Online Advertising Companies are Dead in the Water - Why The Industry Will Fail

Times are tough out there. As the global economy sours, funding is getting harder and harder to come by… and big media conglomerates are starting to feel the pressure just as much as Wall Street. As more and more businesses turn in losses… people are going out of business faster than ever before. And the worst part? You thought you were safe!

Here’s a news flash to those of you that thought, for some reason, that the internet isn’t tied to the globalized economy… it is. The problems that the companies based in technology face can be just as gruesome as what your local McDonalds or Best Buy deal with on a day to day basis. One thing that most people trying to make money online don’t realize is that online advertising companies are pretty much dead in the water at this point in time. Let’s talk about why.

Online Advertising Speculators Create a Bubble

People throw fits when someone says there is an economic “bubble” that is about to pop. So what is a bubble? Essentially, when everyone rushes into the “next big thing,” it creates an over-hyped market where everyone is doubled-down and nobody realizes that things aren’t as good as they seem. An example of this was the technology boom in 2001 or the crude oil craze earlier this year.

An undiscovered bubble has been made in online advertising, an arena where more than 300 online-ad networks have started up over the past few years alone. The Wall Street Journal itself called online ad brokering “one of the most popular, and crowded, niches on the Internet.” Truth be told, there are WAY too many companies servicing ads right now, and they are going to get hammered because there haven’t been that many new opportunities opened up in the same period of time. In fact, it’s not even close!

The Online Collapse Has Already Begun

So yeah, there are obviously way too many competitors in this business for everyone to be the next Google. Everybody know it, yet people continue to jump in as if nothing is wrong and there is plenty of wealth to spread around. Just this month alone, JellyCloud, an ad network that had raised over $11.5 million in venture capital this year, closed its doors.

Well maybe only a few small players are getting hit? Think again. Look at AdBrite, one of the biggest companies on the net with more than $35 million in capital funding raised to date. AdBrite actually cut a whopping 40% of their workforce just to stay profitable. Time Warner said in September that its AOL unit, which has over $1 billion invested, was “experiencing softening in major ad categories.”

Online Ad Networks Anxiously Seek Suitors

Now that everyone (except for you) understands that the industry is in chaos, people have been scrambling about looking for someone to potentially buy them. People want to jump ship… and that is never a good sign. I mean come on, I support around 6-7 internet marketing networks on this blog alone and more contact me every day! “Ad networks like Burst Media, the 17th-largest by unique visitors, and Collective Media, the 16th largest, say they are both seeking buyers” according to Emily Steel of the Wall Street Journal. What to make of this? Companies would prefer to be bought out then to continue their operations in vain.

No More Funding… Get Ready for the Long Haul

In good economic times, people are more than willing to open up their wallets for advertising and whatnot. Marketing companies are feeling constrained now because nobody is spending, and nobody is funding. It used to be a case of simply asking for money… and you’d have instant venture capital. Now, not so much… and there is a big panic all around an industry where companies made big bets, assuming that things would be recession proof all the way. In reality, lots of ad deals that were in the pipeline are being reduced or pulled completely.

This morning (October 30th), BMO Capital’s Leland Westefield gave us a fresh look at how the online ad industry have really fared through hard times. Westefield noted that for the ad business, this will be “an unparalleled recession in severity and duration in the post-World War II era.” As consumer and commercial spending continues to fall into the red… it’s going to be rough sailing for ad companies that were enjoying consistent growth in the post-tech bubble era.

So What Can You Do? Looking Forward.

Is this all doom and gloom? No, not really. The ad industry is still growing at a solid double-digit tick in many areas of the market. However, you need to realize that a lot of these ad companies are having a hard time staying afloat. Many of you remember how CPA Empire was accused of shaving profits from one of their customers… I honestly believe it completely, because times are tough and people will try to stay profitable.

Barron’s predicts that it won’t be until 2010 that we see ad agencies return to “business as usual.” I totally agree with this assessment, and feel that it won’t be until one year from now when you’ll start to see things rebounding and coming on strong. I believe that we have a long way to go, and the industry is about to consolidate as smaller companies are gobbled up or bankrupted by a vicious investing environment.

As an internet marketer… don’t worry too much. Keep your head on straight, and your profits won’t drop off too much, despite the flailing industry you work under. There will always be affiliate business to be exploited for cash… so stay in the game and hope for a better tomorrow. One thing: maybe you should start buying some sympathy cards for the marketers that are about to dance with unemployment.

Source: http://www.thenetfool.com/online-advertising-dead-in-the-water/

Komli Media & Vizu Announce Exclusive Partnership for India

Indian advertisers can now utilize Vizu’s pioneering technology to measure the branding impact of online campaigns

November 24^th, 2008 (Mumbai, India) – Komli Media (www.komli.com), India’s leading digital advertising and technology company, and Vizu Corporation (www.vizu.com), the leading online brand advertising measurement system, today announced a strategic alliance for the Indian market. Under the terms of this partnership, Komli Media will exclusively deliver Vizu’s Ad Catalyst technology in India, bringing a relevant brand campaign performance metric to brand advertisers and agencies.

Vizu’s Ad Catalyst product provides a rich set of brand advertising data that measures advertising induced changes in key customer perceptions and intentions. This data is delivered through a sophisticated, easy to use dashboard in real-time. As a result, marketers can reliably and regularly measure appropriate return-on-investment for online brand advertising campaigns for the first time. This real-time, self-service brand advertising measurement system is currently used to track brand ad effectiveness for numerous clients including high-profile consumer brands and leading digital agencies.

Amar Goel, CEO & Founder, Komli said, “Komli is committed to developing and introducing the most innovative products in the online advertising industry in India. We are delighted to partner with Vizu and bring their path-breaking approach to the measurement of online brand spends to the Indian market. Evaluating the impact of online brand spends is a critical need in this marketplace and Vizu’s Ad Catalyst is just the right product to address that need.”

“Vizu is delighted to be working with Komli to bring the benefits of our Ad Catalyst online brand advertising measurement system to the growing Indian market,” said Dan Beltramo, co-founder and CEO of Vizu. “Using Brand Lift as a metric to determine the effectiveness of online brand advertising campaigns is an important digital advertising industry innovation that continues to be adopted by global brands and agencies at a rapid pace.”

In light of this new partnership, Indian advertisers can now receive broad insights into their online brand advertising investments. Vizu measures the performance of online brand advertising campaigns, using Brand Lift as the metric rather than click-through rates which are generally inappropriate for brand building campaigns. This brand focus separates Ad Catalyst from other online advertisement measurement technologies with roots in direct response advertising.

About Vizu:
Vizu is the leading online brand advertising measurement system. Our Ad Catalyst real-time measurement infrastructure for assessing ad campaign effectiveness provides powerful benefits for publishers and advertisers. Through the use of Ad Catalyst, our clients gain actionable Brand Lift data on their online advertising campaigns, giving them a powerful advertising ROI metric. Vizu is a privately-held company based in San Francisco, CA, with backing from leading venture capital firms Draper Fisher Jurvetson and Greycroft Partners. For more information visit www.vizu.com - Advertise With Confidence.

About Komli Media:
Komli Media is a digital advertising and technology company enabling marketers to reach and acquire their audiences and publishers to maximize their revenues. Komli Media powers India’s leading ad network platform with solutions across lead acquisition, targeting, rich media and measurement. Headquartered in Mumbai, with an engineering centre in Pune, Komli Media is also located in Delhi (India) and New York (US). For more information log on to www.komli.com.

For further press information, please contact:

If you have any questions please email press@komli.com or visit Komli at http://www.komli.com. You can also reach Komli at +91 22 26613185 (Mumbai Office) or +1 (650) 641 2745 (New York Office).

Google Ad Planner now accessible to anyone with a Google account

Google has made its free online media planning tool Google Ad Planner , which was till now available to select agencies, accessible to anyone with a Google account.

According to the company, Google Ad Planner helps agencies to improve their media planning process by letting them know unique users, page views, and other data for millions of websites from over 40 countries.

Google Ad Planner can also help users identify websites their target customers are likely to visit and define audiences by demographics and interests. It can also allow users to generate aggregated website statistics for their media plan.

Source: http://www.alootechie.com/content/google-ad-planner-now-accessible-anyone-with-a-google-account

Google To Replace Online Media Agencies With Ad Planner

Google Ad Planner is a free media planning tool that can help you identify websites your target customers are likely to visit - or so they say. Simply:

Define audiences by demographics and interests.
Search for websites relevant to your target audience.
Access unique users, page views, and other data for millions of websites from over 40 countries.
Easily build media plans for yourself or your clients
Create lists of websites where you’d like to advertise.
Generate aggregated website statistics for your media plan.

Source: http://www.marktd.com/2008/06/google-to-replace-online-media-agencies-with-ad-planner.html

PPC advertising has proved to be very beneficial to all. PPC campaign is one way of generating traffic to your website. Some of the benefits of PPC advertising are:

* Financial Planning – With the help of PPC campaign easily you would be able to set a daily budget. If the campaign is working fine, then it can be increased too. So PPC campaign will depend on daily revenues.

* Targeted campaign – PPC is well-planned target campaign. Here you have the control over the choice of keywords and ensure that the audience targeted come to your website.

* Campaign Flexibility – PPC helps in accentuating the brand name. From time to time one can incorporate the necessary features and keywords. If the given set of keywords is not working for you then easily one can remove them and incorporate the new ones. Quickly you can introduce new advertisement components. This will help in improving the search engine ranking also as you are making some updates on your website.

* You pay for you get - In PPC advertising, you pay according to the number of clicks. Unlike the traditional marketing methods, the main goal of PPC campaign is to guarantee you to pay for the genuine people. Here people carefully decide for what they actually want to read, on careful thought click, and browse through the site.

* Testing Potential – If you have launched a product and would like to know the response you will be getting then you can test run on the website. The number of clicks on the product can be helpful to you in knowing the demand of the product and service. In comparison to traditional selling & advertising method, this will be prove to be less extravagant. Further you can easily measure the success of the program and monitor the advertising technique.

* Instant Result – A well-managed PPC campaign can yield more profits in very short time also. You have the data available for the clicks and money earned readily.

* Brand Awareness – By now you would have realized that PPC helps in creating brand awareness. Even if one doesn’t click the link, they read it when the advertisement appears on the search engine result pages.

To sum up PPC advertising is an easy way to generate traffic and responses. It is an economical way of advertising the products and services as the main crux lies in using the right keyword which can be updated according to current market conditions. Hence, employ an experienced SEO company that has an experience in making effective PPC campaigns, now.

Online advertising in India

Internet advertising was estimated as Rupees 100 crore odd in 2005.

I was asked my client for an advice to estimate his sites potential based rankings, target segment advertisers etc. I gave a report.

However, I noticed some curious things on the banner advertising in India.

As per Alexa India wise rankings ( click here ), Pure Indian websites (I mean non US websites which rank high), went without major banner advertisements for at least past 3 months.

As per todays status

Highest ranking Rediff had just two banners (one very small) on homepage.

Naukri had some good banners, its for recruitment. All India companies face recritment issues. Revenue on recruitments is high.

Indiatimes homepage matches rediff on advertising.

All other sites did not have advertising or just one banner (obviously low cost).

Are banner (read CPM) advertisements dead in India?

My opinion is they are very little. Most banner advertising has bee routed through pay per click channel like google adsense, adbrite, oxado etc. I have seen some Indian media carrying yahoo publisher network (YPN) which had Indian banners. Most non channel advertisements come from companies for recruitment, cricket and specific even based.

Its time to give you a tip. The same client for whom I gave that report, had a text link advertising going in adsense. Guess what?

The client recieved 80,000 impressions at a cost of Rs 400. The major impressions were generated in major of Indian news sites ad portals (ofcourse you guessed it right). Back in 2006, I had asked for 100,000 impression for a client of mine in India times, the representative lady quoted around Rs 200,000 - 500,000 (I don’t want to publicise current figures of Indiatimes).

Why do you think the mainstream ad banners are disappearing?

Source: http://frontierindiatech.com/online-advertising-in-india

Ad Network analysis frequency optimization

Before spending on budget online advertisers looking for some ROI in terms of eCPL or eCPA targets and on the basis of reports renewing the campaigns. Komli media provide us a report which explain how Frequency Optimization Maximizes Efficiency of Online Marketing Spends.












About Komli Media

This originally posted as Komil Media News . It has been reposted with the author’s permission.

Cost Per Lead Model Advertising

With more and more digital agencies mushrooming across India. Everyone is ready to sell the Online medium as 100% performance driven metric with every media property/placement/unique users reverse calculated back to cost per acquisition or cost per lead.

When an year ago we just saw Classifieds and OTA’s like Makemytrip,Naukri,Shaadi, Bharatmatrimony advertising and pushing for CPA model today agencies are pushing same to Financial entities to NGO’s.

Cost per lead campaigns on digital medium have been falling in price points from INR 400 per acquisition to INR 50 per acquisition and trust me their is no science to such except for market economics of marketplace dynamics with players coming in to pick up purchase orders under cutting each other.

At the end of it its the advertiser which is still suffering by even acquiring leads at such price points as their is higher cost to qualify them via call centre which agencies are now starting to realize with increasing number of players ready to give them leads at price points lower than their expectation.

Recent meeting with brand manager of a leading Insurance player shed light on dirty tactics of account managers at digital agencies and how they went in pitched to deliver a great scale of Leads at price point less than INR 75 which was almost 50% less than own media plan estimation of the brand manager. Once they went through with the campaign the agency failed at 2 points

i) Scale was only 10% of what they promised

ii) Quality of Lead was very poor

As a backup the brand manager did run campaign on their price point estimation and properties back calculated from CPM,CPC buys and were able to achieve the required numbers they had estimated easily with quality of lead 10X to what came in from agency.

This brings us to very important junction where what price to pay for what lead. Quality of Lead matrix maintained by lot of brand managers showed on an average lead acquired at price points between INR 140-160 on an media plan have higher conversion ratio to sale. As lower price points you goto for acquiring leads lower the quality of leads. Unfortunately as this feedback to quality of leads is not feed back to the media property owners or ad networks they are not able to improve quality of same and are only able to optimize upto the level of acquistion of lead.

Recently lot of advertisers are promoting use of HTML banners instead of SWF creatives which experienced media planners in agencies are quoting to be saying the biggest source of such junk leads.

In such a scenario it will be very wrong to just blame the ad agencies but even the media owners and biggest of all media aggregators like networks which are not trying to get right feedback on right properties and not optimizing their inventories for quality of leads and continuing to accept campaigns at lower price points and find way to get leads at those price points instead of resolving end advertisers problems.

Source : http://ijsid.wordpress.com/2008/09/19/cost-per-lead-model-advertising-what-price-to-pay-for-leads/

Branding VS Lead Generation

That's all because media planners are treating Ad Network as lead generation machine only to fulfill the lead targets and compromising with the quality and focusing on quantity.

When you go for Call Tracking for Campaign Longevity which shows that CPM is always better then CPL and you go for call tracking which will show you the better result and proves that how the CPM branding can help the advertiser to meet their expectation. But Agencies are targeting towards CPL generation, which leads the Ad Network to think on other ideas to sustain in the market.

Besides that, Advertisers are always looking for branding and looking for ROI, but they need to understand that if ICICI and Relaince are doing the branding activities. On the other hand, if agencies are going to target Ad Network as Lead Genration Machine then Ad Network can approach comparatively brands. Able to sell leads to them at cheaper rate and can generate more money but at point of time Branding going to be in the doom and leading the Ad Networks industry to lead generating machine and if this going to happen in future continuously then Advertisement for branding have no meaning.

Online Advertising Industry challenge India

Online Advertising seems to be the buzzword in the Advertising Industry these days. It is exciting for all of us in the Internet AD world to note that our media, which is still less than 3% of the total Media bought, receives over 50% of the voice share by the Industry gurus and the press. This attention is largely fuelled by the almost 100% year-on-year growth of this medium and the various industry reports suggesting that 80% of all media bought by 2020 would be digital media.
The proof that Internet Advertising works comes from the excellent growth registered by the early adopters such as the jobs, finance, travel & matrimony businesses. These are the businesses who trusted Internet with a large share of their AD budgets and they are the one’s who have to stood to gain returns.

As much as the small success of the Internet Media excites us, what remains a concern is whether we are ready to face the rude challenges thrown up to this industry.

The Challenges…

Adoption of The Medium
With so much of hype around the medium the bitter truth still remains that only 20% of the advertisers have adopted the medium. The biggest challenge today is that Internet is increasingly getting branded as a ROI medium. A few doubts still remain in the minds of the marketers and they doubt whether this should be the medium of choice when it comes to ROI.

There is no problem with seeing the internet as a ROI medium but is approach to the measure of ROI correct. What needs to be corrected is that marketers need to consider Internet advertising as a tool beyond the lead generator. It is high time that we used the more advanced AD Matrix to measure ROI’s on Internet. The Internet might be at the early stage of e-commerce but it is for sure the most preferred & high engagement medium when it comes to influencing one’s perception about a brand or a purchase decision. But, how many (I am sure not many…..) marketers are really using the right Matrix to calculate the ROI.

Check out the success of the I-Coke platform in China – a community of 20 million users and still growing- and the Adidas worldwide platform. When you consider these examples, you will put aside all inhibitions about the possibility of successfully building Brands and Communities on Internet. I am sure these were campaigns launched with goals that beyond CPC, CPL & CPA!

Marketers just need to be more innovative & evolved with the quarterly sales targets not being the “be all and end all” of it.

Critical Mass
It is very disheartening for me when a client says, “well I like everything that Internet can do for me. But you know I am a mass brand and the reach of Internet in India today is not exciting enough for me to put serious time and money behind it”.

Whether the Internet in India has already achieved the critical mass or not is ofcourse, a very subjective and debatable topic. There is still huge growth potential for both the increase of user base and quality inventory. Many more local ideas are available to create compelling content to fuel the growth of Internet in India. It is true that not every business created on the Internet will have the potential to come out with an IPO. But as long as it is an idea with some value for an Internet user, trust me you will be able to run a decently profitable business. We need more entrepreneurs who can fill the huge gap of quality inventory vs demand.

Infrastructure
Whether it is the Internet or the Mobile, bandwidth continues to remain the big roadblock to unleashing the true potential of the medium. Most innovative advertising solutions are bandwidth hungry and to a large extent the growth of broadband and internet advertising are directly proportional. We are all waiting for 3G to make our mobile phones the true convergence device and suddenly we would add up 130 million users. Advertising on the Mobile is going to be big and would give an immediate upside to Online Advertising. Internet advertising agencies will have to gear up to service the needs to Mobile advertising as a lot of Internet Advertising is going to converge with the hand held device.

People
The average age of executives in India’s Internet AD agencies is between 26-27 years. Why are the traditional advertising guys who know so much about Advertising shy of choosing the Internet? Why is it that not many creative gurus of the leading advertising agencies are willing to do Online Advertising? They all believe that Digital is the future yet they are not adopting it. Is it that they are unwilling to learn Online or the clients are willing to invest almost nothing on the Online Creatives. The same guy who spends almost Rs. 25 lakhs on a TV commercial finds if difficult to invest even a lakh on Online Creatives.

Offline Agencies Vs The Online Agencies
As much as the marketers agree that Online is a high engagement medium for the consumers, they also need to realize that the job of Online Agencies is equally high involvement. It will be unfair when the fee’s paid to Online Agencies is benchmarked with the fee’s paid to the Offline agency. The scale and involvement are both not in favor of the Online Agencies to be compared to the offline agencies. Yes you may find a few desperate-for-business agencies taking your mandate on unviable business terms, but be rest assured that the bigger loss is that of the advertiser because he will never receive his money’s worth with this approach. This approach unfortunately also leads to creating a wrong perception towards the effectiveness of the medium.

Localization Of Medium
Finally, there is serious dearth of local Internet inventory today. A lot more needs to be done whether in terms of local/regional content, vernacular advertising, more targeted IP & behavioral advertising. This will not only make Online advertising more targeted & relevant for the national players but shall make way for the yet to be tapped huge SME advertiser market. In a country where organized retail is less than 2%, the potential of the unorganized SME advertiser is too large to be ignored. Companies such as Google Ad Sense and TYROO are doing a great job in helping consolidate the local publishers and advertisers.

While these are all very real challenges being faced by the industry, I am sure they are not insurmountable. The Internet AD world will slowly but surely grab a much larger share of the advertiser’s pie in times to come.

Comments:

1. As far as the hard work is concerned, Online Agencies work much more than Offline Agencies in terms of client satisfaction and ideas or idea implementation. Given the fact that as compared to an Outdoo hoarding/Bill Board on a highway - you are bound to see it for a second if not read it or understand it ; But for Online agencies the job is much tougher to get an idea/concept which will hold that ‘Close Window’ button of the recipient and actually make him see or read what your collateral is.

2. In India,increasing share of online in the advertising is a good sign.Since various studies suggests that it is one of the best ways top reach the customer.More and more people started depending on internet for their needs .Automobile,banking,matrimonial and real estate information portals are gaining popularity.

And if you have your own thought please share with us.

Source: http://www.thinkingaloud.in/2007/02/07/challenges-facing-the-indian-online-advertising-industry/

India’s Internet usage lowest in Asia - Google scores lowly

ComScore, a leader in providing consumer insight behavior reports and research has for the first time come out with a comprehensive review of Internet behavior covering 10 countries in the Asia-Pacific region. The ComScore report revealed that in May there were nearly 284 million people age 15 or older who accessed the Internet from either a home or work computer in the region. This represents 10 percent of the Asian-Pacific population 15 years of age and older.

The average person in the Asia-Pacific region visited the Internet on 13.8 days in the month and spent 20.2 hours viewing 2,171 pages. This compares to the global averages of 17.1 usage days per month, 25.2 hours per month, and 2,519 pages per month, indicating that the Asia-Pacific region?s PC-based Internet usage is somewhat lower than the rest of the world.

Some of the Key finding s from the report are :-

South Korea boasts the greatest rate of Internet usage, with 65 percent of its population using the Internet in May (home and work locations, age 15 or older), followed by Australia (62 percent), New Zealand (60 percent) and Hong Kong (59 percent). India has the lowest penetration at just 3 percent.

• China clearly has the largest online population with 91.5 million people (age 15 or older accessing the Internet from either a home or a work computer in May 2007), but this translates to a penetration of only 9 percent of the country?s population. Japan has 53.7 million users (49 percent penetration) and South Korea 26.3 million (65 percent penetration). Combined, these 3 countries account for 60 percent of the region?s Internet population.
• South Korea has the most active online population, using the Internet an average of 17.4 days per person in May, and dedicating 31.2 hours to viewing 4,546 pages during the month ? twice as many pages as the regional average of 2,171 pages per user.
• New Zealanders constitute the smallest online population in the region (1,949 million people) but are online 16.4 days per month, versus the regional average of 13.8 days.

Asia-Pacific Online Audience Report
May 2007
All Asia-Pacific - Home and Work Locations, Age 15+*
Source: ComScore World Matrix

ComScore has also released a report giving details about the Top 3 popular internet properties accessed in Asia - Pacific. Surprisingly Google has much lower popularity compared to Yahoo in Asia Pacific. Yahoo! Sites are the most popular in the region, ranking in the top three positions in seven of the ten countries studied.

Report: Top 3 web Properties Based on Monthly Unique Visitors

South Korea seems to be moving on completely different path. NHN and Lycos ???
I have not heard about NHN and visited Lycos probably couple of times in last 10 years.

Source: http://trak.in/tags/business/2007/07/22/india-internet-usage-lowest-asia-google-scores-lowly-popular-web20/

Call Tracking for Campaign Longevity

If advertisers and agencies are only tracking the success of online campaigns through clickthrough rates or online conversions, they are missing out on the true value of advertising.

Numerous studies have shown that consumers increasingly use the internet to research upcoming purchases. But did you know that recent data reveals that the majority of consumers are going offline to complete these transactions?

In March of last year, comScore Networks issued a study showing that 63 percent of purchases completed as a direct result of a search query were offline purchases, with 37 percent online.

In fact, this trend is even more significant when consumers search for local information, as shown in a TMP Directional Marketing/comScore proprietary 2007 study measuring consumer usage of all online media sources when looking for localized information.

According to this study, 90 percent of consumers who went on to make a purchase after searching locally completed the transaction offline vs. 10 percent online.

The point is that if advertisers and agencies are only tracking the success of online campaigns through metrics such as an increase in website traffic, clickthrough rate or online conversions, they are missing out on the true value of advertising. Period.

So how does one start recognizing and tracking the offline benefit of online campaigns? One very simple and effective way is to set up a call-tracking line, whereby a unique phone number (local or toll-free) is placed on a website or search engine-sponsored ad. The number routes into the normal phone line allowing the total number of calls received from a specific advertisement to be tracked and reported daily, monthly or any other desired frequency.



In addition to the number of calls, basic call tracking lines can also provide other valuable performance information such as the following:

1. Length of the call
2. Date and time of the calls
3. Basic caller ID data that can then be used to match consumers from initial contact through to purchase
4. Area the call came from via area code or ZIP code

A sample of a basic call-tracking report is shown below:



Below is an example of one of TMPDM's advertisers who was able to see the true value and performance of its local online advertising through the use of call-tracking lines. Without the additional performance tracked via these lines, the campaign would have been discontinued as a result of the client's perception that the advertising had not met the desired cost per lead (CPL) and cost per sale (CPS) metrics. At the time, the campaign was measured solely by total online contacts and sales.

Case study
Situation analysis: A national pest control company was looking to generate additional lead volume at an efficient CPL and CPS rate. A desirable CPL target was set at $20 as well as a target CPS of $50.

TMPDM implemented competitive advertising placements across the top three local search/internet Yellow Pages sites. Although the client didn't typically set up call tracking as part of any of its other online buys, TMPDM was able to negotiate this tracking at no cost to the advertiser for the first year of the campaign.

The Results (January-December 2006):

• Total Ad Investment: $160,230
• Target CPL = $20
• Target CPS = $50

• Results if measured solely on online performance:

As a result of the added performance, the advertiser not only renewed the buy in 2007, but increased the overall campaign more than 200 percent. To date, the advertiser is still generating a large volume of leads and sales from the buy at 20-30 percent below its targeted lead/sales amount.

There are many call-tracking providers, and price points have decreased considerably thanks to some of the newer VoIP-based providers. Some leaders in the field include:

• eStara
• Who's Calling
• Call Source
• VoiceStar

As the lines between online and offline conversion continue to blur, it is more important than ever for marketers to understand the real performance of their campaigns and how each complement and compete with each other. Without this understanding, the advertiser or agency will never really be able to recognize or convey the true performance or ROI of campaign strategies. This may result in missed opportunities or, worse yet, the abandonment of proven, highly performing ad placements.

Stuart McKelvey is CEO, TMP Directional Marketing, the world’s largest local search/yellow pages agency. Read full bio.

Source: http://www.imediaconnection.com/content/15939.asp

Horizontal Vs Vertical Adnetworks


Call 2 publishers in a vertical and tell them to align with you non-exclusively (who says no to a sitting monitory opportunity?), take a “plug & play” 3rd party adserver (there are dozens of commoditised platforms to choose from), and then start your pitch to an advertiser. And you’re good to go.

It’s easier to open a network than launching a website these days. I hear of one opening up every month.

Natural outcome is clutter. Lots of it.

To break away, potential networks have started scampering for cover (read differentiation). One of the easiest one again has to become aligned to a particular vertical.

Such a cosmetic differentiation has the risk of staying just that – cosmetic and might not translate into a ‘must buy’ option for an advertiser.

Let’s take a look at the overall market size for a minute – In 08-09, ad networks are expected to continue to gain momentum with a 30 odd crores billings (6% marketshare). Currently, the top 1-2 Indian horizontal networks are together expected to corner about 75% of this universe, outside of Google. The rest are testing their staying power. With the horizontal game not yet settled down, as to whom the top 1-2 are, I think that the vertical game can only be sliced out once the dust is a bit settled.

Consider this: If you breakup the 500 crores that the Online industry is estimated to do in 08-09, verticals like finance, jobs, travel, matrimony, technology, automobiles take 80% of the chunk. With 6 odd verticals of a certain scalable size, it is narrow enough universe for the horizontal networks to be playing in. Had the vertical channels been a couple of dozen, focus could be something that could have been a focal point of discussion.

Going away from the data for a minute, to start with, for an entrepreneur, a passion for adnetworks comes with the role one thinks networks are positioned to play. It might take a few years to do this, but networks are today best positioned potentially to reach closest to the performance benchmark that Search has set of reaching out to the right user at the right time when intent is strongest. With a page click-through of 20% for Search (each ad on a search page gets roughly a 1-2% clickthrough, multiplied by 10 ads typically on a page), everything else in online advertising is distant – horizontals, social media, emailers, vertical publishers etc.

Today a media planner gets excited with a 1% CTR, so the opportunity gap is very high for the 95% of inventory on the Internet (non-Search). Networks have the potential of coming closest to this benchmark because of the sophisticated platform that they currently use, where audiences are sliced out and inventory is rated according to the performance on a particular type of products. So, as a monetization play, networks have the edge over even horizontals as the latter is a content play primarily.

By starting out as a vertical at this point in India, one is already out of the race of inching closer against Search. Verticals today are opening up so rapidly, because they are essentially content aggregation plays only, with no different platform play.

Coming back to the market - if you go deeper into any of the verticals, there are limited players, in most cases, less than 5 so the longtail around them is not as fragmented as the vertical play would have liked. For a network to call itself aligned to a vertical, it needs to have an exclusive representation of atleast 4-5 players which is difficult to do with such small pockets of supply that are easily accessible to anyone – let alone other networks, but even agencies. If the vertical network doesn’t control a substantial part of the total inventory, say 50% (which is difficult to go with such a small supply pool) by an accepted standard, then again it doesn’t get into the must-buy option. Too much reliance on 4-5 publishers itself in a vertical to have your business model depend on is also downright risky.

Choosing the vertical to play in has its own set of risks. 08-09 hasn’t been a good year for the finance and travel industries in general, and online advertising will also bear a brunt of this. A vertical starting out in an industry going through a rough patch can seriously jeopardise one’s projections for reasons outside one’s control. Horizontals are more insulated from specific industry ups and downs, by switching focus to cover the other critical categories mentioned earlier.

Let’s take this question from another angle – to what a customer really wants from an adnetwork - Scale & Performance.

By slicing out a much smaller niche, albeit a vertical, vertical networks are not viewed as a very scalable audience. Similarly, even so-called premium networks are judged by higher click throughs and leads. Brand monies (without ROI goals) follow to the player who has the perception of performing the best. And that happens, when a network has the history to prove past performance.

And that’s where the greatest challenge for a vertical network with few supply points locked in will find an issue.

Performance is not just a vertical content game. While contextual content works well and the performance of the vertical content leaders proves that, it is just one way that a network uses to target and optimize audiences. As targeting and optimization become more sophisticated, chasing the user irrespective of the content he is viewing real time increases the bandwidth to reach the right user and therefore, performance. To be in the network game for long term, a network will have to have some technology differentiator that its platform or platform top-up brings. The vertical players currently mushrooming are playing more around content, than technology.

Where the horizontal networks have made a dent into is the admonies currently flowing into the horizontal portals, and that’s where the scale opportunity arises. The sheer size of the audience base that horizontal networks, coupled with advanced platforms that horizontal networks are prepared to invest in, give it the potential unfair advantage that a growing company needs. Millions of audience profiles give a network the bandwidth to understand what products work better in which audience profiles, in most cases reactively. It is a ‘learning’ phase, rather than just a sure shot decision based on content.

Now, let’s approach the question from an advertiser point of view. Networks are slowly creeping into media plans these days, consuming roughly 5-10% of an advertiser’s budget typically. An advertiser is just beginning to demystify one network from another. With agencies controlling 80% of the spends, of most big advertisers, they are typically comfortable dealing with 1-2 networks per media plan, usually going by past performance to determine which network works out best for it.

In the US, where the vertical networks have been successful, players like Travel Adnetwork (TAN), Jumpstart etc, the timing of these players came about at a time when players like Ad.com and Tribalfusion matured the market, opened up new categories and the proliferation of content across several players, gave rise to this vertical play.

In India, the horizontals game is still wide open right now, so the verticals will require all the staying power they can muster.

Source: http://www.alootechie.net/content/horizontal-vs-vertical-adnetworks-%E2%80%93-a-view-trenches

Do Websites Require Ad Networks in India

Last couple of days i have been touching base with lot of online publishers across length and breadth of our country and have been hearing lot of commentary on how ESPN decided to go off Specific Media ad network and go solo in selling their inventory. Lot of them echoed they might want to consider following the same path others questioned the whole ad network model and how its in favor of advertisers instead of publishers.

Wont like to iterate what my response to them on same was but what would like to say is one needs to strongly understand dynamics of the industry before deciding what is best for them. Indian Internet Industry or even global for that matter works on lot of different metrics where for large advertisers agencies act as middle man on planners for finding out best performing avenues for spending clients marketing budgets.

Now this performance metrics could be audience reach rather matching of demographics, traffic generated to their message site, actual performance if its a commerce campaign etc.

Now lot of publishers will say we may measure up completely on all these metrics then why arent we able to access these budgets??

i) Agencies dont like to work with lot of publishers. Its too much logistics to manage as ops is last thing they want to specialize on.

ii)Agencies need scale, single point of contact and ability to undo its wrong mid of plan by change of demographics or variety etc. Which in case can mean moving completely from one publisher to another

iii) Agency like to minimize risk on media plans by mitigating to buy directly on CPA and limiting buy on CPM on clients favorites like Yahoo!,Rediff,MSN even their they negotiate on CPC etc.

iv) Agencies dont like to buy user generated content. even with all Web 2.0 - Forums,Blogs etc are still not hit with them for their marketing spends(except performance advertisers again CPA driven buy)

How do ad networks help

In India performance is not the tag or help optimize your inventory is still not some what criteria for selection of ad network. Its pure access to kind of advertisers and their ability to consume scale of your page view inventory.

How to evaluate an Adnetwork for your Site

Whenever you talk to an adnetwork please have following metrics to see if they are the best choice for you or not.

Q1. How many impressions can they consume from you per month?

Like all 10 million page views given can be consumed or not)

Q2. How big is their sales team? How is it spread?

This question will let you understand their accessibility to advertisers and pressence in all major cities like Delhi,Mumbai, Bangalore,Chennai etc talk about their reach.

Q3. Ask what advertiser campaigns are currently in system?

If you get answers on all DOTCOM’s like MMT,Simplymarry.com,naukri.com etc then you should again be little wary as these advertisers are one of the easier access as they are completely performance driven and wont value your inventory for its demographics etc.

Q4. Do they have a self serve model for publisher management?

This is essential for you to monitor on day to day basis performance of your inventory given to them etc.

Q5. Lastly try to find out what special they do to train sales team on advantages of having you on their network?

Do they prepare any media kit for your website announce to advertisers etc.

Till the time you have money and reach with agencies where marketing budgets are low hanging fruit it still makes sense to setup own sales team and control like ESPN otherwise you should take advantage of these ad networks working more as sales representation businesses in India to keep driving revenues from Internet Properties you own.