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Blogging from Ad:Tech - Chicago

To tip my cards, I’m here for two reasons. First, a selfish one: competitive intelligence. I want to see where the traditional agencies are going – do they continue to be my partners or my competitors? Second, my gut’s telling me that mobile marketing is the future, and I want to see where advertisers and brands think it’s heading.

Here is the recap so far from Day One:

Opening Session: Keynote Speaker, Kay Ferguson, CEO, Burrell Communications (Chicago)

The event kicked-off at 9 AM this morning with a keynote entitled “Multi-cultural Clicks In.” Ms. Ferguson started by defining “multi-cultural marketing” as “specific and intentional efforts to market to each key ethnicity, individually.” In response to a questioner, she did indicate that one way not to reach out to African-Americans, for example, is to assume that your advertising has to include either hip-hop or basketball. That’s not marketing individually but by stereotypes.

A few key statistics that I found interesting from Ms. Ferguson’s presentation:

- Young women are more likely to be online than men.
- African-American women are significantly more likely to be online than African-American men.
- African-Americans are more likely than the general market to use mobile devices to access the Internet and use richer content in doing so (video, MP3s, etc.).

I took issue with a couple of her assertions, in particular one where she thought that the Hispanic market takes the lead from African-Americans online. I’m not sure the numbers support that, especially when you consider the explosion in population. Hispanic marketing is one of the hottest – if not the hottest – areas of advertising and marketing communications.

Lastly, there’s no question that Ms. Ferguson is a wonderfully accomplished advertising executive, yet she made several references to her lack of understanding of “computers” and relied upon one of her colleagues to field any questions related specifically to Internet marketing. This clearly detracted from the power of her presentation and made those in the audience perhaps somewhat specious of her authority specifically on our industry. I thought it was unfortunate for her as well as the organizers of Ad:Tech.

Session II: Media Innovation

Fragmentation. MySpace. Other social networks. These subjects dominated discussion at this session paneled by Eric Picard (Microsoft), Paul Santello (Carat Fusion), Amanda Richman (Mediavest Worldwide), and Mark Stephens (Avenue A/Razorfish).

Each panelist agreed that while media is certainly fragmenting, the tools to measure media are only getting better quickly. Mark Stephens, in particular, was impressive in his knowledge of leveraging consumer buying cycles and associated media along that curve. You need to know when, why, and where a consumer engages with media to know where to invest. Using charts pulled from aQuantive software (I assume CampaignOptimizer – ah, a trademark Ciceron sold to aQuantive in 2004!), he demonstrated that you need to know how certain display media placements can actually increase overall search results for certain keywords. It only makes sense: the more a person becomes more familiar with a brand, the more you may see lift across media, including search ads and natural, although natural wasn’t mentioned by the panelists.

Other items from this presentation:

- Online advertisers are now being asked not just to fill in the narrow areas of the traditional sales funnel, but to fill all the way from the top down. This breaks from tradition where offline channels build awareness and online builds relationships. If this is true, we’ll see another mighty shift to the online channels.
- Younger people seem to have less concern about privacy; however, I challenged that notion during the Q & A pointing to the fact that some people are now being denied job offers due to their “less than professional” MySpace and Facebook web sites being discovered by HR professionals and recruiters. Look for a simmering down of the more risqué – and dare I say, entertaining – areas of major social networks.
- Amanda Richman made the very insightful comment that agencies are no longer in the business of crafting and delivering brand messages but rather in the business of engaging in real customer experiences.

In several sessions, it seems as though everyone is wonder who’s going to lead innovation, the digital agency or the traditional agency? The chips here at Ad:Tech seem to be landing on the digital agency, but that might be expected. Yes?

Session III: Ad Neworks – Where are they headed?

Disclaimer: I’m suspicious of ad networks. My experience has been that very few are truly concerned with helping us give our clients conversions. As such, I was glad to see the organizers of this session invited clients to present their view of the ad networks. Ad networks, as a primer, aggregate inventory across often hundreds of web sites. They have traditionally been in the business of selling of ad impressions, but savvy advertisers are pushing the industry more towards cost-per-action deals. And it’s about time.

Representatives from 1-800-Flowers, WeightWatchers.com, and Kaiser Permanente shared their recent experiences with the major ad networks.

Insights include:

- When selecting a network, work with one that’s been around a while. They know the pressure they’re under and realize what advertisers need to continue spending money with them.
- New networks always overpromise and underdeliver.
- Know how much risk you’re willing to take considering that there’s always the chance that your ad will appear on a site that’s less than flattering to your brand. Some networks are sloppy in this regards, so use caution.
- Track your own conversions. Do not rely on the networks’ reporting because you will often get double billed as one network takes credit for a conversion that may have actually appeared on another network since they’re both using the same creative.
- Consider tiered pricing based upon the seasonality of your business and expected transaction volumes.
- Be collaborative with your network partners. Share with them your audience types, your conversion points, and other data that will help them target for you.
- On the other hand – and I found this to be a profound insight – it’s possible to over-target and over-optimize. Especially when considering behavioral targeting, you may achieve excellent conversion rates but from such a small scale of people that you don’t achieve your top line numbers. At some point you need to rebroaden your targets just to hit your numbers.
- Behavioral targeting just isn’t there yet, according to the panelists. The networks don’t really know what they have for inventory and that which they do know about customer behaviors may not by actionable. For example, who cares what a customer or visitor did 30 days ago if they’ve already made a decision to buy?

This session still leaves me scratching my head about display advertising in general. There was no real discussion about which media types actually work. We know that banners have abysmal click-through rates, so what’s next? Apparently online video. I agree with that, but once again, we’re starting over from a historical metrics perspective.

More to come…

Posted by Andrew at July 24, 2006