Understanding Advertiser Behavior

Having spent 27 years in the advertising agency business and now the last four years in the Internet advertising business, I’ve learned that while there is a lot about online advertising that is unique, there is just as much about it that isn’t at all different from traditional media. Success in this new medium is dependent on our ability to discern when the old rules apply and when they don’t.

The Internet is an excitingly different advertising medium, offering new and more powerful ways for advertisers to communicate with their consumers. The unique ability to foster a two-way dialogue between online advertisers and consumers opens up marketing possibilities that we are only now beginning to uncover.

But while the medium is new and different, the advertisers that are funding its growth are not. Advertisers have exactly the same needs and requirements in this medium as they do in every other medium, digital or not.

The week before last, a ClickZ columnist suggested that the quality of the “reach” delivered by a web site’s audience was more important than the advertising format used to communicate with those users. I agree that, as media properties, sites need to sell against the quality of their audiences. All other things being equal, the better the audience the more advertisers will pay to reach them.

Unfortunately, though, all other things are not equal on the Internet. The ability to reach a large quality audience is only as valuable as the effectiveness of the message presented.

Consider this. For less than $2.50 per thousand, an advertiser can reach 88 percent of adults 18 to 49 with a 50 outdoor showing in the top 240 markets. Great reach. Great price. But outdoor captures only about 2 percent of total advertising spending in the U.S.

At the same time, if an advertiser spends against the same demographics in television, the message costs more than $22.50 per thousand to deliver and will reach only about 35 percent of the target. Yet television captures over 50 percent of the total available dollars.

Why? Simple. Advertisers believe that they can communicate with their consumers more effectively in television than they can on a billboard. Television allows advertisers to tell a story, to communicate an effective and powerful message in a seamless, turnkey manner. And advertisers continue to demonstrate they are happy to pay a premium for standard formats that offer the highest level of creative flexibility. The same will hold true on the Internet.

I recall another recent ClickZ article that questioned whether we truly need online advertising standards. The columnist stated that “standards shouldn’t exist unless the industry can’t get by without them.”

Again, let’s think about this. Every other mainstream medium has standards of format and measurement. Standards make the advertising development and evaluation process more efficient for advertisers. What would be the impact on the television industry if advertisers had to produce different length commercials or use different production methods for each of the networks? I agree that standards shouldn’t exist where they are not needed, but standards should be established and supported when they can have a direct, positive impact on facilitating the growth of this medium. You must admit there is a big difference between “getting by” and flourishing.

If the Internet is to become the mainstream medium we all want it to be, we need to attract the large, brand-name advertisers. How? Enable them with the kind of creative flexibility they have become accustomed to in traditional media offered in a standard, turnkey manner. The Internet already has the reach. Now we need the message.

The key to unlocking this new medium lies in understanding advertiser behavior; what they actually believe, not what we in the digital media business would like them to believe. And the simple fact is advertisers are not likely to lower their expectations for the online marketplace.

So, in order to help this medium reach its potential, we need to ensure that we are fulfilling the core needs that advertisers have across all media. Then we can blow ’em away with the functionality that no other media comes close to having.

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