Matthew Creamer of AdAge had an interesting piece on web advertising. Interesting, namely because he questions the whole notion of “advertising” on the web. His argument is that traditional forms of advertising (banners, emails) are ineffective online because the internet is a user controlled medium and users revolt at the sight of advertising.
Creamer uses the ineffectiveness of banner ads as a support for the downfall of traditional online advertising. The metrics on these ads aren’t stellar. However, that’s relevant to performance based advertisers, not the brand advertisers currently on TV. Big brands are paying a lot more for what I see as a lot less on TV. Advertisers only get an estimate of how many people watched their ad and are paying $40 - $50 CPMs. I don’t see how this should go down because we have better metrics online. We just need better creatives. This is what makes video advertising interesting.
Moreover Creamer notes that marketers, once at the mercy of media channels, can now participate as their own media channels online. “In other words, marketers can build website that do cool, useful stuff.” Johnson and Johnson’s Babycenter is cited as an example.
However, the article’s conclusion, to “create advertising that has value” doesn’t leave us with much. It’s about as useful advice as “build a great business”.
The reason marketers pay for advertising is because they’re notoriously bad at creating value outside of their core product. Bud.tv failed. Amazon and EBay have launched Facebook applications that don’t seem to be going anywhere. We don’t need more of these.
The market determines what media properties survive. Marketers need to find out how to inject their message on to these properties. Some are doing it through campaigns on blogs, others on social networks through the likes of SocialMedia. Advertising is far from a dead medium online.
The more relevant question to me is how will marketers adjust their advertising to these new media properties. Will it be through earning placement, or paying for it. For years advertisers have had to pay for access to their audiences. Media channels like newspapers, T.V., or billboards charged premiums to publishers because they were the only way to broadcast to an audience of any significant size.
But social syndications systems (blogging, bookmarking, videos, pictures) let marketers earn their audience by creating engaging/entertaining content. If a company creates an entertaining video (or even someone else does), it can become distributed amongst their target group through “word of mouth” in a much more genuine way. Take for instance the Coke/Mentos videos. The entire series of videos on YouTube have over an eight figure view count. Human Lab Rat on Justin.tv is another interesting promotion.
For those that like pictures, it looks like this:
The question is does self promoting content selected by users get you more value than paid placement? Are social networks inherently viral enough so that creating innovative ad copy is more valuable than paying for distribution? Or is the whole idea of advertising bunk because user recommendations will essentially replace the idea of advertising? I strongly disagree that advertising will cease to function online. Rather, each method will simply find its price based on what marketers want. And viral distribution of conversation about brands is great, but brands still need to get their message out and a simple advertising buy with somewhat predictable reach is still an attractive commodity.
Furthermore, creating viral content isn’t easy and isn’t predictable because you don’t know how wide an audience you’ll reach. Maybe you spend $100,000 on a video that gets 5 views maybe 5 million. Brands also have to frequently move off message in order to be invited in by users. Being raunchy, sophomoric, or handing over your brand to users to play with may get more views, but doesn’t help promote the idea the company is interested in. The fact is that creativity doesn’t scale.
And this is precisely the problem, coming up with a new ad solution that strikes a balance between not being too odious for users and too unreliable for advertisers to buy. That’s why I’m at SocialMedia.
