Web advertising industry snapshot - First half, 2009

Short and sweet tonight. Here's what we've seen in the Web ad industry during the first half of 2009:

1. Q1 performed better than expected, given the current economic conditions. Consumer confidence, unemployment, interest rates, energy prices and more have contributed to restricting economic growth in most business sectors.

2. Q2 performed much better than planned, due to stable-to-growing demand for online ad space.

3. Overall financial performance for 1H09 looks to be lower than in 2008, but only slightly, with a decline under 10% (which is less than predicted by a variety of forecasters).

4. Ad networks performed relatively well. We think this is due to better optimization tools and practices, as well as advertisers shifting budgets away from broadcast, print and cable to the Web.

5. We've noted a slight increase in VC funding of publishers and advertising intermediaries, somewhat disrupting natural pricing equilibrium for both buyers and sellers.

6. We've noted some realignment of publishers and advertising intermediaries away from conventional online media (banners, for example) opening opportunities for those who can effectively work these formats.

Outlook for 2H09:

1. We believe economic conditions will weaken further through the end of the year, with key indicators such as the unemployment rate, interest rates, real estate values, energy prices, tax increases, state budget deficits, tight credit conditions, and more choking economic growth.

2. We agree with predictions that unemployment will exceed 10% (or perhaps even much more) before the end of the year.

3. This particularly critical benchmark will cause marketers to continue to be conservative with their budgets.

4. We think the Web advertising sector should continue to be sound with stable-to-moderate growth. We expect blue chip advertisers to continue increasing their online ad spending for the rest of the year.

More to come, but we wanted to be among the first with a 1H09 summary.

Summer: Sizzle or snooze?

During the stock market crash of 1929, and during the depression that followed (and for that matter, in the film, "It's a Wonderful Life" the antagonist played by Lionel Barrymore), great fortunes were amassed by some smart folks who bought while the masses were selling. To this day, that same pattern repeats itself, by the likes of investors such as Warren Buffet.

So, when your competition is slashing their marketing budget during tough economic times (afterall, why bother selling your product when sales are down, right?), does it make sense to seize the moment and aggressively market your product or service?

Of course it does!

During weak economic times, such as those we're now experiencing, there is a lot less "noise" in the media, meaning that your message can get through more clearly and more efficiently than when times are good and lots of competitors are in the marketplace grasping for your market's attention.

That's why this summer, don't snooze...sizzle!

With the stage to yourself, and while great creative work is always vital, if you don't have a perfect idea, at least you will have more people's attention, so you can get across a sales or reminder or whatever message you're aspiring to deliver.

Think of it this way; Whose message are you more likely to hear: the words of one child in a classroom with 40 other chattering kids, or the words of one person with whom you are in a room alone?

Okay, so I'm not so good at the sales pitch myself these days. To encourage our target market to listen to our message, we're offering discounts and free bonuses this summer to capture your attention.

Too Sweet To Resist!

Check out Intermarkets today to learn more about an offer that's Too Sweet To Resist (plus we have a nice picture of some puppies as part of the promotion; yes, we can be ruthless).

Have a great July 4 holiday, and keep those cards and letters coming!

Managing aspirations

Profound lessons from the Bronze Age, more meaningful than the latest fad in "The Harvard Business Review" (no disrespect intended):

Around 400 BC, near the end of the Peloponnesian War, controversial, brilliant and legendary (and real) General Alcibiades of Athens looked out over a mass of untrained, raw, newly-recruited Thracian soldiers, on a southern plain in Thrace (part of Turkey, today). His military companions looked on at the new recruits in astonishment that Alcibiades could have so much confidence in them.

In a haughty tone, one of the companions says to Alcibiades, "Even yourself are not so vain as to imagine that these recruits will stick (i.e., fight – KPL) for you?"

To which Alcibiades replies, "I'm disappointed in you, old friend. Can you be as blind as these Thracians to what stares you, and them, in the face?"

And what would that be?, his companion asked.

"Their own greatness."

He meant he would lift them to it.

He continued, "They will not stay for my destiny, but for their own."

From "Tides of War," by Steven Pressfield

Go beyond making a sale. Build a relationship.

I recently spoke at a conference about internet fundraising for non-profit organizations and political candidates (they're really non-profit, aren't they?).

The key point I stressed was that while you need to ask for donations aggressively, keep in mind that you also want to engage the visitor to your site and build a relationship with them. It's Marketing 101, all over again. In a relationship scenario, your visitor may keep coming back, and they make keep making donations, over and over. And, they may even form up your grassroots, get-the-work-done volunteers.

That's crucial, because while it's satisfying to donate to organizations or candidates that suit your interests, it's even more satisfying to see them succeed. Money's a big part of that, but so are the actions of the volunteers who vote, recruit other supporters, contact decision-makers, and more.

We just ran a campaign for a political organization on one of our Intermarkets Portfolio sites. The ads generated in some instances >1% CTR, and generated tremendous amounts of donations. This level of engagement can be extended beyond just a single election cycle or issue to be advocated. It can be transformed into a commitment by the visitor to be an engaged member, making an impact, and in turn, producing self-actualization benefits that no "Thank you" card in the mail could ever achieve.

Greetings from South Carolina,
Kevin

Best performing headline in an advertisement on the Drudge Report

I was just reminded today that the best-ever performing headlines for advertisements on the Drudge Report were in the format of:

"Shocking new video! Paris Hilton (fill in the blank)!"

It didn't matter what the "fill in the blank" part said; as long as it was a "shocking new video" featuring Ms. Hilton, click rates were through the roof. We saw some ads hit an 8%+ CTR (albeit with very focused targeting and restrictive frequency capping). And if that sounds high...well, it is. In fact, it's shocking.

With so many of the Drudge Report's users being in the media, this kind of tells you where their minds are.

Marketing in a tough economic environment

Digital media provides marketers with a quantum leap forward in accountability and measurement tools. Everyone knows this. But in the current economic environment, marketers need to remember to focus on the basics.

Here's a non-exhaustive list of what marketers should demand from their media partners (like Intermarkets):

1. Get as much performance reporting, with as much detail as possible. This will let you know why the consumer is behaving the way they are; and may point to ways to guide them on the path you want them to take.

2. Work with your media partner on pricing. They want to sell, you want to buy. If they won't budge on pricing, push for value-add inventory to reach the eCPM you need to make a campaign work. Sometimes media companies have to stick to a baseline CPM, but may be able to deliver the number you need with value-add inventory.

3. Listen to the advice of the media partner to learn what's working on their sites. They can't give you confidential information, but they certainly can guide you in the right direction.

4. Track conversions and share the information with the media company. Working with the same numbers, both marketer and media partner can create the best, win-win opportunity.

5. Chill. Everyone else is stressed out about so much stuff these days, no one needs to add to it. Not everything is going to work out perfectly, and you will have successes. Mutually treating each other well will create a more desirable and productive relationship.

6. If you've got to cut your budgets, talk with the media partner to see what options they can provide to you. You might be surprised at how flexible ad sellers are these days, even in digital media.

7. Share future plans with your media partner, confidentially, to help them understand your goals and objectives so that they can develop placement opportunities for you.

8. Keep in mind that your competitors may--correctly--see the current environment as an opportunity to gain market share more cheaply through reduced advertising costs. When a non-marketer in your company throws down the gauntlet to you to cut ad spending, the best reply is to ask, "why do we want to cut sales and market share now, of all times?" Of course, smiling innocently as you say this will make the comment go over much better.

9. Ask your media partner for ongoing and consultative support to make your campaigns even more successful. You should expect them to provide you with suggestions, strategies and tactics, as well as insights.

At Intermarkets, we strive to provide all of this to our clients, all the time. It's astounding how many ad sellers wouldn't even call clients back just a few months ago; now they're having to cold call prospects.

What a difference a few months make.

--Kevin

Interesting thing on ESPN...

Sorry if this is old news, but the other day I noticed on Jim Rome's show on ESPN that for several minutes, the screen showed what looked like a Web page, with Jim Rome's show in the upper right corner, rightfully taking up a large part of the screen, while the rest of the screen showed a sports ticker, and some text boxes. I was on a treadmill when this occured, reading a very engrossing book, so I only noticed this spectacle for a moment.

Is this the future of television, especially with the upcoming broadcast conversion in 2009?

Maybe that "convergence" thing (that is, a variety of media devices and services combining into one platform) really is going to happen.

Imagine the possibilities...!