Primary Impact

Primary Impact’s first whitepaper, The State of Digital Display, is now available. Sign in at www.primaryimpact.com/stateofdisplay.html and you will be emailed a link.

The “madnum” opus of the past three months is being published 5/12 as a part of the DPAC III conference. The session will be lively — here are the key findings of the whitepaper:

Online Display Advertising Shows Signs of Strength/Revitalization in Challenging Economy

DPAC III Conference panel and accompanying industry whitepaper
based on data from comScore, Dynamic Logic, Google,
Microsoft Atlas and Nielsen Online
reveal continued areas of

growth and effectiveness for online graphic ads

New York, NY – The third semi-annual Digital Publishing & Advertising Conference (DPAC III) will reveal signs of growth and strength for display advertising even in a continually challenging economy.  A panel focused on the State of Digital Display will be comprised of executives from companies each with over a decade of data on the usage, changing nature and effectiveness of digital display. The panel begins at 11:45 AM at the event venue, the W New York Hotel, 541 Lexington Avenue.  Included among the panel are:  Lynn Bolger, EVP Advertiser Services, comScore; Ken Mallon, SVP, Custom Solutions & Ad Effectiveness Consulting, Dynamic Logic; Ari Paparo, Group Product Manager, Advertiser Products, Google; John Chandler-Pepelnjak, Director, Atlas Institute, Microsoft Advertising; Jon Gibs, VP Media Analytics, Nielsen Online; Kyle Johnson, Director of Media Products, Compete. Key findings to be discussed include:

• Online display is going through yet another transitional stage in ad spend, formats and measurement, much as it did in the last recession.
  • The big spending shifts in 2001-2003 involved big-budget early dot-coms dropping out of the market to be replaced by Fortune 500 advertisers who have had a gradual increase in spend over the past five years according to Nielsen Online data.
  • Online ad formats have gotten larger over time and they continue to evolve in terms of functionality and interactive capabilities
• Decreases over the past few quarters in volume are due more to the economy and reduction of clutter (there was 5 % drop in adviews but an 11% drop in the number of ads per page from Febuary ’08 to February ’09 – comScore) than they are ineffectiveness or abandonment of the format according to data from comScore, Nielsen Online and Dynamic Logic
  • Due to the economy, auto, finance and retail ad volumes are down dramatically in the past two quarters, but five year trends show strong growth curve as online becomes more intensely involved in the purchase process for consumers
  • Health and consumer goods spending are picking up in Q1 ‘09; these heavy spending categories shifting dollars to online display bodes well for its future
• Creative is the greatest variable for online display performance; placement/context is highly category specific according to Dynamic Logic.
• Brand impact of online display in terms of ad awareness and brand favorability have remained stable over the past three years.  Purchase intent was also stable but in the finance category dipped along with the economy before stabilizing.
• New measurement techniques that go beyond click throughs, such as measuring exposure and post impression activity, are a better gauge of online display performance, but are often not used to their full capacity according to both Microsoft/Atlas and comScore.
• Recent studies, discussed as a part of the panel and in the whitepaper, are showing that display can improve the performance of search (Microsoft/Atlas and comScore) and that that display ads on the Google Content Network can be an effective way to gain additional conversions beyond those you get via search (Google).
• comScore is now able to show lift in offline sales that result from online ad impressions.

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It’s been my perception that the business media has grossly oversimplified what is going on in online advertising and this paper — which is fueled by so many data sources — provides a broader outlook on trends plus best practices info for publishers and advertisers. Hope you find it useful.

Amidst all the discussion of micro-payments for content and the sturm and drang of “display is dead” arguments, I have a simple proposition for all that excess inventory that could have a positive impact on how consumers see online ads. Use available inventory for the ultimate display advertising PSA: an ad campaign that makes the connection between the content they are getting and the ad that supports it. This campaign could reinforce the media brands that consumers value in the copy: “Love your New York Times Online? It’s brought to you by name the brand. Keeping content free…ADVERTISING.”

This could be developed as a program by the IAB and run through Google/DoubleClick systems. An agency can create templates using one of the Google rich media tools, sites can pick them up and customize them to their media brand and run them in remnant inventory that they are getting pennies on from ad networks. It would also serve as a benefit to the advertiser. Perhaps each site chooses an advertiser of the day that they want to celebrate. What advertiser would not want to be associated with a big media brand?

The IAB could run an adjunct site that the ads click through to that make the case for advertising online and the connection to all that great free content. The site can also serve as an info resource demystifying cookies and other online ad factors that seem to get consumers all hot and bothered.

Interestingly Gawker has just said no to ad networks and runs banners created by artists in its remnant space – this is just a twist on that and one that has a greater benefit to the industry.

There is another target that would benefit from this kind of campaign: Washington and the FTC committee that continues to discuss behavioral targeting. I wish they would just focus on the direct marketing industry and credit card companies with how they use data, but they’re a little too focused on the data soup used for ad targeting. We cannot limit this medium’s revenue potential, especially if there is no actual PII.

Make sense?

What a blast from the past. Richy Glassberg – one of the founders of the IAB and the person who lead various initiatives to standardize ad sizes – was back commenting about online advertising at the IAB conference that is going on today. Those who know Richy appreciate his candor, intelligence and shall we say…”loud” viewpoints on the media industry. He went back to cable TV during the bust, but he was back in fine form like a fist shaking Jeremiah.

“It’s like nothing’s changed because no one has faced the fundamental issues to make this a viable marketing medium,” said Richy Glassberg, senior VP at TV Guide Network. “The last five years there’s been a growth curve and all of a sudden they’re realizing this is an across-the-board downturn in every sector.” (The complete Ad Age article: http://adage.com/digital/article?article_id=134833).

I worked with Richy 10 years ago when he started the first brand focused ad network, Phase2Media. One of the highlights of that Bubblicious era was a speech he gave to Ad-Tech (then with an “@” sign) which actually said something other than hype.   He addressed fundamental problems which would prevent online advertising from developing. Since clearly so many of those issues have scarcely been addressed – metrics, complexity of the buying process — we’re back where we started 10 years ago. I can’t go to another conference and have industry wonks say: fix the creative, come up with metrics that create bridges to other media… Read the text of the speech for his complete 10 ways to fix the problem.

Why should we care?   Online advertising – and by this I mean display and not search — supports content that consumers like and need.   A whole crowd of journalists with no knowledge of the history of media are espousing either micro-payments or non-profit status strategies in order to support the newspaper.    Consumers are voting with their eyeballs in favor of getting news online and that process is not going to stop.   The powerful media brands that exist need to derail the click-train and focus on selling audience and delivering smart, relevant packages for advertisers.    They have fed the beast by dumping inventory on a multitude of ad networks who all compete and as Michele Madansky in her Pubmatic survey (http://www.pubmatic.com/adpriceindex/) has proven, all those ad networks are flooding the market and lowering price.

The giant mistake of online ad reporters is taking the info from that data and assuming it applies to all of online advertising.  From researchers – including the companies that have vast amounts of data on ads online – there is a softening of display, but volumes have not dropped significantly and the declines that are seen are likely due to smaller ads vanishing from pages and more large, dynamic units. This is a good thing for consumers and for publishers. We can take one of the most cluttered media out there and improve the experience. (Please see Jon Gibs of Nielsen Online’s excellent research which introduced a clutter metric to the industry: http://www.nielsen-online.com/resources.jsp?section=preso_lib&nav=4).

I am ashamed to admit that last night was the first time I hooked up my laptop to my TV to watch a Hulu download of 30 Rock – I had missed the episode with the first Salma Hayak appearance and the first McFlurry product mentions.  I am a desirable (in the adverting world at least) above average income mom, with two small kids living in an A county. Yes, I remember that Bertolli Oven Baked Meals sponsored the episode and these very funny Alpo :15s that matched the tone of the show appeared after the episode.   Please tell me that NBC sold that inventory at more than a $1 CPM.