Monday, November 26, 2007

What brands really think about ad networks

Depending on your brand, ad networks can be a boon for your business or kind of a wash. Brands that need to reach a mass audience relatively cheaply say they are happy with the traffic they net on a network's hundreds or thousands of sites. But brands that are especially vulnerable to bad or confusing placement on sites, or want to cultivate a particular user, have to wade into the ad network depths with caution.

Quality placements, of course, are defined differently by different brands. But controlling your image and collecting clickthroughs can be done, say our online marketers. Nevertheless, they warn, overlap and the mass profusion of networks without clearly defined niches can make it hard to differentiate which one is the best buy.

Below, a panel of intrepid marketing professionals discusses how ad networks have worked for them, and what they are still waiting to see in online marketing's evolution.

1. Do you use ad networks? If so, why?

Kyle Sherwin, media director at Sony:
Ad networks are a ripe opportunity for our business in its current state, not only for economic reasons -- low entry costs and aggressive rates -- but also because they can address the special interests of our artists' fan base. Some networks have a host of specialized media properties that are very important for gaining credibility with a core fan base. For certain artists and products that appeal to a narrower fan base, we need to penetrate properties that are relatively undiscovered and can serve as initial points of influence for us.

Keith Pieper, director of performance media at Universal McCann, on online campaigns for client Microsoft:
Yes, Microsoft uses ad networks. We use ad networks primarily for volume and efficiency. We typically test how ad networks perform and then optimize based on performance against campaign objectives.

Valerie Constable, director of media at Kaiser Permanente:
We use ad networks for our individual plans, primarily. Health care has different types of insurance: corporate, small business and individual/family accounts. Our individual plan group at Kaiser Permanente is all direct response-oriented, so we use ad networks.

Katelyn Himes, manager of online marketing for La Quinta Inns & Suites:
We do use a number of ad networks for direct response campaigns. We find that they provide very efficient, targeted campaigns with low-cost, high-volume impression levels, and a lower cost per conversion. They also allow us to be present on a number of sites that we would not normally buy. Smaller sites can be aggregated together to drive scale, and larger sites are sold at a lower cost. Most networks also offer a CPA campaign, which can also be very efficient.

Correy Honza, director of internet marketing for Quiznos:
We've used them in our test markets for new products and we're planning to use them a lot more. We've done a lot of portal advertising but now, looking at the benefits of it, portals require a minimum spend. Ad networks are inexpensive and you get on thousands of sites. So we are checking out ad networks and see what they have to offer. It's also interesting how ad networks are getting into behavioral marketing. It's a slick way of communicating a message.

Dave Chase, CMO for AltusAlliance:
We're more focused on niche ad networks like Glam and Active Athlete Media than "buying ads by the ton" with traditional ad networks.

Katie McCormick, web manager at Revlon:
Yes, we do. In 2007, for our Mitchum Man deodorant, we chose the larger ad networks that had a lot of site traffic. We're planning now for 2008. Who knows where we will land?

Bill Daley, senior manager, interactive marketing for Universal Orlando Resort:
We use them because they are guaranteed targeted traffic to our website and we do the ad buy on a CPC basis. Also, we view the additional impressions to help branding and still track view conversions.

Sean X Cummings, director of marketing for Ask.com:
When you can't advertise on Yahoo!, AOL or MSN, as we can't, you have to find ways to get mass reach. We use a lot of different ad networks. Those brands that are smart are taking advantage of them. Most advertisers do not comprehend the power of online ad networks but are still buying media with old-school traditional thinking. For example, in offline, there is often an associative halo affect with brand name shows and properties. You buy on "Heroes" because your brand's association with the brand "Heroes" makes your brand, for a lack of a better word, cooler. You are one of very few advertisers during an immersive, commercial interruptive experience. This does not exist online.

So why are you paying the price premium for being on a portal or branded site? You used to buy on portals, and sites with scale, because you wanted more bang for your buck. Buying on smaller branded sites and assembling your consumer piece-by-piece required too much effort, too much trafficking and complex media plans. Those days are over. Online networks allow you to scoop up thousands of micro-consumers. It's not death by cannon fire but by a thousand cuts. The ad network has already assembled the inefficiency, into efficiency. Most brands do not understand this. They get convinced that they want to produce very rich creative. Most of that is wasted. Sure you need it, but as a supplement. The argument you often get is "Well, I want to be on that site with the $20 CPM. It's a much better property." Yes, it is, but it also has much better content. Why could that be an issue? First, their brand, the branded site, often overshadows yours instead of providing that halo. Second, what are people there for? Content not advertising. If you are on JoeBlow's blog, his content is not as rich. Where does your eye wander online when the content is not king? Advertising. Sure there are brands with very specific demographics that they need to reach, but often, even with colossal wastage, the online ad network is much more efficient. You get much better price-per-performance on networks. Why? Well, even if your creative performs better on the branded site, it will do so by about 20-30 percent for the same creative; but you get between 3 to 30 times better pricing on the network… you do the math. Unfortunately, or fortunately for us, most brands don't.

Author notes: Mira Schwirtz is a San Francisco-based freelance writer covering the culture and business of technology. Read full bio.

2. If you, either through an internal department or an agency, work with ad networks, are you happy with the placements your ads get through ad networks? Why or why not?

Keith Pieper, director of performance media at Universal McCann, on online campaigns for client Microsoft:
We are generally happy with ad networks. We have used almost every major network in the U.S., including Advertising.com, ValueClick, Tribal Fusion, Specific Media, 24/7 Media and Collective Media. Ad networks provide reach and are effective for retargeting, but we have found that consistency of service and cost effectiveness varies greatly between networks.

Katelyn Himes, manager of online marketing for La Quinta Inns & Suites:
Most of the networks we are working with are blind, so we do not have a strong understanding of where our ads are placed. We try to focus more on the targeting aspects rather than the sites. We generally ask for a sample site list, which usually lists the top tier sites within a given network. We do happen to see a lot of our ads throughout the web due to retargeting, and the placements typically seem to be desirable. We also monitor incoming traffic to our site, and it leads us to believe we are getting some good traction on several sites that we deem to be network traffic. We do plan on testing more open networks in the future so we can pick and choose the sites we are on. In terms of actual ad sizes available, there typically seems to be a wide variety.

Sean X Cummings, director of marketing for Ask.com:
This is a red herring question. We have a unique relationship in that we know many of the sites that our networks use. However, most networks protect their site lists from the advertiser. The important issue is to look at the performance of your various creative sizes. It's about the "mass" placements, not individuals as with a branded site. Don't pay attention if you run into a site that has a poor placement; the data of the "mass" will tell the full story. It really all depends on what type of business you are and what your goals are. Are you an acquisition-and-then-prevent-attrition model? Well, then, the conversion funnel is the most important for you. Getting users in that funnel, retargeting, converting and then loan-to-valuing on the back end. Are you instead a top-of-mind awareness model? Your measurement goals must be very different. You have to change the consumer mindset away from the ad. That is much more difficult and requires different measures. Basically the burden is on the client to develop the strategic measure that drives their business. If you deliver that strategic measure to your agency, they will find a way to get the ad networks that can optimize on it.

Valerie Constable, director of media at Kaiser Permanente:
We only use ad networks where we can use site selection because there are certain sites that would be inappropriate for health care. We're happy with the reach, which can be pretty extensive. And it's a way to get on some of the smaller sites that would be editorially appropriate but wouldn't make it on our radar.

Kyle Sherwin, media director at Sony:
We are generally happy because we work with open, visible, transparent networks. We will suppress any sites or categories that we don't want to be involved with.

Correy Honza, director of internet marketing for Quiznos:
It's an intelligent and economical way of reaching consumers, and we don't have to know about each site and its traffic.

Katie McCormick, web manager at Revlon:
We're happy with the placement for Mitchum Man.

Bill Daley, senior manager, interactive marketing for Universal Orlando Resort:
We work with an agency and we are very happy with the placements. They know where we want to be and where we don't.

3. If you're comfortable disclosing this information, which network do you use? Why did you choose it?

Sean X Cummings, director of marketing for Ask.com:
We've used every major network and constantly test new networks every quarter for performance. Not all ad networks are equal, and not all are equal for each business. A network that performs great for one client may tank for another; that is what surprises most brands. They hear a brand espousing the virtues of a certain network, try it out and their program tanks… and then think either they are doing something wrong, or the other brand does not know what they're doing. There is the illusion that because many networks can provide mass reach, that it means mass consumer. The type of ad placements within a group of sites will be quite diverse. Sure, you may be buying skyscrapers and leaderboards, but where they are on the page has as much influence as what site it is on. Those various combinations of the assemblage of sites within an ad network create a psychographic persona of sorts for that network. It is not about demographics, but psychographics, and the mindset of those consumers when they are on those grouped sites.

Bill Daley, senior manager, interactive marketing for Universal Orlando Resort:
The ones we use the most are Undertone, Specific Media, Advertising.com and Vendare. We also use the MSN Direct, which is like a network buy within the MSN sites. They work the best for us in regards to site conversions, and duplication of websites within these networks is minimal.

Valerie Constable, director of media at Kaiser Permanente:
We've used many including Tribal Fusion, Specific Media and Advertising.com. We apply some internal controls and calculate marketing costs per (potential) member. We've used more general networks, rather than health-oriented ones. Sometimes health content is applicable if we agree with it. We do contextually target, for example, expectant mothers, but we're just as likely to behaviorally target. We re-target too. We have a re-contact strategy that we've only been using for a few months, but we've already seen a significant lift.

Keith Pieper, director of performance media at Universal McCann, on online campaigns for client Microsoft:
Aside from niche networks and nuance features, ad networks in general offer a commodity product -- i.e. massive reach at a relatively low cost -- and they can scale fast. Aside from price, what really makes one network different from another is an understanding of our needs and business, which comes down to service. In our experience, service is a differentiator between ad networks.

Kyle Sherwin, media director at Sony:
We've used Specific Media, Collective Media, Undertone Networks and ValueClick. Other companies like Gorilla Nation that are not technically networks also serve similar functions for us. We have used Advertising.com but since they're not transparent, we've shied away more recently. For a more broad-based artist, we'll use networks with the most popular sites (i.e., Comscore 100 or 200). Sometimes we'll work with networks with thousands of sites because they have properties that attract the right influencers and specialized music genres.

Katelyn Himes, manager of online marketing for La Quinta Inns & Suites:
Without giving away too many secrets, we work with some of the top networks out there and continuously test new opportunities.

Katie McCormick, web manager at Revlon:
We use ValueClick and Advertising.com because they are the best known and came to us with the best proposals.

4. What is your biggest fear about relying on ad networks for the placement of your ads? How have you tackled this?

Keith Pieper, director of performance media at Universal McCann, on online campaigns for client Microsoft:
One of our primary concerns is consistency in performance. Like any good performance-based buy, we'll buy a little from every network to spread our risk then reallocate funds to the ones that perform best.

Valerie Constable, director of media at Kaiser Permanente:
Inappropriate content. We site-select and we have guidelines we provide, but the reality is with the way networks are set-up, we don't have as much control as we'd like.

Katelyn Himes, manager of online marketing for La Quinta Inns & Suites:
Our biggest fear is conversion duplication across networks. If you are using multiple networks, you need to make sure you have a mechanism for de-duping conversions whether it is through an ad server or another method. Also, creative wear-out. With so many impressions served, you have to be careful not to become the advertiser that is considered annoying. Carefully plan your creative variations and frequency caps.

Sean X Cummings, director of marketing for Ask.com:
As with UGC, there is a much higher degree of uncertainty of the content you will be placed next to. Ignore it. Many clients do knee-jerk reactions to a single ad placement; they fear some overly conservative person will get offended by the content it is next to. You are not endorsing that content, and it will always be in the vast minority of placements. Online is not offline where there is an implied endorsement because it is almost always a branded property. When only one in 10,000 people clicks on an ad, and only a moderately better proportion see it and come to your site, it is too transient to get worked up about. If you do, you'll spend your entire time justifying the people barking at the moon and not doing your real job. If you are too fearful then just stay in your little bubble on branded sites, and watch me outperform you.

Kyle Sherwin, media director at Sony:
Invisible networks may be a suitable fit for credit card companies that want to attract huge audiences. We are a micro marketer and need to know where every penny goes. So we're looking at networks with specified points of interest for us.

Correy Honza, director of internet marketing for Quiznos:
Are they able to deliver the impressions they promise? For us, it's about dollars and cents and reach.

Dave Chase, CMO for AltusAlliance:
We only work with transparent ad networks and ones that refuse to use pop-up ads.

Katie McCormick, web manager at Revlon:
Our biggest issue is the use of celebrity sites because we don't want our celebrity models (for example, Halle Berry) to appear next to a competitor's talent in an editorial mention and confuse consumers.

Bill Daley, senior manager, interactive marketing for Universal Orlando Resort:
Our biggest fear would be complaints by consumers if they saw one of our ads on a site that is controversial or inappropriate. Over the years I can only remember this happening once.

5. If you don't use ad networks, why not?

Dave Chase, CMO for AltusAlliance:
Our use has been limited as we are interested in creating brand associations with our ads rather than just buying ads by the ton.

6. What would ad networks have to change about the way they work in order to attract a client like you?

Keith Pieper, director of performance media at Universal McCann, on online campaigns for client Microsoft:
Price and scale are the primary factors for including ad networks on media buys. However, it would be nice to see additional differentiation in product offerings. For instance, we have yet to see a major B2B ad network out there. Or how about a custom ad network for each advertiser based on a vertical niche?

Valerie Constable, director of media at Kaiser Permanente:
Because we're a regional player, we geo-target, so ad networks have to have geo-targeting and site selection. Being able to have more to say on where we are placed on sites would add value. Oh, and of course customer service is very important. We love when reps educate us about their new opportunities so we can take advantage of them and be included.

Katelyn Himes, manager of online marketing for La Quinta Inns & Suites:
As a brand, I speak to about one new ad network per day, and with so many choices out there, it can get very overwhelming. Ad networks need to find a niche. All ad networks claim to have the same value proposition: "Quality traffic, enhanced targeting, account management teams, best inventory, etc." The truth is that the overlap across most major networks is between 60-80 percent or more. With that in mind, ad networks need to take the time to stop the battle and demystify the landscape. What are the true differences outside of what everyone else is saying? In speaking for all other brands out there, if we had a list of all ad networks in one place with the true unique core competencies of each one, it would really help brands holistically understand the uniqueness and pros and cons of each network. I encourage the networks out there to take up this challenge.

Kyle Sherwin, media director at Sony:
We can't know with full confidence that we're getting equal distribution on all the sites within a network, so we need better auditing on a property-by-property basis. But it's a trade-off because we're working with remnant inventory that has its financial advantages. Beyond that, I think networks will have to start organizing segments of unique real estate outside of traditional media placements or offer custom programs that will give us the creative or specialized presence we're looking for.

Correy Honza, director of internet marketing for Quiznos:
It's hard to muddle through all the different ad networks because it seems like there's a new one created everyday. They need to promise a certain number of impressions.

Dave Chase, CMO for AltusAlliance:
By providing the best of both worlds: reasonable ad prices and reach with quality sites.

Katie McCormick, web manager at Revlon:
The problem is there are so many ad networks that it's hard to differentiate between them.

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