“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.

Marketing Sherpa’s Chart of the Week this week comes from their 2008 Online Advertising Handbook & Benchmarks. In their article Display Ads Do Work and They’re Getting Better they posted the following chart.

They go on to point out that for years, online display advertising has been a confusing challenge for brand builders and the object of suspicion for the direct marketing crowd. They surveyed 577 online advertisers from a range of companies and there is a lot of no-nonsense information in their report like; “From an ROI perspective, eliminating wasted impressions, then making a good impression by serving up great advertising, is consistently the best option for advertisers.” But from the advertisers perspective I was delighted to see how well contextual targeting scored in the report. They found that 40.5% of the advertisers surveyed felt that contextual targeting yielded a higher ROI while only 36.7% preferred behavioral. This speaks volumes to how well contextual has matured as a technology in the display ad space. Search advertisers like Google have always had the luxury of having their users input keywords to tell them exactly what the relevance is but in the display space it can be much more difficult to find the most relevant ad in just a few milliseconds. To do this you have to run a rich semantic library against an intelligent rules engine to match phrases to meaning all astride a robust data crawler scarping content in real-time. Few ad networks bring this kind of horsepower to the game and usually fall back to simple keyword spotting against a flat database of user generated synsets. When you really put a potent contextual engine behind an intelligent optimization algorithm you can get much higher returns than even what Marketing Sherpa’s survey set has found. In our early case studies we found that we could easily lift eCPM by more than 70% and return a minimum cost savings of 30% by eliminating waste for the advertiser and focusing their ad spend on just the highest performing combinations of hyper-targeted micro-segments. To me this report found that basic contextual is the top targeting method. You should see what good contextual can do.

Dave Morgan, TACODA’s founder and Executive Vice President of Global Advertising Strategy for AOL, just hit the nail on the head with his blog commentary on the stigma surrounding ad networks. He points out that the ad network brought a pork bellies commodity attitude to online advertising in the lean, post-bubble days when any revenue was good revenue. He goes on to point out that this is changing and bravely outlines a few solid reasons why. What drove this home for me was his conclusion that networks are going to have to continue to deliver solid value, with high-quality ads and rates, to begin to offer something that publishers will never be able to deliver on their own because of their focus on the content. He highlights the need for networks to deliver effectiveness over efficiency. Bravo. This is really the crux of the situation and a very real opportunity for ad networks to step up to the plate. And this is exactly where LucidMedia is strongest, in bringing increased effectiveness—and the proof report down to the impression-level to prove it—instead of just new efficiencies through scale, technology and focus. We saw this void back in 2004 when we launched ClickSense, our robust contextual engine, and have recently applied it to lifting the effectiveness of our customer’s campaigns in the LucidMedia Network. This new effectiveness is inherent in our deep categorization which puts publisher’s content into our 13,000+ industry categories to allow for far more granular targeting than has ever been available in the past. When publishers can sell their inventory with 6 levels of categorization to pinpoint the meaning of their content there is a very real lift in conversions. This assumes all the underpinnings are in place like engaging creatives and streamlined landing pages but when it all comes together there is a tangible return. Hopefully other ad networks will do the same and bring real increases in effectiveness to the table in the future and begin to erase the negative connotations around the ad networks.

YieldBuild is in the news raising another $6M capital with a solution to “maximize advertising revenue for web publishers”. It’s an AdSense layer of code that monitors and tunes your ad for you. Nice. I mention this because it’s just another validation of the very real risk from ad blindness eroding the impact of your ad spend in the industry and I applaud it. The online ad industry has grown so huge and so multi-faceted that many advertisers and publishers become complacent with their campaigns because they are so easy to traffic now and that is when your KPIs start to fall off. Just watch the conversion rate of a campaign after a week or so and you will see the creeping effects of ad blindness setting in. Frequency capping and day parting may help but a good campaign is one that is constantly being evaluated and tuned against your KPI. YieldBuild’s whole business model is based on that truism! A good online ad partner should always be talking to you about tuning and optimization. But more importantly, your ad network should be proactively showing you every single impression down to the URL level. If not, what is it they are trying to hide? It’s the reality that your promised impressions are either eluding them or not having the contracted impact and they are farming out your ad to anyone who can get them some numbers so they don’t have to put up the “mea-culpa” make-good at the end. So please, for me, ask your ad network for a report of every impression and every URL where you are running. Ask them what content you are running on and don’t settle for site level or network level themes. Then re-tune constantly for performance where your ads are getting traction. And if your ad network doesn’t have that kind of real transparency and accountability baked into their DNA, then shop your ad network around until you find a partner who is confident enough to open their kimono and show you everything. Only then can you truly keep ad blindness out of the picture and make the most of your ad spend.

Rohit Bhargava recently wrote an interesting blog piece about online advertising. He ponders what it would be like if there was a site like Priceline for online advertising (he calls it Adline for fun)? He asks what it would be like if you could enter your flight dates, the demographic details of who you are trying to reach, the type of placement, and the maximum CPM you are willing to pay. Placements would need to be rated on some sort of neutral system so you would not be overpaying for obscured inside page placements, as well as by relative visibility of the site, but the idea is that I could decide to do a five star ad unit on a five star site and set my own CPM. The site could choose to accept or decline my offer. I liked this free-market Ebay-esque approach to online ads. But one of the great Achilles Heel’s of online advertising has always been transparency; this notion that ad networks have historically been opaque to the advertiser basically requiring advertisers and agencies to take them on their word that their ads are out there working. A new bidding system like this would work if every impression was audit-able, if every dollar spent was on the table for scrutiny. Only then would people trust the system enough to put their ad spend on the line.