Web retail needs to be fun!

I was with a client last week, talking about online instore merchandising - a topic which hadn't crossed their minds, despite the fact that they're one of the best at merchandising in physical stores.  This is a discipline which is hardly given a second thought right now, but those who get good at it will find themselves ahead of the pack.  Even in 2006 when this piece was originally published, it was clear that this was an area ripe for exploitation - in 2010, no-one's yet picked up the challenge...

Brand advertising on the web, or just direct response?

First published in Marketing in 2006, this piece argued for a planning currency - in later articles I pooh-poohed the idea.  Contradiction?  Not really.  The web needed a planning currency to remove any lingering doubts amongst the laggards, giving them familiar tools.  The danger is in the bar being lowered, with poor, old media metrics being seen as the governor for the new.  We weren't happy with TV's currency, so why are we so enthusiatically applying it to the web?

Google's plan to destroy transparency

In 2006, Google introduced (with virtually no notice) a scheme designed to boost the income of traditional media companies, who had been slow to develop their search propositions.  In doing so, they allowed thousands of advertisers to be ripped off by their agencies, and embedded a system that built in a disadvantage for the small specialist agencies who had helped Google to its success.  The scheme was quietly abandoned two years later.  If nothing else it demonstrates that even the smartest people get it wrong sometimes.  (First published November 2006)

Internet Addiction

The media still likes a scare story, but we shouldn't let these obscure the fact that the web is now a mass-market phenomenon, not just the preserve of geeks.  This article dates from a time when some still stuck to the view that digital was a geek thing; amazingly some still do.

Corporate blogs can damage brands too

When I wrote this in 2006, corporate blogging wasn't new.  Nevertheless it still frequently failed to support the brand, and often just looked like bandwagon jumping.  There's no doubt brands have got a lot better; but the failure to try to see it from the consumer's point of view still makes blogs and facebook pages the frequently toe-curlingly embarrassing efforts they are...

YouTube acquisition, and what social networking means

Back in 2006, when Google acquired YouTube and Newscorp bought MySpace, social networking was still new.  With MySpace's search deal up for renewal, it's interesting to look back.  Whilst YouTube has been wildly successful in audience terms, it's revenues are still yet to make a dent in Google's investment - MySpace on the other hand is looking tired and losing ground; but Newscorp recouped the entire cost of the deal through an adsense deal with Google just months after they bought it.

Media agencies make good business out of being lazy

Back in 2006 when I wrote this, it astounded me that agencies could get away with what seemed to me to be such lazy practises.  Now, I'm impressed.  Many of the network agencies have created profitable businesses, supplying substandard work to clients who aren't incentivised or (sometimes) sufficiently skilled to tell the difference, and who are therefore unwilling to pay for better.  This seems to me to be the definition of good marketing; the profitable satisfation of a consumer's demand.  Until marketers wise up, this is all they're going to get...

At just under £1bn, the UK online advertising market is booming.  The Internet Advertising Bureau’s latest survey, carried out by PwC and WARC, reveals 40.3% growth in the first half of 2006, compared to the same period in 2005. 

At this rate of growth, two key milestones will be reached by the end of 2006.  Online advertising will be bigger than national press, and it will be half the size of TV. 

Search is continuing to outpace the rest of the sector – 58% up year on year – and display is up 33%.  In a wider market where spends are down (on TV, press and radio) this is a real achievement. 

This is the 17th consecutive quarter-on-quarter growth, a continuous record since the wobbles of late 2001.  All of which would make you think agencies would have got their act together by now and figured out how to create value for advertisers in this sector, and make money for themselves at the same time.  Seemingly not.

For some years now, I’ve been banging on about how there’s a concentration of expenditure in the top ten sales points for online media that’s not working to advertisers’ benefit.  Three years ago (the last time the IAB published a figure) 83% of revenue went to the top 10.  If developments here are following those in the US, this is getting worse – research by the US-based Online Publishers Association reckoned 88% went to the top 4 in 2005.

It is argued that concentrating spend in this way gives greater leverage against key properties.  This is true only in the very short term.  Online media are uniquely measurable – trading with niche sites as well as broad sites gives the agency/advertiser a set of performance benchmarks which can be used over time to move pricing and quality along.  And if you only trade with a handful you not only lose these benchmarks, but those publishers will pretty quickly figure out that you lack credible alternatives to dealing with them – and that’s only going to drive the price you pay up.

It’s a fairly rudimentary trading technique imported from TV.  But it isn’t the real reason why agencies support this concentration.

It’s because it saves them money.

It doesn’t get better value, or even better pricing.  But it does wear out less shoe leather if you’ve only got to plan your way around a handful of sites, rather than schlepping round loads of second and third tier sites in an attempt to drive value for someone who’s not aware of what you’re doing.

This shouldn’t be too shocking.  Agencies are businesses, and if their clients are unaware of the value drivers in media, then some will exploit that – especially if all they ever hear about is the importance of cost saving on agency fees.

No.  What’s shocking is the fact that agencies are open about this, and no-one seems to bother. 

Here’s one head of digital at a major agency, quoted in Media Week in August:  “More choice means more time spent planning, which for an agency can lead to negative consequences for the bottom line”.  Another, the joint chairman of a network buying operation in Campaign in May:  “We deal with a huge variety of media owners but the real volume is going through half-a-dozen vendors”.

And in Revolution in January, perhaps the most brazen admission from an agency:  “Clients are constantly trying to reduce their commission rates, agencies have to cut their cloth accordingly and if you do deals with the bigger sites it is easier”.

No mention of driving value for advertisers.  No reference to exploiting the diversity of sites, audiences and creative media opportunities the medium provides.

As the medium continues to boom, these self-serving idlers will get by.  But as marketers learn more about the medium, they’ll understand the damage this is doing to their online media ROI.  And as the medium matures, these practices (and hopefully these practitioners) will find that the market and advertisers have left them behind.