by Andy Atherton
June 30th, 2009
Great piece on NPR’s Marketplace last week. Northwestern marketing professor Eric Anderson spoke with Marketplace host Kai Ryssdal about the impact of the current recession on brand loyalty. Anderson made some important points about balancing the need to show short-term tactical results with consideration of the long term strategic impact of advertising. In particular, he recommends investments in building equity by aligning brands with themes that consumers are concerned about (e.g., the environment) rather than focusing on short-term promotional initiatives. Good advice for those concerned about the long-term health of their brands, as Anderson cites decades of research that shows share loss to private label brands tends to be permanent – a topic that has received a lot of attention recently.
by Andy Atherton
June 26th, 2009
Another anti-ad network screed from Ari Rosenberg yesterday on mediapost. I sincerely appreciate his passion on this issue, but I respectfully disagree.
He’s absolutely right that lots of ad networks lie. Way too many for my taste frankly, but certainly not all of them. For example, Brand.net takes our commitment to preventing channel conflict with our publisher partners very seriously. We have to or we would not continue to be able access the best inventory on the web for our clients. Every conversation we have, we conduct as if there were 3 parties in the room: Advertiser, Publisher and Us. No wink, no nudge, no lying. We sometimes lose sales to other networks because of our principled approach to this critical issue, but our SafeScreen page-level filtering technology provides a level of content safety not available from other networks – blind or otherwise – and most clients understand that.
I think we all need to recognize that agencies are looking for efficiency for some portion of their overall buying activity. I am not just talking about pricing. Buying 50 (or even 5) sites through a network is dramatically more efficient from an operational perspective than buying those sites individually. There’s no way around it. Think of TV buying without national networks. The media market has changed since 2003 when Ari left IGN. There’s a reason why networks exist and that reason isn’t going away; some portion of ad budgets will continue to seek efficiency. Publishers can successfully mitigate channel conflict while still accessing these budgets by requiring networks to be blind and implementing a few other simple policies which I laid out in a byline earlier this year.
The typical publisher CEO is pushing her VP sales to use networks because she intuitively understands all of this. Not every VP Sales is going to cheer about adding a sales channel that puts pressure on his team. Just like not every print division GM for a newspaper is going to be excited that he can’t buy a new printing press because the company is investing in the web publishing effort. Lack of excitement within one constituency doesn’t mean a particular decision is bad for the company. It’s the CEO’s job to maximize long-term profitability for shareholders, not to maximize near-term revenue generated by one sales channel or business line. That said, I think Ari might be surprised by the number of sales leaders I meet that think like CEOs.
by Andy Atherton
June 25th, 2009
Quick note on the ClickZ article last week about CPG companies ramping up online spend. Branding is tremendously important in this category, which includes many of the largest advertising spenders on the planet (P&G, Unilever, etc.). Companies like these are increasingly realizing that their customers are consuming a greater and greater share of their media online, so if they want to protect their brands they need have their ad budgets track that shift in behavior. The alternative is to risk losing share to new brands or – particularly as wallets tighten through the recession – private label products. Research indicates that such share losses can be permanent, so continued investment is critical even in “this economy”. Glad to see them staying sharp.
by Andy Atherton
June 24th, 2009
Interesting article last week on Silicon Alley Insider, commenting on recent OPA/comScore study designed to help the advertising world get beyond the click. This topic is near and dear for me and I have written on it previously. Now, I don’t always agree with the OPA (for example, I’m not sure I would have gone with “The Silent Click” as a title for the research – sounds like a bad Meryl Streep movie), but in this case they are right on. Clicks don’t equal sales. Period. (Sales don’t equal ROI either, by the way). The research (slide 11) showed online ad exposure increased online sales by 7%. We’ve seen the same dynamic looking at offline sales as well; those exposed to online advertising buy more of the advertised product in offline retail stores. This is an even more powerful result than the online data presented by OPA/comScore because nearly 90% of all retail spending still occurs offline, even higher in key brand categories like CPG. Interestingly, the OPA deck stops short of presenting any actual correlations (or lack thereof) between CTRs and the other variables they discuss. So I will pick up where they leave off – in our offline sales lift results to date we have seen no correlation between CTR and ROI (offline sales lift vs. media spend). What drives ROI is a mix of Cost/HH reach and quality of content environment where ads are shown. Clicks might be useful for something, but not as a proxy for ad effectiveness.
by Andy Atherton
June 9th, 2009
P&G is the largest marketer in the world.They are also one of the most successful. This recent article in Ad Age gives us some insights into why.
The article quotes Marc Pritchard, P&G’s global CMO:
“I’ve got a lot of passion for digital. It really is such an incredible way to connect with consumers and really have much deeper ongoing relationships with them… Our media strategy is pretty simple: Follow the consumer. And the consumer is becoming more and more engaged in the digital world.”
It’s that last part that’s most insightful for me. Keep it simple, follow the consumer. This is very good advice, as it seems too often marketers can get so focused on the dizzying array of niche products and capabilities online that they lose sight of what they are really trying to accomplish, which is exactly that: reach consumers. Lots of them. In the right environments and with the right messages. This is something near and dear to our hearts at Brand.net, because when done well it drives strong, measurable results.
The discussion of online spend ramping to the point that marketing mix models can begin routinely reading it is also an important one for 2 reasons. First because the 5% threshold they mention for an MMM read can represent a real inflection point for online spend for the CPG category – an extremely important category for the long-term health of the online ad ecosystem. Secondly, the discussion highlights that fact that marketers want to think of online as a medium in line with other media at their disposal. Online media is often sold as “special” or “different”, but the path to higher spend isn’t in forcing marketers to learn and embrace new technologies and metrics. Nor is it in driving marketers into niche strategies like BT or custom executions that are flashy, but have negligible reach and impact. Increasing online spend will undoubtedly involve new technology and learning on both the buy-side and the sell-side, but to focus on technology for technology’s sake is to miss the point. The path to long-term, significant, sustainable increases in digital spend will be paved in large part by helping marketers leverage the skills and tools they already have to better follow the consumer – a consumer who is becoming more and more engaged in the digital world.
by Andy Atherton
June 8th, 2009
Extremely interesting article in MediaPost last week, including three important points I want to focus on.
The first point is the quote by Forbes.com President & CEO Jim Spanfeller. He says, “Ad network spending is all about demand fulfillment while direct-to-publisher display is much aligned with the traditional advertising goals of demand creation. It is interesting to see the shift of dollars toward demand creation as we see signs of life in the economy. He’s right of course that the vast majority of ad networks are focused on demand fulfillment or DR or “bottom-of-the-funnel” (pick your favorite expression). But there’s an embedded assumption in his statement that the only alternative to DR-focused networks is direct-to-publisher. This is not true.
Brand.net delivers the positives of an ad network – scalability and efficiency – with a unique platform that was built by brand media experts for brand media experts. Brand.net is the only ad network exclusively focused on demand creation – branding. The second point is the fact that half of the 100 senior marketing executives surveyed by Forbes were unhappy with ad networks due to underperformance vs. expectations. This is a particularly important point in an environment where dollars are scarce and ad networks are plentiful; both advertisers and publishers should chose their ad network partners carefully. Finally, the article highlights some marketer concerns with BT – specifically, effectiveness and privacy. That’s a meaty topic for another post, but suffice to say that I believe those waters will get murkier before they get more clear. Stay tuned.
by Andy Atherton
June 4th, 2009
Really insightful article about P&G in Ad Age a few days back. Focused on investments they are making now in long-term growth *over the next decade*. A far cry from the recent fascination with instant gratification marketing that seems to have taken hold (at least in much of the press) during “this economy”.
One of the data points cited in the article was a Consumer Edge survey of 1,000 consumers, which found 19% of Tide’s core users have traded down, at least at times, to value brands during the recession. Of them, 81% said they’ll probably stick with value brands after the recession. An example of the significant, permanent share loss possible when branding investments slip – a topic we have discussed on this page previously.
Even Wall Street likes the long-term focus – a rare occurrence at that address. The article notes that “expectations that P&G will pull back on earnings and sales guidance for next year has been sending its stock *up* in recent weeks, because they signal a more aggressive posture for the long term. Were Mr. Lafley next week to reaffirm a commitment to double-digit earnings growth he’s delivered for nearly a decade, some analysts believe the short-term focus could actually disappoint investors and hurt the stock…Deutsche Bank analyst Bill Schmitz says, ‘Share losses are a slippery slope, and we believe management understands nipping it in the bud now is a lot less expensive than trying to take it back later.’”
We couldn’t agree more and while the short-term results of effective Branding are measurable, the full effect will play out over the long term. This is strategic marketing at its best and sets an example others would be wise to follow.
by Andy Atherton
June 3rd, 2009
There is a well-written and entertaining article on Grape Nuts in yesterday’s Wall Street Journal. It included a fantastic quote from Carin Gendell, senior brand manager for Grape Nuts in the ’80s. “Grape Nuts,” she says, “was people eating advertising.”. The same could be said of many, many foods today.
I have personally had discussions with more than one processed food company where they are viewing advertising as a raw material input to their finished product – much in the same way as grain, corn syrup or cardboard for that matter. While it’s not necessarily appetizing, it’s undeniably true and brings up an interesting point. Effective advertising has become as important an ingredient in many products as the raw materials from which the actual product itself is made. It’s important to note that Carin says “was” and not “is,” because Grape Nuts has lost share dramatically since those heydays – another important reminder of what can happen to a brand if it loses touch with its customers.
I am actually a big Grape Nuts fan – I happen to like “the rhythmic crunching that reverberates around your skull” – so I hope the current $5M campaign moves the needle.
