The Branding War: An Online Alliance?

I’ve written before about how the chief challenge facing Internet ad agencies is to win the trust of brand managers. Despite a growing amount of evidence that online branding works, it’s taking a while for it to sink in.

Dave Yovanno, executive vice president for sales and marketing at ValueClick, called from his foxhole to tell me how his troops are doing.

Agencies need to try something because costs per thousand (CPMs) are down to 50 cents or a dollar, he said. Most advertisers aren’t even guaranteeing that. “Yahoo is getting 80 percent of their revenue from direct marketing,” mostly cost per action (CPA).

It’s a tough fight. Internet salespeople are up against network TV bargains. To get business, ValueClick needs to deliver TV reach and TV results.

Its big weapon is the “roadblock.” An entire network (or big geographic hunk of it) is given over for a time period. Results are measured using branding metrics.

One big documented success was on behalf of a TV station in Tokyo.

“We penetrate 46 percent of the Internet audience in Tokyo. Why don’t you own that for an hour before a new show airs?” he asked the prospect. He also quoted a fixed price. “They got a significant lift in their effective ratings and could charge more for commercials.”

The U.S. is divided into four time zones. To grab a TV network with that kind of program would be tricky. “You would have to geotarget the roadblock,” he said.

Geotargeting could draw local TV advertisers, I suggested, such as fast-food restaurants before lunch.

Most U.S. Internet markets lack the heft Tokyo has in Japan. Local roadblocks would only work in places such as New York and Los Angeles, Yovanno said.

Yovanno has tried the movie studios. They were as big as dot-coms used to be at the last Super Bowl.

He approached a studio on a horror movie campaign, bragging about email addresses collected from banners and great Internet demographics. He got hit with an impossible measurement demand.

“They wanted to show a lift in exit poll surveys, people saying they came to the movie because of the Internet. To get that result would take a huge campaign — becoming the largest advertiser on the Internet for a month.”

He couldn’t even geotarget New York or Los Angeles. “The sample size wasn’t large enough yet.”

Though he couldn’t support a theater opening, he did find success with a DVD campaign.

For the “Spy Games” movie, he said, “we focused on specific sites like TV Guide, our entertainment vertical. We did a sweepstakes promotion with a game and got 20,000 email addresses. Then, we sent a follow-up email to remind those people the movie was coming out.”

Great, but it’s leftovers. Yovanno wants to play the big rooms, targeting fast-food and soft-goods retailers. When he called on The Gap, he couldn’t get in the front door.

“They were only interested in CPA, not CPM. We were talking to the Internet group, not the advertising group.

“We need to prove to the advertising group [they’ll] get a lift in sales from Internet branding. That’s what it comes down to — does it increase sales?”

Internet metrics work great on a micro level. Campaigns can be pinpoint accurate. National brands want big numbers and macro-level measurements.

To get both, industry players such as ValueClick will have to cooperate in ways they never have before.

Call it the Online Alliance.

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