Dispatch: Jupiter/ClickZ AdForum

As I write, I’m surrounded by the sights and sounds of the Jupiter/ClickZ AdForum in New York, where I’ve been immersed in the latest ideas surrounding interactive marketing since early Wednesday. Hopefully, I’ve grown a little smarter basking in the thoughts of speakers and attendees here. I’ll share some insights and trends that have emerged.

Search: Hot, But Complex

The conference opened with a forecast from Jupiter Research (which shares a parent company with ClickZ), predicting that search, not including paid inclusion, will grow 48 percent in 2003, and continue to grow at a 20 percent compounded annual rate over the next five years. From a purely statistical standpoint, it looks like search is saving the online advertising industry.

There are dangers, however, in the search’s increasing popularity, many of which were pointed out in “From Buying to Bidding,” a panel discussion Wednesday afternoon.

No matter the discipline — Web site optimization, media buying, email marketing, or search — interactive marketers are in danger of drowning in data. But in search, what may have seemed like a simple, low-risk process — buy some keywords, optimize on results — is becoming ever more complex. Search’s popularity only adds to the problem. More competition means more money, more risk, and a more critical need to optimize more and more variables.

Kevin Lee, my fellow ClickZ columnist, was on the panel. He said in some categories, he’d look at what competitors were willing to pay for a keyword and deduce the buyers were either crazy… or brilliant. Either the company was losing money on the campaign or had figured out (through advanced analytics that look at things such as lifetime value of a customer) customers acquired via that keyword were worth what might initially seem an exorbitant level of spending.

The data people use to calculate a keyword’s worth seem to be expanding. There’s that lifetime value calculation, which requires cooperation with whoever’s handling CRM. There’s daypart, product lifecycle, seasonality, and, soon, locality. Overture’s Ted Meisel hinted in his keynote behavior-based targeting is coming, adding more metrics to the mix.

The biggest challenge now is for the available technology to catch up with an ever-expanding flow of information. Until then, it’s a game of one-upmanship. The company with the best data (or the best insight) wins.

Don’t Forget Branding and E-Mail

Branding-oriented speakers here seem to be swimming upstream, forced to justify branding’s validity in a search-crazy environment. Panelists pointed out that as well as search can perform, it’s not the be-all, end-all of a marketing program (ClickZ has said that, too). Forbes.com’s Jim Spanfeller reminded the audience that people are probably more likely to click on a paid search link if it represents a brand with which they’re familiar.

New York Times Digital’s Martin Nisenholtz (in a Q&A in which I served as interlocutor) chastised the industry for its tendency to jump on the latest bandwagon (email last year, now search). He encouraged compelling, branding-oriented ads that utilize the bigger creative formats now available. Nisenholtz predicted this industry, like traditional media before it, will split into direct response and branding camps, with each side polishing its techniques.

Meanwhile, even email seems to be becoming a brand-building medium, despite its demotion from love to hate as a marketing platform. In a discussion on Thursday, Ian Oxman, vice president of email consulting at RappDigital, said his company has largely abandoned email for acquisition, using it instead to improve and maintain customers’ relationships with brands.

It All Works Together, But It’s Not As Easy As It Sounds

Integration remains a serious challenge. One theme that kept arising is the difficulty of increasing interactive’s share of the pie, given the incentive many agencies have to use more expensive, traditional media. Integrating on- and offline return on investment (ROI) metrics is another problem. Jupiter Research predicts online marketing will influence $288 billion in offline retail purchases in 2003, growing to $352 billion next year. Figuring how it all fits together for each individual business is another matter entirely.

It was a lot to absorb. The issues are ones we’re likely to face for years to come. But we’ll continue to move forward as long as we keep discussing and debating them at events like this one. Thanks to all who came to share their ideas with us at the Jupiter/ClickZ AdForum. We hope to see you again next year and hope to see some new faces, too.