The Next Scandal in Online Advertising Is…

Harder to do online?

It has been a rough year for online advertising, mostly from two long-standing concerns, both of which seem to be gaining in importance. The first is privacy, the second is viewability. But with other media choices having their own issues, and the field doing well in terms of increased reach via mobile, the tide seems to be turning on the pure numbers. But we are not out of the woods yet, at least to my eyes, because I see a fresh problem on the horizon.

To explain it, I will need to go through a brief history lesson.

In 1977 in the U.S., Congress passed the Community Reinvestment Act. The purpose of the bill was to end the practice of redlining, which was where financial institutions would use maps to discriminate against lenders, primarily in minority areas. Redlining goes beyond cautious lending and straight into discrimination, as it does not take the individual’s qualifications or trustworthiness into account. It also seems like something that the free market would punish, since a redlining institution leaves money on the table, but that is not the point I am trying to make here.

What is intriguing about online marketing and advertising is how even though the technology is new and ever-changing, the challenges are the same as before. Offer, list, creative, in roughly the same ratios as before, for direct. Context, timing and buying cycle, with benefits for cross-channel penetration and frequency. And in the case of remarketing / retargeting, combined with cookie information or device targeting… well, redlining. But this time, it’s more about the individual.

Let’s take this out of the theoretical, so we can make this a little easier to understand.

Two different prospects come to an apparel site that caters to style-forward affluent individuals in the 18 to 25 demographic. The first is highly active on several social media sites, creates content on their own, and is highly active in the category. They also add items to a cart easily, abandon those items often, revisit on mobile, and do not respond to email.

The second prospect comes to the same site for the first time. The visit is out of character or category for the individual, as they usually spend their time on content sites that do not index to the apparel demographic. They are less active in social, spend much more time with email, and do not have the same level of use from mobile.

In the first case, we likely have a dramatically better prospect for lifetime value and referrals – and, in all likelihood, one that is much more sensitive on price. The second is, at best, someone who might use the site periodically for gifting purposes. At worst, we might be in the realm of a fraudulent purchase.

From a business standpoint, it makes sense to float the first profile a better price. In any event, it makes sense to pitch them on a loyalty program, which is a relatively uncontroversial way to offer different pricing levels. But it also makes sense to make the more competitive deal right away.

So far, we are still on the side of defensible business decisions and matching the individual prospect. Nothing too controversial here, unless you are the second prospect, and find out about the practice. 

But it is a very short, very slippery slope into more unseemly areas, where the higher price comes because a brand wants not to reward a higher lifetime value prospect, but to “protect” the brand by having it more likely to appear with desired demographics. The capacity for abuse is, of course, a lot greater with bigger ticket items like financial services, and much easier to disguise, since it is not on an easy to comprehend discrimination level, like a map.

Targeting allows for all of this to happen not in a dark future dystopia, but right now. Public relations risk and the sheer complexity involved in multiple pricing models makes it unlikely, not impossible. There are already recent news stories about how cell phone companies are complicit in the practice, by the way. This isn’t a problem in theory.

Some of these moves may be defensible, both in a court of law and in the court of public opinion… and in all likelihood, it will not be the last that you have heard of it. Especially in an election year, with net neutrality showing as something that activates public interest.

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Speaking of a targeting with a relevant offer, I would like to ask you to like or share this column, connect with me on LinkedIn, email me at davidlmountain at gmail dot com, or hit the RFP box at the top right of the page. The RFPs are always free. Hope to hear from you soon.

The End Of Agencies?

Fade to Black

Much noise this week in my social media feed about how agencies are endangered by the coming changes in marketing and advertising. The theory is that the current way of doing things for the big ticket items in media -- interruptive ads for mass-market brands, with standardized creative -- is going to go away when the last mile of connectivity gets, well, connected.

Let's back to that down out of the jargon, and put it in terms eveyone can understand. Instead of, say, 30-second spots for tires, a family movie, and an expensive sedan to appear in the middle of my preferred TV content, data would allow for the swap out of advertisers that are more relevant to my current purchasing cycles. Say, auto insurance in the weeks before my next six-month auto premium is due, beer that's in my range of past preferences, and a mobile gaming app, because people in my household are into that category. Eventually, this leads to no untargeted mass-market campaigns, or at the very least, a whole lot less of them.

And, well, sure... but only if you are in market for something more lucrative than those less targeted branding approaches. Currently, we don't have enough data to make exceptionally accurate determinations on how much each of these advertising opportunities are truly worth. Direct marketing plays, or online approaches where the branding impact isn't thought to be strong enough to bill, are a different story.

What I think is the more likely end game is a mix of placements. While we currently have local and national campaigns in, say, a basic cable run of broadcast ads. Having the ability to swap in some branding spots triggered by retargeting bids is just the logical next step. More importantly, it's hard to see how those kinds of ads would just be so much more lucrative as to overwhelm the brand spots. But the market will drive.

Where the monkey wrench hits the gears is when more devices come online, and more consumer categories join the mix. Consider wearable technology, where connected items might have, say, the ability to monitor your blood pressure and heart rate for exercise. If it's also able to monitor for spikes, we have the ability to do more cost-efficient and effective healthcare. We also have the ability to advertise over the counter pharmaceuticals to that same targeted audience.

This raises privacy concerns, of course, but the nature of privacy discussions online has been a simple one. Consumers don't care very much, so long as they see any kind of benefit for the exchange of information, and you are upfront and not very excited about the ask for the data. Also, the younger you are, the less offended you seem to be by the approach.

Realistically, there just isn't going to be enough ROI for hyper-targeted broadcast ads for anything but the most over-the-top high margin consumer categories. Which means that the traditional agency still gets to make all of the same ads that they are making right now, and many of the same buys. Hopefully, those ads will just get shown to fewer people, because they will only be going to the folks who are in the right consumer category and lifecycle moment.

That doesn't strike me as the end of agencies. It does, however, strike me as the end of dumb ones. But those folks were always going to go away, right?

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Something else that isn't ending: me asking you to connect with me on LinkedIn, email me at davidlmountain at gmail dot com, or hit the RFP box at top right. .

In addition to copywriting, direction and strategy, we also provide design, illustration, photography, coding and hosting. Tell us what you need done, and your budget, and we'll work out an RFP.

In Defense of Remarketing

Well, that's constructive

Seen tonight in my feed: a "Green Eggs and Ham" style illustration sequence, from a UK content provider, of how everyone hates remarketing.

Sigh. Well, once more into the fray, dear friends.

First off, the linguist in me hates the laziness. If you make universal generalizations about people in any grouping, you are on the express train to Idiot Town, and that train is making no stops. Doing the same thing with a business practice is no better. Be more exact in your ranting.

Secondly, the sentiment it fails on the metrics. If people hated remarketing more than untargeted advertising, it would not be a business, let alone a multiplier on performance metrics. Feel free to slip in the old adage of the opposite of love is not hate, it's indifference. Higher performance is not consistent with hate, especially in a maturing market.

Next, the statement assumes that all remarketing is executed the same, or that the practice is such a universal commodity that it can be summed up without any kind of qualifier in regards to creative execution, publisher mix, dynamic recs, and so on. I would argue that if you are remarketing the same for 0 to 3 day as you might 3 to 7, 7 to 14, 14 to 30 and 30+... well, that's remarketing that everyone should hate. Because no one should like to see money left on the table, let alone a sledgehammer approach to brand and offer awareness. (Small aside: why is it OK to see a million replays of the same ad offline, but not online? Ah, right, branding.) If you can honor where your prospect is in the buying cycle, you should. Any competent remarketer should let you do that.

And finally... well, this is something of a good news moment, because it avoids a problem that has been plaguing display ads, especially in RTB platforms, but to hate remarketing, you have to see it. Which means the ads are not appearing below the fold, on bot sites, or to hacked machines where it all adds up to Not Seen By A Human Traffic.

Nevertheless, let us take away the core of the complaint, and edit it to something that is more accurate. Many people are annoyed by remarketing. That's something we can all agree on, right? Well, actually, not me, because it falls back into the status quo issue. To wit... no one is bothered by untargeted ads with weak frequency, because no one notices those ads in the first place. And we're back to that indifference moment.

Remarketing ads, when they are noticed, work because they are graphically relevant to the user. If the advertiser is executing beyond a static and sad level (i.e., no variation on recency), they can easily deliver different offers and dynamic products, and potentially delight a user that was on the fence, or now finding a better deal. When they do not work, it is because the user is out of cycle for the advertiser, but the remarketing / RTB buyer does not know enough to turn off the frequency. (Also, that the industry has not done enough to publicize how Ghostery watermarks work to turn off a campaign. Top right logo mark, folks. Takes two clicks and five seconds. Compare that to getting off someone's telemarketing or direct mail list. Even an unsub from an email list is slow in comparison.)

Sure, there are issues. Having items show on shared screens, or in sensitive categories, can be inconvenient and embarrassing. There is a threat to profit margins for vendors when we teach price-shopper consumers to always abandon the cart and look for the remarketing ads with a discount. All of these concerns are valid and legitimate, and will eventually shake out as companies that are more efficient consolidate the industry. We are not in the final flower of remarketing, just as we are not in the final flower of online advertising.

Remarketing is progress from what marketers could do before. It is a step up in revenue for publishers. It is a step up in relevance for consumers. Progress is almost never smooth and perfect, but it is, well, an overall good thing.

And hating progress is, well, hateful.

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Speaking of progress, I'd like you to move forward and connect with me on LinkedIn, email me at davidlmountain at gmail dot com, or hit the quote box at top right.

In addition to copywriting, direction and strategy, we also provide design, illustration, photography, coding and hosting. Tell us what you need done, and your budget, and we'll work out an RFP.