We’re all for effective advertising, which is why we wince sometimes seeing major publishers over-clutter their homepages in a desperate attempt to juice ad sales. Take NYT, which sold about 39% of its visual real estate to eBay with this massive trifecta banner concoction. Yes, you can’t help but notice it. Yes, CTRs and conversions may go up, giving eBay’s current campaign a little squeeze for its cost per acquisition. But what does this do to the total ecosystem of advertising in general?
Are you, dear reader, enjoying this view?
When advertising goes too far
A few years ago, Clear Channel radio got a bit (we’re hypothesizing only here lawyers and this certainly can’t be true) greedy and jacked up the minutes of commercials per hour. Ratings fell, and Clear Channel was forced (again, conjecture!) to launch a “less is more” campaign, promoting the fact it now ran less spots per hour.
This is a common pattern in communication networks. Car salemen were overly aggressive until automakers installed consumer surveys and learned distributors should back off. Telephones were encroached by marketers until consumers got pissed about telesales and all signed up for the Do Not Call lists, vaporizing that industry. And way back in the 1960s TV shows ran only 9 minutes of commercials an hour, while today broadcast stuns you with about 18 minutes — so is it any wonder now that younger generations are rushing to Hulu to watch shows with limited commercial interruption?
The sad reality for advertisers is they intrude upon a group of consumers whose majority doesn’t want the interruption, so some mutual restraint is required to make the model work. Direct mail may be the next victim of failure, if over-encroachment gets enough consumers to clamor for a “Do Not Mail list” (we’d link to it except we fear it might destroy the United States Postal Service). If every individual marketer or publisher goes for maximum selfish yield, they damage the entire advertising community, just as John Nash’s game-theorying laddies hitting a bar all go home without a date if they all try to hit on only the single prettiest girl. Group collaboration is required to optimize the yield on any ecosystem. Individual salesmen screaming for more dollars today may get the gold watch, but burn out their future.
So. Dear New York Times, we love you, but keep it up, and you’ll be done with print and HTML, posting news only to your millions of Twitter followers who prefer 140-character updates with no commercial interruption. Your online traffic is down about 20% since the height of Obama’s inauguration. Your Twitter followers now surpass your printed circulation. Is this the path to building a monetizable audience?
Broadcast giant Clear Channel has launched “contextual advertising,” a method of placing radio spots against news, songs, or other ads that might spur interest in a product. GEICO, for instance, tested the service by running its :15 second spots for vehicle insurance directly after radio ads for other vehicles — the idea being that listeners who perk up at the promo for the new Ford Flex might then be more attuned to an ad for car insurance. If people only listen to what they want, why not place ads that mirror that content?
Contextual advertising has a range of performance. With Google pay-per-click Adwords, placement next to search results works brilliantly. With Google Adsense, which chases themes in written content, not so much, and online banners are often so problematic that ad blogger Bill Green has a list of placement offenses he calls contextual madness. We also wonder how chasing microcosms of content might limit inventory, and thus lead to radio schedules without appropriate frequency (repeat impressions) to build awareness. Still — ad relevance tied to content. Good for you, radio; why should the Internet have all the fun?
One of the more interesting defenses against consumers tuning out advertising is when advertisers cut back on the ads themselves. A few years back, Clear Channel was forced to retrench on the minutes of radio commercials per hour after it realized consumers were aghast at spot overload so switched the dial, hurting ratings. More recently Hulu.com launched its online video format with a similar less-is-more ad structure, with minimal paid interruptions.
Now big broadcast boy ABC is cutting back as well, reducing television commercials in its premiere episodes and not starting most spots until 15 minutes into the show. Jeff Bader, ABC Entertainment’s scheduling chief, told the Los Angeles Times “you hope the longer you keep them at the start of the show, the more likely they are to stick to it.” The gripping “Flash Forward,” which premieres this Thursday night, may go as long as 18 minutes before a commercial break.
A history of polluted networks
The tragedy of the commons is something marketers typically fail to think about until it’s too late. Telemarketing was the first victim, becoming so obnoxious that consumers eventually rebelled with the Do Not Call lists, almost killing the industry. Email spam became a joke with filters blocking most messages and a response rate something like 1 in 12.5 million. Now social media risks the same network counter-reaction: paid messages in blogs and tweets — not advertising, but paid opinions in which people profess to write what they want about a brand while being paid to do it — are coming from companies such as Izea, and we predict new filters will arise to block out the confusion. If such fuzzy sponsorships go too far, the utility of the network will be diminished, and all users, including marketers, may suffer the consequences.
Want proof? Try to set up a telemarketing program today, and let us know how well it works.
What advertisers fail to realize is we all need a healthy ecosystem for any communication to work. It’s not easy showing restraint, because you’re betting the lost revenue of today will be replaced by more viewers, and more resulting ad sales, tomorrow. But if advertising is kept inside its box, clearly marked with limits on how much time it consumes, consumers in turn will be more likely to pay attention and respond. As media planners, we find the ABC strategy intriguing … because the marketing messages that do get included are likely to break through.
If I pay you to insert a brand into your conversation with your friends and it makes you feel good, is that OK?
The ethical quandaries of pay-per-post continue this month with Intel’s feel-good outreach to Federated Media bloggers. Maggie Mason, author of the blog Mighty Girl, attracts more than 20,000 unique visitors each month, not a shabby audience. So when she developed a life list of 100 things she wants to do before she dies (hopefully many decades from now), Intel agreed to pick up the tab for 10 of them. Maggie is now delighted, headed for Puerto Rico to swim with bioluminescent plankton. Intel has woven the blogger gifts into its broader Sponsors of Tomorrow campaign, a rebranding effort by agency Venables Bell & Partners of San Francisco to move the chip maker beyond commodity status.
We love the repositioning but still pause over the paid posts. A value exchange is occurring but it is not labeled advertising, and instead has become embedded in the author’s content — a gray area of confusion. As we’ve noted before, Google has declared paid posts off limits for its search engines, requiring bloggers who write such stuff to include “no follow tags” so that such links won’t gum up search engine results, or risk having their page rank removed. For bloggers who seek fame, losing page rank is a big eraser. For those who ponder the ethics of accepting payment to write opinions, it is interesting that Google — the world’s largest search engine and one of its biggest ad channels — has deemed paid posts as worthless content.
Tragedy of the commons
Some in the blogging world, such as Chris Brogan whom we’ve debated here and here, wonder why ad industry types take issue with paid posts at all. “We disclose,” these bloggers say, “isn’t that enough?” The answer is no: advertising, like any communication, requires a healthy ecosystem for it to function, and the rising quantities of paid mentions are beginning to pollute social networks. We’ve seen this before. Telesales almost killed the telephone as a marketing tool due to overuse, spurring the Do Not Call rebellion. Email spam has become so prevalent that filters now block it out, depressing legitimate email ad efforts, with an added benefit that your important work email may get blocked from a recipient by accident. The radio network Clear Channel once ran so many ads per hour that it was forced to retrench, after some in the industry worried the clutter would depress ratings and harm advertiser results. Advertising is like any green commons: put too many cows in the field, and you end up with a dust bowl tragedy.
Going too far in commerce is nothing new; admire your local strip mall for evidence of that. What’s different with today’s paid posts is they are buying opinions, not ad space. When the voice of a blogger talks highly of a brand, you now must filter the message carefully to decide whether to believe the thought. Is the opinion an authentic 10 or a shilling 0? Or is it somewhere on the sliding scale in-between? Perhaps paid posts are lovely if you’re the one taking a trip; we wonder if they will be as much fun when the entire voyage of life becomes one series of cleverly inserted brand mentions.
MySpace hints at desperation with a new design in which more than 50% of its home page is taken over by one giant ad. We don’t mean an interstitial, one of those full-page web ads that temporarily interrupt you on a site before you click through to the real site’s content. We mean, most of the page is now a screaming billboard.
The redesign suggests MySpace is having a tough time making its ad inventory work. Don’t trust us; Bloomberg reported in April that MySpace’s abysmal financial performance had turned Rupert Murdoch’s News Corp. into a toxic stock. Valleywag noted recently that MySpace click-through rates are a little better than Facebook’s, but at 0.10% click-throughs, still aren’t anything to write home about.
But listen, MySpace, we’re trying to help. Look where your media peers have gone before. The $6 billion radio conglomerate Clear Channel once ran more than 12 minutes of radio spots per hour. Audiences began bailing, Clear Channel was forced to launch a “Less is More” campaign and reduce ad time per hour by 23% to 9 minutes and 20 seconds, and now the new Arbitron systems show that the radio audience may have slipped for good, with ratings down 30% or more in many markets.
Which brings us back to MySpace. McDonald’s and other advertisers are probably delighted they can now take over the MySpace home page. But as Ian Schafer, founder of the internet strategy firm Deep Focus, just noted on his blog, social media sites and related widget applications are going to have to show they can be a viable advertising model. The root problem for social media is that users have a different modality, and while in heavy socializing mode they are less receptive to advertising messages.
All of which explains why MySpace has put on more ad makeup.
Just when you thought radio was dead.
Clear Channel has announced a clever arrangement with Apple in which radio listeners can order songs immediately after hearing them on digital FM radio stations … provided they have a special $499 iPod docking station. Kind of a cool way of linking the music purchase impulse to the juice you get from hearing a new song.
Sweetie, keep this away from the kids.
There are about 450,000 outdoor billboards in the United States. This week, in Iowa they will begin broadcasting news.
Mediaweek reports that throughout the evening, digital boards in four markets will be updated by Clear Channel and Lamar with percentages and rankings for the candidates for U.S. president. Points to a future where relevance and timeliness will be empowered, and required, for ad communications to break through. (photo tx NYT)
So now the FBI is using digital billboards to post AMBER alerts and America’s most wanted criminals in 20 cities across the U.S. It’s a brilliant concept that finally makes use of the flexible nature of digital outdoor.
A good thing, because so far the price structure of digital outdoor is out of whack. With all the buzz about those glowing, digital boards, what is often missed is the cost is eight times as high as that of the same sized board with regular illumination.
Here’s how it works. In LA, for example, an advertiser can buy a single unit on each of 10 digital displays in the Clear Channel Outdoor network. The ad would appear for 7.5 seconds as 1 in a rotation of 8 different ads — meaning that it is followed by 52.5 seconds of other advertising. The cost? About $8,500 net per digital board vs. $8,300 for a regular, full-time billboard (rates are unnegotiated and based on the Clear Channel Outdoor 2007 Media Planning Guide).
No matter how bright the digital board looks, we’re not sure that’s a good deal. Mathematically, even if half the drivers caught your message, you’d still be paying about 4 times as much for the same number of impressions.
Outdoor is a powerful media, especially as Americans spend more time in cars. We think digital media has huge potential for timely updates and even personalized messaging. Imagine weaving the day’s news into your outdoor creative, to hit consumers with something truly relevant. And we’ve heard that it costs Clear Channel and others more than $700,000 to put up each digital display, so they obviously need to recoup those costs.
But until the price structure comes down, we can’t see spending 4 times as much for the same outdoor display just to have your name in lights. Perhaps the FBI partnership with Clear Channel isn’t total altruism; at these prices, outdoor vendors may have trouble filling inventory.
Today’s youth are consumed with MP3 players, mobile phones, video games, Facebook and YouTube. So if you asked a parent if she thinks today’s youth spend less time with radio, the answer would be … duh. Yes.
Unfortunately, a new system that accurately tracks radio ratings remains under fire from the Clear Channel networks of the world, and Arbitron continues to delay its rollout in major U.S. markets. Mediaweek reports this week that the delay in the new radio measurement system — the Portable People Meter or PPM — is causing many marketers to question whether PPM is effective.
All of this is really, really sad. We’ve noted before that PPM is a brilliant device. It replaces diaries to record radio ratings by tracking a signal broadcast from each radio station, and can tell if a listener switches channels. For about four decades, radio ratings were based on a survey participant filling out a journal — now, we finally get the real deal.
The PPM ratings are active in Houston and Philly, and the early results have shaken the radio industry by finding — gasp! — ratings are falling for some segments of the youth set. So, predictably, Clear Channel and other radio nets protested that sample sizes were off, blah blah blah, and Arbitron, who runs PPM, went back to the drawing board.
As Mediaweek notes, no matter how Arbitron rethinks the sample sizes, some radio stations are going to get whammed with lower ratings. And the overall trend cannot be masked. Marketers should push Arbitron to get PPM to market. Radio remains a viable medium, but without accurate data and ratings, the radio industry as a whole will disappoint its clients who are measuring real results.
The Portable People Meter is an interesting device — it’s a little cell-phone sized gadget that allows the ratings group for radio to accurately record the exact station a consumer is tuned into. This meter picks up a signal from the radio station, and replaces diaries as an exact way to track radio ratings.
And guess what — as the new PPM system is unrolled in markets, radio ratings are tanking. It seems consumers skip around the dial more than previously thought, and while journals didn’t always capture the truth (say, someone might write in they listen to Howard Stern for 2 hours in the morning), the PPM device doesn’t lie (the consumer may actually change the dial during commercial breaks). Ratings in many markets are down by as much as 30%. Ratings were so startling low, in fact, that Arbitron launched a PR campaign trying to convince media planners that 70 of the new PPM GRPs were as good as 100 of the old ones.
Now, Arbitron is delaying the rollout of the PPM due to controversy over the new ratings results. A lot of networks don’t seem to like the truth. Clear Channel, Radio One, Cumulus, and Cox Radio have protested — because younger demographic groups, in particular minorities, have lower ratings with the new accurate PPM systems. Young audiences are a particularly sweet target for advertisers, and if their ratings fall, ad revenue will dry up.
There are only two ways this can break. Either the truth is young people don’t listen to radio as much as they used to, and instead use MP3s and cell phones to communicate (duh), or the electronic monitoring system has flaws in technology or sample sizes (uh-huh). We don’t know the truth, but we do predict when it arrives, the truth will set radio ratings free.
Arbitron reports the new PPM should be in eight of the nine delayed markets, including New York, Chicago and Los Angeles, by September 2008. For now, PPM is only active in Houston and Philadelphia.