Tuesday, July 28, 2009

Ashton Kutcher and me: Ad performance anxiety

Ashton Kutcher and I have alot in common. I grew up in the late 70s...he played someone growing up in the 70s. Ashton's married to a woman born in 1962...so am I. I post blogs and Tweets with what's on my mind...so does Ashton. Ashton starred in "Dude, Where's My Car"...I, well, I guess there are a few differences between us.

But one other similarity arose at the Fortune Brainstorm: TECH conference last week. While the head honchos and lagging leaders of News Corp, IAC, AOL and other 'we-should-know-we're-digital-companies' regurgitated last year's online advertising trends, it was Ashton Kutcher who seemed to understand best what ails online advertisers moving into the future:

"People who have grown up on the Internet have trained themselves not to see it [online advertising]," he added. (here)

So What?

You may question the sample size on which Ashton's assertion is based, but it would be hard to deny the anecdotal evidence that display advertising advocates are increasingly feeling a bit of performance anxiety. The 2009 Marketing Themes post has more (here)

Click-thru rates on PPC search ads are the gold standard of online ad effectiveness...with Microsoft Bing's first month lap grabbing headlines at a whopping 1.5% click thru (here).

To put search ad performance in an odd sporting context, think of it this way: even Major League Baseball NL pitchers are an order of magnitude more effective in making a connection when they step up to take a swing than is the most effective online advertising format. (NL Pitcher stats here)

And if you don't like data, then maybe you like Barry Diller. As head of IAC Interactive, he says that "display advertising has to evolve".

Here's three ways online advertisers might reduce their performance anxiety when planning online media buys:

1. Buy PPC: The cost per thousand impressions will have to continue to descend in line with the effectiveness of CPM-based buys...which may eventually be closer to zero than to what it is today...offline pricing models are out of whack...they should not be the basis for buying online ads...there's a reason so many display ads are sold on CPM models...the reason is found in whose interest is served by CPM vs CPC.

2. Go beyond demographics. While it may be true that elements of age, geography, gender and income reflect certain common qualities of people, they are directional descriptions at best...one common quality among many people is that they want to determine which pigeonholes they belong in. Exploring deeper definitions of people online will require incremental touches, narrower focus (i.e., anti-reach) and soliciting permission (the audience's) in ways that are individualized and in context with the user's activity.

3. Use traditional media. Just be sure to use it for what it does best: big awareness to (relatively) big audiences in a short amount of time. And if you can't--or don't need to--go big? Try 1 + 2. If you do use traditional media, be sure it ties into something granular, personal, and meaningful online...not something ad-like.

When online advertising is no longer executed like offline advertising, I think we'll all be able to put our punk'd performance anxiety in the past.

Meanwhile, I'm with Ashton on at least this one thing.

Prior posts on ad deflation, earning attention and intrusive annoyance here, here and here.

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