The (Old) Spring Creek Group Blog

Blog Moving (For the Sake of Site Integration)

Well, at long last, we've decided to move the company blog over to our company site (shocker).

You can find the new blog here:

http://www.SpringCreekGroup.com/blog

[Note that our feed remains the same, via Feedburner:
http://feeds.feedburner.com/springcreekgroup ]

Cheers.

On the Differences Between Brand and Direct Response Marketing Online

This blog post succinctly articulates the main issue holding significant brand marketing dollars back from the Web today: the lack of a cogent model and methodology whereby brand marketing can be evaluated for its effectiveness in widening the TOP of the customer acquisition and sales funnel (both online and offline) rather than increasing velocity THROUGH the funnel directly through to online sales.   

Today, almost every marketing dollar spent online is judged according to the direct downstream ROI it generates in terms of direct response ecommerce sales. As Joe says in his post, "...the sum value of all impressions on the Internet can only be equal in value to the sum total of all ROI on fully optimized direct response campaigns."  The conclusion, of course, being that, "...there is still no accounting for branding..."

All other channels (TV, print, radio, etc.) don't work this way... their marketing effectiveness is measured "ex post" by correlating these investments with subsequent (and, where possible, attributable) upticks in either revenues in a given geographic market and/or something like "unaided positive brand awareness among target audience" (usually measured through expensive and time-consuming market research exercises, which we all know have significant inherent bias baked in).

Until this problem is solved in a clever, widely adopted way, there is likely to be a continuing gap between the size of the potential brand reach opportunity online (which is growing every day, with the steady increases in Web usage by American and international consumers at the expense of other forms of media and content) and the willingness of marketers (and their proxies on Madison Avenue) to accelerate the shift of brand marketing campaign dollars on to the Web.

An interesting and significant challenge that all marketing agencies who focus on the Web, as we do, will continue to struggle with.

Cheers.

FTC "Do Not Track" Proposal Review Brings Out Privacy Advocates

...and it may just change the direction of momentum on "behavioral targeting" based online advertising techniques and the promise of 'right ad, right place, right time, right price' that many in and around the ad networks are now chasing as the holy grail.   

If the volume of outspoken privacy proponents on blogs like this one are any indication, there seems to be an awful lot of "fear and loathing" still out there around the topic of tracking, cookies, and targeting. [Apparently a lot of people don't mind - even prefer - the tradeoff of less relevant advertising in exchange for more behavioral data protection. This seems like another example of psychology vs. economics, namely that not every sociological behavior can be explained solely using clever tools of economic theory, because the simple fact is that most human beings aren't perfectly rational.  See: The inability of economists to develop a cogent theory explaining tipping -- similar to explaining why anyone would pay more than nothing voluntarily for Radiohead's new album, as I recently did (3 pounds sterling, an increasingly princely sum with the weakening of the dollar, Thom Yorke you can thank me with a short comment post to this blog when you are ready...)].

If the American Internet-surfing public gains the opportunity to remove themselves from Web tracking, does that blow a large-type hole in the online ad networks' ability to command above-remnant rates for their inventory in the long-run?..... Or will this whole conversation ultimately be inconsequential to the larger trend of aggressively skyrocketing marketing and media spend online?

Time will tell.

Either way, brand marketers (and the agencies who serve them) are going to need access to Web media planning and buying tools that are more effective and more efficient than a room full of grey matter if they are going to keep growing their ROI at a comparable pace to their growth in spend.  And they are going to need tools that rely on more than just clickstream and cookie data, it would appear...

Display Advertising Enters the "Everyone Can Do It" Era

AdReady launched (in beta, but you know, beta is the new gold when it comes to web services) today. Pretty cool. Yet another nail in the (slowly being lowered, but still...) coffin of online media buying requiring actual human beings (read: agencies).

Very interesting. We're going to try it out for SCG and just see how the user experience goes...

Nike and the Shift of Brand Advertising Budgets Online

There is a fascinating article in last Sunday's New York Times about Nike as the poster child for innovative "one to one" marketing via Internet affinity sites, community-building, and straight-to-Internet branding initiatives.  This article is a must-read for those in the Web marketing space.

Also interesting to review is the multi-media graphic chart which accompanies the article -- a telling sign of the shift of major CPG brand advertising dollars from "traditional" brand channels like television and print on to the Internet.... including Web-marketing initiatives that can't even be classified according to typical media buying categories (kind of describes most interactive marketing initiatives, doesn't it?).

 

Awesome pull-quote from Trevor Edwards, Nike's SVP for Global Brand: “We’re not in the business of keeping the media companies alive,” Mr. Edwards says he tells many media executives. “We’re in the business of connecting with consumers.”

The shots heard 'round Madison Avenue (and at 30 Rock, Burbank, Century City, etc.) keep getting fired, louder and louder.

Advertising budget allocations for top brand advertising companies graphic available after the jump here.

The Truth About Meaningful Online Advertising Metrics

Scott Karp has an interesting post up about how FUD is slowing the adoption of online advertising by a surprisingly large percentage of established businesses.  His commentary is in response to a recently released McKinsey study on the perceptions and digital marketing plans of major corporations in five different sectors.

While Scott's reasoning is sound and more or less representative of the conventional wisdom among the digerati, it fails to acknowledge the fundamental structural barriers that are at the heart of what appears to those of us on this side of the digital advertising divide to be a maddeningly slow rate of adoption of online marketers.

In order to understand why it might be that many businesses appear slow to embrace the medium it's necessary to examine the value chain along which a particular business sits.  Many of the largest companies with the most recognizable brands in the world do not sell directly to consumers.  They sell to companies that in turn sell to consumers.  Look within the pharmaceutical, apparel, and packaged goods industries and there are numerous F500 examples of corporations that spend billions of dollars on advertising but do not sell directly to consumers.  What does an online "conversion" or "acquisition" or "action" really mean to a business with a model like this and how does one measure such things when they probably don't occur on a site in the control of the business?

What these businesses are attempting to do through advertising is reach as many people as possible with messages and enticements to get them to go to one of the many conveniently located and enticingly merchandised points of sale (POS) and buy their product.

The order "funnel" for businesses like these isn't nearly so attenuated.  There isn't one point-of-sale or Website there are 10, 100, or 500 and only one (if they're lucky) is under their control.  Another term for this reality is "channel conflict".  Online advertising today is predominantly direct response and yet many of the world's largest businesses with the biggest brands aren't interested in or capable of running direct response campaigns.

Following are a couple of illustrative examples of the point I'm trying to make:

1.    If you're the Charmin brand manager at P&G, does it make more sense to spend $10MM on TV or keywords+display?
2.    If you're running the TV and Home Entertainment business at Sony, will your large retail customers like Best Buy be happy to find out that you're aggressively buying online media at the expense of fewer TV spots in their best markets?  Do you have the metrics to show that your online ad campaign drove sales across channels for the majority of your customers?

Until recently, I had thought that traditional measures like reach and frequency would cease to be meaningful as soon as large advertisers discovered the wonders of performance marketing online.  My thinking has changed on this topic for the simple fact that direct response advertising and marketing doesn't make sense for every industry and yet the planning, buying, and measurement of online advertising force us down that path.

There is a huge opportunity for businesses that can bridge the gap between the strategic value of advertising to a large number of companies and the manner in which the value of online advertising today is captured, measured, and evaluated.

Those of us in online advertising may yet have a thing or two to learn from "traditional" advertising.