It’s no surprise that the context in which an ad runs has a significant impact on its effectiveness. And that’s especially true for brand advertisers who are going online with their campaigns. I’ve looked at this phenomenon from plenty of different angles around here with posts like Advertisers Say Contextual Offers Best ROI and Contextual Targeting Yields Highest Return for Brand Advertisers. And now to finally put the question to bed, a new study by OTX Research has been written up by Jonathan Lemonnier in AdAge that seems to prove the point conclusively. They found brand recognition could be increased 19% just by running ads in context. By in context, or contextual targeting, they mean running ads on non-endemic content that happens to be relevant to the products or services being advertised. That is not the same as site targeting which is running ads on sites that are inherently relevant due to the overall genre they serve. This is significant to note because it opens doors for advertisers to dramatically increase their reach. No longer must advertisers find vertical endemic sites specific to their industry, they can now reach out to a much larger general audience to find specific content pages talking about related topics and actually drive greater brand recognition. This can even mean dipping back into the remnant pool for high performing inventory if you have the means of categorizing pages to determine true meaning. And that is sort of the rub here; it is not easy to discern meaning from the chaotic web and especially the unmanageable long tail. And when you step outside the well-lit confines of the premium world you immediately face the challenge of brand safety. How do you guarantee your brand will run alongside appropriate content when you are out there in the wild-wild-west of the web’s seedy underside? Real meaning and real brand safety take granularity. I am always surprised when I look at the contextual targeting solutions on the market today and realize how shallowly they categorize. Everyone seems to offer 20 or 30 top level channels and that makes good sense on the surface. That accurately reflects how advertisers generally see the world. But a high level channel only puts you in the ball park and does not significantly drive up targeting-based effectiveness. Knowing that a page is about Automotive is a good start but that will not significantly impact clicks considering this level of broad channel-ization has already become a commodity within our industry. It is when you can discern manufactures of cars from types of minivans that you really begin to be relevant to the end user. And when you can determine a page is not only Automotive in nature, and not only related to subcompacts, but also that it is about Toyotas, Hybrids and Fuel Efficient Alternatives, and Hydrogen technologies, then you have deep targeting that has a significant impact on relevance and performance. But sadly there are very few systems that can go beyond a rudimentary understanding to determining the page was really about hydrogen fuel cells on environmentally friendly vehicles. Without this level of granularity you are stuck running an Automotive ad or if you are lucky maybe a subcompact ad and settling for average click rates. The real performance comes in when you know the true meaning is environmental in nature and you can target eco-friendly ads that will have a significantly higher recall rate. I’ve seen semantic engines with only a few hundred total categories across only two superficial levels into which they must classify all the eligible content from the more than 20 billion web pages out there. To really understand meaning in the sea of available ad space you need a solution that is far more granular. You need at least thousands, if not tens of thousands of categories if you really want to certify that a page is brand safe with the goal of maximizing effectiveness and subsequently increasing ad revenues, ROI and page yield. This is why LucidMedia has more than 13,000 fine-grained subcategories behind our contextual engine. It allows us to determine the true meaning of a page before an ad is served and makes sure the most relevant ad can be shown to the user. In some of our earliest tests this deep categorization yielded a 76% jump in clicks in the average direct response campaign versus the typical run-of-network buy. When you want relevance on the web for advertising you need depth and breadth. Having just breadth only gets you half way there.

Shira Ovide wrote an interesting piece in the Wall Street Journal’s On Technology section about self-service display advertising. I agree that the display side of the business needs to get easier for it to move to the next level but there is one thing in this article with which I am struggling. I am having trouble with them equating search-based text ads to display advertising because while self-service may work for direct response advertising (DR), they are forgetting brand advertising in this equation. In branding, display is inherently tied to the creatives and that does not lend itself to a self-service model. I know I disagreed with Spanfeller and Millard in the past, and I still do, but I’ll get to that in a moment. Shira’s analogy is like saying branding on the small screen would grow if it had a self service portal because Google did it with AdWords. That never happened in five decades and trillions of dollars went under that bridge. How could the average advertiser create an engaging 30 second video spot? Not on YouTube. Yes, a guy like Dunn who was mentioned in the article, can use Facebook to upload a photograph of his great pants and take clickers to his e-commerce portal page. He’ll likely hit an acceptable performance-based metric as in their example but the big brand crowd will not have the same luxury. It is different with search and text because search has the key words provided up front for some minimal relevance and almost anyone with a QWERTY keyboard can produce a decent performing monochromatic text ad in 30 minutes. They can even spit out a decent thumbnail image when pressed. But the performance, and subsequent return, of brand advertising hinges on many factors including the engagement of the creative and, when there is a call to action, the quality of the conversion process (as well as the context in which they are served). The best brands in the world go unnoticed with terrible creatives and the best creatives in the world fail miserably with non-intuitive landing pages. Basically I am saying that engagement and emotion don’t lend themselves to a self-service model like AdWords. And I’m not talking about Punch The Monkey here, I’m talking about creating real brand affinity, brand recall and purchase intent online with display. This gets us back to what Spanfeller and Millard were recently pontificating. While I still disagree with their prophesy that the ad networks are a dying breed and are devaluing the brands they serve, I agree wholeheartedly with them regarding the need for the human creative element in the process. This is why we have the great agencies we do. Maybe if there was a simple and free global library of real-time customizable rich media creatives in all IAB standard ad spot sizes using text-to-speech technology to create automated professional voice-overs then the big brands would dip more than the current toe-in-the-water online but we are a long way from that happening. It never happened with TV and now the big and little screen ads are evolving into even more protected methods like paid placements and integrated endorsements moving further away from a self-service potential. I think self-service is highly applicable to DR but I don’t think it’s the magic elixir that will pull more big brand dollars online. To do that you need context but I’ve already beaten that drum enough for now.

Forbes.com President and CEO Jim Spanfeller recently delivered a preemptive eulogy for ad networks at Needham & Company’s Third Annual Internet and Digital Media Conference. In doing so he has stoked the already searing flames ignited by Martha Stewart Living Omnimedia Media President Wenda Harris Millard and her infamous “pork bellies” quote that algorithm-driven ad networks are devaluing premium brand advertising. Forget the dripping irony that Forbes themselves have recently announced an ad network of their own, albeit a “slightly different” model, when you peel back the spinning layers of this onion the death certificate seems to be lacking any sort of authoritative signature. Everyone seems happy to relegate remnant inventory to the networks and exchanges, as though it were the red-headed stepchild of the display advertising world, but their panties sure get in a wad quickly when it comes to premium advertising going through the same algorithm-driven systems. You need look no further than Forbes own healthy revenue growth, even in a recession economy, to see that the current trends are working and improving on both remnant and premium inventory for the publisher and for the advertiser. Spanfeller prophesied that the ascendancy of online ad networks is probably at its peak as advertisers and publishers struggle to monetize the growing supply of inventory created by social media exploding online. He better be ready to embrace Google’s new Friend Connect social widget! He bravely predicted that the role of ad networks and ad exchanges will diminish over time as publishers take back more control over how their own media is monetized. Yes publisher want and need editorial control but the data seems to indicate that publishers gravitate to what maximizes yield and not what maximizes control. The question is really whether or not algorithm-driven media buying will have a negative long term impact on media buying. I have to give props to Tameka Kee over at MediaPost and my colleague Paul Levine, Vice President of Marketing over at AdBrite, who countered recently with a great deal of pertinent data which seems to prove the doom sayers are missing the mark with their dark prophesies. The roots of this debate spring from the early wild-wild-west days of the ad networks. Back in the early formative years of the ad network’s puberty it was almost an “anything for revenue” attitude and the trust got broken. Just look at how Spanfeller describes how the Forbes ad network is different from us unwashed masses. He depicts his solution as a “clean, well lit place” for monetizing the rapidly expanding long tail. How is that different from the new breed of algorithm-driven ad marketplaces out there? Take a look at the Certified Ad Space within the Rubicon Project. With the stellar reputation of the Rubicon folks, their approach seems like a cleaner and even better lit ad space. Or take a look at how LucidMedia provides brand safety through the most rigorous contextual scrubbing solution on the market creating a guaranteed Ad Safe Environment for premium brand advertisers. And yes, they all are in part algorithm-driven solutions. But these are good for the premium brand advertisers (and good for the publishers) and are not devaluing the brands they serve. Actually the opposite seems to be happening as these brand safe zones buoy up premium CPM rates wherever they occur. What the Spanfellers and Millards of the world are really saying is not that this is bad for the premium brands; they are actually signaling that the new breed of competition is an unwanted threat to their profit margins. The amount of angst created by the wonderful new breed of algorithm-driven advertising spaces on ad networks and exchanges like AdBrite, PubMatic, Rubicon and LucidMedia is a very clear indication of how positive these solutions are for brands going online. If they were truly bad then the Spanfellers and Millards would not care and subsequently draw this kind of attention to them because it would not be threatening their margins. I say that while the ad networks and exchanges must evolve to survive and continue flourishing—Levine’s comment about reach versus engagement for example—they are working just fine and are here to stay for the foreseeable future.

“In a nutshell” is a term to which I gravitate frequently because concision in marketing and public relations, when it comes to messaging, is one of the most critical factors of success. The proverbial sound bite. So here is another “in a nutshell” about how to effectively build brands with online interactive advertising as a significant component of your overall strategy: put it in context. Advertising is all about using emotion to create value and ultimately drive commerce. As Ms. Wenda Harris Millard puts it in the recent AdAge article (which got me thinking about this subject) regarding her now infamous pork bellies comment; “If you think about what does advertising do, it creates desire and eventually causes transactions.” Very well stated. She was providing new insights into what was founding her comment. She points out that ad networks and exchanges who are simply aggregating a critical mass of inventory without considering the context are basically just creating volume which will drive down prices over time. But to me, the future of online brand advertising has it’s cart inherently hitched to value, emotion and desire and that is not found in pure volumes. The only way we can address that aspect of advertising online with the technology that is readily available today, especially when you take into account the now inhuman scale of the web, is through advertising in context. While several types of targeting might work well enough for direct response, when you really want to elicit an emotional reaction for a brand you need to do it in context. When your online advertising approach works in concert with your branding campaign goals instead of working for your campaign, that is when you begin to squeeze the maximum ROI from your online advertising dollar.