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Much of it these days is direct-response focused

Jun 10, 2009

When it comes to digital marketing, there’s search engine optimization, email and e-newsletters, and then there’s everything else. Those three platforms are by far the most popular among senior-level media decision-makers, chief marketing officers and other C-suite executives surveyed by Forbes for its 2009 ad effectiveness survey. Nearly three-quarters, 74 percent, of respondents said they had used one of the three, and that figure rose to 86 percent for SEO among marketers with budgets of $1 million or more. The survey found that while almost 60 percent of respondents have used pay-per-click ads, fewer than 30 percent have employed behavioral targeting, partly due to fears of customer backlash. Marketers with bigger budgets were more likely to use a wider range of digital marketing methods, including site or page sponsorship, viral marketing and ad networks. Respondents were the least satisfied with ad networks, with half saying the results did not meet their expectations. Jim Spanfeller, president and CEO at Forbes.com, talks to Media Life about the pitfalls of ad networks, the promise of behavioral targeting, and the importance of brand metrics.


What did you find most interesting or most surprising about this study?

I was struck by the low number of clients that are using brand metrics [measuring a return on brand investment]. There is an ability to take and do metrics that’s not necessarily available in other media, and not doing them seems like a miss.

What’s happened, I think, is because of the economy and the ad network model, and of course search, the web has been tilted back toward direct-response thinking and away from branding.

That had been an issue in the early days of the web.

What is the most important thing media buyers and planners can take from it?

The low faith in ad networks.

It doesn’t mean all ad networks are bad, but the use of ad networks has to be a considered thought. The low sense of success around the ad network model should certainly come into play during the agency process.

Why are SEO, email marketing and e-newsletter marketing so popular among the respondents? What advantages do they offer over other forms of digital marketing?

I think it’s pretty transparent.

If you’re using online marketing for direct-response-focused activities, those three are the most DR-focused tactics. So it makes sense to me, and it seems to support the DR branding paradigm.

Why was there some dissatisfaction with the results from ad networks? How could they address this to marketers' satisfaction?

Advertising is about frequency as well as reach. So my guess is over time is the true backend metrics have been less successful than was initially perceived, but I don’t know that for a fact.

This is conjecture, not fact, but there may have been dissatisfaction because advertising is about frequency and reach whereas ad networks are about demand fulfillment, which often results in low frequency.

Respondents cited fear of customer backlash as one concern about behavioral targeting. Since this sort of advertising would seem to have many potential benefits, what can sites do to ease marketers' concern about such backlash?

The vast amount of data that’s being captured and traded, the majority of it is unknown to the end user. I think some scary moments arise when end users become aware of the tactics being applied to them.

There are a lot of the less-good ad networks that will have questionable placements, such as ads on sites or pages that aren’t what the client hoped for.

Then you can have brand destruction. If you think about losing even 2 percent of pricing power against a high-purchase item, say a car, that math can get awful scary.


Why is viral marketing poised for an uptick in marketing spending?

My theory is I think this is an outgrowth of the huge growth of social network sites. The industry has gone out and tried to use MySpace, Facebook and others in traditional advertising, and it hasn’t really worked.

But there’s such widespread use of those that the general feeling is there has to be a pony in there somewhere. And that may just be viral.

How do the results of this survey compare to similar surveys you've done in the past? How have marketers' attitudes changed over the past few years?

I think it’s gone in waves.

If the economy improves, the pendulum will swing back a bit. When more and more knowledge becomes available you’ll see a shift back to some sort of a more equitable mix between DR and branding.

What were the major differences in responses from those with digital budgets of $1MM and total respondents? What particular concerns do they have?

I think the ones with the higher budgets had more data and were therefore more informed. More spending equals more data.



Diego Vasquez is a staff writer for Media Life.




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