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

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 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.