Reactions to Karp’s “Traditional Ad Formats Fail On the Web”

For those who have heard me say this before, forgive me but I must respond to Scott Karp’s recent post on ad formats on the web.

Advertising typically embraces the formats of prior media formats and evolve into an indigenous format. So too will online advertising. Content is already there. Early sites typically behaved like an online magazine. Now content creators are harnessing the unique properties of the web to create content much more suited to the medium. Twitter, social networks, simpler content management systems (i.e. blogs,) etc. The NY Times is link blogging for God’s sake!

With respect to ads, most other types of advertising could not lead the customer directly to further action. TV ads could point you to a web site, a car dealer, a phone number but you had to leave one experience to begin another. Advertising was about embedding a slogan, idea, phone number into your head. My daughter learned the number for Empire carpet really quickly. She would sing the song. A pretty effective ad. She will likely always remember Empire carpet’s phone number.

Online advertising can seamlessly transfer a subject from an ad to an immersive experience. The trouble is that the ad formats typically don’t factor that into the equation. They are still focused on getting people to (figuratively) remember a phone number.

What’s more, most marketers really don’t seem to want or, perhaps more likely, don’t think about the differences in the mediums. They will and advertising will get better. Now, many ads are based on altered versions of their offline materials. The advertisers that embrace the medium and harness the unique potential of the platforms are doing amazing things. Google keywords were the first but it is not the only and certainly not the last.

For people interested in this discussion and similar discussions, please attend Federated Media’s Conversational Marketing/Media (CM) Summit in New York on June 9th and 10th.

The Paper of Record Link Blogging!

Scott Karp post here. An excerpt:

It’s great to see “the newspaper of record” has so evolved on the web — gone are the days when they to claim they have the last word on a topic or issue. The Times realizes that there is a rich universe of journalism on the web, and they can best serve their readers by helping them find the best reporting, alongside the NYT’s own gold standard reporting.

Scott Karp: Why is the NYT print CPM $144 while TechCrunch is $15-40?

Scott Karp has an interesting post on Local/National Advertising in Newspapers here. In it, he writes:

If you do the math, the cost of 1 page, or 126 column inches at the National Weekday rate of $1,233 is $155,358, to reach 1,077,256 weekday subscribers. That works out to a cost per thousand (CPM) of $144.

Compare that to the $15-40 CPMs that TechCrunch gets for displays. Imagine what TechCrunch’s business would look like if it could command $144 CPMs.

So given that the New York Times can charge 3-4 times as much to show me a technology-related ad in print than TechCrunch can charge online, is it any wonder that they are trying to convert me to a print subscriber?

My thoughts:

- Using the open rate card for the NY Times is just wrong. Very few, if any, advertisers pay open rate no matter what NY Times might say. That said, I doubt there are many full pages in the NYT going for a $40 cpm…

- Most websites have more than 1 ad on the page so the RPM (Revenue per 1000 pvs) is likely higher than Karp cites for TechCrunch, NYT.com, or other A list properties. I think there are a few additional things that are driving the differences in CPMs -

- Expense in circulation/production costs. That direct mail piece wasn’t cheap and neither is the printing of over 1 million copies of an ad. Whether justified or not (and virtually every print ad driven printed publication is seeing advertiser pages shrink) this has been priced into the equation. I know there are costs to serving ads online as well but they are usually shouldered by the national advertiser rather than the publisher.

- Sounds simple but it is meaningful - An executive can point to “his” ad in the NYT’s business section and it will always be there. Much more powerful than hitting refresh over and over again. Part of advertising’s allure is the fueling of corporate ego. Print is better at that than online.

- Display ads online are still very immature. We are still figuring out (cue rich media advertisers to weigh in here) how to use the medium. Print/TV/Radio are medium advertisers know how to use. Battelle writes about this here.

- Not too long ago, publishers like the Times gave away (or bundled in) online advertising to print programs. This reinforced the dominance of their mature business but also devalued online inventory. This is changing on sites in great demand. It will take time. As more newspapers move to 100% digital operations this will likely change. “360 degree buys” or “cross platform buys” are still common and often mask the true value of one property based on how the business wants their product lines to perform. If you want to show growth in online, discount the print. Or vice versa. Multi-platform publishers are looking for share of wallet.

So many people buy as if all ad impressions as equal largely due to the focus on the click through as the primary metric for success/failure of a marketing campaign. More impressions at a lower CPM = a better performing campaign. Google, Platform A (advertising.com) and other offerings do a great job of exploiting that success metric for DR advertisers. As people start to view online as more of a platform for branding that will change.

Madison Avenue vs. an Algorhythm - Are Those Our Only Choices?

Scott Karp discusses the awakening of Madison Avenue to the potential of the web in a recent post entitled The Future of Online Advertising: Entertainment vs Information. In it Scott profiles a really awful ad execution for a Toyota Matrix campaign and contrasts that with useful information found on the other side of a click from a Google search result.

I like Karp’s blog a great deal and respect his intelligence and perspective on the media marketplace but I feel this post really over simplifies the “future of Online Advertising” through the selection of these two campaigns. As isolated cases, the user experience and value (or lack thereof) are pretty evident. But these are two examples picked to support a point. What if you wanted to raise awareness of a car model, perhaps inspire conversations around the topic? Would a keyword buy do that?  I don’t think so.  Advertisers need to use the right tool for the job.  Keyword buys are great at harvesting demand but they rarely create demand.  That’s just why BMW did with a sponsored a recent content with Graffiti as part of the campaign that  launched the BMW 1 series.  This execution stimulated thousands of face to face and online conversations as a result.  Did some of those conversations prompt people to search for BMW 1 series?  You bet.

Just like text link advertising shouldn’t be dismissed with every bad execution

or

Neither should a bad ad campaign be used to throw out Madison Avenue, Online Advertising, or Entertaining Ads.

Ad creative executives will have to work harder however. It isn’t enough to make someone smile at the end of a 30 second clip it is about using tools that serve their customer base.  That toolbox is getting richer and more diverse.

Scott Karp - To understand web publishing you must use the tools

I’m a big fan of Scott Karp. Scott does a great job of tracking the shifts in the media business. This post charts the disconnect between traditional publishing and “new media” publishing. In short, journalist using antiquated CMS tools that were built to adhere to established print publishing (or TV) workflows don’t receive any of the advantages that a guy like me with a free wordpress account would.

To borrow a well know marketing tag line - “Just do it.”

While this is extremely important for web journalists, I would say that marketers, salespeople, etc. should give it a go as well.

Why do so many big media companies seem to ignore these tools while smaller, more nimble independent authors sitting on publicly available blog platforms steal their audience and advertising dollars? Because so many of the people that sought out the tools left their organization and the need for different tools mandates a different organizational structure. Finally, if you spent millions customizing a CMS system would want to be the person that explains how 2 guys and a ~$2000 Movable Type or WordPress support contract is doing a better job at attracting an audience and the search engines that deliver that audience?