Archives for posts with tag: wsj

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Personalization is all around us. Especially online, where companies retarget people with banner ads, bid on competitor terms or even follow prospects who didn’t click on an ad by figuring out a lot about who the possible prospects are. A few years ago, when brands wanted to communicate with C-executives, companies had to run a few hundred thousand banners on a WSJ or Forbes section, read heavily by executives and pay the price of two Ferraris. Then brands tagged the computers of these executives to serve more impressions downstream, for the price of a used Honda Accord.

Suddenly, the audience of Forbes and WSJ was addressable through cheaper means, slashing media costs, aligning offers with the target and making content on high-end sites less valuable.

Personalization lifts response.

Or does it?

Personalization assumes that an offer with high relevance, based on your unique needs, will get your attention, convert you easier to a sale, and keep you as a loyal customer.

It can work. And I’ve seen it work pretty well. Still, personalization is only one aspect of three major pillars of competition: Perceived value and product. Most husbands love their wives but many of them still chase younger girlfriends. Or boyfriends. Apple couldn’t care less about personalization, they make their profit through product design, selling out new computers/phones in a day or so. All of us want a better perceived value (deals) and cool products – personalization can’t help to achieve any of these goals.

Personalization is for generic or necessary sales. It’s not for market revolutions.

Show me the person who yelled out: “I need to get this minivan.” and I’ll buy you three drinks. Nobody screams in delight: “I need to buy this DVD player.”

Market revolutions have high margins because they all have high perceived value and amazing product design. The personalization happens in the head of the customer. They adjust to the cool new product by suddenly being so much more hip.

Here’s a dirty little secret: Advertising makes tons of money off waste.

The average American watches 5 hours of TV each day. Let’s say 30 minutes of that time is advertising. If all of us would suddenly get only personalized ads, the advertising time would be cut down to 10 minutes or the average American would see the same commercials over and over again. Making advertising less valuable and profitable. The advertising industry thrives on waste. True targeting on TV would erase billions of dollars. Just like it did in the digital marketing world. Ask Forbes.

The real problem with personalization.

Human beings are not unique data sets. While I love the personalization of Amazon and Netflix, it also frustrates me to no end because I chose products for others. My kid’s birthday is only once a year and I don’t need to see the newest Lego set as a recommendation each and every day. I wish personalization offers would come bundled with a modality dial: Today I’m shopping as me. Tomorrow I’m shopping as a dad. In 2 weeks I’m shopping as a husband. That’s easy. It’s harder when it comes to my personal preferences: 2 days ago I was a Kings fan. Yesterday I was interested in technology. Tonight I am a German soccer fan. I have no clue who I’m going to be tomorrow, what I will be interested in, what might peak my interest.

We are human beings: Non-linear, all over the place, integrating a multitude of interests.

We’ll keep trying. Still, it remains a sisyphean task. Advertising was always “Spray and Pray”. We used to have 100 bullets to spray. Now we have 103 bullets.

We have to do better.





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A few weeks ago, Digiday published a story titled “Mobile’s inventory glut grows”.

“(…) only 18 percent of impressions were filled by the top 20 U.S. mobile ad networks, representing a decline from the 19 percent of ad slot they filled between April and June. Worldwide the issue is even more pronounced. The average fill rate stood at 10 percent in the third quarter, representing an 8 percent decline from the previous three months, based on the 70 ad networks, connected to the Smaato’s platform.”

Gresham’s Law of the Web

Unlimited inventory, combined with an anachronistic understanding of advertising as “space” causes cheap ads to drive out the good.

This has clearly destroyed the design of content web sites, and is about to kill the content apps on mobile devices.

There are two solutions for this problem that has gripped the digital marketing industry since its inception:

– We need to reduce the number of ad positions dramatically.

– Publishers have to charge more for ads.

We have to get away from the ad network model (Ad exchange, DSP – whatever you want to call it) and, instead, create sponsor relationships with customized packages. To drive real engagement (not some imagined engagement) a package has to be interactive and fully integrated with the content. Why do I need to leave an app when I want to engage deeper with an ad? I’m there to access content and an advertiser finds a way to engage me deeply: Keep me in the initial experience, don’t just give me the option to leave the experience and end up on a brand page. Forcing me to restart the app or go back to the initial web site is a problem. Not a solution.

Responsive adaptability

There is no ad network or other company that serves desktop, mobile and tablet web ads at the same time, with the same insertion order.  Just go to the major publications (NY Times, WSJ, etc.) and see that all the ads are different on various  platforms. Some ads I can swipe away, some have close buttons, some are little bugs. And don’t get me started if I want to experience the sites on my smart phone. Ads are unreadable unless I zoom in. And, who does that? No cohesive experience, nothing really to keep me interested. It feels like litter and not the interactive experience customers expect.

The whole industry has to work together to develop a responsive adaptability model for digital marketing. What does this mean? It’s a model that adjusts the layout while staying on a grid, adjustable to any screen size. Since the industry moves slowly, the first order of business should be adaptability. Let’s worry about responsiveness a bit later.

Disconnect between publishing and advertising

Digital Marketing has followed the print CPM model: audience and impressions trump good design and reader engagement. Because that static litter didn’t work well, we created another artifact: Rich Media. Attention-grabbing, colorful and moving litter that was completely disconnected from the new design of sites (simple, direct, user-focused) that creates connection with customers. Just like Flash is fading away, we will see this litter discarded for CPM prices for 1/1000 of $1.

The print model for digital marketing is bankrupt. And, it’s time to destroy it. The fluidity of current digital design is battling with the fixed and standard sizes of web ads. It’s a legacy of a single-size page design, and the idea that a web page is “space” we carve up like an old newspaper. The value of homepage ads has peaked a long time ago when we moved from a digital portal economy to a digital link economy. A real sponsorship of content has more value and is more intriguing because it’s part of the overall content, no matter where I engage with it. And, that’s what we all want: Connection with the reader.

How to solve the digital inventory problem

We need to reduce the number of ad positions

Do I really have to explain this? Do you remember the 8 ads on Yahoo’s homepage? Or the 11 ads on NYT’s homepage?

We need to charge more for ads

That’s a tough one. Sometimes it feels as if the whole digital marketing industry has signed a Grover Norquist-like pledge never to increase prices. Cheaper, faster, less effective has been the mantra of our industry. We need to change it to “Pricier, more engaging and effective”.

Publishers need to focus again on sponsorships and stop littering their content with network junk. I’d be willing to pay more for exclusive sponsorships and positions through cross-platforms and supported by insightful analytics.

It comes down to good content and great stories. We have to rethink what worked in print and develop a new business model for the digital marketing community.

From hoarder to minimalist.

Good advertising is interesting and looks intriguing. Litter is never interesting and doesn’t look intriguing.

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Unless you lived on the moon, you realize the global economy is struggling because most corporations are not constructed to produce any real value. They are designed to maximize shareholder value while stakeholders are getting squeezed to improve the bottom line and introduce as many efficiencies as possible. Add to that corporate welfare, Fed and Treasury policies, regulations (or lack thereof) and you end up with a toxic mess of an ongoing banking crisis, mind-numbing landscapes of mini malls, toxicity in assets, the environment and the overall capitalistic world we are living in. And, while people are crowding the bargain bins, corporations continue to develop cheaper ways to satisfy the need for the bargain. Interestingly, when you produce a mediocre product/service (create thin value, as Umair Haque calls it), the price is all what matters. When you create real value/thick value, price becomes a tertiary consideration. Call it awesomeness, call it being amazing, call it being a linchpin.

With a few, rare exceptions, advertising has focused on creating thin value. Rather than inspiring people with marketing for products that add value, most of marketing/advertising is focused on brainwashing people into buying stuff that makes no difference. Just another item I can use and throw away/forget about effortlessly without considering the implications for the rest of the world. (Labor Conditions, Environment, Export/Import Structures)

Now, let’s look at the advertising/marketing industry. It’s not a dying industry but an industry in deep trouble. We are not considered partners, we’re just another vendor that sells questionable value. Media Buying has become a commodity, media planning to follow soon. The people we market to are busy tuning us out because they don’t feel marketing creates any real value. While we continue to communicate to people as they were still consumers, they are busy producing, communicating and building networks. We have commoditized our industry to death, starting to hop on a dangerous death spiral. Just like the whole economic system.

Advertising is just one pillar of the economic system we’re living in. Advertising can’t change the world or make it a better place. But, as part of a new economic system, advertising can be an inspiration, an artistic expression of the paradigm change. As an industry, we need to focus on the drastic changes the economic system is going through. We can safely say, the end of creating slim/thin value for profit is fast approaching. No matter how good your strategies/tactics/ideas are, unless you create real value for society with your products and services, you will fail in the long run.

My headline “Why advertising professionals need to be economic professionals” didn’t imply you need to watch Bloomberg all day, read each article in the WSJ or get a degree in economics. Most of what you read or see there is just an expression of times almost passed. All of us need to understand that our whole economic system is transforming and changing into something much more substantial, sustainable and human. Advertising is just another expression of this change. Please work, create, add value accordingly.