Tuesday, 6 October 2009

This Internet Thing May Catch On

Cuh, who would have thought it, eh? This little wire into your house and down it comes all this fantastic information and now TV and much more.

In fact so popular has this phenomenon known as 'The Internet' become that advertising spend on it has actually overtaken spend on TV advertising. Some years ago, I attended a conference in London on the future of the web and some chap who was part of an investment group justified some of his company's hair-brain investments by saying precisely this would happen. I wonder if he survived his daft investments in web 1.0 but he was right, despite the guffaws and rude questions of the chap sitting next to me who kept whispering in my ear how he thought the speaker was talking rubbish. I noticed from his badge he worked for a TV company.

It is a fact that during this year, advertising spend has decreased, even on the internet. Companies are questioning more than ever the worth of some of this spend. As Aviva showed with their crazy decision to spend £millions on publicising a name change from Norwich Union while making people redundant, you can blow a lot of money very quickly on TV advertising. While glitzy agencies would tell you can measure the success by means other than sales growth, it would be a really tough job to understand what a campaign like that could have done for Aviva. TV advertising, in the main, is incredibly wasteful. For the millions of TVs it gets played on, the net effect is pretty low and you have to spend a lot of money to sustain the message and advert in order to get some tangible effect.

The internet has given advertising a new lease of life. You see, the trouble with the TV is that by by and large it is technically just a broadcast or stream which hits every aerial in the country regardless of if the TV is switched on or what channel they are watching. At any one time, the vast majority of people are actually watching something else while the advert is being broadcast. The other issue is that TV advertising is not very context sensitive in that an advert for a car may play after a scene where people are in a pub - yet would it not be cool if an advert for beer or wine were shown at precisely that point.

This is where online advertising scores as you can be incredibly targeted down to timing, demographics, geography, location and by the very words used to search the web. At the point you enter your search using a keyword, up will pop an advert only on your browser which is directly related to that keyword. If you search for Indian restaurants, up will pop the name of a local one. There is a simple, yet complex way of 'buying' access to a keyword for your specific needs that is governed by an auction in the ether - it's a bit like TV adverts but it is far more targeted. It can be far more powerful than that as a great deal more information about your browsing habits are stored than you may know or want. It means that adverts on places like Facebook in the future could actually be far more tailored. This is why Social Networking is so important to advertisers and why companies like Facebook and Twitter who have no revenues to speak of today are so highly valued - they contain a great deal more information about you and your online habits than many of your friends know about you. This only exaggerates the futility of TV advertising which is 'hit and miss' at best.

Related to all this is measuring results. The online advertising industry talks a great deal about Return on Investment (ROI) and can measure a great many things about your adverts and traffic to your website. The trouble is that there are many companies that can monitor a great deal of the traffic information by many different methods. There are only a few who have mastered the art of correlating data from multiple sources like Webtrends, Omniture and Google and make some sense of what is really going on by displaying the results with clear dashboards and automating reports. One such company I have found is Theorem Inc and their Data Analytics product which does precisely this. It is now available for companies to buy and use on their own premises to keep their data within their corporate firewall whereas most companies offer web-based access only.

The plethora of analytics tools mean that you can accurately measure response rates, numbers of views, where the clicks came from, time spent on your website, which pages were viewed, how often, for how long and then you can adjust and refine your marketing to maximise response and, hopefully, sales as a result. Naturally, I am simplifying what is a complex industry but when you boil it down, the internet means you can have a great deal more power over your advertising spend to get real results from all your marketing and adjust your budgets as you go, daily and by the minute if you wish. For TV, once you have paid for all that design and production work, it is just a matter of affording the right places to put the advert at vaguely the right time and, literally, hope for the best.

The internet has brought advertising into a new age. For those who doubted its viability against the sheer weight of the TV, it has now proved itself beyond all doubt. The spend statistics tell their story.

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