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Why Direct Response Online Still Reigns Supreme

  |  August 21, 2001   |  Comments

Despite all the studies, why are so many advertisers still reluctant to use the digital medium as a tool for any kind of marketing save direct response and customer acquisition? Why do clients still call for pay-for-performance media deals?

As you know, CBS MarketWatch.com has eliminated clicks as a data point from the regular online campaign reports that it provides its clients.

Studies in recent months (from entities such as the Interactive Advertising Bureau [IAB], MSN, Diameter, and CNET, some in conjunction with Dynamic Logic) indicate that branding metrics can indeed be positively affected by advertising on the Web.

Interactive marketing units (IMUs) beyond simple banners and tiles are finding wider acceptance and seeing greater use.

And, imperfect though they might be, IAB guidelines for more complex rich media are finding an audience with publishers previously reticent to place on their sites any advertising unit other than the standard banner.

So why are so many advertisers still reluctant to use the digital medium as a tool for any kind of marketing save direct response and customer acquisition? Why do the majority of my clients still call for pay-for-performance media deals? Why is it that "cost-per" metrics still have primacy when determining the success or failure of an online advertising campaign?

One of the commonly heard answers is that advertisers haven't been provided with adequate evidence that the online media space can accomplish branding the way other media can -- that once Web advertising is deemed capable of facilitating some form of branding, then more advertisers will put dollars into the medium.

But this is a disingenuous position. Not only do the aforementioned studies provide evidence of online advertising's ability to positively brand a product or service, but so have numerous other studies conducted over the last few years. Since the IAB/Millward Brown online advertising effectiveness study of 1997, plenty of data has been gathered to show that the Web can affect awareness and branding. I recently talked to Rex Briggs, founder and currently president of Marketing Evolution, and formerly of Millward Brown and HotWired; he said there were probably a thousand or so studies and reports that demonstrate the effectiveness of online advertising beyond just that of ancillary sales channel.

So, what's the real problem on this front?

Lack of salesmanship on the part of the agencies, for one. All of this data is available, but agencies simply do not work hard enough to merchandise it to their clients. There are two reasons for this:

  • Interactive agencies don't quite understand what the reports mean beyond their conclusions: Branding happens online. Most interactive shops do not have foundations in traditional media and marketing, and so the branding metrics being referred to lack a broader context that the online media folks are familiar with. This, in turn, leads to a kind of muddy interpretation of the studies that do not translate for the client.

  • Traditional shops never learn about the studies. Traditional agencies, still a little out of the loop on digital marketing goings-on, might not be aware of all the branding data available and so can't bring it before their clients. Coupled with a lack of motivation and incentive for being up to speed on what is happening in the digital marketing space, they remain blissfully unaware or numbly indifferent.
This, of course, opens the doors for large, well-branded publishers to step in, with the likes of MSN, Yahoo, and AOL declaring that they will be the digital marketing "sperm-to-worm" solution for large advertisers entering the space -- going around agencies, directly to clients and coaxing those clients to engage through zillion-dollar deals with only them.

However, the biggest reason online advertising is still looked upon primarily as a direct-response medium is because it can be one.

Considering the amount of data that an online advertising campaign can yield, it simply lends itself to being seen and used only in the light of an acquisition tool. This is not to say that it cannot be used in more robust ways, as ample evidence proves that it can. But as the most accountable medium, a trait that the industry was anxious to tout at the doors of the delivery room when it was born, it simply cannot avoid being looked at and used in this way.

The Web as an advertising medium continues to evolve in interesting and exciting ways, and we as an industry will see it find a place as a branding vehicle more and more. But we should not hiss in disgust when clients say they want to cut some cost-per-acquisition deals or are only interested in using direct-response metrics to determine success.

If interactive agencies or interactive departments within traditional agencies want to evolve with the industry, they need to get smart about what traditional advertisers want while understanding that the original killer app of online advertising is still one of its killer apps -- namely, the accountability it brings to not only advertising within itself but to advertising in general.

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Jim Meskauskas Jim Meskauskas has had a long career in both traditional and interactive media. He was most recently the Chief Internet Strategist at Mediasmith Inc., where he worked with a range of clients -- from BabyCenter and CBS MarketWatch to Eidos Interactive, Roxio, and LuckySurf. He has also been in media at Hawk Media, Left Field, and USWeb/CKS. He is a founding board member of the Society for Internet Advancement San Francisco, where he oversaw communications. Jim is now developing an independent media consultancy called Media Darwin.

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