Advertising Tech Vendor Rivalries Intensify

Will Google’s Comparison Ads, launched in October 2009, grab business from established online lead generation businesses?

Can any ad technology company ever bring order to the unordered world of local advertising?

Will it ever be possible to collect meaningful metrics about mobile advertising performance?

These were among the questions kicked around last week at the BMO Capital Markets Advertising and Marketing Services conference. There, financial executives from ad agency holding companies and chief executives from ad tech companies agreed that online marketing is getting a bigger share of marketing budgets, but there was little agreement on likely winners.

Dan Salmon, BMO Capital’s advertising and marketing services analyst, offered up a list of trends to watch. They include:

  • Real-world objects, such as bridges in Korea, roadways in Japan, and appliances, are using IP-based communications systems, and offering new opportunities for marketing messages.

  • Technology companies are striving to better coordinate online relationships across disparate places, such as e-mail and mobile contact lists and social network friends and followers. “Is there a killer app/platform that unites the mainstream?” Salmon asked. “Globally? Is it Facebook? Google?”
  • Credit card companies engaged in transaction processing are building out marketing services, e.g., American Express Business Insights, established in November 2009, and MasterCard Advisors Merchant Solutions.

Google Watch

What does Google intend to do with Invite Media, a demand side platform it acquired for a reported $81 million? Will it integrate the technology into DoubleClick, offer it as a stand-alone service, or both?

Executives from demand-side platforms and performance marketing companies speculated on whether Google would trample other businesses.

Epic Advertising CEO Don Mathis pointed out that Google, which possesses customer intent data from its search marketing business and owns an ad exchange, can now go directly to display advertisers. “What does this disintermediation mean for the rest of us?” he asked. “We sure hope this looks like the financial services model where Google is a giant aggregator of supply like the New York Stock Exchange or Nasdaq and there is room for brokers.” If Google decides to be both an aggregator and broker, that would be another story for rivals and customers alike.

Tree.com, another company that has seen Google move in on its category, is not sitting idly by. The parent company of LendingTree has entered new markets: lead gen for education (DegreeTree), insurance (InsuranceTree), and home improvement (Done Right).

Tree.com General Manager Greg Hanson is banking on his company’s reputation to help it stand apart from newer rivals. “It’s more than just our brand recognition, it’s also what our brand stands for,” he said in a follow up e-mail interview. “LendingTree – and by extension Tree.com – offer a unique proposition around competition, choice, and empowerment that’s different than say, a Google or Yahoo.”

David Graf, CEO of Tranzact, a company that develops lead gen software, suggested Google might be better off sticking with search advertising. “It might be difficult for Google to make the numbers work,” he said. By going to a lead gen model, “you are taking more of a risk and relying on the ability to optimize at a similar rate as the lead gen guys. That’s bit of a leap.”

Mobile Marketing: Overcoming Obstacles?

Just about everyone thinks it’s the breakthrough year for mobile marketing. Even Morgan Stanley technology research analyst Mary Meeker. Speaking at the CM Summit last week, she said the firm estimates worldwide smartphone shipments will exceed PC shipments by 2012.

Despite mobile’s popularity, others see obstacles. “There’s no one mobile. There’s a rainbow of mobile,” said Jon Gibs, VP, media analytics at the Nielsen Co., during BMO’s conference. Audience and other data are controlled by an assortment of companies, such as Apple, telecom carriers, and mobile ad networks. “There’s a broad variety of platforms and data sources. There’s no way to bring it together,” he said. “Right now, the data sets as they exist, tell us very little.”

Until there are improvements in the way that data is collected and analyzed, there will be limits to the success of mobile marketing efforts.

Local Businesses: Too Many Choices?

Executives at marketing services companies, also at BMO’s conference, discussed how they aim to make it easier for local and small businesses to advertise online.

The way these executives see it, small businesses – bombarded with pitches to advertise – are not sure what approach to take. And as more small businesses set up websites and move marketing dollars online, these businesses are competing more fiercely for visibility on search results pages and in paid search listings.

Localeze President Jeff Beard pointed out that local companies often find that their online identity is “garbled” over time. His business specializes in helping local businesses track down outdated Web pages, update company profiles and contact information, and more. “We’re a business listing identity management service, which is not advertising,” he insisted.

Taking a different approach is Yodle, which also sells search marketing services to local businesses. As part of its offering, it tracks calls and e-mails from its campaigns. “We’re pure ROI. We measure everything in terms of leads and price per leads,” said CEO Court Cunningham. While print advertising generates calls, he said the return on investment is lower because it costs more to advertise with print publishers. “If the print guys dropped their prices, they’d have a pretty competitive product,” he said.

As the publisher of 331 local print directories in cities like Oshkosh, WI, and Fishers, IN, American Marketing & Publishing stood out as an anomaly next to the digital guys.

When CEO Abe Andrzejewski bragged that his print-based business is healthy and growing, he took some people by surprise.

“How can print media companies survive…Why are you different? Why are not you behind the curve?” someone asked Andrzejewski, sounding as if they could not quite believe him.

The larger directories, he said, “abused their position” by charging high prices without offering value to local businesses. In contrast, he said his company charges lower rates because each directory covers smaller, more targeted areas. Typically, revenue at each directory will increase by 5 to 10 percent compared to last year, he said. Total revenue is on target to grow by 30 percent thanks to the launch of 54 directories this year.

Tweet that, social media mavens.

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