One of the key elements necessary before online ad spending can grow beyond the fraction of overall ad budgets it represents today is a core body of knowledge about the medium, and The Advertising Research Foundation (ARF) hopes that need will be filled by its latest project, The Online Advertising Playbook.
The 320-page Playbook, set to be published as a hardcover in early 2007, is important to the industry for two main reasons, Ridgway “Taddy” Hall, The ARF’s chief strategy officer, explained during a panel discussion Monday at the Ad:tech conference in New York.
“It’s the first time we as an industry have come together to discuss what we’ve learned in the past 10 years,” he said. “And it will finally establish a core body of knowledge that will give advertisers the confidence to allocate substantial parts of their budgets to the medium.”
Once these requirements, which are present in other media, are met, they could spur the next wave of advertising growth online, he said. In creating the Playbook, the ARF compiled research from hundreds of marketers, who shared thousands of pieces of data, Hall said. That data was reviewed by the ARF and a board of more than 30 advisors spanning marketers, agencies, media companies and trade associations to come up with the playbook.
While that goal is worthy enough on its own, the playbook becomes even more important when marketers realize that the way marketing and advertising are done online is going to have an ever-growing influence on how they’re done in all media, said Tom Lynch, VP and head of marketing integration at ING.
“What’s fascinating about the playbook is that these new ‘rules of the road’ are not just for how to do advertising online well,” Lynch said. “As all of this starts to come together, other media are going to start to act more like the Internet — like getting data back in real time, or treating the medium as a channel to build a customer ecosystem. These rules for how you act online become rules for how you behave in any medium.”
The day when Internet becomes the dominant medium is still far off, largely due to structural impediments within agencies and client organizations, Lynch said. “Nobody’s being compensated to solve the problem. In fact, everybody is being compensated to not solve the problem. There’s no common P&L among agencies; no financial incentive for the whole.”
To make real progress, change needs to come from the top, he said. The CEO and CMO both need to be committed to making the change, but to get there they need to be able to understand how each medium contributes to revenue, and that’s a long way away, he said.
In the meantime, the best course of action is to work toward that accountability by picking a measure that everyone agrees will move the business forward, and working to prove how interactive marketing efforts make that happen, Lynch said. The measure can be anything, as long as there’s consensus that it’s important to the business. “As long as everybody agrees that the piece of paper in your pocket is worth a dollar, you’ve got a dollar,” he said.
Another tactic is to use cross-media optimization studies to put all media on a common playing field, as a first step toward forcing a dialog, Lynch said.
The Playbook includes chapters on targeting approaches, reach and frequency, online ad strategy, display ads, search, measurement, e-commerce, e-mail, and a glimpse at the future from several industry leaders.