we are no longer at the mercy of the television networks to dictate content and programming schedules to us. With the advent of TV shows on iTunes, Hulu, Video Ninja, etc etc we can watch whatever we want, whenever we want. In my home we see shows like Damages, Entourage, dare I say it Gossip Girl, The Mentalist, Flight of the Concords, Mad Men etc within hours of it airing in the USA. We stream it, download it and watch it all ad free on a schedule that suits our lives, rather than that of the networks. Actually we watch 3 or episodes all back to back, it is a much better experience.

www.Hulu.com

Video Streaming site - Ninjavideo.net

So I ponder the question, what will the future & Economics of TV be? Is there a better way? (yes obviously) Who will hold the balance of power, will it remain with the networks who still today are scratching their heads, wondering if they can fight it the same way the music industry did or will they embrace the change that is being thrust upon them by a technical and consumer lead revolution? Should they look to the pioneers of the web (gambling & porn), watch & listen carefully and adapt and commercialise their models or put their heads in the sand, only to come up for breath & see that everything has moved on without them? So I hear all you naysayers saying the IP TV market is small and nascent, but so too was the wireless broadband market, the 3G handset market and yes our old friend the Music market. Believe me it is sooner than we all think, and much much sooner than the guys paid to believe the old system won’t change.

So whats the new model then….

I think, predict, believe that Goggle will become the biggest TV network in the world in the very near future….here is why:

1. All TV based content ( that and everything else – Radio, Books etc) will be digitised ( fact is it already is!)
2. All TVC’s will also become digitised and stored on a TVC Ad Server System (similar to current ad digital display ad servers)
3. TV’s will be increasingly connected to media centers ( think Windows Media Center, Mac Mini or next Gen Apple TV), or co-exist in harmony with hand held devices like an iPod Touch or iPhone.
4. Google will be able to behaviorally understand a consumer / household based on a myriad of data sources (web surfing history, Search history, IP TV viewing history etc) & serve TV ads directly into a program that has been legitimately downloaded or is being streamed in realtime. Ad serving will be served on the basis of complex algorithms in a live auction model where market forces set pricing, similar to Paid Search today. Think Google’s recently announced “interest-based” ads on the content network with the mechanic applied to TV.  Media planners & network sales forces will be a thing of the past.
5. Consumers will decide how much advertising they are willing to bear and will trade the cost of ad free convenience off against receiving free TV, where & when they want it. So if I want no ads, I’ll have to pay a higher cost than someone who is willing to see say 8 or 10 ads an hour who may pay nothing.
6. TV schedules & post campaign analysis will be more like digital campaign analysis than the current pay, hope and pray approach (what I like to call the Strategy of Hope) to accountable effectiveness reports. Advertisers will be able to  understand who they’ve connected with vs. what shows they’ve bought and most importantly how the consumer has reacted within different latency periods from viewing TVC’s embedded into the content (no time shifting of course). Did they visit the site,buy the product, subscribe, buy something else in the clients product portfolio, did churn drop etc etc. The opportunities are endless. Will all TV in the future be more like DR / internet based campaigns – yes I think so at least.
7. Content producers / companies may distribute their content or shows directly to their audiences over the web and get a larger cut of ad revenue thereby dis-intermediating the networks.
8. A new breed of KPI’s will evolve based on value & yield, rather than TARPS and average spot cost.
9. Creative agencies will need to think of new mechanics to engage their clients audience meaningfully. No longer can they solve marketing challenges 30 seconds at a time, in the same linear fashion as the traditional TV networks serve programs.

I’d really appreciate alternate view on this, either from a Television network’s perspective or from the digital industry’s perspective. All I know is TV is going to change faster than we know it and become more like a Search market than the current state we all know and love ( or hate?).

Interesting update:

http://www.smh.com.au/business/content-rules-needed-for-internet-tv-20091105-i0b0.html

The Economics of Online Music

Short & sweet today. I’ve been talking with a new on-line music portal www.bandit.fm being pioneered by Sony BMG here in Australia. Downstream are looking at potentially partnering with Sony to help build an audience for their new service.

Now anyone that knows me, knows how much of an Apple fan I am. I think anything Apple touches, generally turns to gold. Apple have successfully become the trail blazer in almost every product category (think iMac, iPhone, iPod, Mac Books of all types and descriptions). They’ve also revolutionised the consumer software market with easy to use intuitive applications (think iPhoto, iMovie, iDVD and before anyone cans me the whole iWork suite, awesome productivity suite for $99! Let’s also not forget iPhone apps – just brilliant way to build and scale your mobile platform).To date no brand really comes close to Apple’s innovation and foresight.

But when it comes to music, I think there is a true challenger that could really take it to them. Sony have developed what I believe is the BEST music site / portal on the market today.

New iTunes killer

I think it is the best for the following reasons:

1. Great content – they’ve developed the site intuitively with a mixture of channels, artist specific pages, video, news feeds etc. You can engage in specific genres like R&B, Hip-Hop, Rock, Pop or you can navigate to specific content rich artist pages like N.E.R.D, John Legend, Duffy etc etc.
2. Great site build – mixture of indexable HTML & interactive flash elements, URL structures, title tages, H1 tags etc
3. Downloads are easy after simple registration process
4. Music & videos are DRM free
5. Great experience – you can listen to a whole song or view a video in high quality full screen mode vs. Apple’s 30 second preview function
6. Not constrained by an app like iTunes – you can access it from any browse
7. Easy content network integration (PPC) into YouTube & Myspace. They are “THE PLACE” to view music related content.

Specific Music Genre Channels

Usher on Bandit.fm

The site will work very, very well for Paid Search / PPC campaigns, the site structure allows you to deep link to exact content as well as being able to achieve great quality scores which impacts highly on economical bid prices and as content is more compelling than iTunes, I believe with a much higher conversion process too.

The site also has very high potential to work very very well for Social Media, as the site structure let’s consumers be very specific about their Tweets, blog postings etc and create specific interest in genre based content communities. One area they could approve is allowing their content to be aggregated and syndicated on other sites, think embedding audio files or video files to MySpace or Facebook profile pages with pre & post roll Bandit.fm ads promoting their service – very economical way to drive new subscriptions, downloads or cross sell new artists / releases / albums.

So the product I think is truely world class, if this is release 1.0 I can’t wait for new versions updates. Bandit.FM can successfully take on iTunes and Apple in the market they really pioneered and commercialised (on-line music), and hopefully give consumers a compelling reason (safety – no viruses / Trojans, reliability ets) to BUY music rather that steal it from sites like Limewire.com. They only have to carve out small incremental percentages of the on-line global market to create real value & high return for their pioneering investment in on-line music. Congrats to the whole team at Sony BMG!

If you are into music give it a go.

Economics of a Google & Twitter collision…

So I’ve been thinking about what happens when like things collide.

The most interesting thing I could come up with is a big social media trend & technical collision between Google & Twitter, think Toogle or Gitter…ok maybe not on a brand front. But seriously lets think about the two most potent forms of digital marketing on the planet today, Search & Twitter (Social Media).

Twitter - the new social tool

Google - the new Master of the media Universe

In order:

Search

• Fastest growing media on the planet (Australian est 60% year on year compound growth)
• Search network – larger scale than any ad / publisher network
• Media with the highest level of accountability & conversion
• Performance related media – no click, no pay
• Live media auction based market driven by relative pricing mechanic
• Investment based on conversion yield
• Media with the shortest conversion latency
• Highest integrity media – only deals in post click metrics and avoids the BS of cookie spraying, post impression conversion & analysis
• A CONSUMER DRIVEN MEDIA THAT MAPS CONSUMER THOUGHTS WHEN THEY ARE IN AN ACTIVE MIND STATE

Twitter

Twitter Mobile

Twitter - the real value is the searchable content

• Collaborative social media tool
• Growing exponentially fast
  
• Maps social groups & connections
• Maps social conversations about content & brands
  
• Combines desk  & mobile functionality
  
• Has indexable content / conversations / links
  
• Has location based functionality in mobile devices
• Easy to execute algorithm based analysis on conversation value & stickiness of content or users
  
• A Consumer driven media – WHEN IN AN ACTIVE ENGAGED MIND STATE

QUESTION : What if you combined the power of them both?

• A performance based, digital media super power
• Advertising at the speed of thought (or conversation)
  
• Behaviorally targeted advertising based on a collective combination of conversations and connections / social media groups
  
• Location based advertising & ad serving based on real-time geo-targeting
  
• Two sticky, lean forward, consumer engaged media channels

IMPACT

Immense revenue scale for both Google & Twitter.

On Google’s side an inordinate amount of live, actively engaged impression inventory to serve ads to based on conversations (past & present), combined with consumer clustering (birds of a feather flocking together etc) and search & surfing history. For Twitter a ready made ad revenue stream of either text ads, by making Twitter effectively part of the content network ( yes some tweaks to algorithms required) or make it a part of the biddable display market from a content placement perspective.

Twitter would have a ready made, low or no cost sales channel at their instant disposal. Google would have the most valuable and dynamic digital inventory available.

Together they would be unbeatable, together they’d own social & performance media, together they’d have scale and momentum that couldn’t be broken. Together they’d provide a one stop, easy solution for brands to capitalise on both in terms of performance media, social media and mobile media.

Digital trends from the USA

AdTech Day One Opener – San Fran 09I’m a little slow off the mark after coming back from the US & have a whole bunch of new posts that are currently works in progress. Great content on social media, online / IP TV, the Future Agency etc etc. In the meantime here is a quick snapshot of online trends from the US across digital media, social networking, ad revenue monetisation etc etc. Hope it helps or provides some insights for your work here in Australia. Digital Trends from the USA.

Economics of Brand Loyalty – Does it really exist?

Sorry for the delay & silence between posts, I’ve only just returned from a few weeks holiday in Italy & Scandinavia.

During one of my flights I randomly pick up a copy of the London Times and found a story that caught my interest. It was about loyalty in the times of the GFC and changes in consumer behaviour. The story details a USA based brand study, sponsored by the USA CMO Council from 2007 to 2009 that focused on consumer loyalty and retention across 685 brands. The study used  data from 32 million consumer loyalty cards, similar to a Woolworth’s Every Day Rewards program.

The study found that in 2008, during the height of the GFC the average brand lost a third of its highly valuable customers – a staggering and frightening reality for direct marketers. This defection came from a group that habitually bought a specific brand for more than 70% of their purchases in a category. Brand measures of affinity, esteem and loyalty collapsed under price and promotion pressures. The study also found that in times of economic pressure, customers once loyal to premium brands in a category could be easily shifted to private-label house brands. The shift downwards was found to rapid, however the upwards shift to return to premium brands took far far longer. Over the two years of the study & data analysis, on an aggregate basis 52% of customers deemed as highly loyal either reduced their loyalty or completely defected from the brand.

The findings raise big questions for marketers and agencies (both creative & media). These include:

• Is the current strategy of hope, that deploys a spray & pray approach of TV, print, outdoor etc still relevant?
• How do we target more effectively through digital media? What is the impact of Search, Social Media, Blogging etc on purchase behaviour and intent at a retail level?
• What is the role and effectiveness of current loyalty programs? It would seem that they don’t influence behaviour as much as we all would hope. Do they need to be better planned and executed using dynamic behavioural data in an almost real-time way?

Loyalty as we all know is a key driver of revenue for brands and most marketing activity and investment are focused primarily on customer acquisition metrics with some form of loose LTV ascribed to a business case that justifies the campaign activity. As the above study indicates, in the majority of cases loyalty and retention programs lack structure, data insights, don’t track consumer behaviour and engagement and from the customer perspective lack relevance. Most programs at best follow a strategy of HOPE, where a single digit response rate is deemed successful and everyone involved slaps each other on the back and we as an industry celebrate flawed success.

Mark Buckman, the CMO of the Commonwealth Bank in Australia loudly shared his views on the role of direct communications and customer relevance at the 2009 ADMA Forum and in the Sydney Morning Herald. Simply put he believes its time for marketers to lift their game, become smarter and more insightful about engaging in a relevant way with consumers. I couldn’t agree more, most marketing is executed here in a lazy laissez-faire way with a “good enough is good enough” attitude.

Here at Downstream, we’ve also seen the rapid change in consumer behaviour. Search query volume is up significantly across almost every category and especially across banking, finance and travel, consumers are increasingly benchmarking brands against each other. The biggest rate of change we’ve also observed is in retail where Search has been traditionally shunned by bricks and mortar businesses in favour of mass media. This disconnect in the marketing equation unfortunately is consumers are increasingly turning to Search price check and either buy online or being driven to a retail outlet. Unfortunately brands that aren’t found aren’t relevant and are losing share of mind and wallet to their more dynamic, insightful and nimble competitors.

I’d love to know what has happened here in Australia over the past 2 years, how have customers defected from brands they once loved regardless of the price differential. Have the DM & eDM programs held off customer defection, how are the biggest brands in Australia thinking about the more effective use of data, segmentation, evaluation and brand engagement? What is the future of loyalty and how will it be executed more effectively than it is today?

Thoughts and opions are warmly welcome.