Breaking Into A Category

The rush to the web is a land grab. And unfortunately, sometimes people are late to the game. The web has several categories of products and services that are established — some of these categories are even profitable. ;-) But what do you do when a client looks to your department to help them break into a well-established category? What happens when your client’s competitors have snarfed up the best ad inventory with exclusive multi-year deals?

It’s important to remember that just because your client’s competitors have locked up most of the obvious places to advertise, this doesn’t mean that you can’t reach the people you need to reach. To illustrate some strategies for dealing with this problem, let’s use a hypothetical category.

A well-funded Internet operation called WidgetNow.com comes to your agency, hoping to develop a plan for breaking into the online widget sales business. Of course, the battle for control of the widget category was fought nearly two years ago with the top two competitors: Widget.com and Universal Widget locking up most of the portal deals. They’ve also managed to pretty much split the category by locking in exclusive advertising relationships with many major content sites and launching gigantic affiliate programs. By the time WidgetNow.com is ready to launch a marketing campaign, it’s a full two years behind.

What might you do?

First, sit comfortably at your desk. Relax. Pay no attention to the screaming account planners whom are running all over the place, freaking out. Then, repeat after me:

“Just because everyone else is doing it doesn’t mean that I have to do it, too. The vast majority of portal deals are not renewed.”

Now that we’re in a reasonable state of mind, let’s go about this in a smart way. Ignore for the moment the fact that your client might be locked out of some advertising environments and plan normally. Although your competition has your top ad environments locked up, be sure to have discussions with ad sales reps at these sites to discuss those deals. Things you should discuss include:

  • Exclusivity — Does the site’s existing deal name WidgetNow as a competitor? Does the deal apply to all areas of the site? Explore the specifics of any exclusivity clauses you encounter. Be sure to remember that most ad sales reps will work with you to see if there is any way WidgetNow can have a presence on their site.

  • Expiration — When does their existing deal expire? More importantly, does the incumbent have a right of first refusal in the contract?
  • Advertising vs. Distribution — Does the site’s existing contract exclude banner advertising only? Does it allow for banner advertising by competitors but not integrated sales models? If you can’t do one, do the other.

If your late-to-the-game client has a large advertising budget, do not forget to consider traditional media outlets. Not only will the use of TV, radio and other traditional media give your client’s brand awareness a significant shot in the arm, but it will also allow you to compete on a more level playing field. For the most part, you won’t encounter exclusive relationships to the extent that you might online.

Work together with your research team and find out about what Widget consumers like to do. What are their media consumption habits, leisure activities and purchase behaviors? Use your findings not only to select traditional media venues but also to explore other environments online. Maybe you won’t achieve the same contextual relevance advertising on a computer-related site that you would if you advertised on WidgetLand.com, but you may still increase awareness of WidgetNow among the target audience.

Also, be sure to watch carefully for new advertising venues. Somewhere out there, in someone’s garage, the next big Widget enthusiast’s site may be in the planning stages. Watch the trades to learn about it first. It might also help to watch for any new domains that get registered with the word “widget” in them. Should you hear of a new potential advertising environment that would fit WidgetNow’s goals, dial the phone quickly.

As always, careful optimization of the online campaign will not only yield better results but will also reveal other profitable advertising venues. Track all Widget sales back to the ad placement to see if any other content environments seem to generate higher response rates than others.

Who knows? If you get lucky and negotiate around some exclusive advertising arrangements, find a category of advertising sites that your competition hasn’t found yet and execute a strategic offline plan. You might be able to make a nice-size dent in the Widget category.

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