Boring Giants?

Here’s a quick – and hopefully educational and fun – little project for you. I’ve given you the links to 16 top-selling Web sites. Your job is to visit them (just the home pages) and then decide what they all have in common from a general design point of view (well, two present exceptions, but not big ones). Don’t pick over details; go for the Big Picture.

Dell, ticketmaster, Amazon, Quill, Staples, Sears, QVC, 1-800-Flowers, TigerDirect, Victoria’s Secret, HSN, J C Penney, Lands End, Travelocity, Match (click past the home page on this one), Ebay

Okay, off with you. Just be sure to come back!

Now, if you could give me one word to describe your impression of these sites, what would it be? My word, and I absolutely do not mean this unkindly, would be:

BORING!

We are not talking fancy glitz here. We are not talking elaborate graphical design. Yes, 1-800-Flowers uses a very distinctive color palette, and Match and Victoria’s Secret are more image conscious (but then, they are selling love and seductive glamour). Fundamentally, there is nothing terribly exciting about the design of any of these Web sites.

Tons of research and attention have gone into the process of making sure these sites do the job they are supposed to do. Have you ever visited Amazon and discovered some new little thing that lingered for several weeks and then disappeared? They were consumer testing a tweak in an effort to improve the overall persuasion architecture of their site. Don’t ever think “boring” design is easily achieved!

None of the above sites are perfect, but each tries to address these critical persuasive home page issues through their designs. Here are some of the basics:

Professional appearance that takes the best principles for design and adapts them to the online environment

Relatively uncluttered, streamlined design

They load pretty fast

Color blocks rather than patterns

Good use of white space

More text than graphic images (for the most part)

Visual groupings of similar information

Scannable and skimmable presentation of information

Functions and elements located where visitors generally expect to find them (or made otherwise prominent)

Qualification schemes that quickly help the visitor identify what she’s looking for supported with links that take her directly there

These sites are conversion-oriented, process-conscious and they don’t try to hide behind very much visual drama. Sure, deeper in the process some have thrown in a glitzy feature (like a rotating view of a product), but you never have to rely on the glitz to reach the goal.

The Giants seem to have internalized the message that shopping is, first and foremost, about shopping. It’s really not about being entertained. And a design that is subdued and non-intrusive, that supports the business objectives rather than undermines them, is worth its weight in gold.

Think you can learn something from a Boring Giant?

How You Look at It

Two moms are sitting at the park watching their four-year-old daughters play together. Mom One shakes her head and guiltily announces, “She’s certainly not the child I expected to have.� Mom Two smiles empathetically, watching the child in question, so Mom One continues, “I love her dearly, but it’s always conflict with her, everything’s a problem. She can be so … difficult.�

Mom Two watches the girl stand her ground in a face-off. “She certainly seems a spirited child. It must be a challenge for you.�

Overhearing this exchange, I have to chortle. Mom Two has hit the nail on the head. You can focus on the negative in a situation (problem, conflict, difficult) or you can focus on the positive (spirited, challenge). Guess which way is going to lead to more productive results?

You just know I’m not thinking about kids, though, right? I’m thinking about the design of Web pages.

The Web certainly isn’t the publishing offspring most designers were expecting to deal with. Centuries of designing for the printed page didn’t prepare them for the challenges of this new medium where printed-page principles sometimes work. And sometimes don’t.

Why? John Allsopp explains:
“Designers in the world of paper based publishing are used to control. A whole industry has evolved to ensure that what the designer wants is what the reader gets.�1

But the Web is a participatory, voluntary medium, and your visitors are in control not only of what they see, but even how they see it.

Folks can resize pages and adjust their screen resolutions.
They can choose how large or small text appears on their screens.
They can decide whether or not they want to display pictures.
They can choose whether or not they want to see color (some can even change the color palette).

They view your site on a variety of devices: PCs (and Windows appearance differs from Mac appearance), handhelds, WebTV – each of which presents a different visual format environment.

I always seem to be repeating myself, but this stuff is really that important: Your goal is to persuade by delivering content and information in a way that meets your visitors’ needs. The second you ignore those needs, your visitors are gone. Just like a child. You tell him “No,� and he tunes you out. But if you can find a way to tell him “Yes,� so both your needs and his are acknowledged, he’ll keep paying attention.

The challenge is discovering how you can say “Yes.� Think you can design so one size fits all? Not if you are going to constrain the elements of your design. But if you add flexibility to your design equation, you will get much closer to “Yes.�

In the mechanics of Web design, this becomes possible with Cascading Style Sheets (CSS), which allows designers to suggest how the Web page should appear.

With CSS, you don’t have to single out one font, which your user may or may not have. You can cover more bases by suggesting a number of fonts.
You don’t need to specify the actual point size of the fonts you use. Instead, you represent them as percentages of the basic text. Headers and subheadings can be proportionally larger; some text can be proportionally smaller. It will then appear on any device in the appropriate size relationships to the base text.
To make page layout adapt to a user’s settings, you can specify margins, indents and other layout features as percentages, or other relative values, of the width of the element which contains them. So when users change the size of their browser windows, the entire page layout adapts to fit.

When it comes to color, it is extremely important to make sure the persuasive objectives of your Web site can be conveyed in black and white, and that you do not rely on color alone to communicate your meaning. Consider that color can enhance your message, but should not be, in and of itself, the message.

Khalil Gibran said of children,
Your children are not your children. …
They come through you but not from you,
And though they are with you, yet they belong not to you. …
You are the bows from which your children as living arrows are sent forth.2

Not bad parenting advice. It even offers a thoughtful parallel for online design. Your Web site is your child. And while you can shape it, you cannot control it. When it leaves you, it takes on an entirely new life shaped by all those who interact with it.

You needn’t throw the baby out with the bath water – although there are some lessons you’ll want to avoid, there are lots of important things to learn from designing for print. Just refuse to think of the design of your Web site as a problem child. Think of it as a challenge. Because how you look at it influences what they see.

And that, as we all know, is the key that gets the persuasive ball rolling.

Online Ads Are Bigger, Richer
By Brian Morrissey

Internet advertising trends toward larger unit sizes and more rich media are continuing to develop, according to DoubleClick's (Quote, Company Info) second quarter ad serving report.

The ad technology company said that nearly a third of the ads it served in the quarter used rich media, up 14 percent from the previous quarter. DoubleClick defines rich media as any ad using Flash, pop-ups, interstitials, or Unicast and Eyeblaster formats.

DoubleClick also reported that ads reflected a growing trend toward larger units, with big sizes, such as leaderboards and half-page units, grabbing share from the standard banner. The standard 468 x 60 pixels banner was still the most prevalent unit, accounting for 42 percent of ads served, but it dropped 23 percent from a year ago. The skyscraper remained in the No. 2 position, with 9 percent.

The growth in rich media, averaging 10 percent per quarter, puts it in line to surpass static GIF and JPEG ads by 2005, the report said. Once separate from the online ad industry, rich media has become very mainstream.

"It's not too far-fetched to assume that the entire concept of rich media as a separate form of online advertising will cease to exist, as rich media becomes 'just advertising," DoubleClick said in the report.

The move to rich media is a sign that Web marketers have begun to use the medium for more than just direct response advertising. Publishers like Yahoo! have reported increasing success in bringing traditional advertisers into the fold with online campaigns aimed at brand building.

DoubleClick culled the data from its DART ad-serving platform, which served just under 150 billion ads in the quarter.

Flash dominated rich-media forms, accounting for 13.4 percent of all ads served. DoubleClick has close ties with Flash, having inked a deal with Macromedia to develop a rich media authoring, trafficking and reporting tool.

While advertisers continue to flock to rich media for branding, they might be disappointed by the difference rich media makes in direct response: Click-through rates for rich media declined 15 percent in the quarter to 1.87 percent. That response rate still dwarfs the anemic .34 percent DoubleClick recorded for static ads.

Still, DoubleClick found that rich media does leave an impression on consumers. Rich media ads are three times more likely to lead to a post-impression sale than static ads. Also, the report found that view-through rates, which measure some type of action within 30 days of viewing an ad, have continued to rise. However, the rates remain quite low at .63 percent, up just .02 percent from the previous quarter.

DoubleClick hopes to get a better hold on the effectiveness of rich media as a branding tool with its recently unveiled DART Motif, built in conjunction with Macromedia. Motif promises sophisticated multi-event reporting, which tracks user interactions with rich media ads. That functionality, however, will not be ready until November.

Redesign Time?
By Bryan Eisenberg

Companies are taking a hard look at their Internet initiatives. Many have decided it's redesign time as soon as the busy holiday season is over.

I applaud the initiative, but I'm skeptical about execution. If we applied the same logic to traditional architecture most people use for redesigning Web sites, we'd hire a handyman. A coat of paint, new plumbing fixtures, minor wiring -- a few cosmetic touchups. All fine, provided there are no underlying foundation problems. The right paint job can make a room look bigger, but square footage doesn't increase. Do you want your site to merely look better or also to persuade more effectively?

Foundation problems are frequent when sites are constructed by committees or when no single decision maker has responsibility for measurable results. Objectives that are less than crystal clear and no defined goals for the site make answering the critical question for any project impossible: How will you measure success? If you can't measure it, you can't manage it.

Answering that question is the purpose of "uncovery," the initial phase of the Minerva Architectural Process (MAP) used in persuasive architecture. Any site that needs to persuade or sell must define clear objectives. Your conversion rate is a measure of your ability to persuade prospects to take the action you want them to take. It's a reflection of your marketing and sales effectiveness and your customers' satisfaction. To achieve your objectives, your prospects must first achieve their own.

Objectives are the whats (not the whys or hows) we want people to do. They are quantifiable within a given time frame (e.g., I want 34,000 investors to read my annual report online during fiscal year 2003). Objectives must be clearly stated, have a schedule, and be measurable. Otherwise, they're just wishes.

As with traditional architecture, a great deal occurs before design or implementation. The needs of the building are identified (a hospital or a two-family home?); resources are secured (is financing in place, will the windows be delivered, are builders hired?). Now is the time to get questions answered, so the foundation can support the structure.

The uncovery phase is responsible for:

Mapping objectives
Developing strategy
Understanding the customer's buying process
Understanding and refining the sales process

Researching keywords and key phrases (as in search engine marketing, but with broader application)

Defining key business metrics
Only people with responsibility for defining objectives are involved in this stage to ensure business objectives won't succumb to the needs of designers or developers. The most important question isn't what technology to use or what functions the site will include. The only thing that matters is how the site will satisfy prospects, be profitable, and serve your needs. Uncovery helps a project run smoothly and manages risk effectively.

To ensure the success at this stage, assign an impartial project manager and a person whose own success is tied to the project's business objectives. People lose objectivity when they have a personal stake in the issues (e.g., their children, their home, their business). The person responsible for results should work with a persuasive architect who can employ active listening and interviewing skills, is unaligned with internal politics, is technologically agnostic, and can manage, record, and transcribe all information gathered at this stage.

This persuasive architect's role is to make the connection between the big picture and the nitty-gritty. Between intuitive right-brain thinking (business strategy, understanding users, sales process, and design) and the detail-oriented left(categorization, database schema, development, and coding). The persuasive architect leads the next phase, wireframing (which I'll discuss again in a future column).

Redesigns will be needed. But if you can't find the time to do it right now, you're unlikely to find time to fix it later. Effectively planning your site from the beginning ensures the project will be properly executed.

The 5 Percent Solution
By Bryan Eisenberg

I recently mentioned the "power of 5 percent" concept to a new client and was surprised it seemed such a novel idea. When we helped traditional companies increase the effectiveness of their sales forces it was something we spoke about all the time. The concept has great value and is very rewarding to apply.

For those who've never heard it, this column will be a revelation; for those who have, it should be a good refresher. Hal Slater, a sales trainer, reminded me of this concept recently, and his thinking influenced me in the writing of this column. I've adapted the concept a bit for e-tailing.

When you start talking percentages you're undoubtedly discussing measurements, so let's start with the essentials. There are 10 business metrics, or operating measurements, an e-tailer must track to measure performance: visitors, conversion rate, sales, average sale, gross revenue, margin, gross profit, overhead, net profit, and growth.

Of the 10 metrics you need to track to achieve the 5 percent solution, only 5 are key:

Visitors
Conversion rate
Average sale
Margin
Overhead

Why are these the five key metrics, when you've been paying most of your attention to the other five? Simply because the key metrics are the only ones you can do anything about. You have absolutely no control over the other five metrics; they are simply the mathematical results of the key metrics. However, you do have control over key metrics, and, by exercising that control, you can improve your business... 5 percent at a time.

The starting point is to make the decision, put someone in charge, and establish and use a system for measuring, testing, and optimizing your Web site. Using a system can help you:

Get more and better qualified visitors
Learn what visitors really want
Present better and increase your conversion rate
Price more accurately
Increase the effectiveness of your merchandizing
Understand your errors and learn from your mistakes
Train others

Do I suggest you use a system? No, I insist you use a system.

It's not intentional, but many businesses that measure their key metrics offline don't do the same online. That is how many businesses set out on the path to mediocrity while imagining themselves en route to their business objectives. Some businesses still don't know how many visitors their Web sites get in a given month and have no idea how many of those fine people made a purchase. If business is declining, company execs can't know whether it's sales (the Web site's persuasive architecture) or marketing that is failing. It's very sad because that information is even more important than revenue and net profit. Of course, they'll get those results soon enough.

What I'm advocating is using a system similar to what the Japanese call kaizen -- steady, regular, incremental, unrelenting growth. More visitors, higher conversion rates, bigger sales, and fatter margins are the payoff. Focusing on all five key metrics is how you get triple-digit gains from single-digit improvements.

For example: What if we were to increase conversion rate (on those things we can control) by only 5 percent this month. If we started out with a 1 percent conversion rate, we would finish the month with only a 1.05 percent conversion rate. I can already hear the groans. What would that do? Seems like a whole lot of effort for so little. Nevertheless, over the course of a year, that 5 percent a month would increase our conversion rate to 1.796 percent. The power of compounding would give us almost an 80 percent increase in conversion rate. Doesn't that seem more worthwhile?

The Web allows you to target your market tightly, qualify them to find out exactly what they want, and present exactly what they want presented -- in the way they want it presented -- each and every time. Certainly it takes more effort and planning to be credible and relevant to every visitor and provide them with value. Nevertheless, the unfulfilled promise of the Web is just that, unfulfilled. It takes a great deal of work to create a Web site with persuasive architecture. However, the process produces highly customized and measurable scenarios that can be tracked and optimized continuously.

It takes more patience, a high degree of planning, and more work up front to get results. It's why so many businesses tread water or produce anemic profits. It's the exceptional manager or entrepreneur who is willing to roll up her sleeves, question the value of her business, and commit to constant improvement. That's what it takes to be successful. It won't come out of a black box, you can't buy it from a consultant, and it will be more painful, at first, than profitable. That's the lesson of the 5 percent solution. Ask yourself; are you truly committed to success?

How to Decrease Sales by 90 Percent
By Bryan Eisenberg

Last week Brad, a reader of this column with whom I've become friendly, asked me for some advice. He'd conducted a test campaign that resulted in a huge discrepancy he couldn't identify. No doubt losing 90 percent of his sales, when his normal conversion rate is over 4.6 percent, distressed him. He wanted to know what caused his conversion rate to come in at just 0.47 percent. Together, we discovered the variable he'd ignored, and in his most recent test the conversion rate is back to normal.

Brad was so excited he insisted I share this case study with all of you. I hesitated to do so but promised him I'd share the data with you and let you reach your own conclusions. My concern is what is valid for Brad's business isn't valid for everyone's. Brad's product has a target market with very particular characteristics. Plus, his marketing is response driven, not branding driven. The entire buying process for his products is, though not entirely unique, not universally applicable, either.

Case studies can be very informative, but they can also do a lot of damage. Be very careful what you copy. Many companies try to emulate more successful competitors without really knowing what they're copying, because they're unaware of all the variables. What you need to do is uncover the key factors that influence your target audience to buy your particular products, then utilize this information to help you refine your sales process.

We constantly get requests for averages and benchmarks on conversion rates. We always advise against comparing your own conversion rates with "norms" or "averages." These are drawn from sites that don't have the same traffic or product as yours, and they may differ in any number of ways. We've identified over 1,100 variables in our own work alone. This is why I cringe when I hear the phrase "best practices" tossed around as if it were gospel.

To illustrate my point, I called a friend I knew could further confuse the issue. I told Sam Decker, senior manager of Dell Consumer eBusiness, what Brad did. Dell is one of the top e-commerce sites and is known for its innovative approach to measuring, testing, and optimizing. Sam is responsible for sales on the consumer Web site, so if anybody would know what to learn from Brad's case study, it would be Sam, right? Interestingly enough, Dell's own case studies prove that making Brad's "mistake" would actually help Dell's online sales.

How can it be that two case studies contradict each other so blatantly? The answer is no business is linear. There are many facets, or topological elements, to consider in designing an effective online strategy to maximize your conversion rate. Your conversion rate is only a reflection of the marketing and sales effectiveness and your customers' satisfaction. It depends! It always depends! If you're looking for one canned, simple solution, you're bound to be either bankrupt or very disappointed. I know I've just aggravated a bunch of people who are binary thinkers, but the world has lots of gray, seldom displaying true black or white.

I'm going to make this simpler on you than it was on me. I've given you two screen shots: Test A and Test B. I'd like you to let me know what the offending variable is (and, yes, there is more than one change on the page. Can you find them all?).

Here's a quick refresher on making improvements to increase conversion rates. There are thousands of improvements, big and small, you can make to improve your conversion rate. Nevertheless, you should focus on changing one thing at a time. If you change too many things at once, you may see a net increase in sales, but a change with a negative impact may have diluted a change with a positive impact. Make one change, see that it gives you X percent increase in sales, then make another change. If you start losing sales after the second change, just undo what you did and try something else, always moving your conversion rate up.

The Payoff of Planning Persuasive Architecture
By Bryan Eisenberg

I've discussed the Minerva Archectural Process (MAP) steps to arrive at the point where most people begin the development process. These initial steps help get from abstract concepts (uncovery) related to Web site development to the concrete issues (optimization). All phases are critical to delivering a project on time, on budget, and on purpose.

Prototype
Rapidly go through the uncovery, wireframe, and storyboard processes. Cycle through successive iterations to arrive at a finished prototype. The prototype's appearance is identical to the application to avoid that costly project killer, "scope creep."

Complete Scenarios
During development, it's easy to focus on features and checklists. They're minimum requirements to get a site, any site, up and running. Concentrating on features for features' sake results in a bloated feature set (most of dubious utility) and a difficult product for users. Adding a feature to a Web site, regardless of its utility or role in the sales process, is poor persuasion and worse architecture.

Features are not a site's value. Value lies in a customer's ability to complete the tasks described in scenarios they find relevant. If your team recognizes the difference, they'll strive to create a site that enables users to complete actions they (and you) want them to take.

Acceptance Tests and Freeze
Lay out these scenarios, then use them to complete the front end of the development process (no coding yet). No prototype is complete until it accomplishes all client-identified scenarios, and does so in a way the user of each scenario agrees with in an "acceptance test." At the point where both client and development team agree prototyping is complete, freeze the prototype. No other changes can be made (in this version). A final set of acceptance tests are then defined.

How do you know when iterations are done and freeze can occur?
Hal Helms explains: "There's an old story told about a little girl who's asked to spell 'banana.' 'I know how to spell it,' she explains. 'I just don't know when to stop.'" (Keep reading, I'll explain later...) With these techniques, we know when to start writing markup and code (when the prototype is frozen) and (just as important) when to stop (when the prototype runs). Thus, we begin to craft a system that will make both client and developer successful.

Development
What's the danger in writing code? Author and businessman Richard I. Winwood said, "If we do not choose to plan, then we choose to have others plan for us." If you fail to provide every detail, the developer makes choices for you. If the prototype is complete, there's no guesswork. He'll do what he does best: code.

Every hour spent planning a project saves roughly three in coding and development. Programming is expensive -- way more than planning. It doesn't take a rocket scientist to understand the significant savings in keeping a brake on development until planning is complete. If that means spelling the fruit "banananana," so be it.

Optimization
Optimization is where a development project comes full circle. Technically, the site works. That's the point of acceptance test hurdles. Now, test how visitors use the site. By tying in the site's objectives (defined in the uncovery phase) and viewing the persuasive architecture's results in visitor scenarios (created during wireframing), you can determine using Web analytics how close intent is to what actually occurs. Then, follow a disciplined strategy based on measurement, testing, and re-evaluation to get closer to meeting objectives and to improve results of every page not meeting its responsibility.

Keys to Success
Successful methodology requires:

Being flexible. Methodology must be flexible enough to deal in principles, not absolute rules. It must accomplish the same results regardless of size and scope of a project. There are countless ways to make holes: big and small, holes in dirt and holes in concrete. If the right tools are available, I can reach the objective of making a hole.


Focusing on people. For group acceptance of a methodology, understanding cognitive psychology and communications theory is critical. Focus on individual team members' roles. The methodology must initiate with an understanding of the people involved and their goals and objectives. This facilitates meeting both end-user needs and business objectives.

Using it. No matter how good the methodology, it's worthless if it's not used. Apply methodology to the smallest projects, even if it's not necessary. It's good practice for projects that will need it.

'Six Sigma' Web Marketing
By Bryan Eisenberg

"You create the system your visitor must navigate. People don't cause defects, systems do," said the late quality management guru, W. Edwards Deming.

Anything that results in a lower level of customer satisfaction or a lost customer is a defect, a flaw in the sales process. When a visitor doesn't convert, your Web site has a service defect and your processes don't deliver on your promise to customers or to prospects. At least, that's how you'd look at things if you applied the Six Sigma discipline to your Web site. I've referred to these defects in the past as holes in a leaky bucket.

Six Sigma Defined
For many organizations Six Sigma is a measure of quality that strives for near-perfection. It's a disciplined, data-driven approach and methodology to eliminate defects in any process (driving toward six standard deviations between the mean and the nearest specification limit). It can be applied from manufacturing to transactional businesses, or from products to services. Six Sigma was originally developed at Motorola in the 1980s for high-volume, highly standardized production processes. The goal is to eliminate waste by achieving near-perfect results. General Electric, AlliedSignal, and other well-known manufacturers credit Six Sigma with having produced billions of dollars in efficiencies.

Six Sigma's value is not limited to manufacturers. Organizations use it to optimize such nonmanufacturing processes as accounts receivable, sales, and research and development (R&D). The Harvard Business School's Working Knowledge reports:

Dow Chemical, for example, estimates that the application of Six Sigma to environmental health, and safety services has saved the company $130 million in the past two years; other initiatives are under way for corporate R&D, finance, information systems, legal, marketing, public affairs, and human resources processes.

It should come as no surprise all sorts of companies are becoming Six Sigma converts. The article continues:

Six Sigma won't work for every service process, and adjustments may be required for it to suit even those processes for which it does apply. Nevertheless, many of the lessons learned from the production lines are relevant to service processes....

Six Sigma's off-the-shop-floor successes are too significant to ignore. The issue is no longer whether Six Sigma should be considered; it's when, and how....

Take Web site development. Highly customized site developers are likely to achieve benefits from Six Sigma in project administration: client set-up, billing and collection, and perhaps in project status reporting. Mass-customized Web developers can apply Six Sigma to hone their core service. Standardized services have the greatest Six Sigma potential because they use software or Web sites to take clients through the entire process. A human is involved only to answer a question.

Six Sigma methodology's fundamental objective is to implement a measurement-based strategy that focuses on process enhancement and variation reduction through the application of Six Sigma improvement projects. This is accomplished through the use of two Six Sigma submethodologies: DMAIC and DMADV. The Six Sigma DMAIC process (define, measure, analyze, improve, control) is an improvement system for existing processes falling below specification and looking for incremental improvement. The Six Sigma DMADV process (define, measure, analyze, design, verify) is an improvement system used to develop new processes or products at Six Sigma quality levels. It can also be employed if a current process requires more than just incremental improvement.

Six Sigma in Action
Identify and measure specific service and process defects, then ask, "Why are they happening?" That question uncovers the underlying reasons for customer dissatisfaction and/or defection. Typically, there's more than one reason. You'll often find a half-dozen or more root causes contributing to the service defect.

Once you've identified the chief contributors (e.g., copywriting, usability, visual communications, marketing plan assumptions), you can build systems that better serve customers.

For example, at a macro level the problem is defined as conversion to leads. Measure conversion to leads, analyze causal factors (a.k.a. chief contributors), and improve those variables versus a control. Then, repeat the process.

At a micro level, the problem is defined as a high rejection rate (visitors exiting) on a page. First, measure and define a baseline. Then, use surveys, pathing, content analysis, sales process analysis, persuasion architecture scenario analysis, time on page, and other data to determine root causes. Analyze the results to determine what needs to be improved, then fix the leading root causes (e.g., copy, design, navigation, interaction). Test the leading variables to see what changes make the biggest impact. Then maintain the variable (e.g., fresh content) to control the improvement. In the end, you've learned something that can apply to other pages as well.

Conclusion
It may sound like pure theory, but Six Sigma is practical and yields enormous return on investment (ROI). We apply its principles to Web marketing, also utilizing two submethodologies. Web site design as embodied in persuasion architecture is a similar to DMADV. The DMAIC cognate is how we tie Web analytics to Kaizen. Applying Six Sigma to Web marketing makes everything measurable. The result is a repeatable process. Of course, this doesn't apply equally to all areas of marketing. Advertising is an exception.

You Want Them to Buy? Sell Benefits
By Bryan Eisenberg

So you're the biggest, the best, the fastest, the first? So what. Big deal. How do you know if any of that answers the question your customer is asking, "What's in it for me?" (WIFM).

"Features versus benefits" is Marketing 101. But as I look around the Web, I wonder if anybody heard that through their college-day hangovers. Very few people even talk about benefits, much less make the effort to get really good at translating features into benefits. Yet power-packed words describing benefits are what trigger the emotions that motivate us to spend our money, time, or energy. People (including you and me) buy because of the positive emotions associated with the benefits.

"The 2001 model has a 220-horsepower V8 engine, antilock brakes, traction control, automatic safety restraint system, and both front- and side-impact airbags." This statement may excite some of you out there, but the average consumer (and by "average consumer" I also mean "most of them") is lost after the word "model." Speak to consumers in their language: "This car has a very powerful engine, so it won't need to work as hard as one with a smaller engine. You'll find it a pleasure to own, especially when you want to merge or pass. The extra power will also help you avoid obstacles and quickly get you and your family out of harm's way, while the extra safety features ensure you're all safe and secure. And it's great fun to drive!"

Here's another example: "This ring features a 1.4 carat, pear-shaped cut white diamond with an SI1 clarity grade and an H color rating." Huh? Unless you're a gemologist or you understand the four Cs (cut, color, clarity, and carat weight), that's just gibberish. Here is what might sell diamonds better: "Imagine that special evening when you gently slip this on her finger and stare intensely into her eyes. She peers at this symbol of your devotion, the promise of your future together, and tears begin to glisten. An adoring smile spreads across her face, and at that moment your love is sealed forever."

Would it be indelicate to ask that gentleman if he cared about the four Cs the next morning?

Focus on emotions, not intellect. Emotions are the gateway to making a buying decision. Zig Ziglar, a world-renowned sales trainer, explains, "People usually buy on emotion and then they justify it with logic." Therefore, appeal to their emotions first and foremost. Benefits are the language of emotion. Features are the language of logic. Even people who insist they buy logically or based on features do so because that's what makes them feel better.

One of the common problems companies have translating their product or service features into benefits is that they are "looking at the label from the inside of the bottle," in the words of best-selling author and ad guru Roy H. Williams. In other words, because they know too much about their businesses, they often assume that others, too, not only want to know them but also should know them. These companies spend time (and money) "assuming" and "shoulding" all over themselves.

How does one get out of this thought trap? I thought you'd never ask. Here is a process to use to identify benefits.

Products' attributes usually have four principal levels:

Features -- what products have. For example, "This application is able to handle multiple users concurrently."

Advantages -- what features do. For example, "This application provides essential information in real time."

Benefits -- what features mean. For example, "This information will allow your managers to keep their fingers on the company's financial pulse at all times."

Motives -- what features satisfy. For example, "This feature will provide cost-savings, control, and efficiency."
List all of the features of your product or service, including standard, technical, supportive, and abstract features. For each feature, develop a subsequent list of relative advantages, then list benefits, and finally motives.

I'll close this article with a simple question: Would you prefer to read an article that will provide you with data on sales, marketing, usability, consumer psychology, and Web site design, or one that can actually show you how to increase online sales?

The ABCs of GTC and POA
By Bryan Eisenberg

You step up to the counter of your favorite store. The cashier smiles at you warmly and asks politely, "Will that be cash or charge today?"

In sales parlance that's called an alternate-choice close. Whichever alternative you choose, you complete the purchase, and the merchant accomplishes GTC -- a well-established sales axiom: get the cash.

In the dot-com world, the meaning of GTC can be expanded. If you're doing business on the Web, you can still think of it as get the cash, or you can think of it as get the customer, or you can think of it as get the click. But however you think of it, definitely think GTC!

The Ka-Ching of Cashing In
GTC may be a nice abbreviation, but what do you do with it? Paint it on your monitor, embed it in your mind, and use it as a guiding principle whenever you are trying to get a prospect to take action.

Let's say you have an e-commerce site and your customer is ready to check out. To maximize GTC, you would offer all of the following, prominently and clearly:

Alternative ways to pay (credit card, check, COD, money order, etc.)

Acceptance of as many different credit cards as possible

Multiple payment channels (secure server, fax, mail, phone)

Third-party payment services -- Beenz.com, MyPoints.com, PayPal, AOL Payment Services, and so on -- if you determine they offer benefits to your business

Security assurances

Guarantees

Return policy

Privacy policy

But notice what you just did. You didn't just do the right things, you did them at the right time, at the right place. If you want to maximize the sales impact of what you do, you have to do it at the corresponding point of action (POA).

Get Them While They're Hot... or Not

You do provide reassuring policies on privacy, returns, guarantees, credit card security, shipping, and so on, don't you? Great. Now also make sure you provide them at the POA.

The key to gaining the confidence of potential customers lies not just in providing assurances but in providing the right assurances, phrased in the right way, and presented when they matter most to your customers as they move through your sales process.

Take a look at Nordstrom.com. With regard to POA, the site does a pretty good job of taking the brick-and-mortar customer experience and transferring some of the fundamentals online. At the bottom of most pages you'll see a section called Shop With Confidence. As soon as you get to the shopping bag or checkout pages, that same message is not just repeated, it's moved up the screen and displayed more prominently.

Here is some of the language used in the links:

Easy Returns, Free Exchanges

Secure Shopping

Credit Card Safety

Privacy

As you move through the (unfortunately way too many) steps of its checkout process, the "Shop With Confidence" message keeps following you.

Don't you want your own customers to shop with confidence, too?

Amazon.com also has a fine example of using GTC and POA. Its "Add to Shopping Cart" button uses both simultaneously. The Amazon.com folks know it is difficult to get someone to put something into his or her cart. What did they do? Right underneath the "Add to Shopping Cart" text they included "(you can always remove it later)." Amazing how seemingly little messages presented at exactly the right time can slip in subliminally and affect buying.

Why don't other sites do the same?

Making a Point of Point of Action
So often we neglect to use POA on our sites. Include a reassuring statement that you value your client's privacy right next to the subscribe or submit button, and it will increase response dramatically. Display a toll-free number prominently at all times, and if shoppers have a problem, they'll be more likely to call you than just click off to another site.

After the sale, include return, shipping, and customer-service information along with your order confirmation. (You do confirm every order, right? And say "thank you"?) When you deliver, include an incentive to return to your site. This is when customers are most delighted with their transactions with you (hopefully), so it's when they're most inclined to return. They might need just a little push, and your incentive will do the trick. Oh, and why would they "tell a friend" before their experience with you is complete and delightful? Then don't ask them too soon. By all means, ask for referrals -- but only at the right POA.

Isn't it time your site graduated from the ABCs of business to the slightly more advanced GTC and POA?

Navigating Through Analysis Paralysis
By Bryan Eisenberg

In last week's article, I spoke about the importance of keeping your site as simple as possible. You never want your prospects to be confused or frustrated. This is especially true when they are dealing with navigation.

Many designers and information architects plan their navigation based on George Miller's landmark research on recall tasks. His research concluded that the human memory system has a capacity of 7 1 2 chunks.

First of all, that research was done almost 50 years ago. Second, while Miller's research has stuck in people's minds, a lot of other research indicates that the number may be as small as 4, not 7. But even more important, designing good navigation for a Web site has little, if anything, to do with prospects' recall ability. The key, rather, is in how human psychology handles choices.

Where to Go, I Don't Know
It's Saturday night. You get together with a bunch of friends. You're the first to suggest, "Let's get something to eat!" Another friend pipes up and says, "What are you in the mood for?" How often do you hear those infamous words, "I don't know"? If someone had shouted, "Pizza or Mexican!" everyone would have had an immediate opinion. But when faced with too many choices, our brains seem to freeze. Instead of making one, we become paralyzed while thinking about which one to choose, and often end up not choosing at all.

The Alternate-Choice Close
It might sound counterintuitive, but the best way to make a sale is to limit the buyer's choices. An alternate-choice close presents the customer with a simple choice; regardless of which choice the customer makes, the sale is closed: "Will that be cash or charge?" "Do you want that in yellow or blue?" "Would delivery tomorrow be OK, or would Friday be better?"

Studies have shown, and experienced salespeople know, that if you ask simple yes/no questions, you're likely to get a "No," but if you offer customers a clear, simple choice, they are very likely to choose one of the options you offer, and you make the sale.

Now, you have to realize that every step in your navigation is a minisale, and you have to design it accordingly.

Getting Around
There are numerous navigation schemes. Hierarchical, global, supplemental, and embedded links are the most common.

Hierarchical navigation helps people keep track of how deep into the site they are (e.g., books/subjects/business). Global navigation schemes, such as tabs, help direct and orient the customer to what type of products is available (e.g., Books, Electronics, Music). Supplemental or local navigation allows users to get to related information within a category rather than between categories (e.g., Advertising: Web, TV, print, radio). This is particularly helpful when your visitor has landed on your site via a search engine but hasn't landed on quite the right page.

But from our work with clients, we've discovered that the navigation scheme important to actually closing more sales is the embedded-links scheme. And it's very easy to implement. Within the body of your (great) copy, you simply place links to the places you want prospects to go next. Of course, what works best on your site can be determined only by testing. And, naturally, embedded links are only one component of a complete navigation structure.

If embedded links are done well (a topic for another article), they will engage your users effectively as they browse within the "active window" of your site. The active window is the main area of your page, underneath or to the side of your main navigation. It is where you place your body text, display your products, and present your offer. It is also where you want to keep your visitors' eyes focused. If you properly engage them in this area by providing the right choices to click on, you persuade them to follow the path you want them to take. This is also why it is very important to keep a consistent look and feel around the active window.

The Power of Blue
Be sure to take advantage of conventions most of your prospects already understand. I am all for creativity, but when designing for the Internet, it's foolish to make your prospects learn quirks of your site design when what you want them to be doing is shopping.

John Rhodes, my friend at WebWord, wrote about population stereotypes. These are the long-term habits and well-ingrained knowledge we have about the world around us (Kantowitz & Sorkin, 1983). Ask anyone who has logged only a few hours of Internet surfing, "What color are hyperlinks?"

As John says, "The color blue for links is a very powerful population stereotype." When you break that stereotype by using a different color scheme, you undermine the usability and, ultimately, the "shopability" of your site. You actually hide your links instead of making them easy to find. On the flip side, people get really ticked off when something is blue and underlined yet is not a link. (Yes, I've seen blue, underlined text that does not function as a link -- absurd!)

They Want to Buy
Don't make it hard for your prospects to be able to find what they want and buy it. By choosing the right navigation scheme, you not only make the process easy for your customers, but also make it a process that actually influences the closing of more sales

KISS Your Customers If You Want Them Back
By Bryan Eisenberg

KISS. It stands for "Keep it simple, Stupid." You've probably heard it before, but from where I stand, the message needs some SHOUTING.

The key to successful Web site design isn't sophistication, it's simplicity. Designing for simplicity is anything but simple (as if I needed to tell you that). But well-thought-out simplicity is what makes the successful Web sites successful. When you want to learn to be the best at something, do you study the amateurs or the pros?

The best Web sites load in about 10 seconds at 28.8 Kbps. Your designers may have T1 lines or DSL or cable modems, but 93 percent of your customers don't. Plus, all sorts of things further slow down download times. But the bottom line is that nobody is going to wait more than 10 to 15 seconds for your page to appear. Want your site to appeal to most people? Well, most people still surf at speeds under 56K, have their monitors set for 800 x 600 resolution, and don't even know they can change that, much less how.

On the Web, visitors look first for relevant text, not graphics. Make clear, strong text available right away. That will also keep them interested while graphics load. Use graphics only if they help prospects understand what they are looking for or if they convey information that can't be conveyed effectively through text. And keep graphics as simple as possible so they load quickly.

The best Web sites have simple and consistent navigation. Your average prospect will view two to three pages before leaving; so, at best, you're two clicks away from dead in the water unless you help her get where she wants to go quickly.

Respect conventions
Blue, underlined text means hyperlink, or "Click here," to almost everyone. Don't confuse anyone! Avoid underlining or using blue text for anything else. Place your navigation cues on the top or left of every page, with the same links arrayed at the bottom. Use categorization schemes that make sense (a series of tabs or something similar works well) for multiple elements.

Make everything obvious
First and foremost, help your prospect see the information -- white backgrounds are quick to download and help information stand out. Label stuff, and do so clearly -- no jargon. Offer concise explanations. Always remember: If your visitor can't find a function, it's not there!

Never leave your prospect stranded anywhere on your site
Imagine you're lost in the middle of a huge store with no signs. Where's housewares? Where's checkout? Where's the bathroom?! Now, how much do you like this store? How much do you want to buy now? So, on your site, provide clear navigation from anywhere to anywhere, and do it on every page. And for heaven's sake, keep all your navigation links within your page. Unless you want to encourage your customers to leave, don't direct them to the Back button on the browser. Any trip to the menu bar is an opportunity for your prospect to kiss you goodbye.

The best Web sites don't assume the client is an expert user. Technology is a wonderful thing, but Joe and Josephine Consumer are years behind the tech types. Therefore, your GUI should be simple (GUI, graphical user interface, pronounced "gooey" -- the sort of stuff you won't want your prospects stuck in). Also, never make them download plug-ins. Average shoppers don't know how, and even if they do, why take them away from the shopping process and force them to do something else because some designer thought it would be cool? They won't say, "Wow!" -- they'll leave. If you can't design it into your site and still have it load quickly and do all that other important stuff, leave it out. And give your prospects simple, clear instructions and helpful tools to guide them through the buying process. (If they can't understand checkout, they won't.)

Keep in mind
Visitors are looking for a reason not to trust you. Pay attention to the details: Check for typos, grammatical errors, screen error messages, images that don't open, browser compatibility problems, functions that don't work -- everything. Then have someone else check again. The best Web sites build their brands by creating a great user experience.

Short and sweet
Here's what the top 100 Web sites have in common -- fast download times; few graphics; little, if any, multimedia; no frames; similar navigation systems; high-contrast text with lots of white space; most links in "traditional" blue, underlined text; no background imagery; very few obvious JavaScript tricks; no DHTML; no splash pages; and a solid database-powered back-end. Simple.
Am I beginning to sound like a broken record? Good! Now, pucker up and give your prospects a big, delightful KISS.

What is Six Sigma?

A measurement and methodology for success

Our Six Sigma methodology is a proven tool set for driving and achieving transformational change within an organization. It is a business improvement process that focuses an organization on customer requirements, process alignment, analytical rigor, and timely execution.

Statistically speaking

Six Sigma is a measure of quality that strives for near perfection. The Six Sigma process uses data and rigorous statistical analysis to identify "defects" in a process or product, reduce variability, and achieve as close to zero defects as possible.

Using a universal measurement scale, Six Sigma defines and estimates the opportunities for error and calculates defects in the same way every time, thus offering a means for measuring improvement. In fact, Six Sigma takes its name from the Greek letter "sigma," which is used in statistics to indicate standard deviation.

The Six Sigma methodology incorporates this data and statistical analysis into a project-based workflow that allows businesses to make intelligent decisions about where and how to incorporate improvements.

The DMAIC Model

At the heart of Six Sigma is a systematic method for analyzing and improving business process called DMAIC. The DMAIC model includes five phases:

Define opportunities
Measure performance
Analyze opportunity
Improve performance
Control performance

What does this mean for you?

Ultimately, Six Sigma is about more than numbers. It's a highly disciplined methodology and practice that provides the tools you need to achieve consistent, high-performance results from your products and processes.

By increasing performance and decreasing variation, Six Sigma allows organizations like yours to make customer-focused, data-driven decisions that ultimately yield a reduction in product defects, increased profits and employee morale, and high-quality products - a win-win situation for everyone involved.

How Many Holes Are in Your Bucket?
By Bryan Eisenberg

In a recent article, I explained how once a user arrives on a Web site, the conversion process becomes a "sales funnel." At each step of the sales process, a site loses users. We use the leaky bucket metaphor for a site that doesn't successfully convert visitors into buyers. Traffic fills the bucket but leaks out of holes. You need to plug as many of these holes as possible.

Unfortunately, most people measure conversion by the complete macro-action they want users to take (e.g., how many people made a purchase, subscribed, registered, etc.). Every one of these actions is composed of a series of smaller actions. Each micro-action, or omission of one, is a potential hole in the bucket.

Take Microsoft. Assume we need to get people to download Internet Explorer 6 -- the macro-action. At present, the top image in the center column of its home page has the following text: "Download Internet Explorer 6 now. Experience the latest in private, reliable and flexible Internet browsing." Our ultimate goal is to get Jane Consumer to download and install the browser on her PC. Here's an outline of the necessary micro-actions:

She finds the link for IE 6 on the home page.

She understands it.

She clicks on it.

From the main Internet Explorer page, she chooses to download immediately, order a CD, or learn more.

If she chooses to learn more, the goal still is to get her back on track to download or order a CD.

If she then chooses to download IE 6:

Her first action is to select which language she wants.

Then she must click on the link to start downloading the setup file.

If she instead chooses to order a CD:

She must decide which CD she wants to order (there are 2 options).

Once the action of choosing the CD is complete, she is taken to step one of the form.

From there, she must continue filling out the form till the order is complete.
That's a lot of micro-actions! Imagine measuring the drop-off of activity every step of the way. How do you plug the holes in the leaky bucket? First, understand and account for every step in the process. Second, design effective calls to action.

Every page on your site should focus on getting the visitor to take an action -- even if that action is simply to move on to the next step in the process. Conversion rates suffer when sites fail to drive customer micro-actions and maintain momentum through the sales path. Once the path is defined and each of the micro-actions described, you can work on optimizing the most effective call to action for each step.

Back to Microsoft. On the home page, there's a link: "Download Internet Explorer 6 now. Experience the latest in private, reliable and flexible Internet browsing." This call to action is done well. Why? Simple. The sentence contains an active verb ("download") plus an implied benefit ("private, reliable and flexible Internet browsing") Action-benefit interactions work quite effectively. That's why they've been used by marketers for over three decades. Take the Columbia House Music Club pitch: "Join the Music Club: 12 CDs for Free!" Action to benefit. Energetic. Engaging. Compelling. The technique works particularly well with people who scan information, namely, Web users. Using well-placed blue, underlined text links within the page attracts attention.

These rules apply equally when you want a visitor to fill out a form. Display the form (a call to action itself) and specify the benefits. And specify the benefits at the point of action. Finally, when visitors accept a call to action, their expectations must be satisfied. Deliver the benefits!

How well have you mapped the actions you want your prospect to take? How well is she guided, step by step? Are you letting her slip through any of those holes?

helllo all

Advergaming Catches On
By Tessa Wegert

Last week's column discussed online gaming ads -- a marketing method sometimes referred to as "advergaming." Since then, a deluge of e-mail has come in from other marketers generously sharing campaign results from their personal experiences with this technique. The sheer magnitude of feedback suggests this format in online marketing campaigns is catching on.

Beyond that, the nature of the responses I received indicate high performance levels that are in line with what Dreamam Ltd. asserted last week: The ads encourage consumer interaction, garnering relatively high click-through and conversion rates in the process. This facility for engaging users has led many companies to develop online games that not only increase brand awareness and recall, but that also can be used in conjunction with online contests and promotions to attract registrations and expand e-mail databases.

Online games come in many forms. Perhaps the most recognized are the highly visual, action-oriented pop-ups familiar to NYTimes.com users. They're primarily used by advertisers for branding purposes and are generally delivered via pop-ups and in various other ad formats on third-party sites. The objective is to attract traffic and acquire new customers.

Instant-win promotions and contests requiring some level of consumer participation are increasingly popular. Again, their purpose goes beyond branding into acquisition and building databases of customers and prospects. These games can take many forms, from a roulette-style wheel spun by the user to determine whether she's got a winning game card to an online drag race in which consumers challenge an automated car for a chance to win a related prize.

One marketer specializing in such online instant promotions had noteworthy results with incentive-based online games and contests. According to Bob Marsh of ePrize LLC, whose client roster includes General Motors, IBM, Snapple, and The New York Times, "Our clients are making a very rapid shift to these instant-win promotions which have a 'gaming' element to them and are seeing very large spikes in participation."

Marsh points out the average instant-win game created by his company receives 2.7 times as many opt-in registrations as a traditional sweepstakes promotion. He claims the average cost per opt-in is 34 percent lower than a sweepstakes.

An interactive scratch card is another incentive-based online game. With a proven track record for success, this is particularly effective when paired with an online contest. The technology behind this particular game -- as straight-forward a concept as the name suggests -- allows a registrant to use the mouse to uncover boxes on a game card to reveal logos or symbols. Depending on how the game is customized, if a user uncovers a certain number of logos or reveals matching symbols, he's an instant winner. Losing participants are still registered in the advertiser's database, having provided their contact information before being permitted to access the game.

My agency has developed these scratch card games for some time now. We've had considerable success in business-to-business (B2B), notorious for hard-nosed users who prefer substance over style. A recent card created for a B2B client that was promoted on targeted portals and network sections garnered a 14.82 percent conversion rate. Over half of all the game's registrants also signed up for the client's e-mail newsletter.

A business-to-consumer (B2C) online scratch card game for another client utilized a similar concept. In this version, the user could play the game without supplying any personal information. Nevertheless, almost 55 percent of players volunteered their names, e-mail addresses, street addresses, birth dates, and gender and opted in to receive e-mail from the advertiser.

Some readers weren't able to disclose campaign statistics for client confidentiality reasons. All maintained their experiences with online gaming ads -- specifically in conjunction with contests -- have been successful overall. If you're considering the approach, act now -- while the concept's still a novelty. Given the rate at which popularity is increasing, this phase of the phenomenon won't last long.

The Industry has Spoken (Again) – Part II
Joseph concludes his coverage of and insight into Ad Age’s AdWatch: 2003 Outlook conference, which took place last month in New York.
By Joseph Jaffe

Two weeks ago I began my AdWatch coverage with an assessment of the forecast presentation, followed by the first panel which focused on the bigger advertising picture. This week I’ll conclude with some of the most powerful thoughts or themes I took away from this panel and the ones that followed.

Things are Going to Change, but not on My Watch

It’s amazing to me how some of the most senior and influential figureheads in this business can also be so sheep-like. I keep on hearing talk of change or hints of action, but they always seem to be just around the proverbial corner.

Case in point
“We love TV, but it’s no longer enough” or “TV in itself is no longer enough to round out a total communications program” from Wendy’s Don Calhoon. That might sound inspirational enough but now let’s check the walk against the talk with Wendy’s 2002 spend numbers. According to Ad Age’s 100 Leading National Advertisers report (based on total U.S. advertising spending in 2002) Wendy’s spent 84% of its measured media spending on TV. Online came in at a click through like 0.036%.

How cynical I’ve become in just one year.

Let’s move on.

Say It with Me:
“Procurement” P-R-O-C-U-R-E-M-E-N-T. That’s PROCUREMENT.

The consensus was pretty overwhelming: procurement is here to stay; consultants are here to stay (phew!); purchasing driving pitches is here to stay.

Stephen King couldn’t have written a scarier headline.

I’m not sure when the line was crossed, but the day that agency pitches stopped being about top ideas and started focusing in on bottom line a vital cog became detached from the very mechanism that makes the entire business tick.

According to Grey Worldwide’s President Steve Blamer, the financial emphasis has put marketing clients on the sidelines and in some categories, such as DTC for example, the brand team is not involved in the process until the deal is actually done. And there’s nothing marketing folk hate more than inheriting an agency…

Universal McCann’s Chairman-CEO Robin Kent surmised that there will be some upside to the continuation of the procurement trend in that this will ultimately make agencies smaller. Another implication will be new perspectives and approaches on compensation altogether. Both are sorely needed.

Panel II — Consolidation: Is Bigger Better?
The second panel of the day focused on consolidation – you know, that which makes the rich, richer and the poor, poorer.

IPG’s Chairman and CEO David Bell, Berlin Cameron/Red Cell’s Chairman Andy Berlin, Viacom Plus’ EVP Lisa McCarthy and Patrick Kelly, Pfizer’s President of U.S. Pharmaceuticals, were just some of the panelists on the impressive stage.

But it was Jon Mandel, MediaCom’s Co-CEO, who burst out of the starting gate with his analogy of nine-year-old boys and power – the belief being here that he who has the bigger stick, wins. Or to put it more upfront, “You can’t beat the market if you are the market.”

He segued into a discussion about the importance of talent and most of the panel agreed that ultimately, it all comes down to being able to tap into a reservoir of best ‘n brightest -- which is all well and good, except for the fact that consolidation and talent are as diametrically opposed as oil and water.

Jessica Reif Cohen, First VP, Managing Director at Merrill Lynch, questioned the impact on talent in light of the move towards procurement, waves of layoffs and tighter focus on margins, as well as the implications from bureaucracy and politics, two resident side-effects of size.

Or as the late Jay Chiat once said, “Let’s see how big we can get before we suck!”

Pfizer’s Kelly brought a more sobering reality to the conversation by rebuking Deutsch agency founder Donny Deutsch’s industry rants in favor of a pragmatic demand of wanting to get the best (read: acceptable) possible work for the best (read: lowest) possible price.

The conversation then degraded into an oversimplification and explanation of the differences between “good big and bad big, good small and bad small.” In other words, big is not always bad.

Whatever you say, Goliath.

Panel III — Communication Strategies: Maximize Your Media and Marketing Budgets
Panel three was a bit of a mixed bag, but in it was the jewel of the entire day’s proceedings – Keith Reinhard, DDB Worldwide’s Chairman. Reinhard doesn’t have to say anything he doesn’t want to – in other words, gratuitous plugs or pre-selected sound bytes to appease the audience and fulfill the headline writers. So when he does talk about something visionary or slightly off the beaten track, it’s best to take note of his advice.

Reinhard gets it. In fact he was probably the only person present who spoke intelligently and articulately about what I call New Marketing and what you might call New Media or Digital Marketing.

The conversation began on the subject and importance of emotional connectivity and evolved into brand experiences. Both subjects are no strangers to the interactive world: the former typically as a hurdle and the latter as a springboard.

AT&T’s VP of Marketing Communications and Brand, Cathy Constable, volunteered the recent “Talk is Good” campaign as a testament to the power of emotional connectivity. I personally find this as asinine and believable as Citi’s “Live Richly”; however, the fact remains, “people use products, but they buy brands.”

Quite clearly, creativity is the means to achieve the emotional connectivity and/or brand experience ends, particularly in a landscape dominated by an oversupply of meaningless clutter. This is perhaps why we need to begin to rethink the very definition of creativity, and for that matter, media too. These were the thoughts introduced by Graham Bednash, Managing Partner of Michaelides & Bednash.

In its current iteration, media and creativity are both synonymous with 30-second television commercials. Reinhard, however, introduced some powerful thoughts that might help us get beyond the “interrupt, repeat; interrupt, repeat” monotony of mainstream media communications.

He highlighted the importance of helping creatives to migrate and evolve beyond the heroin fix of television, and in doing so helped identify why it’s just so hard to do so. Some of the reasons given included:

The “reel” problem – meaning if you can’t put it on a reel, it’s not worth it.
However, this is only because it’s where client demand is and for this reason, agency pay structures favor those who create the best television ads.
This being said, Reinhard paved the road ahead with the building blocks of multi-channel ideas and the execution thereof. He also identified the “tipping point” as being the day clients demand big multi-channel ideas and the good news is that this is beginning to happen.

Of course the problem now is that there is an entire community that doesn’t understand (or cares to understand) life after TV. He cites the ineffectual Cannes ceremonies, which still silos each media category instead of uniting them and organizing them around brands and ideas.

He specifically called out TiVo, Gaming (for example: McDonalds’ involvement with The Sims online) and the Web as indicators of where the audience is or will be.

Instead of worrying about how to divvy up budgets, Reinhard expressed that the focus should be on the consumer. He posited on what he called mental convergence i.e. will consumers use specific media for specific purposes e.g. TV for entertainment or the Web for information?

He also introduced a rather delightful quote, “The tyranny of or, as opposed to the genius of and,” which I’ll let you interpret the way you see best fits in the context of this conversation.

If you’re wondering why I didn’t spend much time on the other panelists, which included Greg Coleman from Yahoo! and Traug Keller, President, ABC Radio Networks, it’s because they just didn’t add anything remotely new to the forum.

Truth be told, I was somewhat disappointed with Interactive’s only representative at the day’s proceedings. Last year, AOL’s Ted Leonsis spoke about life after advertising; this year Coleman spoke about paid search. At the time, I almost fell off my chair that the best Yahoo! could come up with was text links. Now my disappointment is interspersed with a bitter aftertaste as I understand Coleman’s Overture pretty clearly.

GM’s C.J. Fraleigh delivered the lunchtime keynote and the day concluded with the final panel on Madison + Vine (I’ll save these two for a rainy day in the near future).

All in all, one of my highlights continues to be an emphasis on the significance of unique and relevant big ideas that are workable solutions before they are one-size-fits-all ads.

See you all at next year’s bash (or before.)

DoubleClick Report Shows Maturing Industry
Reported by Dawn Anfuso

DoubleClick Inc.’s Q2 2003 Ad Serving Trend Report released this week shows that online advertising is getting richer and bigger, and having an affect on branding.

The data reveals that rich media usage continues to grow quarter by quarter, while larger ads have surpassed the smaller options in popularity. The report also suggests that marketers, having mastered direct response on the Web, are now perfecting the art of online branding and creating more memorable ads that leave lasting impressions. This is evidenced by declining click-through rates - the lowest in six quarters - and higher view-through rates (assessed when a user takes some action on an ad within 30 days of viewing, but not clicking on it).

"Building on the success of online direct response, marketers are starting to really take advantage of the Web as a branding medium," says Doug Knopper, vice president and general manager, Online Advertising Solutions, DoubleClick. "As DoubleClick's latest report shows, click-throughs are being deemphasized and we're seeing more memorable ads that will have a latent impact on the user. Rich media, which has shown massive growth, promises to play a central role in these branding strategies."

The top-line findings

Rich Media and Larger Ad Formats Gaining
Rich media, defined as dynamic ads that fly across Web pages, pop-ups, and any ad that includes Macromedia Flash creative technology, increased from 17.3% of all ads served in Q1 of 2002 to nearly 32% (31.7%) in Q2 of 2003. While on average, it has been increasing 10% per quarter, it increased 14% from Q1 2003. Flash accounts for the largest percentage of rich media served and is now nearly 14% of all ads served.

Rich media also continues to display stronger conversion rates than non-rich media (GIFs and JPEGs). Rich media generates higher rates of post-impression activity per impression (.76% vs. .55% for non-rich media) as well as post impression sales per impression (3.07% vs. 1.02% for non-rich media).

In terms of ad size, the standard banner (468 x 60 pixels) still accounts for a substantial portion of all ads served (42%), but it has been losing ground to other, larger sizes. Since Q2 2002, the standard banner declined in volume by 23% and the button is down 43%. Larger ad units, however, like large rectangles (both 300 x 250 and 336 x 280) increased 257% and 117%, respectively. Skyscrapers, which are now the 2nd most popular unit, accounting for 9% of total volume in Q2, grew 55% from Q2 2002 to Q2 2003.

Newer large units are performing well. The leaderboard, a wide unit (728 x 90) that often appears at the top of Web pages, is now the fastest growing size at 562% growth from Q2 2002, and is now the fourth most common size served by DoubleClick. Half-page ads (550 x 480) had the second highest response rate at .90%.

Click-Throughs vs. View-Throughs Suggest Growing Use of Online Advertising for Branding
The report notes that click-through rates have declined to the lowest in six quarters, while view-through rates have continued to rise, surpassing click-throughs (.63% vs. .52%). View-throughs assess some action observed within 30 days of a consumer viewing an ad (post impression impact). These metrics are part of the larger picture of the effectiveness of online advertising: click-throughs assess immediate response, while view-throughs reflect the latent impact of that online ad.

Average click-through rates for ads served by both advertisers and publishers declined 14% from Q1 to .61% in Q2 2003; the rates had remained constant in the previous five quarters at an average of .70%. The decline of click-throughs and the growth of post impression metrics like view-throughs could reflect growing use of online advertising for branding: more creative executions designed to have impact over time rather than solicit immediate response.

Online Advertising Volume Increases
DoubleClick Ad Serving volume has increased to its highest level since Q2 2002 and is currently at 149.8 billion ads delivered for the quarter. This is a 5% increase over Q42002 and a 10% increase over Q1 2003.

Rich Media and Larger Ad Units Maintain Growth Levels
by Newswire Report

DoubleClick Inc. on Wednesday announced results of its Q2 2003 Ad Serving Trend Report, which reveals that rich media usage continues to grow quarter by quarter, while larger ads have surpassed the smaller options in popularity. The report also suggests that marketers, having mastered direct response on the Web, are now perfecting the art of online branding and creating more memorable ads that leave lasting impressions. This is evidenced by declining click-through rates -- the lowest in six quarters -- and higher view-through rates (assessed when a user takes some action on an ad within 30 days of viewing, but not clicking on it).

"Building on the success of online direct response, marketers are starting to really take advantage of the Web as a branding medium," said Doug Knopper, Vice President and General Manager, Online Advertising Solutions, DoubleClick. "As DoubleClick's latest report shows, click-throughs are being de-emphasized and we're seeing more memorable ads that will have a latent impact on the user. Rich media, which has shown massive growth, promises to play a central role in these branding strategies."

Rich Media and Larger Ad Formats Gaining
Rich media, defined as dynamic ads that fly across web pages, pop-ups, and any ad that includes Macromedia Flash creative technology, increased from 17.3% of all ads served in Q1 of 2002 to nearly 32% (31.7%) in Q2 of 2003. While on average, it has been increasing 10% per quarter, it increased 14% from Q1 2003. Flash accounts for the largest percentage of rich media served and is now nearly 14% of all ads served.

Rich media also continues to display stronger conversion rates than non- rich media (GIFs and JPEGs). Rich media generates higher rates of post- impression activity per impression (.76% vs. .55% for non-rich media) as well as post impression sales per impression (3.07% vs. 1.02% for non-rich media).
In terms of ad size, the standard banner (468 x 60 pixels) still accounts for a substantial portion of all ads served (42%), but it has been losing ground to other, larger sizes. Since Q2 2002, the standard banner declined in volume by 23% and the button is down 43%. Larger ad units, however, like large rectangles (both 300 x 250 and 336 x 280) increased 257% and 117%, respectively. Skyscrapers, which are now the 2nd most popular unit, accounting for 9% of total volume in Q2, grew 55% from Q2 2002 to Q2 2003.

Newer large units are performing well. The leaderboard, a wide unit (728 x 90) that often appears at the top of web pages, is now the fastest growing size at 562% growth from Q2 2002, and is now the fourth most common size served by DoubleClick. Half-page ads (550 x 480) had the second highest response rate at .90%. Click-Throughs vs. View-Throughs Suggest Growing Use of Online

Advertising for Branding
The report notes that click-through rates have declined to the lowest in six quarters, while view-through rates have continued to rise, surpassing click-throughs (.63% vs. .52%). View-throughs assess some action observed within 30 days of a consumer viewing an ad (post impression impact). These metrics are part of the larger picture of the effectiveness of online advertising: click-throughs assess immediate response, while view-throughs reflect the latent impact of that online ad.

Average click through rates for ads served by both advertisers and publishers declined 14% from Q1 to .61% in Q2 2003; the rates had remained constant in the previous five quarters at an average of .70%. The decline of click-throughs and the growth of post impression metrics like view-throughs could reflect growing use of online advertising for branding: more creative executions designed to have impact over time rather than solicit immediate response.

Online Advertising Volume Increases
DoubleClick Ad Serving volume has increased to its highest level since Q2 2002 and is currently at 149.8 billion ads delivered for the quarter. This is a 5% increase over Q42002 and a 10% increase over Q1 2003.

Online Planning Tools Come of Age
by David Ward

With online still only getting on average one to three percent of media dollars — even in an integrated advertising campaign — you might think that the prospects for Internet marketing have changed little since the dot.com collapse of a few year ago.

But a lot has been going on just under the radar. Up to now, most advertisers have run Internet-based campaigns for direct response capabilities that online provides, but a host of companies are offering new tools that allow for the sort of audience segmentation and demographic targeting that has long driven traditional, offline brand awareness advertising as well.

The result is an almost unprecedented ability to gather information about an audience, which is taking some of the guesswork out of online media buying and planning, and enabling agencies to create detailed, compelling cases to get traditional brands back online.

“In many cases the media planner will tell us I want as much data on a given audience as possible — demographic, behavioral, attitudinal — I want it all,” says Karl Siebrecht, vice president of strategy and product management for Atlas DMT. “They want to be very granular, and the Internet can help them do that.”

A lot of this wouldn’t have been possible without several pieces falling into place, most notably the maturation of the Internet as a medium. “There's no question that both the Web as a whole and individual sites have stabilized,” notes Douglas Knopper, vice president and general manager-online advertising at DoubleClick. “There are studies out there that find that the average person doesn't go to more than 10 or 12 sites in any given period of time, and that makes sense. There was a lot of experimentation going on in the early days, and there's a lot less of that now.”

With that stabilization has come the realization that the overall online audience doesn’t differ that much from consumers for television, print, and radio. “There can be some cases where it can skew a little bit more affluent and a little bit younger, but the entire Internet population is reaching a point where it is approximate of the US population,” says Amy Auerbach, associate media director for Euro RSCG Circle.

This in turn has enabled companies such as DoubleClick with its MediaVisor program, Atlas DMT, and Mediaplex, to develop the tools and technologies that allow for what essentially are “apples to apples” comparisons of online and offline audiences, as well as advertising campaigns.

“When Internet media was a new thing, people realized that super-sophisticated targeting was suddenly possible, and you could then reach very narrow demographics or behavioral segments,” explains Siebrecht. “The problem was a lot of people got ahead of themselves and, instead of starting with the basics, they started with crazy, super-sophisticated new stuff that a traditional media person couldn't process. Their world is women aged 18 to 49 — the type of demographics you could buy on TV.”

Part of the recent efforts by Atlas DMT, DoubleClick, and others have been on tools that allow online campaigns to be framed, through use of the same metrics and terminology, in ways that are easily understood by traditional marketers.

“There has been some resistance to companies using online in the traditional advertising sense,” says Greg Pomaro, group media director at Exile on Seventh. “That is due in part because it has sort of its own language, and there’s this layer of technology that pervades everything that happens online. Companies don’t have to deal with that in, say, broadcast, where your entire creative decision is basically, are we going to do a 15- or a 30-second spot. We have to make sure that we’re giving a common frame of reference, so we can discuss a range of media choices in somewhat more common language.”

With these tools in place, online media buyers and planners can then take advantage of what the Internet does best, which is to enable the gathering of huge amounts of information about an audience, and then combine that with technology that can deliver ads relevant to any consumer’s interest. “What all this leads to is contextual ads delivered to a finely defined demographic,” says Knopper.

In many ways the tools are already being rolled out to enable what amounts to the next step in contextual advertising. An example is a consumer who visits a website and clicks on an article about the CIA headquarters. In a static contextual scenario, that may trigger a banner ad for an espionage-related movie, book, or TV show. But if you had gathered historical data on that visitor, and knew that his interests were more likely to be government spending, or northern Virginia commercial real estate, or even simple acronyms, you could change the ultimately delivered ad accordingly.

These are admittedly uncharted waters, and not everyone thinks the advertising community is ready for it, especially given that some of these tools carry with them some “Big Brother”-like implications. But Atlas for one already has a tool that allows advertisers to gather information on where your best potential customers tend to gravitate online, which can then give you great insight into their interests.

“Basically you put these action tags (commonly known as “cookies”) on the ‘landing pages’ you’re trying to drive traffic to and then, after a while, the cookies collect information on where those people who’ve visited that landing page tend to visit,” explains Greg Brown, managing director with FCBi Seattle. “So in theory, you kind of build a profile of the people that run to those sites, being that they they’re going to have a higher tendency to visit your (client’s) site.

Brown and others note that while this information is gathered in aggregate, and doesn’t necessarily give an agency and its clients access to each individual’s specific online movements, there already is some concern about potential privacy issues. “Atlas has done a pretty good job of presenting this on paper, and so we’re going to test: number one, what kind of return do we get and number two, what are the privacy implications?” says Joe Giannantonio, analysis director for Exile on Seventh. “For a direct marketer, this approach could be a way of reaping higher returns on your investment dollar, but in terms of the efficacy relating to privacy by both the publishers and individual, it’s going to be more of a challenge to promote that kind of marketing.”

But media buyers and planners don’t have to rely on their own tools and technologies to better segment their audience. Even though most are vigilant about respecting their audience’s privacy, the publisher sites themselves have been increasingly aggressive about using opt-in surveys and online subscription forms to better segment their users. Led by the NewYorkTimes.com site and others, these sites are building vast databases on their users, and are just now beginning to offer up this information to media planners, so they in turn can craft campaigns that target particular segments within that site’s audience.

“There is a growing consciousness that (the sites) have got to be proactive in audience management and audience segmentation if they are going to meet the needs of advertisers and agencies,” notes Dave Morgan, CEO of New York-based Tacoda Systems. Tacoda provides tools that enable publishers to integrate information on their audience from a variety of sources, including web servers, ad servers, opt-in registrations programs, and commerce systems, as well as from offline databases. The company works with the sites to analyze that data and segment out their audience accordingly, and then hands that information off to the publisher’s ad server, email server, or whatever else is needed to deliver a marketing program.

Morgan agrees that there is a need to come up with a common framework that enables brands to compare offline and online ad programs. But once that’s in place, he argues, the sites themselves can then take the leading role in segmenting out their audience and present target groups to advertisers, since they’ve already established an ongoing relationship with their users.

“The agencies only get to segment what they’ve already bought, but if the publishers manage the segmentation, they can deliver to the advertisers the exact audience that they want,” Morgan says. “They can deliver say, one million young women twice a month, and actually give them 100 percent audience composition of those people, as well as measure the results for them.”

Once you’ve gathered all this information on your audience, it’s then up to the media planner to figure out what information can be used for direct response, which the Internet has always excelled in, and to help determine what should be factored into brand-building, reach and frequency media buys. “We haven’t found that demographics are a very good indication of purchase,” says Andy Sims, media director at SF Interactive. “Now, from a brand perspective where you’re really concerned with moving large groups of people to think about your product, demographic targeting becomes very important.”

Above and beyond audience segmentation tools, Atlas DMT, DoubleClick, Mediaplex, and a few other smaller players also offer software products for everything from putting in and tracking insertion orders, to real-time measurement of a campaign’s ongoing effectiveness. So it’s tempting to think that online media buying and planning may eventually become a bit of a plug-and-play job. You simply put in your client’s demographic target and campaign goals, and out pops the sites you should be advertising on, as well as the recommended media spend.

But the interactive media directors we spoke to stress that these new technologies are what they are, simply tools. “These planning tools allow us to hedge our bets up, particularly when it’s a new target for the client or a new client for us …and then we can get a direct experiential read on what these tools tell us,” says Giannantonio. “The tools may tell us that Yahoo! is a great place for the target, but we can never get a rate that will make it pay out for us.”

Jordon Hirsch, media supervisor with Earthquake Media, adds, “Your clients have to know that you’re looking at things creatively and from a different angle than a computer that’s just going to spit out numbers. For one thing, some of the categories they have may not be as individually ‘cookie cut’ as some clients you may have. A lot of programs may end up picking the top five [websites], but sometimes as an adviser, you don’t want to go to the top five. You may want to go to another site that is outside of the top five, in order to dominate that space with rich media and other things.”

Web Team Roles and Responsibilities: Who's in Charge?
by Gerry McGovern

A major shift is occurring in who is in charge of the Web. Previously, responsibility tended to be with IT. Occasionally, marketing was in charge.

Today, the Web site—particularly the intranet—is the responsibility of the communications department. This is as it should be.

At a recent content management workshop in Washington, DC, a woman informed me that she had been nervous about attending. “However,� she said in a relieved voice, “when I saw all the other women here, I felt a lot more comfortable.�

In the last couple of years, I have noticed a significant shift in the profile of people who are attending my talks and workshops. In previous years, the crowd would have been very much male and from IT.

Now, around 70% of those attending are women. Most of these women have a communications background.

Communications is the natural home for the intranet, since the Web is inherently a communications vehicle. The public Web site should also be driven by a communications expert who has a strong marketing focus.

Currently, many organizations are struggling with a Web team that is no longer suitable. There is the pioneer who built the original Web site by hand. He (it was generally a man) persevered when the Web was largely ignored. It was his baby.

But now, the Web site has grown up and been embraced by the larger organization, and in those circumstances the pioneering attributes of doggedness and individuality often become drawbacks. The best pioneer knows when to gracefully step aside and let the Web site go to the next stage of development.

Graphic designers were often heavily involved in early Web development. The role of the graphic designer is greatly diminished today. The Web is about standardized design. Text dominates. Thus, editors and writers are in far greater demand.

Marketing people in love with Flash and splash screens often do more damage than good. However, if they understand that e-commerce is about selling with content, they can make a significant contribution.

In the early years, getting a Web site going was a major technical challenge. That is no longer the case. Web technology is becoming more reliable and standardized. Thus, the role of the IT department is becoming less central.

Some IT managers are only too happy to hand over responsibility. Their staff became accidental writers and editors. They want to get back to their core focus of making technology work.

Unfortunately, some IT managers like the extra power that owning the Web site gives them. These managers become blocks to progress.

Communications staff should embrace the Web, but many of them don’t. Many are technophobes who think that because IT originally owned the Web, it must be technical. Others are locked into a print view of content. They don’t want to take the time to learn how to write effectively for the Web.

So, it’s not simply about shifting responsibility for the Web over to the communications department. Old habits will require changing. New skills will have to be learned.

But the change is well underway. The Web may have been the almost exclusive domain of techies. Today, it is increasingly the domain of communicators.

Improving web marketing effectiveness
Most organisations now have a well-established online presence, but how is it contributing to the business and how can its marketing performance be improved? In this article Dave Chaffey reviews approaches to measuring and improving web marketing.

Introduction
Most organisations now have a well-established online presence and naturally they want to assess and improve its contribution to the business. Measuring and optimising a web site is not straightforward as is suggested by these quotes from the NetGenesis e-metrics report.

‘I think working with this volume of data is a bit like being in a canoe in front of a tidal wave – paddling like hell and just hoping it doesn’t overrun you’

Publishing Company

‘Right now there is a growing demand to the point where people are banging on the door so that business decisions can be made on fact rather than fiction’

Services Company
A 2000 survey from Accenture and Cranfield School of Management has also highlighted the difficulties facing marketing managers looking to introduce or improve such measurement systems. Managers were asked to name their priorities for improvements to e-business measurement systems.

For Bricks and mortar companies, developing or introducing a more comprehensive measurement system and enhancing analysis capabilities to establish what really drives business performance was most important.

For Clicks and Mortar, integrating new systems with legacy systems and benchmarking against best practice was most important.

Finally dot-coms were concerned with improving clickstream analysis and customer tracking and profiling and improving the entire company’s performance measurement system.

In this article and the next we will describe an approach for building an e-marketing measurement system that will overcome some of these problems. It can be suggested that the following are needed:

(1) An effective process for the performance measurement,

(2) A metrics framework that specifies groups of relevant metrics,

(3) Appropriate tools and techniques for collecting, analysing, disseminating and actioning results (this is covered in next month’s column).

1 The process for performance measurement
To find the best process for measuring and improving the web presence we need to understand the barriers to implementing an effective process. Those commonly encountered are

· Senior management myopia – performance measurement not seen as a priority, not understood or is targeted at the wrong targets – reducing costs rather than improving performance.

· Unclear responsibilities for delivering and improving the measurement system

· Resourcing issues – lack of time (perhaps suggesting lack of staff motivation), the necessary technology and integrated systems

· Data problems – data overload or of poor quality, limited data for benchmarking



To avoid these pitfalls, a co-ordinated, structured measurement process is needed. Four stages are common to most measurement processes, but some are sometimes missed out due to other time pressures or unclear responsibilities. For each of the following stages, ask these questions. Do we have a person responsible for this? Do they have the skills? Does their manager review their performance? Are they supported by the right tools?



Stage 1 is a goal-setting stage where the aims of the measurement system are defined, this will usually takes the strategic e-marketing objectives as an input to the measurement system. The aim of the measurement system will be to assess whether these goals are achieved and specify corrective marketing actions to reduce variance between target and actual key performance indicators.



Stage 2, performance measurement, involves collecting data to determine the different metrics that are part of a measurement framework as discussed in the next section. Tools for collecting this data are discussed next month.



Stage 3, performance diagnosis is the analysis of results to understand the reasons for variance from objectives and selection of marketing solutions to reduce variance.



Stage 4, corrective action, is the implementation of these solutions as updates to web site content, design and associated marketing communications.



After stage 4, the continuous cycle repeats. As well as reviewing whether targets are met, the suitability of the metrics and targets should also be reviewed and revised.

2 The metrics framework
A metrics framework defines groupings of specific metrics used to assess e-marketing performance. It can be suggested that suitable measurement frameworks will fulfil these criteria. Check the measures you use against this list:

A. Includes macro-level metrics that assess whether strategic goals are achieved and indicate to what extent e-marketing contributes to the business (direct and indirect revenue contribution and return on investment).

B. Includes micro-level metrics that assess the effectiveness and efficiency of e-marketing tactics and implementation. Such measures are often referred to as performance drivers. E-marketing performance drivers help optimise e-marketing by attracting more site visitors and increasing conversion to desired marketing outcomes. Agrawal et al. (2001) recommend companies use metrics defined in three categories of attraction, conversion and retention as part of an e-performance scorecard using a combination of macro and micro-level metrics.

C. Assess the impact of e-marketing on the satisfaction, loyalty and contribution of key stakeholders (customers, but also investors, employees and partners).

D. Enables comparison of performance of different channels such as web against mail order.

E. Can be used to assess e-marketing performance against competitors.

F. Individual metrics follow the tried and test SMART guideline of Specific, Measurable, Actionable, Relevant and Time-related. Reducing the range of possible metrics to key performance drivers is also highly desirable to avoid information overload.

Calculating the Cost of Content
by Jim Sterne

In our enthusiasm to measure clickthroughs, pageviews and revenues, we seldom stop to consider the cost of our Web site content.

Even if your page count is only in the hundreds, you can't add new pages simply because it's fun. So you must have a general rule of thumb for calculating the cost of creating content as well as a general rule of thumb for measuring the return on that investment.

The cost side of content can be straight forward if you identify specific costs for specific labor required to create it. You'll need to know what you're paying by the page or by the hour for the following services:
• Writing copy
• Proof reading copy
• Creating graphics
• Formatting layout
• Maintaining the site map and/or index
• Maintaining the site navigation system
• Page hosting & serving
• And the most costly of all--getting content through the approval process

How often should you update your content? It costs money to create it, and it costs to refresh it. The simplest calculation is comparing your refresh rate to visit frequency. If people come back to your site on an average of once a month and you're updating the same page twice a month, there may be some savings in your future.

If the numbers are reversed, then you are training people to stay away. They show up twice a month and see the same content every other visit. Not very engaging.

The ROI side of this coin is a bit trickier. What's the right size for a Web site?
If it's too small, it doesn't have the ability to produce the desired effect and isn't worth the expense. If it is too big, there's simply too much overhead and, again, it’s not worth the expense. Lots of content means lots of people to manage it. The right size for you depends on what you're selling and how much information people need before they are willing to buy.

What's the value of a Web page? Your metrics for content fall into two broad
categories: making money and saving money.

On the saving side, my favorite ROI gimmick was a spreadsheet on the corporate intranet that listed various electronic documents on the investor relations area. The annual report was listed first, showing a cost for printing, handling and postage of $7.00 each.

The cost for downloading the PDF was listed as $.002. Every time the PDF was viewed or downloaded, the spreadsheet automatically increased the "Savings" cell by $6.998. It didn't take long to show upper management that converting the report to PDF would save the company some serious money over the course of the year.

Measuring how content makes money means tracking people as they wander through your site. Look at your content as you do your transaction systems. Have you over-complicated your offering?

A well-known camera company found that they had done just that when selling low-end digital cameras. There were pages and pages of technical specifications about each and every camera they sold. There were charts and graphs comparing features. There were diagrams pin-pointing every button. Then somebody looked at the server logs and discovered nobody was viewing those pages.

When the product price goes up or the product is sufficiently unique, people want to know as much as they can. I suspect the Segway site gets combed over very carefully by people serious about spending $4,950.00 on "the world's first dynamically stabilized, self-balancing Human Transporter."

But when considering a digital camera for under fifty bucks? Just the facts, ma'am. Don't waste my time.

You can zero in on content value by implementing a comprehensive traffic tracking system to watch the people who come into your site. Which path do browsers take and which do buyers take? If you delete the pages that only browsers look at, do you increase or diminish the number of buyers? If you add more detail to those browser pages does it increase the number of future buyers or simply send your current browsers into paroxysms of confusion?
Easy to tell if you're selling an impulse item--not so easy if you have a direct sales force using the site to support a multi-month sales cycle.

Every page on your site should be created with a specific goal in mind.
• This page will reduce the calls to the call center.
• This page will lower the number of product returns.
• This page will increase brand attitude.
• This page will increase sales.

Each goal calls out for its own method of measurement to determine whether your content is filling the bill or merely emptying your coffers.

Metrics On a ‘Need to Know’ Basis
by Jim Sterne

"We have too much technology."

That statement, proclaimed at the Emetrics Summit 2003, in Santa Barbara, was in direct response to the ubiquitous, "We have too much data."

We now know more than we can understand. We know more than we can assimilate. It seems that the more facts we amass, the less meaning we can derive, and the less actionable decisions we can make. It seems to merely mimic the human condition that we know what is, but we know not why.

This was struck home at the Emetrics Summit when Gary Beberman, director of technical research at macys.com, spoke to the Web analytics-savvy audience about business-oriented cohorts back at the office, "Sometimes you have to simply tell them what they need to know and tell them what to think about it."

It’s 1994 all over again.

Way back then, upper management really needed to understand what the Internet was all about before they could determine what it meant for business. So many people were shouting about how the Web would change everything. It was tough for business managers to sufficiently understand the fundamentals of bits and packets to make up their own minds.

Today, Web analytics looks pretty much the same. Lots of heat, little light. Lots of noise, little signal.

If only the technical folks babbling about marketing and the marketing folks blathering about technology would speak in short and simple sentences, all would become clear.

If you want to get across just how important emetrics can be, here's what you need to explain to your boss, depending on what type of boss you have.

Type A: The Corporate Upper Class, and Those Who Prefer Strategy to Tactics

What to tell them: Why, not how.

If you try to differentiate URL tags from page tags, their eyes will glaze over and they'll reach for their Blackberries. Better to talk about how the resulting reports can be used instead of how they are created.

No, do not explain how raising the relative value of click paths will improve overall conversion ratios. Talk about how improved understanding will raise revenues and lower costs.

Type B: Division Managers in Control of Your Project Budget

What to tell them: The process, not the products.

Making funding decisions require thorough knowledge about what's going to be done, who's going to do it, how long it'll take, what it's likely to cost and how much it's likely to save/earn.

These folks are also not interested in the difference between client-side Javascript tracking and third-party web-beacon serving. They want to know what the end result is going to be, when it's going to happen, and how you're going to ensure that result.

Type C: Business-Oriented Department Managers Trying to Use the Resulting Reports

What to tell them: What it means and what to think about it.

Talented leaders blessed with talented staff can take input from that staff at face value. They can trust their people to understand the analyzed data and make well-considered recommendations.

They want your honest opinion based on your best efforts. They're desperate to know what changes to make to their portion of the Web site to reach their current goals, and they want you to save them from reading the graphs and charts your Web analytics spits out. Tell them what it means and what to think about it and they'll thank you.

Type D: Technically-Oriented Department Managers Trying to Use the Resulting Reports

What to tell them: How it works, in gruesome detail, so they can make up their own minds.

The department manager who is more technically astute and less comfortable with how you came to your conclusions is a high-maintenance misfortune. They need the white paper, the book, the PowerPoint slides and the workshop to firmly grasp the intricacies of Web analytics so they can understand exactly how the reports were created and, therefore, what the data might mean.

Let your vendors have some face time with your boss and then crank out the desired reports. Do not hesitate to offer up insights, but be sure to show exactly which bits you relied on for your opinion.

Type E: Technical Managers

What to tell them: How it works, so they can determine the best technical solution.

Now it gets really sticky. You'll need to get your type C's (Business-Oriented Department Managers) to clearly identify their goals so you can help your type E's (Technical Managers) figure out the best technical solution to capturing, analyzing and reporting Web site data.

If you have some type D's (Technically-Oriented Department Managers) who are willing to work hand in hand with your type E's, there's a decent chance you'll be able to find a Web analytics tool/process that meets your needs, instead of waiting until after implementation to find out it doesn't.

So create your multi-layered PowerPoint stack that will tell the whole story. But then figure out who you're pitching to so you'll know which part of the story they need.

Yes, this does assume you know all about all of the above already.

What? You thought this was going to be easy?

Do Your Metrics Measure Up?
by Michael Perla

At a recent neighborhood function, I had a discussion with someone who worked in the finance area for one of the Big 4 accounting firms. Since he specialized in the valuation of companies, I asked him about the models he used and he brushed me aside to tell me it was all about the assumptions, not the models per se.

I couldn’t agree more with his statement. I have often termed the rise of measuring everything to be the deification of numbers. It’s not that I disagree with the well-known axiom that you can’t manage what you don’t measure—it’s just that I have to ask how, and why, you’re measuring it.

That premise is the basis of this article. Although putting each of your metrics through the paces may not seem exciting, it is those measures that are the basis for any business case you construct or objective you set.

Each metric or measure—marketing or otherwise—should be vetted in light of its reliability, validity, sensitivity, responsiveness, cost/benefit, comprehension, and balance.

Reliability
In research, reliability means repeatability or consistency. A measure is considered reliable if it would give you the same results over and over again, given that what you are measuring is not changing.

If you weigh yourself on a scale that is always 10 pounds off (and your weight is stable), you would have a reliable measure, it’s just not valid for the intended purpose. But I’m getting ahead of myself. Each measure in your company should be tested to determine if it’s measured in a reliable and tenable fashion.

In other words, are people measuring the area using the same methods, processes, decision models, assumptions, and so on?

If the way you measure something is not clearly outlined, leaving room for little interpretation, it will have more “noise” or error and is less likely to be considered reliable. The fundamental basis for standardized processes is the push for reliability, which is a necessary but insufficient condition in determining whether a measure is valid.

For example, in sales, pipeline analysis (e.g., I’m in the Qualify or Develop stage) is meaningless without a clearly defined sales process and stage gate criteria.

Test
What evidence is there that the measure is reliable and is being measured in a consistent, repeatable, and defendable manner?

Validity

Although validity is often thought to mean accurate or reasonable, it must be put in context to be meaningful. A measure is valid for a particular purpose, and it must be reliable in order to be valid. Something may be valid for determining market share, but not for the valuation of the business. Within research, there are a number of ways to test the validity of a particular measure.

Two tests that are pertinent to business would include content validity, which looks at whether other content or subject matter (finance or marketing personnel) experts would agree on the use of the measure for its intended purpose.

The other, predictive validity, a form of criterion validity, looks at whether the measure is predictive of the construct it’s intended to provide guidance about. The latter test would be more applicable to a key performance indicator (KPI) as predictive of another macro measure, such as revenue.

Test: Assuming the measure is reliable, what evidence is there that it is measuring what it’s intended to measure?

Sensitivity
This criterion focuses on the sensitivity of the measure to changes in the underlying construct. For example, how much does the underlying construct (like campaign costs) need to change (1%, 10%, and so on) before it registers or is detected?

Test: How sensitive is the measure to changes in the
underlying construct?

Responsiveness

This criterion focuses on whether the value of the measure changes immediately when the underlying construct changes. Today’s lingo would link this criterion to the real-time (or zero-latency) enterprise (RTE) concept.

Many executives would like to be able to pull up a dashboard of metrics on their business and have it be updated in real-time, with each metric being highly responsive to actual changes in their operating reality. How long does it take for your “check engine” light to come on?

Test: Does the value of the measure change immediately when the underlying construct changes?

Cost/Benefit
This criterion focuses on the costs and benefits of measuring a particular construct. For example, how much time does it take to collect, input, and analyze the requisite information (to determine sales cycle time or cost per lead, for example)? What benefits (better resource allocation, for example) accrue from measuring the construct?

Given the alternatives, do the benefits outweigh the costs given the time, focus, and analysis required to measure the construct?

For example, in the sales arena, numerous sales managers ask their sales representatives to collect and input information that they do not follow-up on or use in their assessment of the business. The costs of this scenario to employee productivity, focus, and trust far outweigh the benefits given that the information is not utilized or paid attention to.

Test: Do the benefits of the measure outweigh all the costs involved in the collection, input, analysis, and reporting of the measure to the requisite stakeholders?

Comprehension
This criterion revolves around how easy it is for the requisite stakeholders to comprehend the measure. The measure may meet all of the other criteria, but if few people can understand it, it is unlikely to take root.

This issue has happened with some companies that have instituted an Economic Value Added method (EVA: a value based approach that charges managers a cost of capital for “renting out the balance sheet”). This is because it is more complicated (a matter of degree) than other approaches and it can be difficult to reliably and accurately assess changes from quarter-to-quarter. Additionally, if you look at incentive compensation in the sales area, most plans today have been re-configured to be simpler, easier to understand, and more pragmatic.

The watchwords for today are simplicity, clarity, and priority.

Test: Can the measure be easily described and comprehended by the requisite stakeholders?

Balance
This criterion focuses on the portfolio of measures that you use in evaluating your business, unit, and/or functional area. The popularity of the Balanced Scorecard approach (based on a 1996 book by Robert S. Kaplan and David P. Norton entitled The Balanced Scorecard: Translating Strategy into Action) is in part driven by the need to identify other measures besides financial ones in evaluating the health of a business, hence the term “balanced.”

The balanced scorecard approach, for example, looks at measures that are oriented around the customer, the financials, the internal workings, learning and people development, and some other pertinent variants of the four.

On the whole, a balanced set of measures should include those that are leading and lagging, causes and effects, in-process and end-process, and inputs and outputs, in each relevant area of the business.

Test: How balanced is the portfolio of measures used to assess the health of the business, unit and/or functional area?

Summary

The above criteria can help you to better understand the pros and cons of each measure that is employed to monitor and track the health of a business, unit, and/or functional area. Each measure needs to be evaluated in the context of the portfolio of measures to be useful, as any single measure, just as any single asset class, may be unbalanced or risky in isolation.

The criteria mentioned above may seem like common sense, but they are not common practice. Many companies try to roll-up or trend “apples and oranges” or inconsistent data, leading to erroneous conclusions and risky strategies.

At the top level, a measure is a proxy for something, such as an IQ score being a proxy for one’s intelligence or employee turnover percentage being a proxy (a lagging one) for employee satisfaction (e.g., see the map is not the territory concept).

As these examples illustrate, most measures need to be triangulated, or combined and analyzed along with other measures, in order to present a useful and complete view of a construct or gap.

The essence of measurement is how you operationalize the measure, in other words, how you define and measure it in practice, as well as how you triangulate measures to accurately reflect a certain phenomena, trend, or divergence.

Lastly, given that measuring is a tool that creates change, each measure should be tested rigorously so as not to dilute focus or waste time and energy on measures that provide little direction, are not actionable, and/or are not closely aligned with the goals and objectives of the organization.

Response Measurement: Tracing a Customer’s Behavior
by Monique Swafford

One objective of customer relationship management is to continually refine an organization’s insights into its customer base.

These insights drive how an organization communicates with customers, so that each contact is more intelligent and meaningful than the last.

Often, necessary data is not in place to draw meaningful conclusions from previous customer experiences. In order to drive towards information based, data driven business decisions, organizations must have a process and tools in place to complete all four components of campaign management.

Campaign Management is defined as the process of designing, executing, and measuring marketing campaigns through the use of applications that:

Select and segment customers
Track the contacts made with customers
Measure the results of those contacts
Model those results to more efficiently target customers in the future

The Common Mistake
The first step in the Campaign Management Process tends to be the primary focus for most marketing departments. Organizations spend a large percentage of their efforts identifying customers, defining the offer or message, applying suppressions, defining segments, and delivering the custom message, whether it is email, direct mail, or telemarketing.

Unfortunately, tracking a customer’s reaction to a custom message is usually not given the same level of attention and planning as the execution component. This leaves marketing analysts and marketing departments salvaging bits and pieces of incomplete data information, from which they are asked to draw conclusions and define business insights.

Issues around tracking, sourcing and matching a customer’s behavior must be evaluated and resolved during the planning phase of a campaign. In this article we will talk about clearly defining the customer-centric business questions that are to be answered, and some of the data sourcing issues that must be addressed in order to successfully learn from campaign efforts.

Avoiding the Pitfalls
As you consider the business objectives of campaign execution you have to ask yourself the following questions:

Define Your Objective
What am I trying to learn from this customer contact? What do I need to know to make the next communication more rewarding for the individual and the organization?

By prioritizing the questions that need answers, it is much easier to identify the data relevant for response measurement and analysis. Once you identify the data that does not reside in a source you currently have access to, such as through a corporate data warehouse or a marketing data mart, you are better prepared to approach other sources for assistance. This allows for clear, concise conversations with administrators of these source systems.

Remember these individuals know their data well, and share with them the business question you are trying to answer. They may contribute to your learning process by bringing their system-specific data knowledge to the discussion.

Identify Channel Data Dependencies: How are my customers going to respond to me? Which channels will they use?

Often the primary information captured at a channel level is very specific to a channel. For example, call centers capture the length of a call, or the activities that took place during a call. Log files on a web site are used to determine the time on a page or number of web page hits. These systems are often not designed with marketing efforts in mind, so there will be a gap between current data captured and your data needs. You must seriously weigh the effort and time required to fill this data gap by modify these systems against the importance of the business question being answered.

Be aware these systems you will be considering are often operational systems, which need to be running at all times. Typically, managers of these systems are very protective and hesitant to introduce change. Prepare to discuss the value of the data and whether you will be using it on an ongoing basis. Also, if this data is critical, begin these discussions far enough in advance so there is sufficient time to make necessary system modifications.

Consider Data Quality: How reliable is the data?

As with any analysis, data quality should always be evaluated. You don’t want to expend a great deal of effort tracking and gathering data if it is incomplete. Leverage those individuals within your organization who have intimate knowledge of the source systems. They often can tell you if the data looks reasonable. One simple example of information that may seem telling, but may not be populated is a "Reason for Closing an Account" code on a call center system.

From a marketing perspective, it would be interesting to know why an individual closed an account. From a customer service perspective, however, a service representative may not ask the question, depending on the disposition of the caller, or in an effort to shorten the call time. Call center representatives may fill this field with a meaningless code during the call, which provides no insight during analysis.

Define Response Stages
Do I need to capture “degrees of response?” If so, what are the degrees?

Degrees of response are stages that a customer may pass through before displaying your preferred behavior. For example, for a credit card solicitation, response stages might include ;
1) calling the call center for additional information,
2) completing an application,
3) receiving credit approval,
or 4) activating the line of credit.

You must define these stages during the planning phase of your campaign, and determine if this level of detail is important.

This information might be useful in uncovering unknown customer contact issues. In the credit card example above, if you find that every customer who called for additional information never completed an application, this may be the result of insufficient call center training, or difficulty fulfilling one-off information requests. Keeping in mind your key business objectives, if you still believe this type of data is critical to your learnings, make sure to thoroughly define the “degrees” of interest and how you will track them.

Gain a Holistic View
Can I get a view of the customer’s response behavior across all channels?

You must determine the importance of knowing how a customer reacts, and if they contact your organization across multiple channels. Perhaps they request more information through the call center, but place their order through the web site. From a marketing perspective, this may be important to you. However, in order to get an “all channel” view of the customer’s behavior, there must be a means for identifying an individual across systems.

The disparate source systems that you are considering may or may not identify customers at an individual level. If they do, they may use very different means to identify an individual customer.

For example, the web site may use an individual’s email address, while the call center or legacy systems might use a social security number. Very rarely will you find the email address captured in the call center data source. And due to security concerns, web sites rarely use social security numbers to identify an individual. If the web site and the call center do not use the same identifying information, greater data manipulation effort may be required to identify one person across systems, such as a match on name and address.

Again, this is extra effort, which may give you incomplete results, and should be evaluated during the planning phase. Consider tailoring your message to encourage consumers to use a single channel for contact and using that source as your primary source for response analysis.

Accumulate Data & Knowledge: Where do I want to store my data once I have completed my response analysis?

Once you have gathered and reviewed the captured data after a campaign, it is critical that the data is archived in a location for future use. You may find subsequent analysis is needed on the campaign, such as development of a predictive model or answering additional business questions.

Failure to archive the response data will, depending on the structure of the source systems, result in the need to re-pull and massage the necessary data fields, which can be time consuming, or worse, result in the loss of the key data you worked so hard to capture.

Bottom Line
In order to conduct meaningful response measurement and analysis, it is vital that you have a thorough, well thought-out plan for capturing and storing customer behavior data.

The execution of campaigns, and all of the effort that goes into that process, is wholly dependant on response tracking in order to be of value to the organization. Depending on the number of channels an organization uses to communicate with customers, implementation of a holistic tracking plan can be daunting. Remember your objectives, and work in a phased approach to reach your goals.

Marketing to Peacocks
by Mitch McCasland

Years ago, I was conducting research on the personal grooming habits of the American consumer. The research highlighted one segment of the target audience as a group of males who spent an extraordinary amount of time on hair care each day.

This group was referred to as the “peacocks.” Animal euphemisms aside, the research identified what has become known in current marketing-speak as the metrosexual.

The metrosexual is the prototypical 21st century male, with refined sensibilities and priorities. A recent article in the New York Times deemed them “straight, hip and moisturized men—every marketer’s dream.” These are not wimps or girly-men. More accurately, members of this market segment are into taking care of themselves inside and outside.

According to a recent study sponsored by advertising giant Euro RSCG Worldwide and conducted by Market Probe International, masculinity has been in a state of transition in recent decades.

The male of the new century is more comfortable in describing his feelings, is more emotionally invested, and is honed in on daily grooming and prepping to make a good impression. A whopping 89% of men surveyed said good grooming was essential to success in the business world. Nearly half of the men admitted that there was nothing wrong with getting a manicure or facial.

I recall my grandfather as a figure larger than life in many ways: a bomber pilot in WWII and a hard-drinking man who loved to fish, golf and swear, in no particular order.

As a kid, I recall him joking that all he needed for a shampoo was his handkerchief as he pulled it out of his pocket and wiped it across his bald head. Metrosexual? I think not….

Admittedly, I have inherited some of his machismo traits, having eaten rattlesnake and survived a skydiving accident, and I’m a fan of single-malt scotch.

However, I also confess to a higher-than-average involvement in personal grooming and clothing. I’m not sure if I’m a metrosexual, but I suspect it is not an assessment easily made about oneself. Therefore, you may be a metrosexual and not even realize it.

To find out, answer the following question (or pose it to a man you know): How many hair-care products do you have in your bathtub or shower? Count them… shampoos, conditioners and so on.

Is it two? Three? Five? In one focus group, a consumer admitted to having 12 hair-care products. If you have more than three, chances are you are a metrosexual (or you know one well).

Tom Granese has some key insights to offer on this emerging segment. As founder of Regimens, he understands that an increasing number of men adhere to these new qualities and values. As a retailer of premium personal grooming products specifically designed from a masculine perspective, Regimens has placed the metrosexual at the bull’s-eye of its target audience.

“We are tapping into the male segment of the beauty category with an estimated annual value of $4.5 billion,” reports Granese. “It’s anticipated to increase to $5.5 billion by 2006.” This makes male-focused products the fastest growing segment of the beauty products industry.

Such brands as Mont Source, Nickel and Baxter of California are marketed to men who spend an average of 51 minutes per day on personal grooming and hygiene. Compare that with women, who spend an average of 55 minutes per day. The metrosexual has a decidedly higher level of involvement than the average Joe.

On the whole, most advertising in America has been targeted to women because they have historically controlled or influenced fully 85% of the purchasing decisions. As a result, women have had an important role in the purchase of men’s toiletries. By tradition, men’s grooming products have been relegated to a small section of the local grocery aisle with such legacy brands as Edge, Aqua Velva, Brylcreem and Top Brass.

“It’s time to stop getting grooming tips from a grocery clerk,” says Granese. “The retail environment for men’s products has generally not kept pace with this market.”

There have been some signs of recent change that reflect the increasing importance of men in the premium grooming category:

Department stores have increased their focus on the male category by boutiquing their premium lines.

Such specialty beauty retailers as Sephora and Ulta have dedicated sections of their stores to male-targeted products.

Leading mass-market beauty care manufacturers Neutrogena and Nivea have launched skincare lines with men in mind.

The emergence of this new class of male consumer raises a question in consumer marketing: How do you now market to the new American male in a characteristically different, yet appropriate, manner? Here are some basic guidelines:

Avoid the male cliché. Hot-rod magazines and a prize catfish mounted on the wall do not a retail experience make. Consider an open, well-lit environment that invites the male consumer to enter and explore. In retail, men generally do not like to feel closed in. Depending on your retail model, consider an open seating area where they can relax and enjoy spending time in your retail space.

Use visual breadcrumbs. Male consumers need clear visual clues to lead them into your store. Place items near the front to capture attention while broadly representing your product offerings. A bit further back in your store, place larger, more engaging displays to draw them further into the space.

Call off the hounds. Like any shopper, men may or may not want to have sales assistance while in your store. Learn to read customers as you greet them when they enter. Consider a retail philosophy that allows them the freedom to explore on their own, with plenty of printed product information around, yet makes sales assistance available when they have questions.


Sample, sample, sample. Men like to try before they buy (as do women). But men generally want to try it on their own. Have open products readily available for testing. Most men won’t admit it, but they also love free samples. Have trial-size products available with or without purchase.

Dollars and scents. The nose wins every time over sound and vision in the retail game. The sense of smell is the most primitive of the five senses and in many respects the most powerful. Ensure that you have a well-thought-out fragrance philosophy and plan for your store.


Show what you know. Men in this market segment want to know why your products are better than others. They are open to knowledge and research on a better solution to personal grooming. The more information you can provide at the point of purchase, the more you will engender their trust and confidence.

Men in the premium category decidedly have their own perspectives and preferences on how they choose products for skin care, hair care, shaving and toiletries. They are beginning to understand that it is a good thing to take a more active role in treating themselves to a heightened level of personal grooming.

Savvy retailers who understand the mindset of the peacock will reap the benefits of customer loyalty by becoming an important part of their daily rituals.

Guerilla Research With Web Site Audiences
By Mitch McCasland

In the world of web site development, there is a popular pastime and it’s not baseball. It’s the inevitable debate that arises regarding the content of a web site.

Prior to cognitive maps and paper-based prototypes, there is the traditional imbroglio: “The client wants this feature on the site,” or “the marketing department thinks that this would be a cool function.” Within the project team, everyone has an opinion. What’s missing from the debate? It’s not what – it’s whom: The Audience.

While the field of human factors aims to build a web site that is usable, the field of account planning (a.k.a. audience research) focuses on a web site that is useful. Usefulness is defined as the most appropriate features, imagery, content and tonality that connect with the audience.

Used by traditional advertising agencies for years, account planning is a research-based discipline that uncovers audience insights. These insights provide a perspective for building brand experiences that are engaging, relevant and compelling. By using techniques from account planning, the longstanding internal debate can be alleviated by identifying the optimal content for interactive projects from the audience’s point of view.

Admittedly the term “research” affects most people like sleeping tablets. It can also conjure up images of huge budgets, large surveys and hours spent observing focus groups.

As a result, many marketers and project managers often proclaim that there is no time or money research-based strategy. Which leaves us with the question: In the current business climate that is rife with uncertainty, how can we develop a solid, research-based strategy for our projects?

Guerilla research can support strategic development by tapping into audience insights on projects with tight timelines and shoestring budgets. But, these techniques require you to get up from your computer and go into the real world to interact with your audience.

What’s Cookin’?
One such example is Wolf Gourmet Ranges. Wolf competes in a category of premium cooking appliances among such category leaders as Viking and Thermador. With prices ranging from $1,200 to more than $12,000, this is not your mother’s cooktop. Being the underdog (so to speak), Wolf was challenged to develop a meaningful positioning against competitors that had a significant market lead and big budgets.

The marketing department believed that Wolf’s stainless steel look and trademark red knobs provided a distinctive positioning in the marketplace. The marketers believed that by simply showing the images of the appliances and their descriptions, the Wolf product line would practically sell itself.

However, a review of the competitors’ web sites and advertising revealed that all competitors had a similar stainless steel look. This left Wolf Gourmet Ranges in search of a point of difference.

The research team devised guerilla techniques to open the door to potential strategies. They sought an inexpensive way to tap into the minds of affluent owners of premium cooking appliances. If traditional research such as focus groups had been used, it would be expensive to locate and recruit this elite consumer into a study.

A review of such high-end publications as Gourmet, Bon Appétit and Epicurious revealed that these consumers perceived professional chefs as authority figures and celebrities. Many such chefs offer exclusive cooking classes targeted to “foodies” and affluent consumers. Fees for the two to three hour classes range from $60 to more than $300.

Researchers identified courses sponsored by such premium cookware retailers as Sur La Table and Williams-Sonoma. Posing as fellow students, researchers were free to converse with affluent consumers in an under-the-radar investigation of how they chose their ovens and ranges. Insights gained from the affluent students were vital inputs in a preliminary positioning of the Wolf Gourmet brand and content for its web site.

A key learning: a celebrity chef would provide a positioning for Wolf as a superior professional appliance among audience members for its web site, advertising and product catalog. Subsequently the chef and instructor at the L'Etoile Restaurant, Eric Rupert was chosen as the web site’s professional cooking celebrity. For the product catalog, renowned chef Wolfgang Puck was selected as the spokesman. Research had also revealed that Puck used Wolf cooking appliances in his kitchens, both at home and in his restaurants.

Keep on Truckin’
When Nissan’s UD truck division was considering a new web site and renewed advertising campaign, it was looking for insights and a fresh perspective on its brand. The company saw the web site an important tool for presales information and directing prospects to a local dealer.

Traditional research would have required a difficult recruitment effort and a substantial budget. Because its commercial trucks are sold through franchised dealerships, the company has little direct contact with the owners or drivers. In pursuit of the audience’s perspective, the research team hit the road.

Researchers visited the dealerships to gain first-hand experience in the sales process. In absence of being able to talk directly to customers, the insights of the sales force were used to leverage customer insights. After all, each sales rep had contact with hundreds of customers each year. Moreover, they also sold competing trucks and understood how certain customers made choices between brands. The research team even took test drives to understand the value of the experience behind the wheel.

The research team learned that UD trucks were designed from the driver’s point of view. The engineers at UD considered the perspective of the driver throughout their vehicles, from the reduction of blind spots in the cab interior to the location of the oil dipstick. This insight was used to identify web site features that highlighted the drivability of UD trucks. The guerilla research also identified the online content that helped support the sales process and directed prospects to the dealerships for a test drive.

High-Speed SOHO
When GTE decided to compete in high-speed Internet access, it wanted to target the small-office-home-office (SOHO) customer. Unfortunately, it lacked a clear understanding of how to talk to the SOHO customer about the value of high-speed access and the additional cost over standard dial-up service.

The company considered an online survey of existing customers. Unfortunately, the customer database did not have sufficient information to identify the SOHO customer. Moreover, GTE also wanted to include the perspective of their competitor’s customers who were not in its database.

Online searches and phone calls to local groups (chambers of commerce, Rotary Clubs, Internet user meetings, et al.) identified organizations that had a significant number of SOHO members. By attending these meetings, researchers were able to engage individuals in discussing the challenges of running a SOHO and the role that high-speed Internet access could play in productivity and income generation.

The insights from these meetings were used to design a direct marketing campaign that creatively and clearly demonstrated the value of high-speed access. An interactive demonstration featuring hyper warp spaceship game provided an understandable metaphor that was engaging for the SOHO audience. At the conclusion of the game, prospective customers were directed apply for high-speed service at a special discount on the web site or via a toll-free mnumber.

Get Out There
If you have the luxury of ample time and budget, you can explore a full range of traditional research techniques. However if you are like most developers, you have constraints on time, money or both. Guerilla techniques may be the answer.

First step in your guerilla efforts: Understand everything you can about your target audience. Who are they? What is important to them? How do they make everyday decisions relevant to your web project’s objectives? Develop the questions that must be answered to provide strategic direction for your web site.

Next, think about where your audience is. Do they have clubs or associations? What types of events do they attend? Where do they go in their daily lives? How can you engage them in a discussion that will answer your questions?

Finally, get out there! Once you have targeted the venue, go out and be among the audience members. Consider it role-playing — don’t be timid.Think of it as going undercover to gather intelligence from the field. Have fun while you learn. Remember, the perspective of the audience is vital to the success of a web site in terms of both usefulness and usability.

Keep in mind the big picture: Web projects are sponsored by marketers who have business objectives. Web sites are also expected to foster audience behavior and actions that are channeled toward those business objectives. Therefore, web developers must understand how to create web sites that are engaging, relevant and compelling.

Usability and account planning share a common mission: Advocates for the audience. Amidst the plethora of internal opinions from a web development team, the voice of the user must ultimately prevail to ensure the success of online initiatives.

Guerilla Research With Web Site Audiences
By Mitch McCasland

In the world of web site development, there is a popular pastime and it’s not baseball. It’s the inevitable debate that arises regarding the content of a web site.

Prior to cognitive maps and paper-based prototypes, there is the traditional imbroglio: “The client wants this feature on the site,” or “the marketing department thinks that this would be a cool function.” Within the project team, everyone has an opinion. What’s missing from the debate? It’s not what – it’s whom: The Audience.

While the field of human factors aims to build a web site that is usable, the field of account planning (a.k.a. audience research) focuses on a web site that is useful. Usefulness is defined as the most appropriate features, imagery, content and tonality that connect with the audience.

Used by traditional advertising agencies for years, account planning is a research-based discipline that uncovers audience insights. These insights provide a perspective for building brand experiences that are engaging, relevant and compelling. By using techniques from account planning, the longstanding internal debate can be alleviated by identifying the optimal content for interactive projects from the audience’s point of view.

Admittedly the term “research” affects most people like sleeping tablets. It can also conjure up images of huge budgets, large surveys and hours spent observing focus groups.

As a result, many marketers and project managers often proclaim that there is no time or money research-based strategy. Which leaves us with the question: In the current business climate that is rife with uncertainty, how can we develop a solid, research-based strategy for our projects?

Guerilla research can support strategic development by tapping into audience insights on projects with tight timelines and shoestring budgets. But, these techniques require you to get up from your computer and go into the real world to interact with your audience.

What’s Cookin’?
One such example is Wolf Gourmet Ranges. Wolf competes in a category of premium cooking appliances among such category leaders as Viking and Thermador. With prices ranging from $1,200 to more than $12,000, this is not your mother’s cooktop. Being the underdog (so to speak), Wolf was challenged to develop a meaningful positioning against competitors that had a significant market lead and big budgets.

The marketing department believed that Wolf’s stainless steel look and trademark red knobs provided a distinctive positioning in the marketplace. The marketers believed that by simply showing the images of the appliances and their descriptions, the Wolf product line would practically sell itself.

However, a review of the competitors’ web sites and advertising revealed that all competitors had a similar stainless steel look. This left Wolf Gourmet Ranges in search of a point of difference.

The research team devised guerilla techniques to open the door to potential strategies. They sought an inexpensive way to tap into the minds of affluent owners of premium cooking appliances. If traditional research such as focus groups had been used, it would be expensive to locate and recruit this elite consumer into a study.

A review of such high-end publications as Gourmet, Bon Appétit and Epicurious revealed that these consumers perceived professional chefs as authority figures and celebrities. Many such chefs offer exclusive cooking classes targeted to “foodies” and affluent consumers. Fees for the two to three hour classes range from $60 to more than $300.

Researchers identified courses sponsored by such premium cookware retailers as Sur La Table and Williams-Sonoma. Posing as fellow students, researchers were free to converse with affluent consumers in an under-the-radar investigation of how they chose their ovens and ranges. Insights gained from the affluent students were vital inputs in a preliminary positioning of the Wolf Gourmet brand and content for its web site.

A key learning: a celebrity chef would provide a positioning for Wolf as a superior professional appliance among audience members for its web site, advertising and product catalog. Subsequently the chef and instructor at the L'Etoile Restaurant, Eric Rupert was chosen as the web site’s professional cooking celebrity. For the product catalog, renowned chef Wolfgang Puck was selected as the spokesman. Research had also revealed that Puck used Wolf cooking appliances in his kitchens, both at home and in his restaurants.

Keep on Truckin’
When Nissan’s UD truck division was considering a new web site and renewed advertising campaign, it was looking for insights and a fresh perspective on its brand. The company saw the web site an important tool for presales information and directing prospects to a local dealer.

Traditional research would have required a difficult recruitment effort and a substantial budget. Because its commercial trucks are sold through franchised dealerships, the company has little direct contact with the owners or drivers. In pursuit of the audience’s perspective, the research team hit the road.

Researchers visited the dealerships to gain first-hand experience in the sales process. In absence of being able to talk directly to customers, the insights of the sales force were used to leverage customer insights. After all, each sales rep had contact with hundreds of customers each year. Moreover, they also sold competing trucks and understood how certain customers made choices between brands. The research team even took test drives to understand the value of the experience behind the wheel.

The research team learned that UD trucks were designed from the driver’s point of view. The engineers at UD considered the perspective of the driver throughout their vehicles, from the reduction of blind spots in the cab interior to the location of the oil dipstick. This insight was used to identify web site features that highlighted the drivability of UD trucks. The guerilla research also identified the online content that helped support the sales process and directed prospects to the dealerships for a test drive.

High-Speed SOHO
When GTE decided to compete in high-speed Internet access, it wanted to target the small-office-home-office (SOHO) customer. Unfortunately, it lacked a clear understanding of how to talk to the SOHO customer about the value of high-speed access and the additional cost over standard dial-up service.

The company considered an online survey of existing customers. Unfortunately, the customer database did not have sufficient information to identify the SOHO customer. Moreover, GTE also wanted to include the perspective of their competitor’s customers who were not in its database.

Online searches and phone calls to local groups (chambers of commerce, Rotary Clubs, Internet user meetings, et al.) identified organizations that had a significant number of SOHO members. By attending these meetings, researchers were able to engage individuals in discussing the challenges of running a SOHO and the role that high-speed Internet access could play in productivity and income generation.

The insights from these meetings were used to design a direct marketing campaign that creatively and clearly demonstrated the value of high-speed access. An interactive demonstration featuring hyper warp spaceship game provided an understandable metaphor that was engaging for the SOHO audience. At the conclusion of the game, prospective customers were directed apply for high-speed service at a special discount on the web site or via a toll-free mnumber.

Get Out There
If you have the luxury of ample time and budget, you can explore a full range of traditional research techniques. However if you are like most developers, you have constraints on time, money or both. Guerilla techniques may be the answer.

First step in your guerilla efforts: Understand everything you can about your target audience. Who are they? What is important to them? How do they make everyday decisions relevant to your web project’s objectives? Develop the questions that must be answered to provide strategic direction for your web site.

Next, think about where your audience is. Do they have clubs or associations? What types of events do they attend? Where do they go in their daily lives? How can you engage them in a discussion that will answer your questions?

Finally, get out there! Once you have targeted the venue, go out and be among the audience members. Consider it role-playing — don’t be timid.Think of it as going undercover to gather intelligence from the field. Have fun while you learn. Remember, the perspective of the audience is vital to the success of a web site in terms of both usefulness and usability.

Keep in mind the big picture: Web projects are sponsored by marketers who have business objectives. Web sites are also expected to foster audience behavior and actions that are channeled toward those business objectives. Therefore, web developers must understand how to create web sites that are engaging, relevant and compelling.

Usability and account planning share a common mission: Advocates for the audience. Amidst the plethora of internal opinions from a web development team, the voice of the user must ultimately prevail to ensure the success of online initiatives.

Gains Boost AOL, but Accounting Probe Heats Up
07/23/2003 07:53 AM EDT

Two large gains lifted AOL Time Warner (AOL:NYSE) to sharply higher earnings in the second quarter over a year ago, while revenue rose 6% and the company's overall debt fell to $24.2 billion from $26.3 billion.

The media giant also said full-year revenue would rise by a mid-single-digit percentage over the $41 billion it put up in 2002, roughly in line with the analyst consensus of $42.85 billion as compiled by Thomson First Call. The company's revenue outlook reflects expectations for a mid-single-digit revenue decline at its America Online unit and a 35% to 45% fall in AOL advertising revenue.

The shares were down 15 cents, or 0.9%, to $16.70 on Instinet.

AOL also said the government continues to investigate its accounting practices, and recently determined that it misallocated some of the $400 million it received from Bertelsmann in the sale of AOL Europe. The company said it believes its accounting is right but conceded that view could change as it continues to investigate itself.

On the bottom line in the second quarter, AOL Time Warner earned $1.1 billion, or 23 cents a share, reflecting pretax gains of $542 million and $760 million for the sale of Comedy Central and its Netscape settlement with Microsoft (MSFT:Nasdaq - news - commentary) , respectively. The quarter also included a $277 million asset-impairment writedown. The after-tax impact of all the items was $524 million, or about 11 cents a share, leaving the company with earnings of about 12 cents prior to the items. That was 2 cents better than analysts were forecasting.

Earnings in the year-ago quarter were $396 million, or 9 cents a share, including a $364 million pretax investment charge.

The Big Three More Willing To Listen To Real Music
BY NIKI SCEVAK

The launch of the blandly titled MusicNet by Real Networks sparked renewed interest in the company, with many hoping that the service will emerge as a legitimate alternative to Napster.

Under the deal Warner Music, BMG and EMI will license their portfolio of artists on a non-exclusive basis to the online music service. In return the three labels will take a minority stake in the burgeoning startup.

In addition to launching its own paid subscription service, Real Networks will license its underlying technology platform to others wishing to a launch paid initiatives. The first licensee is AOL, who will centre its music subscription service around the platform. Online music bad boy, Napster, will only be allowed to license MusicNet if it is able to meet certain security and legal requirements.

Will the streaming technology come media mogul be able to succeed where others have failed though?

There are certainly some encouraging signs with Real Networks' GoldPass service. It launched the service last June and has amassed 175,000 subscribers, who each pay $US9.95 per month to access over 2500 radio channels, including live streaming of NBA and MLB sporting events.

The shift to the online music world however, is not without its problems. The absence of the remaining two major music labels in Sony Music Entertainment and Universal Music Group, means that the service will be somewhat incomplete. Many argue that consumers will be reticent to subscribe to the service as they will be confused at to exactly which artists will be available. The conundrum for Real Networks is that for the majority of the population can not name the artists each label owns.

The development of online music locally is restricted by the struggles of local players to come to grips with the bonfire of capital burning in front of them. ChaosMusic is aggressively pursuing an offline strategy in order to stabilise its online operations, and Sanity.com.au is embarking on an ambitious capital raising.

WiredRecords.com, an initiative from diversified holdings group EhYou.com and Sanity.com.au, is probably the most significant in the area. It aims to provide musicians the technology to allow them to regulate the distribution of content. The uncertainty of its parents however, have surely hindered its progress.

The critical factor in this debate will be degree of consumer demand for music subscriptions. Will the underground networks of illegal music sharing be too prevalent for a paid service to survive? Would you personally pay a nominal monthly fee to access a comprehensive catalogue of songs? I'd be interested in hearing your thoughts via the commenting feature at the bottom of this article.

Charging Toward Paid Content
BY NIKI SCEVAK

More than four in ten consumers acknowledged that content can't remain free forever in a recent Jupiter Research survey. When will publishers start charging for content? And what types of content will they charge for?

The early attempts of publishers to charge for content were marred by the wide array of free alternatives. TheStreet.com, Microsoft's Slate.com and Inside.com were three high profile ventures that fought and lost the battle to implement a subscription only service.

Now that the harsh economic climate has eliminated many of the alternatives across the content categories, will we see publishers experiment with paid subscriptions?

One of the barriers to a paid subscription is that the structure of consumer payments on the Internet is fundamentally different to other mediums. Consumers of other media - such as PayTV and print - outlay the single cost of subscription to the publisher. However with the Internet, consumers pay a monthly access fee to their ISP and then additional subscription fees to various content sites. This extra layer of expense is key in understanding the largely free nature of content on the Internet to date.

In a sense, the allure of wireless services is largely to do with the single layer of payment the consumer makes. NTT DoCoMo's iMode service, for instance, manages a central billing relationship with the customer and distributes consumer payments to each of the content providers.

AOL had a similar policy in place when the online service began. It charged by the hour and passed on a percentage of the consumers access fee to its content partners, with the amount to each site dependent on how often the user visited that partner. The move to a flat monthly access charge however prevented expansion of the programme.

In an executive survey, Jupiter Research found that 82% of respondents expected to offer paid-content offerings in the short term. Clearly, subscription revenue must become a viable revenue stream for online publishers to survive. In terms of other media, Pay TV gets around 80% of its revenue from subscription fees and magazines rely on about 40% from readers.

In the near term Robert Hertzberg (Analyst, Jupiter Research) believes that content helping to build wealth, further careers or enrich people's personal lives will have the greatest chance of success. A chance doesn't necessarily translate into success however, with The Wall Street Journal recently revealing that the online arm was not turning a profit on a subscriber base of over 500,000.

A factor looming on the horizon is broadband. With a platform for delivery, paying for entertainment based content - such as music and video - becomes a reality. Indeed, early guidance can be taken from the pornography industry, where many premium offerings are based around video.

The decision to implement a paid-content initiative ultimately comes down to a trade off with potential advertising revenue. The greater the size of an audience, the greater the potential for advertising - assuming that quality is constant. And with a depressed advertising market at the moment, the trade off is increasingly attractive.

The Challenges Of Implementing Paid Content
BY NIKI SCEVAK

With a depressed advertising market, many online publishers are introducing subscription based content programmes. The task is not to be tended to lightly however, with a number of potential pitfalls becoming increasingly evident.

An interesting argument put forward by Jason McCabe Calacanis (editor of the Silicon Alley Daily) is that the second greatest (he believes the banner ad was the greatest) mistake of the Internet was to give content away for free.

Publishing executives reasoned that since distribution costs online were so cheap, content could be given away for free. The greater reach achieved by the lower cost of distribution meant that advertising would become even more lucrative. The flaw in the argument was obviously the assumption of a strong online advertising market.

Although the medium is becoming more and more viable for advertisers, it would be unreasonable to assume a mature market at this stage. Indeed, the first instance of online advertising was only in 1994. To its credit, in a relatively short amount of time, the online advertising industry has grown to $US5.7 billion world wide according to Jupiter Media Metrix. In Australia the estimates for online advertising vary from about $40 million through to $80 million per annum.

The chief impediment to paid content is the technical and payment infrastructure needed to administer subscription programs. Yesterday at Internet World Australia, Danni Ashe - CEO of Danni's hardrive - described the three greatest challenges to paid content from her perspective. Interestingly, two of the three were infrastructure related, with the free culture of the Internet the third.

Over the six years that Ashe has operated her soft pornography site, she has spent a significant amount of money on credit card processing and fraud detection. Being in such an industry, Ashe said that during the early days of operations a large percentage of transactions her site processed were fraudulent. Having to pay for the unauthorised transactions, Ashe quickly invested ways to detect any wrongdoing. The development is now at such a point that Ashe sells her payment processing engine to other sites. Interestingly, she expects around 50% of her revenue to eventually come from licensing her technology.

The major problem in turning consumer sentiment towards paid content is the number of free alternatives available. Listeners will be unlikely to pay for music for instance, if applications like Napster and Gnutella still exist.

A model that is becoming increasingly discussed at the moment is 'content cartels'. The prime aim of each cartel is to band together a number of sites with the same vertical focus (e.g. finance news) and centrally manage access to the network.

The benefits are twofold. Firstly, it enhances the value proposition to the consumer and secondly, from the publisher's perspective, it eliminates the majority of free alternatives.

The consumer maintains one billing relationship, so there is no need to manage multiple subscriptions and process multiple micropayments. For publishers, the group stance toward subscription based content gives them a stronger negotiating position with readers.

Whatever the model, publishers across all forms of media have ignored paid content up until now. Although there will inevitably be teething problems and mistakes made, a commercially viable will emerge before long.

Blogging for Bucks
By Leander Kahney

Journalist Rafat Ali is an unusual beast: a laid-off dot-com reporter who's making money online writing about, well, making money online.

Ali, a former reporter for Inside.com and an editor at the Silicon Alley Reporter, is making a comfortable living as an independent journalist-cum-blogger.

Working out of his East London flat, Ali publishes PaidContent, a one-man trade newsletter about the business of online media.

After six months of publication, Ali has earned as much as he would make in a year as an editor at the Silicon Alley Reporter. And he has just won a prestigious European Online Journalism Award for News Weblog of the Year.

Published daily, Ali's site mixes weblog entries with Ali's original reporting. The site boasts a healthy readership and a full roster of advertisers. Though Ali puts in odd hours (he works on New York time), he doesn't seem too stressed about paying the rent. Wired News asked him by e-mail how he does it.

Wired News: So how much money do you make?

Rafat Ali: I have only been in this full time for about five or six months, so it's early days, but I am slated to get about $60,000-$80,000 in advertising/sponsorship alone this year. I earn enough now in U.S. terms to live comfortably. Of course, convert the money I am getting into U.K. pounds, and then take out the ridiculous amount of U.K. tax -- but it is still a lot more than I would have earned in New York City or London in a full-time mid-level journalism job.

WN: What are the sources of your income? Is PaidContent your only source of revenue, or do you have a trust fund?

Ali: Advertising and sponsorships. My newsletter commands premium rates. It goes out now to about 2,500 subscribers daily and (has) about 10,000 pageviews on the site daily. Plus, I estimate about 500 to 700 people get my (site summary) feed. I do not freelance. This is my sole work. And I wish I had a trust fund!

WN: What's your lifestyle like? Where do you live? What car do you drive? What do you do in your spare time?

Ali: I live in a small flat in East London in an area called Leytonstone. I don't drive. I have never owned a car. I don't even have a license. I don't have a lot of free time. I read a lot.

WN: Describe your typical working day.

Ali: I work U.S. hours. I wake up around 11 a.m. or noon every day. I ferret out the first set of links and then send out the newsletter by about 2 p.m. London time, which is 9 a.m. EST. Then I ... catch up on news outside my work (I read the Guardian and The New York Times online). Then I catch up on e-mail, breaking news if any, and update the site until about 5 p.m. I catch up with friends in London and U.S. on the phone. Then I do the last set of updates on the site. I might call up sources in U.S. on the West Coast. I do that until about 1 or 2 a.m.

However, I do travel a lot, mainly to conferences. In the last three or four months I've been to Germany, Holland, New York City three times, Boston, Spain. I live-blog these conferences as much as possible.

WN: How did PaidContent get started?

Ali: I started PaidContent.org in June 2002, as a way to raise my profile as a journalist.... I wanted to get out of my Silicon Alley Reporter job, and getting into this area seemed logical.

I kept doing it on the side, and started doing some original stories, which got linked from other places like Jim Romenesko and I Want Media. Then word-of-blog started. It grew bigger and bigger and I started getting e-mails from vendors asking if I took advertising. I refused then (this was fall 2002) since I didn't want to get into trouble with the Alley.

WN: How and why did you choose the focus of paid content?

Ali: Niche, niche and niche, that's the name of the game. You can't just start a site/blog just because you love it, and there are 1,000 other sites like that out there. Unless you know that you will be breaking stories that no one else will.

I have been lucky that I caught a sort of curve, a trend toward paid content. The great thing about doing everything so lean is that you are very flexible and fast, so you can mold your site to whatever trends are emerging.

Another important factor is being international. I try to cover both sides of the Atlantic, most European countries and Asia to some extent. The problem (with Asia) is the language.

But being international has meant that I have been able to attract advertising clients from U.S. as well as Europe. Another thing is that technology/software companies are always looking to expand in different countries: U.S. companies want to break into Europe, and vice versa. I have a good international audience -- the advertisers, who are mainly software companies, like that.

One thing I guess I was smart about was starting an e-mail newsletter for PaidContent very early on. All the links/stories went into that daily newsletter, which helped solidify my position with the site. And the viral nature of e-mail perhaps helped.

WN: Where do you see yourself, and your site, in a year or two? How do you see the site developing?

Ali: Well, a sort of mini-digital-media empire.

WN: When and why did you get into blogging?

Ali: Pretty early.... I was among the very early users of Blogger. I've been blogging at my personal site, Naivete.org (now dead for a long time) since 2000. Naivete.org was the day-to-day living of an Indian-British-American, and the fitting-in pangs I was going through in U.S.

(NOTE: Ali was born in the United Kingdom but raised in India and the United States. He moved to New York after finishing school in 2000, working at Inside.com and then Silicon Alley Reporter.

WN: How did you end up in London?

Ali: I am not a U.S. citizen, and I had a lot of problems with work visas. The stress and uncertainty was too much. I am a British citizen, but I've never really lived in the U.K. (before now).

WN: What are the tools of your trade? How do you go about finding/blogging/publishing stories?

Ali: I am lucky in that I have done freelance Web design, so I'm pretty comfortable with design and technical issues. I use Movable Type, which is very good. I still think pMachine is the best nano-publishing tool but I am too lazy to move from MT to PM.

For blogging, I have my own personal portal of daily sources I go to. I get stories the same way every other journalist does it: working the phone, speaking to contacts, sources in the industry, getting tips.

I do, however, make sure that I get links or stories first, and from many non-obvious sources. As a journalist, I value my neutrality above all else, and then the speed.

WN: Do you work harder as an independent, or is life easier?

Ali: Harder. If anyone told you life as an independent is easy, well, dream on. If you work for yourself, you're working all the time. But it is the good kind of work, the work you want to wake up to every day.

WN: Do you have an editor?

Ali: No. I became used to not having an editor at the Silicon Alley Reporter, when I was the "managing editor" and writing (and) editing everything I did.

(NOTE: As the sole staff member on the Silicon Alley Reporter newsletter, Ali was able to choose his own title).

I wouldn't mind somebody copy editing my work now, but it slows down the work. I thrive on speed.

WN: What are the advantages and disadvantages of being independent? Is it lonely?

Ali: Hah, yeah, it's lonely. Online radio was invented for home workers like us. Radio here in London sucks, like everywhere else, so I listen to some dedicated Van Morrison stations online, or some good '60s-'70s radio stations online.

The advantages are you can do whatever you want and clothes, well, no more worrying about wearing clothes to the office. But I miss office chit-chat, office politics, gossip. Now all I do is read Gawker and Romenesko for gossip.

WN: How do you motivate yourself to post every day?

Ali: My traffic figures, subscriptions to the newsletter, the e-mails I get. I know people are reading my work and expect it. It has become a social obligation of sorts -- in a very good way.

When I wake up every morning, the two steps I take from my bed to my work table are the best two steps I take -- the best two I have taken in all my life.

Blogging for Bucks
By Leander Kahney

Journalist Rafat Ali is an unusual beast: a laid-off dot-com reporter who's making money online writing about, well, making money online.

Ali, a former reporter for Inside.com and an editor at the Silicon Alley Reporter, is making a comfortable living as an independent journalist-cum-blogger.

Working out of his East London flat, Ali publishes PaidContent, a one-man trade newsletter about the business of online media.

After six months of publication, Ali has earned as much as he would make in a year as an editor at the Silicon Alley Reporter. And he has just won a prestigious European Online Journalism Award for News Weblog of the Year.

Published daily, Ali's site mixes weblog entries with Ali's original reporting. The site boasts a healthy readership and a full roster of advertisers. Though Ali puts in odd hours (he works on New York time), he doesn't seem too stressed about paying the rent. Wired News asked him by e-mail how he does it.

Wired News: So how much money do you make?

Rafat Ali: I have only been in this full time for about five or six months, so it's early days, but I am slated to get about $60,000-$80,000 in advertising/sponsorship alone this year. I earn enough now in U.S. terms to live comfortably. Of course, convert the money I am getting into U.K. pounds, and then take out the ridiculous amount of U.K. tax -- but it is still a lot more than I would have earned in New York City or London in a full-time mid-level journalism job.

WN: What are the sources of your income? Is PaidContent your only source of revenue, or do you have a trust fund?

Ali: Advertising and sponsorships. My newsletter commands premium rates. It goes out now to about 2,500 subscribers daily and (has) about 10,000 pageviews on the site daily. Plus, I estimate about 500 to 700 people get my (site summary) feed. I do not freelance. This is my sole work. And I wish I had a trust fund!

WN: What's your lifestyle like? Where do you live? What car do you drive? What do you do in your spare time?

Ali: I live in a small flat in East London in an area called Leytonstone. I don't drive. I have never owned a car. I don't even have a license. I don't have a lot of free time. I read a lot.

WN: Describe your typical working day.

Ali: I work U.S. hours. I wake up around 11 a.m. or noon every day. I ferret out the first set of links and then send out the newsletter by about 2 p.m. London time, which is 9 a.m. EST. Then I ... catch up on news outside my work (I read the Guardian and The New York Times online). Then I catch up on e-mail, breaking news if any, and update the site until about 5 p.m. I catch up with friends in London and U.S. on the phone. Then I do the last set of updates on the site. I might call up sources in U.S. on the West Coast. I do that until about 1 or 2 a.m.

However, I do travel a lot, mainly to conferences. In the last three or four months I've been to Germany, Holland, New York City three times, Boston, Spain. I live-blog these conferences as much as possible.

WN: How did PaidContent get started?

Ali: I started PaidContent.org in June 2002, as a way to raise my profile as a journalist.... I wanted to get out of my Silicon Alley Reporter job, and getting into this area seemed logical.

I kept doing it on the side, and started doing some original stories, which got linked from other places like Jim Romenesko and I Want Media. Then word-of-blog started. It grew bigger and bigger and I started getting e-mails from vendors asking if I took advertising. I refused then (this was fall 2002) since I didn't want to get into trouble with the Alley.

WN: How and why did you choose the focus of paid content?

Ali: Niche, niche and niche, that's the name of the game. You can't just start a site/blog just because you love it, and there are 1,000 other sites like that out there. Unless you know that you will be breaking stories that no one else will.

I have been lucky that I caught a sort of curve, a trend toward paid content. The great thing about doing everything so lean is that you

Blogging for Bucks
By Leander Kahney

Journalist Rafat Ali is an unusual beast: a laid-off dot-com reporter who's making money online writing about, well, making money online.

Ali, a former reporter for Inside.com and an editor at the Silicon Alley Reporter, is making a comfortable living as an independent journalist-cum-blogger.

Working out of his East London flat, Ali publishes PaidContent, a one-man trade newsletter about the business of online media.

After six months of publication, Ali has earned as much as he would make in a year as an editor at the Silicon Alley Reporter. And he has just won a prestigious European Online Journalism Award for News Weblog of the Year.

Published daily, Ali's site mixes weblog entries with Ali's original reporting. The site boasts a healthy readership and a full roster of advertisers. Though Ali puts in odd hours (he works on New York time), he doesn't seem too stressed about paying the rent. Wired News asked him by e-mail how he does it.

Wired News: So how much money do you make?

Rafat Ali: I have only been in this full time for about five or six months, so it's early days, but I am slated to get about $60,000-$80,000 in advertising/sponsorship alone this year. I earn enough now in U.S. terms to live comfortably. Of course, convert the money I am getting into U.K. pounds, and then take out the ridiculous amount of U.K. tax -- but it is still a lot more than I would have earned in New York City or London in a full-time mid-level journalism job.

WN: What are the sources of your income? Is PaidContent your only source of revenue, or do you have a trust fund?

Ali: Advertising and sponsorships. My newsletter commands premium rates. It goes out now to about 2,500 subscribers daily and (has) about 10,000 pageviews on the site daily. Plus, I estimate about 500 to 700 people get my (site summary) feed. I do not freelance. This is my sole work. And I wish I had a trust fund!

WN: What's your lifestyle like? Where do you live? What car do you drive? What do you do in your spare time?

Ali: I live in a small flat in East London in an area called Leytonstone. I don't drive. I have never owned a car. I don't even have a license. I don't have a lot of free time. I read a lot.

WN: Describe your typical working day.

Ali: I work U.S. hours. I wake up around 11 a.m. or noon every day. I ferret out the first set of links and then send out the newsletter by about 2 p.m. London time, which is 9 a.m. EST. Then I ... catch up on news outside my work (I read the Guardian and The New York Times online). Then I catch up on e-mail, breaking news if any, and update the site until about 5 p.m. I catch up with friends in London and U.S. on the phone. Then I do the last set of updates on the site. I might call up sources in U.S. on the West Coast. I do that until about 1 or 2 a.m.

However, I do travel a lot, mainly to conferences. In the last three or four months I've been to Germany, Holland, New York City three times, Boston, Spain. I live-blog these conferences as much as possible.

WN: How did PaidContent get started?

Ali: I started PaidContent.org in June 2002, as a way to raise my profile as a journalist.... I wanted to get out of my Silicon Alley Reporter job, and getting into this area seemed logical.

I kept doing it on the side, and started doing some original stories, which got linked from other places like Jim Romenesko and I Want Media. Then word-of-blog started. It grew bigger and bigger and I started getting e-mails from vendors asking if I took advertising. I refused then (this was fall 2002) since I didn't want to get into trouble with the Alley.

WN: How and why did you choose the focus of paid content?

Ali: Niche, niche and niche, that's the name of the game. You can't just start a site/blog just because you love it, and there are 1,000 other sites like that out there. Unless you know that you will be breaking stories that no one else will.

I have been lucky that I caught a sort of curve, a trend toward paid content. The great thing about doing everything so lean is that you are very flexible and fast, so you can mold your site to whatever trends are emerging.

Another important factor is being international. I try to cover both sides of the Atlantic, most European countries and Asia to some extent. The problem (with Asia) is the language.

But being international has meant that I have been able to attract advertising clients from U.S. as well as Europe. Another thing is that technology/software companies are always looking to expand in different countries: U.S. comp

Blogging for Bucks
By Leander Kahney

Journalist Rafat Ali is an unusual beast: a laid-off dot-com reporter who's making money online writing about, well, making money online.

Ali, a former reporter for Inside.com and an editor at the Silicon Alley Reporter, is making a comfortable living as an independent journalist-cum-blogger.

Working out of his East London flat, Ali publishes PaidContent, a one-man trade newsletter about the business of online media.

After six months of publication, Ali has earned as much as he would make in a year as an editor at the Silicon Alley Reporter. And he has just won a prestigious European Online Journalism Award for News Weblog of the Year.

Published daily, Ali's site mixes weblog entries with Ali's original reporting. The site boasts a healthy readership and a full roster of advertisers. Though Ali puts in odd hours (he works on New York time), he doesn't seem too stressed about paying the rent. Wired News asked him by e-mail how he does it.

Wired News: So how much money do you make?

Rafat Ali: I have only been in this full time for about five or six months, so it's early days, but I am slated to get about $60,000-$80,000 in advertising/sponsorship alone this year. I earn enough now in U.S. terms to live comfortably. Of course, convert the money I am getting into U.K. pounds, and then take out the ridiculous amount of U.K. tax -- but it is still a lot more than I would have earned in New York City or London in a full-time mid-level journalism job.

WN: What are the sources of your income? Is PaidContent your only source of revenue, or do you have a trust fund?

Ali: Advertising and sponsorships. My newsletter commands premium rates. It goes out now to about 2,500 subscribers daily and (has) about 10,000 pageviews on the site daily. Plus, I estimate about 500 to 700 people get my (site summary) feed. I do not freelance. This is my sole work. And I wish I had a trust fund!

WN: What's your lifestyle like? Where do you live? What car do you drive? What do you do in your spare time?

Ali: I live in a small flat in East London in an area called Leytonstone. I don't drive. I have never owned a car. I don't even have a license. I don't have a lot of free time. I read a lot.

WN: Describe your typical working day.

Ali: I work U.S. hours. I wake up around 11 a.m. or noon every day. I ferret out the first set of links and then send out the newsletter by about 2 p.m. London time, which is 9 a.m. EST. Then I ... catch up on news outside my work (I read the Guardian and The New York Times online). Then I catch up on e-mail, breaking news if

Paid Content Gains Online Viability
BY DARRYL NELSON

Australia's online consumers are increasingly comfortable with the idea of paying for content. According to a new survey, 50 percent of all people regularly online now say they are willing to pay for some forms of content. However, there appears to be a definite selection process as to what those forms constitute.

A new report by Jupiter Research, a division of Jupiter Media, publisher of Australia.internet.com, has found that publishers can no longer simply look at online content as a generic product. Niki Scevak, Jupiter Australia's chief analyst and author of the report, says we've passed that point: "They have to look at how to market these kinds of services to particular target groups."

"If you look at a person's age, for instance, it's a determinant for what they're willing to pay for or not," he says. "The young are looking for more entertainment, while the older are looking for more convenience services."

Key factors

Key findings in the study show that entertainment content such as video, digital music, ringtones and SMS alerts, increases in value as potential consumers get younger. So while less than 10 percent of 35-49 year-olds would pay for video streams, this rises to around 22 percent among 16-24 year-olds.

Conversely, for utility content like newspaper archives, finance and business news, e-cards and enhanced email services, the propensity to pay increases the older consumers get: around 17 percent of 16-24 year-olds expressed willingness to pay for newspaper archives, but this rises to around 30 percent for over-35s.

According to Jupiter, the most significant factor in the behaviour of online consumers is tenure, or how long the person has been using the internet. "There's a real barrier early on. In the first 2 years, people are far less likely to transact online," says Scevak.

"In Australia, we have the advantage of most users having been online for some time. In 2003, three-quarters of the online population have used the internet for 2 or more years," he continues. This maturity seems to be influencing the growing propensity for Australians to accept paying for online content.

This is also reflected in the greater willingness of broadband consumers. Generally, broadband users are well tenured, and the report finds consistently that more of them would pay for all forms of digital content than dial-up users. Of course, the report also points out that broadband users are more likely to come from higher income households.

A quiet sea-change

The activities of local online publishers are also starting to reflect this change in attitude. Ninemsn has been engaged in a range of paid-for content services for some time now. "For the past 2 years, we've been quietly generating revenues centred around a range of paid-for products our consumers are interested in," says Samantha Herron, spokesperson for Ninemsn.

These have included ringtone downloads and pay-to-play online versions of Channel Nine's television content 'Who Wants To Be a Millionaire' and the National IQ Test. Another successful product it's running is an online dating service. Subscription based, it now has 450,000 members, says Herron.

Crucially, Herron says the portal has based these kinds of services on what its users have told them they want: "We don't just develop these things and put them out there to see if they want them."

However, it is also significant that Herron says online advertising remains the main component of its online revenues. And it is arguable just how much of this constitutes "content" in the purest sense. Publishers were one of the first industry sectors to try and monetise the web audience, and many attempts to get people to pay for published content online have consistently proved fruitless.

Not yet do we choose to receive our daily newspaper in our email inbox, as many newspaper publishers had hoped not too long ago.

Jupiter: Paid Content Market to Soar
BY RYAN NARAINE

Consumer spending on paid content on the Internet will jump to $2 billion in 2003, up 30 percent from a year, according to a survey published by Jupiter Research.

However, despite the growth of the paid content market, the research firm found that online advertising remained the "best opportunity" for most online media businesses.

Jupiter Research, which is owned by the same parent company as internetnews.com, is projecting paid content will grow at an annual rate of more than 20 percent until 2007, when it will reach $5.4 billion.

The report, released at the company's Online Media Conference Monday, found that syndication revenues for consumer content will grow from a very small base in 2003 to $1.4 billion in 2007. At the same time, Jupiter Research said online advertising spending will reach nearly $14.0 billion in 2007, up from $6.2 billion in 2003.

But, even as consumers are opening their wallets to pay for online content, Jupiter's researchers found that, for the next 18 to 24 months, online media house will generate 60 percent to 70 percent of revenues from advertising.

"The $2.0 billion forecasted for paid content spending is fragmented across over a dozen categories ranging from news to sports to health to adult content, making it difficult for any one company to collect a significant share of that spending," Jupiter noted

Paid content slowly winning converts
By Lisa M. Bowman
Staff Writer, CNET News.com

Consumers are warming to the notion of paying for online content, but that isn't likely to translate to a significant source of revenue for Internet companies anytime soon, according to a new study.

In a report released Monday, Jupiter Research predicted that consumers will pay $2 billion for online content in 2003, a 30 percent jump from the $1.6 billion they spent last year. The company also predicted that paid content will then grow at a 20 percent rate through 2007 to reach $5.4 billion.

"Consumers are slowly opening their pocketbooks for paid content," Jupiter Research Director David Card said in a statement. "However, for at least the next 18 to 24 months, most online media companies should generate 60 percent to 70 percent of their revenues from advertising."

Online advertising revenue is expected to dwarf paid content revenue, reaching $14 billion by 2007, up from $6.2 billion in 2003.

Internet companies will have trouble becoming leaders in the area of paid content because the money will be split across a dozen categories, ranging from health to news to adult content, according to the study.

Other sources of revenue, such as syndication, are too immature to be significant at this point, the study said. But researchers did say that digital direct marketing, such as e-mail marketing, could boost revenue, if only companies could figure out how to harness it.

The report comes as consumers are giving paid content mixed reviews. According to a study released earlier this month by the Online Publishers Association and ComScore Networks, paid content revenue nearly doubled last year, but spending on paid content during the holiday period of 2002 actually declined when compared with the same period in 2001.

That study also said that online dating was the clear leader in the paid content market, but that consumers were also willing to pay for financial services and entertainment/lifestyle content. The top five paid destinations in that study were Yahoo, Match.com, RealNetworks' Real.com, Classmates.com and Dow Jones' WSJ.com.

AUTO MARKETERS EXPAND INTERNET AD CAMPAIGNS
Category Spending Rises for 7th Year in a Row
By Jean Halliday

DETROIT (AdAge.com) -- When Toyota Motor Sales USA launched its second-generation Sienna minivan earlier this year, the automaker tried a new ad strategy -- breaking its online ad campaign before its TV commercials.

Web ads lead
Normally, marketers wait to start online ads until after the first TV flight, but Toyota broke its Web ads the first week of April, prior to the TV effort, on third-party auto, parenting, educational, family and financial Web sites.

That move helped spike daily traffic to toyota.com by 75% in the first two weeks of April compared with the previous two weeks and gave Sienna's launch a "really big boost," said Mark Simmons, Toyota's national manager of advertising strategy and media.

Online spending up
Automakers like Toyota are increasingly advertising online to boost awareness and consideration. While still a pittance compared with the $16 billion in automotive measured media spending last year, as tracked by TNS Media Intelligence/CMR, online spending in the category has risen every year for seven consecutive years. Carmakers spent nearly $196 million for online ads last year vs. $176 million in 2001, according to CMR, and $43 million in the first quarter of 2003.

The phenomenon has benefited Microsoft Corp.'s MSN Internet network, which has seen its ad revenue grow more than 40% this year, said Stephen Sirich, director of MSN's automotive unit. He said deals such as MSN's with Toyota's Lexus and Volvo Cars of North America have contributed significantly to the portal's growth.

$25 million MSN boostMSN's auto channel racked up $25 million in carmakers' ad dollars in 2002, three times more than any other Web destination, a spokesman said. The spokesman said Chrysler Group also dramatically increased its online advertising with MSN's auto unit to launch the Chrysler Pacifica in June, an add-on to an existing three-year deal.

MSN launched lexus.msn.com in February, targeting affluent consumers and offering travel and financial content. Mr. Sirich said the program aims to help Lexus increase consumer familiarity
Like its competitors, Toyota.com offers extensive sections of brochures that can be viewed online, printed to color printers for immediate product reference.

Volvo teamed up with MSN (volvo.msn.com) to sponsor the Volvo Digital Garage and Virtual Showroom, where visitors can see the marketer's new models, peruse features, obtain price quotes or download an owners' manual. The site also offers a chance for consumers to enter to win a trip to the Bertil Roos race and safety-driving school in Pennsylvania. Volvo captures consumer information using the contest.

Long-term planning
In addition, Volvo advertises in other parts of MSN to drive people to its area, said Phil Bienert, manager of customer relationship management and e-business at the marketer. While the carmaker has worked with MSN on a long-term basis, it has worked with other portals, including Yahoo! and AOL Time Warner's America Online since 2000. Longer-term relationships allow both the portal and the marketer the benefit of planning 12 to 18 months in advance. The deals are tactical and provide better tracking vs. short-term online ad programs, said Mr. Bienert, who added that Volvo's regional-dealer ad groups are now asking for online ads, which would be done by its national ad agency, Havas' Euro RSCG MVBMS, New York.

Blocking the competition
A new online tactic is to buy all the ad space on portals with third-party auto sites, said Mr. Bienert. It's a defensive move to keep competitive ads out of the space. Until a year or so ago, it was "easier to target competitors that weren't as aggressive" about protecting their pages, he said.

Toyota spent the most of any automaker on Web ads for a single model last year for the launch of its newest-generation 4Runner SUV. According to CMR, the vehicle was backed with $4.4 million in online advertising. The total included a presenting sponsorship of Yahoo!'s Global Extremes that was integrated with Toyota's promotion offering a trip to climb Mt. Everest in May. Toyota's 4Runner TV and print ads used Sir Edmund Hillary, the first man to reach the mountain's summit 50 years ago.

Ad planning online
Last month, Chrysler introduced a service for its Dodge, Jeep and Chrysler dealers providing ad materials online that can be tailored for individual Dodge, Jeep and Chrysler dealers. Available through the automaker's internal DealerConnect portal, the "Marketing Planner" offers custom newspaper ads, TV footage, radio scripts, direct mail and billboards by Omnicom Group's BBDO Worldwide, Troy, Mich. The goal is to save money and reduce ad production time from weeks to hours.

The service, said John Fisher, senior manager for direct marketing, eliminates individual dealer usage of different ad agencies and offers a uniform look for ads. Chrysler first offered the planner in a notebook about eight years ago and later on a CD.

AUTO MARKETERS EXPAND INTERNET AD CAMPAIGNS
Category Spending Rises for 7th Year in a Row
By Jean Halliday

DETROIT (AdAge.com) -- When Toyota Motor Sales USA launched its second-generation Sienna minivan earlier this year, the automaker tried a new ad strategy -- breaking its online ad campaign before its TV commercials.

Web ads lead
Normally, marketers wait to start online ads until after the first TV flight, but Toyota broke its Web ads the first week of April, prior to the TV effort, on third-party auto, parenting, educational, family and financial Web sites.

That move helped spike daily traffic to toyota.com by 75% in the first two weeks of April compared with the previous two weeks and gave Sienna's launch a "really big boost," said Mark Simmons, Toyota's national manager of advertising strategy and media.

Online spending up
Automakers like Toyota are increasingly advertising online to boost awareness and consideration. While still a pittance compared with the $16 billion in automotive measured media spending last year, as tracked by TNS Media Intelligence/CMR, online spending in the category has risen every year for seven consecutive years. Carmakers spent nearly $196 million for online ads last year vs. $176 million in 2001, according to CMR, and $43 million in the first quarter of 2003.

The phenomenon has benefited Microsoft Corp.'s MSN Internet network, which has seen its ad revenue grow more than 40% this year, said Stephen Sirich, director of MSN's automotive unit. He said deals such as MSN's with Toyota's Lexus and Volvo Cars of North America have contributed significantly to the portal's growth.

$25 million MSN boostMSN's auto channel racked up $25 million in carmakers' ad dollars in 2002, three times more than any other Web destination, a spokesman said. The spokesman said Chrysler Group also dramatically increased its online advertising with MSN's auto unit to launch the Chrysler Pacifica in June, an add-on to an existing three-year deal.

MSN launched lexus.msn.com in February, targeting affluent consumers and offering travel and financial content. Mr. Sirich said the program aims to help Lexus increase consumer familiarity
Like its competitors, Toyota.com offers extensive sections of brochures that can be viewed online, printed to color printers for immediate product reference.

Volvo teamed up with MSN (volvo.msn.com) to sponsor the Volvo Digital Garage and Virtual Showroom, where visitors can see the marketer's new models, peruse features, obtain price quotes or download an owners' manual. The site also offers a chance for consumers to enter to win a trip to the Bertil Roos race and safety-driving school in Pennsylvania. Volvo captures consumer information using the contest.

Long-term planning
In addition, Volvo advertises in other parts of MSN to drive people to its area, said Phil Bienert, manager of customer relationship management and e-business at the marketer. While the carmaker has worked with MSN on a long-term basis, it has worked with other portals, including Yahoo! and AOL Time Warner's America Online since 2000. Longer-term relationships allow both the portal and the marketer the benefit of planning 12 to 18 months in advance. The deals are tactical and provide better tracking vs. short-term online ad programs, said Mr. Bienert, who added that Volvo's regional-dealer ad groups are now asking for online ads, which would be done by its national ad agency, Havas' Euro RSCG MVBMS, New York.

Blocking the competition
A new online tactic is to buy all the ad space on portals with third-party auto sites, said Mr. Bienert. It's a defensive move to keep competitive ads out of the space. Until a year or so ago, it was "easier to target competitors that weren't as aggressive" about protecting their pages, he said.

Toyota spent the most of any automaker on Web ads for a single model last year for the launch of its newest-generation 4Runner SUV. According to CMR, the vehicle was backed with $4.4 million in online advertising. The total included a presenting sponsorship of Yahoo!'s Global Extremes that was integrated with Toyota's promotion offering a trip to climb Mt. Everest in May. Toyota's 4Runner TV and print ads used Sir Edmund Hillary, the first man to reach the mountain's summit 50 years ago.

Ad planning online
Last month, Chrysler introduced a service for its Dodge, Jeep and Chrysler dealers providing ad materials online that can be tailored for individual Dodge, Jeep and Chrysler dealers. Available through the automaker's internal DealerConnect portal, the "Marketing Planner" offers custom newspaper ads, TV footage, radio scripts, direct mail and billboards by Omnicom Group's BBDO Worldwide, Troy, Mich. The goal is to save money and reduce ad production time from weeks to hours.

The service, said John Fisher, senior manager for direct marketing, eliminates individual dealer usage of different ad agencies and offers a uniform look for ads. Chrysler first offered the planner in a notebook about eight years ago and later on a CD.

INTERNET AD SPENDING CONTINUES TO INCREASE
eMarketer Study Predicts Return to $8 Billion by 2006
By Katie Johnson
http://www.adage.com/news.cms?newsId=38304#

NEW YORK (AdAge.com) -- Internet advertising spending is increasing steadily and will reach or surpass $8 billion annually by 2006,

Among other things, the $8 billion figure is important for its symbolism -- it represents the peak level of online ad spending in 2000, just before that era's superheated Internet economy imploded.

12.2% increase
After falling to $6 billion in 2002, Internet ad spending stabilized and has increased by 12.2% this year, according to the e-Marketer report.

Many observers view eMarketer's findings as particularly meaningful because the results are so broadly based. The company doesn't conduct its own narrow market studies but rather surveys and aggregates the findings of hundreds of other research organizations.

One item cited is a report by the Online Publishers Association that says first quarter 2003 online ad revenues at 24 member companies increased by an average of 40.7% over first quarter 2002 revenues.

'Come a long way'
"We've come a long way, but we've got a long way to go," said Michael Zimbalist, CEO of the Online Publishers Association, which represents TV, magazine, newspaper and other media companies with large online holdings. Members include companies such as The New York Times Co., Hearst Publications, Forbes, ESPN, MSNBC and Cox Enterprises.

Mr. Zimbalist suggested the resurgence in Internet business vitality is because the medium has become a core part of consumers' lives.

The eMarketer report also arrives as U.S. auto marketers announced an expansion of their own spending on Internet advertising for the seventh year in a row and giants like McDonald's Corp. indicated plans to shift more of their budget away from traditional media toward online media, which has become a favored communications venue of younger consumers.

Search engine ads
According to Geoff Ramsey, eMarketer's CEO, search engine-based advertising and broadband connectivity are among the top trends driving the new growth in online advertising. In fact, almost as if on cue, as e-Marketer was issuing its report, Yahoo! announced it was acquiring search engine advertising company Overture for $1.63 billion. The deal is widely seen as likely to alter and intensify the online advertising landscape as Yahoo!, Google and MSN compete to provide more effective search-based ad services.

"The hype is gone," said Greg Stuart, CEO of the Interactive Advertising Bureau, who concurs with the latest study's thesis that the Internet is making a major comeback.

"The online phase of overexuberance from public and private sectors has worked its way through the system," he said. "Now marketers are making fact-based decisions."

Creating a Brand Personality
BY Martin Lindstrom
http://www.clickz.com/brand/brand_mkt/article.php/2237521

This week's column goes behind the scenes of one of the best-known brands in the U.S. It's an insider story -- just so you know -- reflecting my involvement with the Yellow Pages brand over the past year.

On July 15, YellowPages.com released its "old and improved" site, reintroducing the brand to the next generation of consumers. YellowPages.com builds on a heritage stretching back to 1878. Such a long history of involvement in the world's daily activities has made Yellow Pages an icon of domestic and business life . Though an online presence has only been possible since 1995, YellowPages.com's goal was to create associations between its household-name directory and the interactive medium and ensure the brand's digital version represents the same level of service and inspires the same trust customers have in the brand's paper manifestation.

Yellow Pages' success rests on a crucial tenet of good branding: core values. YellowPages.com carefully identified the brand's core values and came up with a well-defined and unusual profile, giving it a real branding edge. Most international brands would identify values such as innovativeness, progressiveness, and internationalism. All are far from unique and still further from useful as brand differentiators. YellowPages.com's palette of brand values combines courage, simplicity, morality, tradition, and humor.

Use Humor to Build Brand
Let's look at humor. Humor creates empathy. It breaks the ice in the online environment, just as it does anywhere else. Too many corporate sites take themselves too seriously. Brand-builders forget their brand deals with people, people whose humanity provides behavioral norms and expectations that should be addressed.

The site uses humor to inspire mirth and turn unsuccessful searches into positive experiences. Try mistyping data in the search box. You'll be rewarded with one of many cute rebukes. You might even be inclined to make mistakes in the future, just to see what else comes up!

Smash Your Brand
A few weeks ago I discussed "smashing your brand." If your site were broken into individual pieces, would visitors still recognize your brand? YellowPages.com's visitors would.

Every element on the site is unique to the brand. If the YellowPages.com logo were missing, you'd still easily recognize the brand. Every detail of the site reflects the "smash your brand" philosophy. Copy and design knit the site to its brand and speak of the brand without having to name it.

The site copy is carefully composed, establishing a unique YellowPages.com voice that ties into the brand's overarching philosophies. For example, the privacy policy uses language we all understand. It fulfils its legal obligations validly, solidly, yet lightly. You can smash the copy and still hear the brand voice in the pieces.

YellowPages.com makes the most of its heritage. The site locates its personality in the '50s, which many people associate with happy memories. The message is clear: Yellow Pages has been around forever. It's reliable, and it's here to stay. The site combines retro design with clearly conveyed new values, tying it to the familiar offline directory. Anonymous dialogue boxes and gray error messages are not part of Yellow Pages' human, practical environment.

The site reflects the brand's offline function, even its failings (just as '50s print technology didn't always achieve full registration, the site's colors don't always marry perfectly at the edges). Those minor flaws are used to create a comfortable, nostalgic relationship between visitors and the brand's service.

Aging Gracefully
YellowPages.com is an example of mature, considered use of the Internet, demonstrating the medium is approaching maturity. Yellow Pages brand-builders use technology to communicate old-fashioned values, reflect offline simplicity, and convey humor that addresses visitors winningly. At last, the medium is led by reason rather than leading users into irrelevant tech talk, thoughtlessly applied graphics, and clichéd language.

The Internet's technical versatility has, until now, distracted brand communicators from executing their missions with clarity and precision.YellowPages.com is the master of its medium. Through applying humor, mastering and conveying core values, and consistently communicating a brand personality in copy, design, and navigation, the brand adopts human qualities.

Branding means creating a brand personality. It's about making a brand human. That sense of humanity inspires loyalty. What a great start!

In ‘search’ of an online ad rebound
By Jane Weaver, MSNBC
http://www.msnbc.com/news/938669.asp

July 14 — Yahoo!’s purchase of Overture Services for $1.6 billion adds momentum to the rebound in the Internet advertising market. Search-related advertising has been the big success story of the year — with paid-search revenues doubling on average for the past 12 months — but it’s not the only category that’s driving the Web’s comeback, analysts say.

• Buy Life Insurance
• eDiets Diet Center
• Yellow Pages
• Get A Loan
• expedia.com
• Shopping

AT A TIME when Internet advertising has been struggling to recover from the dot-com collapse, paid search revenues have “fueled Yahoo’s growth and increased profits,” analyst Safa Ratschy wrote in a note Monday, just before the deal to acquire Overture was announced. When Yahoo reported quarterly earnings on July 9, the company said its paid-search business more than doubled during the quarter.

Yahoo’s not the only Web portal benefiting from the paid listings boom.

Search-related advertising — where marketers pay to have their Web site links listed at the top of Internet search results—have doubled on search engines such as Google, Yahoo! and MSN in the past two years from $500 million to over $1 billion, according to Overture estimates. Search engine executives project that paid listings will grow to about $8 billion a year in the next five years.

Overture has 80,000 advertisers. Yahoo’s rival, the privately-held Google, has 100,000. Over half of the advertisers are in business-to-business categories, according to research firm eMarketer, with the others consisting mostly of small and medium-sized business selling a vast range of products and services.

The marketers pay for placement at the top of the page when a person searches for a service or product such as DVD players. The fee is split between the search engine or portal and the listings provider.

Search-related advertising isn’t closely researched yet, so there’s no clear indication of how well it works, but because the ad placement is highly targeted, click-throughs to the targeted links can reach 17 percent, Overture has claimed.

Yahoo! Inc. (YHOO)
price change
30.59 -0.46

“For an advertiser, there’s no more efficient marketing vehicle out there,” said Geoff Ramsay, chief executive of eMarketer. “In paid search, you only pay for what gets results.”

For Yahoo, the Overture acquisition brings 80,000 smaller businesses into its portfolio of advertisers. It also means the Web portal can sell premium services like hosting and storefronts to those new clients, industry observers note.

But the biggest question remains, what will the deal mean to Microsoft’s MSN, one of Overture’s largest partners?

“Ultimately Microsoft will seek another provider,” says Danny Sullivan, the U.K.-based editor of industry newsletter SearchEngineWatch.com. “MSN wouldn’t necessarily want to be funding their competitor.”

[MSNBC is a Microsoft-NBC joint venture]
MSN project manager Lisa Gurry said it’s too soon to say how the Web portal will react to Overture being owned by its chief rival. MSN’s total ad revenues grew 50 percent by the end of fiscal year 2003, driven partly by paid search, she noted.

“Across the board, there’s no short-term impact to our business,” she said. “We’ll evaluate and determine what is the best long-term strategy going forward.”

Yahoo’s purchase of Overture is likely to make search advertising more appealing to premium marketers, says Gary Stein, analyst with Jupiter Research in San Francisco.

“Yahoo has a plethora of services to offer beyond just a search listing,” says Stein. “They can also offer a content sponsorship or home page ad [with the keyword].

The downside for consumers? If portals go overboard trying to monitize their searches and tip the balance between advertising and content in their results.

“The danger may be that the search engines get so entrapped with paid, they push up the percentage of things on the page that are paid,” says Sullivan. “You could potentially see 75-80 percent of listings being paid.”

THE COMEBACK
While Yahoo’s purchase of Overture shines the light on paid listings, online advertising overall has been experiencing a comeback this year, aided by blue-chip, brand-name marketers.

Search has been a bright spot for online in the last few years, “but it’s not the sole success in Internet advertising,” said Leff Lanctot, vice president of media for interactive agency Avenue A, which handles online advertising for Best Buy, Weight Watchers and Microsoft. “Rich-media is seeing as much growth as search.”

Rich-media, or multimedia Web ads that use Flash animation and feature audio or video, are a key part of online advertising’s comeback.

High-speed Internet access at home now reaches 36 percent of the U.S. population, according to online measurement firm Nielsen/NetRatings, which means Web sites can use larger ad formats that get better responses from consumers. At the same time people with a broadband connection tend to spend 30 percent to 40 percent more time online, based on industry research.

As a result mainstream consumer advertisers are moving more of their marketing budgets to the Web.

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In its recent “Advertising Spending” report, eMarketer forecast that U.S. online ad spending will inch up to $6.3 billion in 2003, a 4.8 percent rise over last year, the first year-over-year increase since 2000. TNS Intelligence/CMR, an advertising research firm, forecast in June that Internet advertising would grow 7.4 percent this year. Goldman Sachs upped its online ad spending projection for 2003 to $5.9 billion from a prior estimate of $5.4 billion.

Multimedia ads — which can appear on top of a Web page or pop-up between pages — make up only 5 percent of online ad spending right now, according to the Interactive Advertising Bureau. That percentage is expected to grow as new formats such as the half-page ads used by the NYTimes.com and full-screen commercials from the technology firm Unicast become more widespread.

Unicast began offering Web publishers full-screen commercials 2 months ago and already a number of entertainment, automotive and consumer packaged goods companies have been using them, says senior vice president Allie Savarino.

“A full-screen ad gets 100 percent of consumer attention,” says Savarino. “We not only see advertisers moving to that with greater support, but, in the future you could have multiple full-screen ads in a break similar to multiple commercials in a TV break.”

Sites such as the NYTimes.com have been running full-page ads which appear for about 10 seconds between pages.

“Our advertisers have been very pleased with the full-page ad format,” says Jason Krebs, vice president of NYTimes.com.

Rich-media’s distribution across the Web should also get a boost from the deal announced Monday between Internet ad firm DoubleClick and software-maker Macromedia. The companies said they have built a technology that cuts down the time needed to place advertisements online.

The current rich media process is complicated with a lot of chance for error,” says Doug Knopper, DoubleClick’s vice president of online advertising. “We’re making the process more streamlined and easier to use so advertising agencies can focus on better creative as opposed to focusing on the technology.

Movie Marketers Need to be Online
Online media can impact moviegoers’ purchase decision significantly because the channel is not constrained by the limitations of the 30-second spot.
By Underscore Marketing
http://imediaconnection.com/content/features/050703.asp

If you’re a movie fan, you might have every premium movie channel piped into your home by satellite or digital cable, you might have the most expensive home theater setup on the block, you might visit every independent film festival between Colorado and Cannes, but you really can’t immerse yourself in a movie unless you go online. That is, you can’t experience everything that a movie has to offer without going online.

“We look at recent studies, and three points jump out,” says Tom Goosmann, executive creative director at True North, Inc., which counts Buena Vista Home Entertainment among its clients. “One, entertainment information is a top reason users go online. Two, as broadband grows, users spend more time online and less watching TV. Three, whether online or on TV, users try to avoid ads. The obvious conclusion: You’ll miss a growing audience segment if you’re not online with an entertainment product like movies, and you need to offer users engaging, interactive content to overcome ad reluctance. Placed in the context of a site for movie enthusiasts, such ads actually help publishers meet user expectations. The ads become content.”

Destination vs. Syndication

Official movie Websites often offer a communal focal point for fans of specific movies to completely immerse themselves in the film universe, or dare we say, the film’s brand. The nature of the medium is to provide immersive experiences founded on two-way, active communication, as opposed to the lean-back, passive experiences that traditional media typically offer. Sneak-peek features, games, trailers, interviews with cast and crew, wallpapers and screensavers are just some of the content elements that can provide value to movie-going consumers and get them excited about a particular theater or home video release.

One trend within the movie marketing space is to bring these content elements to the audience, as opposed to bringing the audience to the content.

“For Buena Vista Home Entertainment, we’ve been creating what we call AdSites since last year,” says Goosmann. “These are in-page, interactive units that give control to the users. Without leaving the page, the user can stream in trailers, hear music, read about DVD features, play games, and so on. Publishers love them—users stay put and interact rather than clicking away—and interaction rates have been many times higher than banner click-through rates.”

With a syndicated model, advertisers do not necessarily have to rely on luring Web surfers from an engaging content area on a movie site to an official destination site in order to get their message across. Taking the content to the audience also allows marketers and agencies to segment their targets appropriately, often by where they are in the consideration process for attending a new movie release, or buying a home video or DVD.

Interaction from Every Angle

Destination sites within the movie category tend to be somewhat specialized, which gives advertisers the opportunity to market to different segments of movie enthusiasts. Standing in contrast to general entertainment sites are sites like Moviefone and Fandango, which allow for ticket purchases and can be used tactically to reach moviegoers in the last stages of consideration for in-theater releases.

Similarly, those marketing DVD or VHS releases might consider advertising with sites like the Internet Movie Database (imdb.com), which hosts an extensive informational resource for movie buffs, including plot outlines, cast and crew information and user reviews. Such sites are great places to find people seeking out a specific title.

Destination sites can also help to market movies prior to their release date, especially when trying to get the word out on a sequel to a prior release. WhatIsTheMatrix.com caused a splash when teasing the introduction of The Matrix. The site now has a second lease on life, promoting the sequel – The Matrix Reloaded. In the same vein, fans of Marvel Comics’ X-Men who registered at the official Website when the first X-Men film was released were treated to trailers, a game called Mutant Madness, live video chats with the cast and a chance to buy advance tickets to X2: X-Men United on opening day, all brought to them via an HTML newsletter known as The X2 Insider.

Whether marketing a new in-theater release or driving sales of a home video or DVD, marketers have many options for tapping into the various segments of movie buffs.

“Mass media like TV can establish broad awareness of a movie during the theatrical run, but online is particularly suited to translating that awareness into action later for the DVD release,” says Goosmann. “We can craft interactive content to re-position a movie or to target audience segments based on research during the theatrical run. We can deliver right to the ad interactive content that the user wants about the coming release, and can drive the person to a sales site or collect e-mail addresses.”

Interactive Media Immersion

Movies represent escapism for many, as immersing oneself in fictitious storylines and settings can serve as an escape from reality and routine. Interactive media can complement such movies by providing a two-way interaction with the film’s “universe.” Take, for instance, StarWars.com. A focal point for all things Star Wars, the site provides the latest news on the films, but doesn’t stop there. It also offers community features, e-commerce, FAQs, fan club memberships and much, much more, including a section called “Expanded Universe” where fans of the popular movie franchise can get information on novels, comics and games set in the Star Wars universe.

StarWars.com also features a database of collectibles and an engine to allow collectors to comparison shop for Star Wars merchandise across multiple online vendors. Since the site is a true platform for all things within the Star Wars universe, it allows fans to immerse themselves as deeply in the Star Wars brand as they might like. At the time of this writing, pop-up ads on the site were pushing Yoda and Darth Vader-themed credit cards.

Another example of immersive, escapist environments is the official Website for the movie AI, which was released in 2001 and featured Haley Joel Osment as an intelligent robot boy capable of emotion. Upon arriving at the site and after viewing the movie trailer, users are greeted by a chatbot that can actually carry on intelligent conversations. We know you’re dying to try it out, if you haven’t already. The URL is aimovie.warnerbros.com. Caving in to the temptation to be mean to the chatbot will result in its taking offense. But don’t worry – if you offer a sincere apology, the bot will accept it.

Involvement over Awareness

Film is a highly visual medium, and thus other visual media may be the best choice for generating awareness of a new movie. In fact, research released by DoubleClick earlier this year indicates that television is vital to all aspects of the purchase decision process for movies.

But online isn’t a linear medium, and it can impact the purchase decision significantly because the channel is not constrained by the limitations of the 30-second spot.

“Movies aren’t soap flakes,” says Goosmann. “They’re uniquely suited to marketing online. Unlike most products, we can actually offer an online sample, but unlike TV, we’re not limited to just a 30-second trailer. We can let users view a trailer in the ad, but we can also provide extra content the user can interact with over extended time.”

Whose Rebound Is This Anyway ?
BY Gary Stein | July 21, 2003
http://www.clickz.com/mkt/capital/article.php/2237501

The news was great, just not great enough.

I refer to the real-time ebb and flow of public opinion that surrounded Yahoo!'s second-quarter earnings announcement. It came midweek, after market close (and before the news of the Overture purchase, which really reshuffled this deck of cards). In the days before the announcement, the stock price surged and phones leapt off their hooks. "Is it here?" the market asked. "Is this the online advertising rebound we've been waiting for? How great is this?!"

Then the announcement came. Earnings were stellar and met analyst expectations.

"Oh," said the market. "Met expectations, huh? Well. Shoot." The stock price dropped off, losing much of its gains. My colleague Nate Elliott tells me this was a whole lot of profit grabbing. I can see that. But the sell-off continued because, according to the business press and traders' message boards, shareholders were a bit disappointed. They anticipated not that the company would meet estimates, but exceed them. In a sense, Yahoo! didn't meet expectations... at least not the inflated ones held by those who set the Way-Back machine to 1999, when Internet companies routinely beat expectations. Not doing so in 2003 was a bit of a letdown.

The online advertising rebound is real. That is, the rebound of companies -- publishers, advertisers, agencies, and other service providers -- are correctly using the Internet's technology to achieve advertising and business goals. What the stock market does with this news is beyond my scope of interest (for the purpose of this column, at any rate).

The Internet bubble didn't burst because there wasn't one. The "let's make a whole bunch of cash with some poorly thought out ideas using the Internet" bubble burst. Stock indices have risen and fallen over the last several years, but some numbers have climbed: the number of people online, the number of households with Internet connections, the amount of time spent online, the amount of traffic, and the amount of e-mail sent.

All of that creates a good, healthy environment in which a rebound can occur. What's making the rebound actually happen and gain momentum is an alignment of priorities between publishers and advertisers. A few examples:

Multi-agency alignment. The integrated-marketing vision is simple: have all media work together to communicate one message. The dream wasn't fumbled due to a lack of vision, but a lack of organization. Either clients segregated media into different silos or the work was divided among multiple agencies, which didn't communicate. Clients came to realize this and began engaging single-ad-campaign stakeholders to uphold the concept and align different internal and external teams. These people work like symphony conductors, getting multiple, disparate groups of people to generate one beautiful, integrated sound.

Publisher flexibility. I've built a script to insert the phrase "publisher flexibility" in every bit of advice I write (OK, not really). It's the key to sustaining the Internet as a viable advertising medium. The less publishers think "sell inventory" and the more they think "build solutions," the higher the quality of the creative product.

Media purchase negotiations. Pay-for-performance models did a great job of bringing advertisers back to the Internet. I still worry about nontraditional risk offsetting from clients to publishers, and sometimes agencies. That will keep a lid on risky creative, which hampers the medium's development. I want to see more publishers and agencies try to convert at least some of their clients from pay for performance back to CPM, but they must do so on the heels of positive campaign performance.

Long-term planning. A sure sign of a rebound. The best evidence I've seen of long-term planning by advertisers is inclusion of brand goals in Internet campaigns. Branding is a long-term endeavor. Immediate feedback -- clicks and conversions -- are not always the best indicators of success. A decision to focus on brand goals connotes a decision to stick with a medium over a long period.

I'm not a stock-market analyst, so I can't offer advice on which company's shares to buy or sell. Those who watch Internet advertising are only concerned with catching short-term profits from company movements. They're not in the best position to determine if a rebound is happening. This space was created (out of thin air, really) from within. It's from within any growth will occur.

Yahoo! to Buy Overture
By Brian Morrissey


Yahoo! (Quote, Company Info) on Monday morning shook up the booming search industry with plan to acquire Overture Services (Quote, Company Info) in a stock and cash deal worth $1.6 billion.

Under terms of the deal, Overture shareholders will receive .61 shares of Yahoo! stock and $4.75 in cash for each share they own, making the purchase price around $1.6 billion. Overture will become a wholly owned subsidiary of Yahoo!. The transaction is expected to close in the fourth quarter.

The deal marks the apogee of Yahoo! CEO Terry Semel's drive to focus the company on solidifying its leadership in the search sector. Last December, Yahoo! bought algorithmic search provider Inktomi for $235 million

"This combination of companies really positions Yahoo! as the largest player in the rapidly growing Internet advertising market," said Jeff Weiner, Yahoo!'s senior vice president for search and marketplace. "Pay-for-performance [search] is one of the fastest growing and dynamic segments."

The blockbuster deal will dramatically and immediately reshape the red-hot search sector. With Overture part of Yahoo!, its relationship with MSN is likely to end. In addition, the deal now more clearly sets up Yahoo! and Google as rivals. While Google is still signed up to provide the portal's search functions, industry analysts expect Yahoo! to migrate its search functions over to Inktomi's system. Yahoo! and Google signed a "long-term" non-exclusive contract in June 2000. MSN has a deal for Overture to provide paid listings through 2004.

"It definitely shifts the nature of the battle," said Gary Stein, an analyst with Jupiter Research, which is owned by the parent company of this site. "Google versus Overture was not a clear comparison, but now if it's Yahoo versus Google, that's a significant thing."

Yahoo! officials said the economic rationale of the deal does not hinge on those relationships remaining intact, but Yahoo! says it intends to maintain the Overture distribution network.

"We are absolutely committed to providing as much value to our affiliate partners as possible," Weiner said.

For Yahoo!, the deal means it now gains total control of its search services, from algorithmic to paid search to paid inclusion. Semel has made this a goal of the company since search emerged as a major revenue generator outside of Yahoo!'s traditional brand advertising business. In April, Yahoo! revamped its search offering, making it more integral across its network and giving users personalization options. Yahoo!'s commitment to search was underscored by the launch an ad campaign in May to drive usage and build its brand as an alternative to search king Google.

Last year, Overture generated $140 million for Yahoo!. This year, its importance has only grown: Deutsche Bank estimates paid search accounted for 75 percent of the company's growth in marketing services' revenues in the second quarter. Although the two companies have not reveal their revenue split, it was generally believed that Yahoo! kept about 70 percent. The deal will allow it to keep all of the revenues.

"Overture is a proven partner of ours," Weiner said. "Equally important, they are a pioneer in this area."

Now, Yahoo! will be able to more deeply integrate paid listings into its vast network. The company said it planned to put paid search into its vertical properties, such as shopping, travel and yellow pages. Yahoo! also will use Overture's recently unveiled contextual advertising product in properties like sports, real estate and autos.

Perhaps more importantly, Overture brings to Yahoo! an advertiser base of 88,000, most of which are small-and medium-sized businesses. Semel has made a point of reshaping Yahoo! to make it the one-stop shop for small businesses, offering everything from robust e-mail services to Web hosting to micro ad buys. Now, Yahoo! will have an entry point for moving these businesses through its funnel of higher-priced services.

"We think there's a very large, substantial opportunity there that's still a fragmented business," Weiner said. "We think we're in a position to add substantial value to small-and medium-sized businesses."

Yahoo! will now have an embarrassment of riches of search technology. In addition to Inktomi, the company will gain control of addition algorithmic search capabilities thanks to Overture's acquisitions earlier this year of Alta Vista and FAST's Web search unit.

Weiner said the various search technologies are complementary, with FAST bringing robust linguistic capabilities and Alta Vista adding multimedia search technology.

Overture also brings over a host of new products, either recently released or in the pipeline. Just last month Overture released a contextual advertising product, Content Match. The company has plans to unveil a paid inclusion product in the coming weeks, in addition to designs for local search in the next year.

Finally, Overture has a growing international presence. The company plans to expand to seven markets this year, giving it operations in 11 countries.

The transaction is subject to customary closing conditions, including regulatory approval and the approval of Overture's stockholders. Overture will retain its headquarters in Pasadena, Calif., and chief executive Ted Meisel will report to Yahoo!'s chief operating officer, Dan Rosensweig.

http://www.internetnews.com/IAR/article.php/2234561

Yahoo! Reports Record Revenue, Raises 2003 Estimates
By Pamela Parker
http://www.internetnews.com/fina-news/article.php/2233351

Internet industry bellwether Yahoo! raised its full-year revenue and earnings estimates for 2003 Wednesday as it posted a second quarter profit of $51 million, or $0.08 a share, more than doubling its earnings from the same period in 2002.

The company reported revenues of $321.4 million in the three months ending June 30, its highest ever revenue figures for a quarter. The revenue numbers met analysts' expectations, with some analysts having boosted their estimates over the past several days. The net income figures also met analysts' consensus estimates, according to Thomson First Call.

The positive revenue and earnings numbers spurred Yahoo! to raise its estimates for the full year 2003, noting that the company felt it had a better handle on its financial future because it has been cultivating more stable revenue sources -- namely, blue chip advertisers, small businesses and fee-paying consumers. Yahoo! now expects to bring in between $1.26 and $1.31 billion for the full year, with operating income -- which the company formerly referred to as EBIDTA -- coming in between $375 and $400 million.

Marketing services, which encompass advertising as well as paid search, continued to provide the lion's share of Yahoo!'s revenues in the second quarter, coming in at $219.2 million, up 42 percent from the $151.7 million it brought in last year. Yahoo! Chairman and CEO Terry Semel credited the rise to the increased adoption of the Internet by traditional marketers and the popularity of paid search.

"The market has been more robust over the past year," said Semel, "and I believe there are a number of factors that point to a significant bright future for Internet advertising."

One of those factors was the fact traditional marketers continue to turn toward the Internet in greater numbers, according to Semel. While in previous quarters he had attributed growth to stealing market share from competitors (likely referring to AOL), this time it appeared the number of Internet advertisers was increasing, in Semel's view. Still, he was a bit hesitant to predict a rosy future for the sector.

"It's a good time to start to feel a little bit good," he said.

Paid search, driven by Yahoo!'s relationship with Overture Services, grew in several different ways over the quarter. The number of clicks grew, the cost per click grew, and the popularity among marketers also grew. Some of that growth, at least, Yahoo! attributed to its recently re-configured search area.

Yahoo! is "only just beginning to realize our full potential and take advantage of the long term growth opportunities," said Semel.

Other company executives mentioned contextual search as part of Yahoo!s future plans. The company has been experimenting with Sprinks as a contextual search provider, and Overture and Google -- both of which have relationships with Yahoo! -- also have offerings in the space.

The second quarter also saw Yahoo!'s fee revenues, such as for the Yahoo!/SBC co-branded ISP and for Yahoo! Personals, show a double-digit increase. They totaled $69.9 million, up 43 percent over the same year-ago period. Yahoo! said it had 3.5 million paying subscribers by the end of June and expects to have 4.2 to 4.5 by the end of the year.

Listings dollars, such as those brought in by the HotJobs employment service, came in at $32.3 million in the quarter, their 29 percent year-over-year growth rate driven primarily by revenue from HotJobs.

The company ends the quarter with quite a bit of money in the bank, not only because of its free cash flow of $67.7 million, but also because of the $750 million convertible debt offering it made last quarter. On the earnings call following the release of its financial results, company executives hinted that investments or acquisitions may be in the works.

Resuscitate Integration
The apparent disconnect between television and the Web is just one expression of the lack of integration in today’s day and age. This simply has to change.
By Joseph Jaffe

Right at the beginning of this Best Practices series, I covered both cross-media blitz and cost-efficient incremental reach and frequency as two leading best practices. Then it dawned on me that there was an even stronger best practice that essentially precedes both of these – integration itself.

Next time you watch a pod of television advertisements (force yourself), try this little experiment on for size. Try and assign a numerical value between 1 and 30 for the portion of each piece of communications which dedicates itself to some kind of Web presence. The numbers should be dismally unsurprising.

The apparent disconnect between television and Web is just one expression of the lack of integration in today’s day and age when the term itself is as commonplace as “a”, “the” or “Coke.” In fact, the full extent of the application of the notion of integration seems to vest wholeheartedly in the hands of the art director and copywriter combo (look, feel, style sheet, tone etc.). Quite clearly the surface applicability of a common set of design principles as the means to harness the synergies of cross-media integration is woefully inept.

“Many of the multi-national holding companies have kluged together service organizations that theoretically are built to deliver on 360 degrees of marketing,” states Glen Sheehan, Executive Creative Director of AKQA. “However, they often (just like independent models) are fighting for a piece of the pie. All have separate revenue goals, and that creates competitiveness to push more weight to their solution as it means more business for them. On the client side, it’s often not much different -- marketing groups are built around above-the-line and below-the-line, often with sub departments, and often all with their own budgets and numbers to deliver up the chain.”

In other words, talk is cheap. Real integration requires real infrastructure, real commitment and real execution.

“Clearly there is benefit to brands to be able to bridge their message across an increasingly disbursed media landscape,” explains Adam Guild, President of Interep Interactive. “Time was when a buy on any one of the broadcast networks would reach most of the country. This is hardly the case now. Ad programs that match up with the way audiences now multi-task (such as listening to radio while they are online) can help restore some semblance of reach to advertisers. Integrated programs can be infected by the ‘we own it, you need it’ virus.”

In a tissue-session with CNET Networks a while ago, we mused and conceptualized the five stages of integration, where 1 denoted the token Website.com URL that appears fleetingly at the final end frames of a commercial, 4 might have referred to the Nike “Whatever” campaign, and the ultimate 5 would be awarded to something like BMWFilms.

Unfortunately in today’s times, the 1s seem to outweigh the 5s by vast multiples. This simply will have to change (and quickly), if companies are to resist being swept away by the rapidly evolving media landscape.

The good news is that there are signs of a truly integrated pot of gold at the end of the multi-media rainbow.

The ING work springs to mind as one campaign that works real hard online to respect and fulfill on the overall integrated strategy and creative idea.

In addition to exploiting the unique and differentiated best practice tactics that the medium has to offer (see below), there’s also the more literal application of one of ING’s key brand identifiers – the color “orange.”

Objective: The primary objective was to introduce a new brand name to the target audience. Secondary objective was to do this in a way that reinforced key brand attributes like innovative and refreshing without overtly saying anything about the brand.

Approach: Primarily by communicating in bold ad formats that relied heavily on the color orange. Initial research showed that the competitive set was overwhelmingly blue, and that the use of orange would make the brand stand out, and would strongly communicate ING’s core attributes.

Results: Nearly 50% aided awareness in less than a year, on a relatively small budget. Dramatic increases in attributes related to innovation and refreshing, though they were only communicated by use of the color orange.

Here’s another integrated success story: Visa’s ideasHappen campaign. “We were given a target (18- to 29-year-olds), and a business objective by our client Jon Raj and the rest of the Visa marketing group to (position Visa top of mind as the credit card that can best allow them to achieve what is important to them),” says Sheehan. “We were looking for an idea, not a program. The distinction being, many times we rage towards tactics of contact before we have an idea that determines the relevance and opportunities of the tactic. And that may point to the biggest change that needs to be addressed for integration.”

“Procter & Gamble’s BeingGirl.com is an information Website targeted to teenage girls,” explains Guild. “P&G is always looking for new ways to drive traffic to the site, and so in conjunction with Interep Innovations and Interep Interactive, they developed an integrated radio/online campaign to bring Teenage girls to BeingGirl.com. The effort centered on a Web-based sweepstakes, offering a prize of a trip for three to Chicago to see ‘N Sync in concert. The sweepstakes was promoted with live DJ reads on one radio station in each of eight top markets. To enter, girls were instructed to visit the BeingGirl.com Website. Other promotional elements included online advertising across a variety of targeted Websites, as well as targeted emails to over one million teenage girls. During the four-week promotional period, BeingGirl.com counted nearly 200,000 visitor sessions, with nearly 50,000 people entering the sweepstakes.”

Integration as a buzzword will fold like a house of cards; as a superficial application of design principles will be both transparent and ineffective; as a way to win business without the means to execute is a surefire fast track to the “Accounts in Play” section in the weekly trades. But if properly understood, objectively built around the consumer and executed to do justice to the campaign idea, the results are self-evident.

Some believe that the term rich media is both redundant and should be done away with entirely. I would dare say that integration as a philosophy, approach or concept is also high on the favorites list to be either marginalized or reborn.

http://www.imediaconnection.com/content/features/072103.asp

NEW CROSS MEDIA OPTIMIZATION STUDIES (XMOS) FROM
KIMBERLY-CLARK AND COLGATE-PALMOLIVE LATEST TO HIGHLIGHT ONLINE
ADVERTISING’S VITAL ROLE IN THE MEDIA MIX

New York, NY – February 10, 2003 – Today, the Interactive Advertising Bureau (IAB) released new research results from the latest of its Cross Media Optimization Studies (XMOS) based on advertising campaigns from Kimberly-Clark’s Kleenex® Soft Pack tissues and Colgate-Palmolive’s Colgate® Total® toothpaste. This landmark study methodology, supported by the Advertising Research Foundation (ARF), affords a marketer the ability to determine the optimal mix of interactive, TV, radio and print advertising drawn from real world, in-market results. Based on the research, assessing the optimal advertising mix provides increased brand or sales impact ranging from 10 to 15 per cent.

One year ago, MSN and Unilever released their initial XMOS results, followed by findings from McDonalds in October 2002. This latest round examined campaigns for Kleenex® Soft Pack tissues and Colgate Total® toothpaste that ran for six to eight weeks and involved television, print, and online advertising. The three key findings from the research are: 1) using a static budget, optimal results are achieved when online advertising is 10-15% of the marketing mix; 2) adding online advertising expands reach and coverage and 3) increasing online allocation produces better overall results by increasing the ROI.

"In today’s economy there is no greater imperative than to maximize marketing dollars and XMOS unequivocally provides the data to do just that,” said Greg Stuart, President and CEO of the IAB. “From a cost-effectiveness standpoint, XMOS demonstrates that online advertising is the deal of the century for major brand marketers. In other words, same budget, better results.”

COLGATE-PALMOLIVE: Among other findings, the Colgate® Total® toothpaste “purchase intent” data demonstrated that online advertising should be 11% of the overall mix to best achieve marketing goals. Specifically, dedicating 11% of the overall budget to online advertising generated an increase in “purchase intent” to 4.3% as opposed to 3.4% purchase intent from using offline media only. In addition, Colgate’s data showed that it cost 23% more to encourage consumer purchase using TV alone compared to using TV in combination with online.

“This research proves that the Internet has great potential as a marketing tool for our brands," said Jack Haber, Vice President, E-Business, Colgate-Palmolive. "And as a lead marketer we have to harness the Internet's potential to connect with our consumers to influence purchasing decisions and to increase brand awareness."

KIMBERLY-CLARK: The research from the Kleenex® Soft Pack campaign underscores the ability of online advertising to supplement television’s reach and coverage to normally hard to reach consumers. More specifically, when targeting those not reached or only lightly covered by TV, the combination of online and magazine advertising was the most effective for boosting “aided brand awareness”, “Brand Image,” “Purchase Intent” and “Bundled Trial Intent.”

“Based on our experience, XMOS are valuable for marketers looking to make educated, targeted advertising decisions,” said Brad Santeler, Interactive Services, Kimberly-Clark. “It shows us that without increasing the media budget, we can simply reallocate media dollars to better reach our core audience by leveling out our delivery and, at the same time, better impact brand attitudes.”

The table below lists the recommended allocation for online advertising in the media mix for each marketer:

Current Recommended
Colgate 7% 11%
Kleenex 3% 10%
Dove Nutrium Bar 2% 15%
McDonalds 1% 13%

Over the next few months, additional research results are expected from AstraZeneca, Universal Home Video and ING.

To support this research, the IAB has added a new XMOS section on its Web site at www.iab.net/XMOS, and beginning April 1, will conduct a seven city road show tour inviting traditional media buyers, marketers and agencies, to a presentation of the findings from the first four XMOS studies from Unilever, McDonald’s, Kimberly-Clark and Colgate-Palmolive.

XMOS, the largest cross media advertising research study conducted to date, was developed and conducted by the marketing research expert Rex Briggs of Marketing Evolution, with Dynamic Logic executing the study. XMOS research methodology was nominated for the prestigious John & Mary Goodyear Award for “Best International Research” from the global research authority, ESOMAR and is currently patent-pending.

Twenty-one online publishers and industry leading companies funded XMOS including: 24/7 Real Media, ABCNews.com, America Online, Ask Jeeves, CNET Networks Inc., ESPN.com, The Excite Network, Flipside Network, Forbes.com, iVillage, Google, Meredith Corp., MSN, New York Times Digital, RealNetworks,Terra Lycos, Unicast, Univision.com, Walt Disney Internet Group, The WashingtonPost Newsweek Interactive, The Wall Street Journal Online and Yahoo!

Contact:
Stu Ginsburg
FAVA PR
(646) 336-2612
(917) 554-0724
sginsburg@iab.net

Emily Kutner
IAB
646-472-3904
917-586-2525 - mobile
emily@iab.net

Elusive Reach Part I
Through the introduction of the Web as a viable incremental medium, we’re finally witnessing an efficiency-effectiveness one-two punch through the ability to reach elusive segments of consumers more cost efficiently.
By Joseph Jaffe

At every given point in a media plan, there exists a point at which the marginal cost of adding incremental reach exceeds the value of doing so.

This line should be tattooed on every media professional’s forehead or pinned up above their computer monitors to remind them that their primary directive is to help their client’s maximize their investment in media communications. Or to put it differently, optimize efficiency and effectiveness through the optimal allocation of media resources.

Unfortunately for most clients, this is found sadly wanting.
I first heard the melancholy tones of integrated optimization from the goateed lips of Rex Briggs – Principal of Marketing Evolution and co-author of the cross-media research studies – on the MSN-Dove road show.

The two takeaways I gained from this presentation were simple and straightforward:
1. There are optimization efficiencies to be gained from optimizing integrated media mixes
2. These efficiencies can be identified and harnessed by including online into the planning process early on.

In other words, weed out the least efficient line-items on the traditional media plan for reallocation in favor of interactive. The findings demonstrated how a budget shift would result in increased overall brand lift.

And so it was fitting when he and I shared a working session, in which we co-developed some of the best practices in this very series, and I presented to him my concept of elusive reach.

A sparkle ignited in his eyes as he nodded in approval at the idea. He shared my belief that this concept would stick.

We’ve all heard the philosophical question, muses Briggs. “If a tree falls in the woods, but no one hears it, does it make a sound?” Well here is a more practical question: “If a marketer runs a TV ad that doesn’t reach a consumer, does it have an impact? Certainly your TV campaign has no impact if the consumer never sees it. And, almost every TV campaign fails to reach or adequately cover a significant portion of the target audience.“

John Wanamaker‘s famous quote is obsolete. For one thing, the figure attributed to wastage is not 50%, it’s probably much higher; for another thing, we’ll soon be able to find out exactly how much was well spent and how much was well….wasted.

“A TV campaign with 75% reach is by definition not reaching 25% of target consumers,” adds Briggs, “And, if one looks at the TV campaign closely, one will see that the campaign does not deliver the advertising impressions evenly. Some people see many more TV ads than others.

“Media planners typically perform a ‘quintile analysis’ to illustrate the point. They divide the population into five equal segments (or quintiles) based on the number of TV ads that have been seen. The lightest quintile may have only seen the advertisement once over the course of the campaign. Yes, these people are reached by TV, but not with a frequency level that a marketer was aiming for. Add the 25% that are not reached and those that fall in the lightest quintile (who are not adequately covered by TV advertising because they see only one or two ads when the goal is four ads over four weeks) and the total not reached can often exceed 40% of all consumers in the target.”

This of course assumes that the reachable 60% are in fact reached and we all know that it is downright folly to suggest that potential GRPs and actual GRPs are even remotely similar.

Ah, but if only this could be proved. Worry not, as the findings from the recent wave of cross-media research changed everything.

Kleenex was achieving an impressive predominantly TV-based 75% reach over an eight week campaign, however subsequent quintile analysis reflected that in reality, this was more like 58%, excluding those reached on average 1.5 times throughout the eight weeks.

Findings showed that a meaningful online campaign could help complement TV’s reach by helping to deliver over half of these consumers (26%).
Colgate Total had elusive reach figures and results that were almost identical to Kleenex.

In both cases, results showed that online could help deliver over half of the consumers that are not adequately covered by TV.
McDonalds highlighted not only the point of diminishing returns, but also identified the elusive reach, which online was able to capitalize on.

“20% of McDonalds’ TV budget hit a point of diminishing returns, explains Briggs. “We were able to suggest that 13.6% go to online, which freed up the additional dollars to be invested in other marketing options.”
By scaling back TV by 20%, and allocating13% of this to online, online’s reach expanded from 3% to 60% of the 18-49 media target. More importantly, with the new mix, overall awareness in McDonald’s target market grew by three points over and above the previous media mix. This translated into a brand effectiveness lift of 8.3%, or six more million people added in the process.
I think it is significant to point out that not all dollars were recommended against online. In the past, this kind of research was poo-poo’d based on its perceived subjectivity. These findings suggest otherwise. They also net out at a number similar to that of Dove’s optimal online allocation ~15%.

I would suggest we all go out and buy ourselves and our teams a delicious McDonalds Flatbread Sandwich. If this landmark research isn’t the silver bullet we’ve been looking for, it’s pretty close. McDonalds’ supersized contribution to the industry should not go unnoticed or unrecognized.

If there’s one thing that rings true among all marketers – and I mean all marketers – it’s the universal desire to get more for less. Through the introduction of the Web as a viable incremental medium, we’re finally witnessing an efficiency-effectiveness one-two punch through the ability to reach elusive segments of consumers more efficiently, as well as the capability to boost key brand metrics without requiring additional ad spend in the process.

Budget shifts aside, the conclusions underpin the symbiotic relationship between TV and the Web. The Internet is not a replacement, but a complement. However, these synergistic effects of online as part of an integrated media mix, together with the ability to reach the prime elusive segments, are not going to happen if budgets are not allocated efficiently.

“The problem is that most marketers are just dipping their toes in the water,” surmises Briggs. “Their campaigns are not fully leveraging online advertising. They buy twenty or thirty million impressions and think that is enough. It isn’t. As a result, one quarter of the target consumers hear nothing from the brand when they could be getting the message through online advertising. Surely, reaching your consumers with online advertising is better than silence.”

Beyond a Website
Marketers need to harness the power of online media to drive interested prospects to a given destination, as well as to, ultimately, drive integrated conversion.
By Joseph Jaffe

In some respect, I can’t believe I’m writing about why a Website isn’t enough for any and all marketers. However, it seems the need has never been stronger to help educate the market on why it makes sense to venture beyond the server-doors of their own Websites.

I like to use the analogy of a Website being a storefront. If you think about it, a company’s bricks store is really no different to its clicks store. After all, if a store is defined as a place to buy, browse and/or research, then where is the distinction between land and cybersea?

In reality, there are marked differences and advantages to online storefronts. For example, online possesses such characteristics as superior customer service in the form of “perfect” information, succinct return policies and inventory that’s always in-stock. There are also no dirty stores, no apathetic salespeople, no long lines.

So assuming that a client buys into the importance of an online storefront (which given Website spending certainly seems justified), why on earth would they not dedicate media resources towards promoting it?

One could ask companies where they think they’d be if they just stood in their stores and hoped people would venture in, or if they just stood outside their doors passing pamphlets to people passing by?

Their obvious response would be, “That’s why we have distributed or paid advertising” to which we should now say, “Exactly. And that’s the precise reason why online advertising makes so much sense, given your belief in your online storefront.”

Perhaps another way of stating this would be to combine two popular phrases: fish where the fish are and the shortest distance between two points is a straight line. For sure, the fish are not on your site on any given day (unless of course you’re eBay or Amazon.com). Some are searching for you and for someone like you, and for these people you have search engines. However, there has to be more to online life than a text-linked existence. There has to be a richer way to communicate specific and relevant information to prospects to tempt them to visit. How else would they find out about Gap Khakis, The Matrix Reloaded, American Express Blue or the All-new 2004 Lexus RX 330 (which without advertising would be getting awfully lonely on lexus.com waiting for cyber test drives)?

We know the so-called “fish” are online in schools, so given the shortest distance between two points being a straight line, might we not want to consider elaborating on “two points” to refer to an intended audience and a destination Website, and replacing “straight line” with “click of a mouse”?

Offline is not cutting it, especially when the sum total of support is a token three-second URL at the end of a typical television commercial.
And AT&T Wireless’ mLife campaign supports this assertion.

At the end of the campaign, online advertising was responsible for 33% of all visits to the mlife.com Website, despite only 10% of total budget being allocated behind interactive.

I would be acutely remiss if I made this best practice all about clicks or visits to a Website. It isn’t. This discussion needs to be stepped up a notch to allow for and accommodate the bigger picture of connecting with consumers in their natural environments (read: not your Website), especially with the very real reality that if they are to convert, it will most likely be offline.

Like many CPG marketers, Purina had put all of its eggs into one basket by creating and maintaining more than 30 individual product sites. Purina approached comScore to help in ascertaining the power of paid media versus a menagerie of product sites. The hypothesis here was that pet lovers were alive and kicking on the Web and that by reaching them with relevant messaging, Purina could bring them closer to the brand and closer to the point of purchasing.

Program:
comScore Networks combined its panel data with Knowledge Networks’ grocery shoppers to identify 50,000 online pet-food buyers.

comSore overlaid its panel of 1.5 million Internet consumers with the Knowledge Networks’ panel of 20 million grocery shopping households to identify 50,000 consumers whose offline buying habits and Internet usage matched Purina's target audience. Those in this test cell were randomly served Purina banner ads on sites they visited, while a control group saw different (non-Purina) ads, and then a sample of both groups was surveyed afterwards.

The results indicated significant lift in awareness and other key brand metrics as well.

When it comes to driving qualified traffic to an intended location, the contention that a standalone Website is not enough is joined by the argument that offline media (for the most part) is not enough either. The best practice in question therefore, is the ability to harness the power of online media to not only drive interested prospects to a given destination, but ultimately to play its part in driving integrated conversion as well.

Next week I’ll continue the discussion by focusing on measurement and proper evaluation of online advertising efficacy, either as a driver to a Website or as a branding vehicle. I’ll also expand on the idea of fishing where the fish are by exploring the idea of “in-context” relevancy.

Command Awareness with Cross-media BlitzBecause consumers use different forms of media at different times of the day, an optimized mix of strategically selected media works best to reach and impact them.
By Joseph Jaffe

It’s a bird; it’s a plane; it’s…it’s…a butterfly?
The Itsy, Bitsy Spider
Crawled up the Water Spout
Out came the Web
And cleaned the box-office Out
Got mLife?

Above are three examples of recent high-profile campaigns that made use of the Web as a core component of an integrated media mix.

Marketers abound embrace the best practice of utilizing a variety of touch points in order to communicate their core positioning, support and messages to their intended target audiences. Each touch point incorporates a unique subset of nuances, capabilities and distinctive abilities to tell a story in its own way.
Television offers the capability to tell a story within a story -- a multimedia extravaganza packed into 30-seconds of Pytka-esque genius; radio tantalizes the inner-workings of the ear, sparking imagination and thought; print presents a moment frozen in time – an iconic blast of imagery shrouded in several proof points; out-of-home demands attention with larger-than-life executive summaries of succinct nuggets of communication.

Enter the Internet -- a virtual Utopia of entertainment, information and coupons to boot, wrapped in a layer of interactive glitter, which delivers the magic of instant gratification through the power of a hover, click or touch of a keypad.
Each medium is an invariable superpower capable of taming even the toughest consumer. And a combination of these superpowers leads to a Justice League of America type outcome. Or in other words, the brand with the most touch points wins.

Washington Mutual executed perhaps one of the finest examples of an integrated campaign that was everywhere – and I mean everywhere! Tightly integrated, consistent design and singular messaging ensured you now know that Washington Mutual is not a D.C. patriotic movement; nor is it a society of caffeine-loving Seattleites.

In this particular campaign, Organic created flash-based slices of local city life through which to deliver an interactive compendium of positioning statements, while offering the all-mighty zip-code store-locator to reward the bank’s most engaged prospects (see: best practice of rewarding interest with immediate fulfillment).

Spiderman has the accolade of the highest box office weekend in movie history. It is also the biggest online movie advertiser of all time. Coincidence?
2002 saw all kinds of box office records broken on the movie circuit. Lord of the Rings, Austin Powers: Goldmember, XXX and Harry Potter all had incredibly successful launches and movie runs: All utilized the Web aggressively in their cross-media run up to their premieres.

Jeff Silverstein, founder/VP Media Services at Catalano, Lellos & Silverstein, points out that there are several ways of using the Web in launch type situations. “The medium can serve as a launch pad, landing platform or the entire ride in between. There is no set formula. It is dependent on marketers’ needs and comfort level with the medium. Many marketers are still learning how the Web can benefit them, how the Web can overcome problems they might be experiencing. We've had clients launch products using online as the lead vehicle and others who have used it to support their launch as a means of getting more information out there.”
The best practice of commanding awareness is not a case for why using the Internet makes sense; it’s an instructional video of how or how much to use the Internet in similar highly visible situations, including – but not limited to – launches (see: best practice of cost-efficient incremental reach/frequency).
From a consumer behavior perspective, it’s a concept I call follow-through media planning: the ability to stay close to a typical consumer over a given period of time.

The concept is predicated on the understanding that any one consumer uses different forms of media at different times. Think perhaps of your typical day. It begins with the alarm radio blaring a few bars from your local radio station (until you hit snooze!). It continues with your choice of morning programming weaving in and out as you pass from room to room. Next up is the daily newspaper in the subway or on the bus, joined by the boom of out-of-home signage. Enter the wonderful World Wide Web between the hours of 9 and 5. A magazine accompanies you on your way home, where finally you sink into the sofa and reward yourself with must-see TiVo.

Follow-through media planning recognizes that consumers are a moving target (audience) and reaches them accordingly through an optimized mix of strategically selected media.

“I'm a true believer in ‘the day in a life of’ concept, whereby your target is exposed to your ad message from the moment they wake up to the moment they go to sleep,” explains Silverstein. “An effective launch takes into consideration media consumption habits, how they differ by target and time of day.”

It also stands to reason that with 160MM Americans now online, online’s inclusion in an integrated mix (which itself is no done deal) should be subject to the same treatment and investment levels of its offline counterparts.
Furthermore, online’s widespread inclusion in the mix helps plug the ever-widening holes caused by media defections, brand apathy and PVRs. The 2002 Media Mix Study from the Online Publishers Association and MBIQ, for example, concluded that online advertising is more likely to be seen than television advertising, where, in a controlled test of a TV-plus-Web ad campaign for the U.S. Air Force, "a large portion of TV viewers do not see the commercials" (see best practice: elusive reach).

“If you are trying to reach influential working people,” explains Michael Zimbalist, executive director of the OPA, “the daytime at-work audience is completely captive to online.” Furthermore, our OPA research with Millward Brown has shown that At-Work users are spending more time online (excluding e-mail) than with any other medium during the workweek. GE's new branding launch is an example of this use.

The additional touch point also spikes the overall halo effect generated by surrounding the consumer in short bursts of marketing communication.
AT&T wanted to convey to current and potential customers the new mLife brand among key target audiences and to promote interaction with the mLife brand – even before customers knew what it represented. With an eye toward a Super Bowl kick-off for the brand (and you don’t get any bigger than that) AT&T began a teaser campaign with the slogan "What is mLife?"

Traffic had built gradually over the course of the campaign and by the Saturday before the big game had hit 34,000 unique visitors. On Sunday, traffic spiked to 681,000 visitors. Of the whole mix of media, online ads drove 33% of mLife.com's traffic, although the online spend represented only 10% of the campaign's overall budget. Of the visitors to the site, 6% signed up to receive more information via e-mail. Daily traffic to mLife.com increased another 42% with the launch of online advertising on the Monday following the Super Bowl. In addition, the online campaign significantly outperformed its AdIndex norms for message association, brand favorability, and purchase intent, according to Dynamic Logic.

"There's a strong correlation between eyeballs on the Web and customers who will actually buy," AT&T Wireless spokesman Mark Siegel told ZDNet AnchorDesk. "If you have a lot of interest in what you're doing expressed on the Web by unique visits to the site, that is going to correlate highly to people doing business with us."

Tom Deierlein, VP of sales at Dynamic Logic, expands on this really salient thought. “Don’t treat each medium as a silo. The same audience you are attracting and attempting to reach offline is online. If you are a high-end luxury brand offline, don't try to be a discount brand online.

This makes even more sense in the context of a high-impact integrated objective. In order to reach a maximum number of a given target audience quickly and comprehensively, and in doing so, establish and leave an indelible impression on them, a combination of high-impact best practices is required. Deierlein highlights these tactics, which includes use of rich media, larger ad sizes/formats and all-important frequency (see: various rich media and ad format best practices; see best practice of building brand effectiveness with increased frequency).
And you’re just not going to get this kind of impact from a half-hearted approach, are you?

IAB AND PwC RELEASE “TOP-LINE” DATA FROM 2002 INTERNET
ADVERTISING REVENUE REPORT

4Q 2002 Totals $1.5 Billion - 2.3% Increase Over 3Q 2002
Full-Year Revenue Totals Slightly Under $6 Billion

New York, NY – April 9, 2003 – Internet advertising revenue in the U.S. totaled $1.5 billion for the fourth quarter of 2002, increasing over 2 percent from the third quarter, reflecting the first consecutive quarterly increase since the second quarter of 2000. Internet advertising for full-year 2002 totaled $5.95 billion.

These top-line results are based on compiling data from the top 15 online ad sellers, which historically account for over 80 per cent of total industry revenues. The results of this revenue compilation are then extrapolated to calculate the total industry revenue figure. These estimates will be adjusted in the 2002 full-year report, including data breakouts, to be released next month. The Internet Ad Revenue Report is sponsored by the Interactive Advertising Bureau (IAB) and conducted independently by the New Media Group of PricewaterhouseCoopers (PwC).

While the $1.5 billion fourth-quarter figure decreased 9.8 percent from the same period a year earlier, it marks the first single-digit year-over-year percentage decrease since the first quarter of 2001. “The improved online advertising environment reflects a confluence of factors The publishers are offering a more manageable, uniform and understandable business proposition than ever before. The creative side has gotten smarter and is delivering compelling, entertaining content, which will only improve as the installed base of high-speed access users increases. This adds up to a fertile environment for the industry to right and propel itself,” said Greg Stuart, president and CEO, Interactive Advertising Bureau.

“The improved performance over the past two quarters reflects a stabilizing online advertising market, highlighted by continued strength in paid-for-search results. The recent upturn, coupled with forecasts of continued expansion of broadband distribution, bodes well for a strong year in 2003” said Tom Hyland, Chairperson, PricewaterhouseCoopers New Media Group.

Internet advertising for 2002 totaled $5.95 billion, a 17 percent decrease versus 2001. “Those who monitor the industry know that a few predominant factors contributed to the revenue decline, including the conclusion of some long-term advertising deals. What’s important to recognize is that the majority of online publishers are profitable, and their revenues continue to rise year-over-year. In such a volatile economy, we don’t want to see an inflated market – we want to see a mature, level and stable platform, where revenue fluctuations are even with the rest of the advertising business. Based on the mixed results across all media for 2002, that’s what I believe we are seeing here,” said Stuart.

Conducted by the New Media Group of PricewaterhouseCoopers the "Advertising Revenue Report" was started by the IAB in 1996, and represents data from all companies that report meaningful online advertising revenues. The results are the most accurate measurement of online advertising revenues because the data is compiled directly from information supplied by companies selling advertising on the Internet. All-encompassing in nature, the survey includes data concerning online advertising revenues from Web sites, commercial online services, free e-mail providers, and all other companies selling online advertising.

PricewaterhouseCoopers (www.pwcglobal.com), the world's largest professional services organization, helps its clients build value, manage risk and improve their performance. The PricewaterhouseCoopers New Media Group -- with offices in New York, Los Angeles, Seattle, San Francisco Bay Area, and Boston -- combines content and technology specialists to provide comprehensive service to dynamic entrepreneurial companies. Services include business assurance services, ad delivery and privacy attestation and consultation, assistance with mergers and acquisitions, tax planning and compliance, capital structuring and employee benefits and executive compensation packages.

IAB
Founded in 1996, the Interactive Advertising Bureau (IAB) is the leading interactive advertising association and represents companies responsible for selling over 75% of online advertising in the United States, including; AOL, CNET, MSN, Overture Services, Walt Disney Internet Group, Yahoo, and over 100 others. Its activities include evaluating and recommending standards and practices, fielding research to document the effectiveness of the interactive medium and educating the advertising industry about the use of interactive advertising. Membership includes companies that are actively engaged in, and support the sale of interactive advertising. For more information please visit the IAB web site at www.iab.net.
Contact:
Kelly Colbert - IAB
917-846-1648

Pete Petrusky – PwC
646-394-3309

Applying Online Insights to Offline Advertising
Laurence Hayward

In merely a few years' time, online advertising has developed from infancy into adulthood. As it has matured, businesses buying online ads have increasingly demanded results through methods such as pay-for-performance pricing. Now suppliers are feeling the pressures of those demands and facing the challenge of the medium's inherent measurability.

Metrics Matter
The effectiveness of advertising on the Internet can be quickly assessed by several metrics, including number of visitors to a site, page views, click-through percentages, session lengths, and purchase behavior (pay per purchase). As more businesses have used this medium, they've demanded greater accountability for results. In turn, the price of banner advertisements has dropped from a cost per thousand impressions (CPM) of more than $50 to a CPM often less than $5.

So have entrepreneurs and business owners been paying too much for offline, or traditional, advertising all along? It reminds me of John Wanamaker's oft-quoted lament: "I know half the money I spend on advertising is wasted, but I can never find out which half." Many experts accept that companies pay for a lot of inefficiency with advertising, but few can say to what extent.

Would offline advertising rates drop significantly if they could be tracked more effectively? Have marketers let offline advertising escape the same level of scrutiny and skepticism that is applied to online advertising media?

Comparing Media
Media professionals provide in-depth analysis of offline advertising vehicles by calculating cost per thousand prospects reached, cost per rating point, cost per target, and percentage of vehicle overlap -- all to ensure proper and efficient targeting on the front end.

Without a doubt, obtaining this information is critical; however, it doesn't solve the problem of measuring performance. Market research companies offer several measurement techniques, including pre- and post-testing, to assess advertising effectiveness. Though sensible, the expense and time-consuming nature of these tests often -- and mistakenly -- precludes their use. Other advertisers resort to simple techniques, such as asking customers questions like, "How did you hear about us?" Although helpful, these techniques are severely limited to who responds, and they fail to address brand perception.

Then there is direct-response advertising, to which online advertising is most commonly compared. It is specifically designed to produce a measurable response or transaction. Many feel online advertising is held to a direct-response standard (most commonly click-through rates), while offline advertising is not expected to be as accountable.

So if an advertisement isn't eliciting a direct response, what is its remaining value? Often it's said to "build the brand"; advertisers argue that the value comes from increasing awareness, creating a recognizable image, and developing a reputation for the product or services represented.

Yet does it make sense that offline advertising receives so much credit regarding branding value while Internet advertising receives little to none? Clearly, some media channels offer better branding potential than others. Still, it is wise to hold all advertising accountable and not shy from measuring brand impact. Even if one accepts the direct-response comparison, offline direct-response advertising does not appear to be held to the same tough standards now applied to online advertising.

Demanding Accountability
To hold both online and offline advertising accountable, marketers are left with the challenging task of building closed-loop systems in which each advertising strategy has a set of defined performance measures. This includes assessing the costs to reach the target market prior to developing the advertising plan as well as calculating the actual reach after the plan is executed. Many Web-based advertisers calculate return on investment (ROI) by following the customer from exposure to purchase. Though ROI solutions may not be as obvious offline, disciplined advertisers measure customer behavior by monitoring customer inquiries, revenues, market share, customer-acquisition costs, and brand perception.

Examining the recent drop in online advertising rates, one might conclude that the price businesses are paying for offline advertising is significantly higher than the value they receive. Others would say that this is a hasty conclusion, given the additional branding value of the offline medium, and like any good or service, the price of advertising is driven by supply and demand. In truth, both sides should be taken into account, and we must acknowledge that companies buying offline advertisements are paying for a lot of inefficiency.

The issue remains one of valuation. Online advertising's perceived value is now subject to results-oriented industry standards such as click-throughs and purchase rates, while offline advertising is typically held to a broader "reach" standard. Management must compare the efficiency and results of its offline advertising purchases to those of its online purchases. By being familiar with overall pricing and effectiveness amid the rapid maturity of online advertising, managers should take a more critical look at their offline media buys.

http://www.clickz.com/mkt/onl_mkt_comm/article.php/840031

An Internet Advertising Primer

Web advertising is typically sold on a "Cost Per Thousand Impressions" basis, or CPM. An impression (also referred to as an "exposure" or "page view") occurs when a visitor to a Web site views a page where an ad is displayed, whether the ad is seen or not. Whenever a page is "served" to your computer screen, measurement software counts the "impression."

Ads can be placed anywhere on a page, although ads are more successful when they are displayed near the top of the page("above the fold"). This ad will deliver higher click-throughs than the same ad placed at the bottom of a page. Some sites use frames to display advertising more prominently.

A common banner ad package consists of 100,000 impressions costing anywhere from $20 to $100 per thousand ($25-$70 CPM is average for popular sites). Keep in mind that most sites have repeat visitors, and most visitors view more than a single page of information, so your 100,000 impressions could actually represent 10,000 to 40,000 unique visitors. In some cases, impressions are guaranteed, in others, estimated. Some sites will charge a flat rate for estimated impressions. If the actual delivered impression count is higher, some will let you keep the "overdeliveries" for no extra charge. Most popular sites offer ad agency discounts and volume or frequency discounts. The ad agency rate, known as the net rate, is typically a 15% discount from the gross rate, which is the typical rate if you purchase advertising directly instead of through an agency.

"Hits" and "page hits" are not favored as measurement units because a hit is registered every time any text or graphic file is delivered, whether advertising is displayed or not. A page hit, or HTML hit, is registered every time a complete HTML page, including text and graphic files is delivered. The ratio can easily be 10 or more hits or 2-4 page hits to actual impressions.

Advertising measurement is performed primarily by using tracking software and server activity logs, which meter, but understate, impressions. This undercounting can be caused by "caching", "site mirroring" and "firewalls." With caching and site mirroring, the page displaying the ad is sometimes delivered once, then stored locally on the visitor's computer or the ISP's computer. When the page is viewed later -- by the same visitor or other visitors -- it is retrieved from local memory rather than from the Web site. It's faster for surfers, but prevents the tracking software from counting it as an impression delivered from the Web server.

A firewall with proxy server is used by corporate intranets for security, but it also can cause impressions to drop because it's possible for 10 or 10,000 corporate employees to be identified by the same corporate visitor address.

Tracking software can't measure the number of unique visitors so statistics, surveys, and subscription information is used to supplement the estimates. It's conceivable that a single visitor, who visited a Web site twice per hour, every hour, for a month, could register 1,440 impressions according to the tracking software.

An undercounting twist to this scenario: many ISPs assign the same IP string to each new user as the previous user logs off. So, for example, a new Chicago-area visitor from the Netcom service who visits a Web site could be identified as chi-il11-13.ix.netcom.com, even if a previous Netcom user with the same temporarily assigned IP string just left the same site minutes ago. Proxy servers and local caching also hide portions of IP strings from the server log access files. So, during a very busy time period, more than one unique visitor could visit a site with the same reported IP string, and the log will consider it a single visitor.A solution that many sites use to correct their traffic measurement is to set a cookie that uniquely identifies each visitor. This is assigned, and stored in the browser's cookie file the first time you visit the site. On subsequent visits, the unique cookie helps identify the visitor in conjunction with the IP address. Cookies are only partially helpful in identifying unique visitors because they can be turned off or the visitor may use different computers and browsers with differing cookies, which makes them a less than perfect confirmation tool.

An intelligent agent, or "bot," could automatically visit a site every hour and inflate a visitor count. Variations on intelligent agents include "Spiders" and "Crawlers," which are software programs that visit virtually every page on the Web to create indexes for search engines, but cause overcounting of traffic in the process. Spiders and crawlers are much more interested in text files than graphics files such as banner ads. If the tracking software is counting requests for a text page, rather than the ad banner, this could result in overcounting actual ad impressions. Some flawed spiders and crawlers continually request the same text page.

Virtual includes and filters can also cause misrepresentation with visitor counts. "Virtual includes" are techniques that are used to capture only a desired image, such as a weather map, without a user having to visit a page and view banner advertising. Filter software such as "Junkbuster" enables a user to strip banners and cookies from accessed pages in order to speed up page delivery. Virtual includes and filters cause a reduction of delivered ad impressions but not necessarily accurate tracking of the reduction.

Browser bugs are constantly changing but are constantly present. A browser bug can cause a request for the text portion of a page twice, but the graphics only once. The impact on the ad impression count depends on the tracking software.
Rogue bots are designed to deliberately inflate the traffic count on CGI-generated in-line GIF advertising images. These graphics are usually only displayed, and counted, when a specific Web page has a legitimate visitor as determined by the http_referer field sent from the client to the server during http transactions. A rogue bot acts as a "visitor" to a web site and sends a fictitious http_referer and a fake IP address. Rogue bots are rare.

Internet bottlenecks can cause the visitor to request the same page repeatedly until the full page with graphics is actually displayed. But the traffic counting software is counting all requests for the full page, thereby overcounting impressions.

Bottlenecks affect larger banner ad graphics more than smaller banner ad graphics. If a banner ad is large, it takes longer to load, giving the visitor a chance to move on to another page or site before it is displayed - yet the impression is still counted. But larger banner ads generally deliver higher click-throughs to the advertiser's site, so there is a trade-off. Smaller banner ads may load faster, ensuring the visitor sees them, but they may be too small to capture the visitor's interest.

Some Web users choose to run their browsers with "graphics off" to speed up delivery of pages. For these users, a text advertising message is delivered instead of a graphic banner ad. Advertisers are more frequently demanding that they only pay for ad impressions when the actual banner ad graphic is fully loaded, not just the alternative text version. Industry estimates place "graphics off" browser usage at 6 percent. Requiring the visitor to navigate a site using only graphics and not text links can significantly improve this problem.

"Cache-Busting" refers to the ability by ad management systems such as MatchLogic and Imgis to "bust" cached banner ads (to "view" inside a cache and count the number of ads delivered from the cache rather than from a server). This improves accuracy of reporting delivered advertising impressions. These cached ads previously were not counted. A controversy arises because historically, no advertiser had to pay for cached ad impressions, they were a "bonus." Now, the same advertiser finds that they may have to pay more to advertise on the same site, because the "bonus" ads are now being counted and charged for.

Some web sites are now also offering "cost per click" or "cost per click through," which is a direct measurement of response and ad performance. A click through occurs when the visitor sees or reads the ad and clicks on it, taking them directly to the advertiser's Web site. Sometimes a visitor will click, but quit before the other Web site is displayed. Click through averages anywhere from 1 to 25% of total impressions, but generally 1 to 3% is used as a rule of thumb. The overall average for click-throughs is falling to around 1 percent. Web sites try to avoid selling advertising this way because poorly designed ads won't be clicked on, reducing ad revenue. Numerous other advertising models require performance results before the Web advertising site is paid. Examples include banner ads sold based on percentage of sales, which has been done by Nabisco, and based on a bounty for every software program download, as has been done by Microsoft.The common log format is the standard for most Web servers where your Web site might reside. It exists as a text file in the log directory and can be viewed on-screen or downloaded by anyone who has FTP or Telnet access to the server files. Numerous log formats exist, each of which can be used by themselves to analyze Web site traffic. Traffic analysis software then takes this raw data and plots it for easier reading. The common log will report the following information on every visitor and what activity they performed on your site:

host/ip
• RFC name
• logname
• datestamp
• retrieval
• code
• bytes.

They look like this:
unknown-23-147.pilot.net /Webadmin/home/pub.d/delph/public_html - [02/Apr/1997:22:53:14 -0800] "GET /login_on.gif HTTP/1.0" 200 8452 "http://www.positionagent.com/" "Mozilla/3.0 (Win95; I)
" unknown-23-147.pilot.net /Webadmin/home/pub.d/delph/public_html - [02/Apr/1997:22:53:15 -0800] "GET /ad.gif HTTP/1.0" 200 22443 "http://www.positionagent.com/" "Mozilla/3.0 (Win95; I)"
" unknown-23-147.pilot.net /Webadmin/home/pub.d/delph/public_html - [02/Apr/1997:22:53:20 -0800] "GET /bg.jpg HTTP/1.0" 200 4377 "http://www.positionagent.com/" "Mozilla/3.0 (Win95; I)
" unknown-23-147.pilot.net /Webadmin/home/pub.d/delph/public_html - [02/Apr/1997:22:56:12 -0800] "GET / HTTP/1.0" 200 7047 "-" "Mozilla/3.0 (Win95; I)
" irv-ca28-44.ix.netcom.com /Webadmin/home/pub.d/delph/public_html - [02/Apr/1997:22:56:45 -0800] "GET /ord.com HTTP/1.0" 404 240 "-" "Mozilla/3.01 (Win16; I)
" irv-ca28-44.ix.netcom.com /Webadmin/home/pub.d/delph/public_html - [02/Apr/1997:23:00:14 -0800] "GET / HTTP/1.0" 200 7047 "http://www.netgambit.com/" "Mozilla/3.01 (Win16; I
" irv-ca28-44.ix.netcom.com /Webadmin/home/pub.d/delph/public_html - [02/Apr/1997:23:00:20 -0800] "GET /links.html HTTP/1.0" 200 7404 "http://www.positionagent.com/" "Mozilla/3.01 (Win16; I)
" burn-mx0508707.smartt.com /Webadmin/home/pub.d/delph/public_html - [02/Apr/1997:23:02:05 -0800] "GET / HTTP/1.0" 200 7047 "-" "Mozilla/4.0b2 (Win95; I)

Host/IP
The first field in the record is the host/IP. It indicates the hostname, or RFC name, of the visitor or an IP number if domain nameserver lookup is not enabled for that visitor. The example above shows the activity of three host/ip visitors. Visitors can have .com, .edu, .net, .uk and other extensions, indicating whether they originate from a company, an ISP, a university, or another country.

Datestamp
The next important field is the datestamp, which is useful when running the log figures through analysis software. The datestamp information can be used to graph peak activity throughout the day, week and month. This will show you whether traffic picked up after your banner ad started appearing.

Retrieval
The retrieval method is posted. GET /links.html indicates that the link resource page was retrieved by the visitor. Most visitors retrieve multiple files which make up a single Web page. Some counters would indicate three hits to the Web site. Others would indicate a single HTML page hit. If a banner ad also appeared on the page and was retrieved with the other three files, an appropriate counting device would register an impression.

Code
The code field indicates whether a retrieval was successful.

Bytes
This indicates the size of the file retrieved. This is important because many ISPs charge a Web site based on traffic activity as measured in bytes.

Browser and Platform
Other data in this log shows which browser and computing platform were used by the visitor.

Referrer URL
This file usually resides in your Web site log directory along with your activity file (common log file or other). If you don't have a referrer log, you will know because their will be no field in any activity log that indicates where visitors came from. Since this is one of the most crucial items of information for any Web site, you should ask your ISP to create a referrer log file if you don't have one. The set-up cost should be minimal, and you can utilize the raw file by viewing it in your word processor, although reporting software will help make it easier to follow. Often, the referring URL will be a search engine or directory. In this case, the field will also show what "keyword phrase" the visitor used to find your site in the search engine listings. Use this information to fine-tune the keyword usage in your home page.

'140.161.64.126','Student-5-2.Lab-4247.Douglas.BC.CA','http://Webcra wler.com/select/market.09.html','Mozilla/3.0 (Win16; I)','859944487'
'195.37.0.67','ext3.fh-brandenburg.de','http://www.botspot.com/newbots/ newbots4.htm','Mozilla/3.01Gold (Win95; I)','859944829'
'139.92.89.97','slip139-92-89-97.tel.il.ibm.net','(null)','Mozilla/2.0 (Win95; I; 16bit)','859944864'
'204.32.199.230','ftl-fl11-06.ix.netcom.com','http://www.exposure-usa.co m/exposure/970321.html','Mozilla/2.01E-NC250 (Win95; U; 16bit)','859944993'
'204.32.166.173','chi-il11-13.ix.netcom.com','http://personal.netscape.co m/custom/page/show_page.html','Mozilla/3.01 (Win95; I)','859945061'

This is a custom referrer URL log which provides a line showing each visitor to a Web site, their host IP and RFC name if available, the site they were referred from (any site which offers a link to your site) and the browser and computing platform. If the field before browser and computing platform (in our log, it's the third field) reports "NULL" instead of a URL, it usually means that your visitor typed in your URL directly or has it saved in their bookmark or hotlist file. Knowing the difference between a visitor who was "referred" by another site, and a visitor who came on their own will help you in your effort to determine new visitors vs. repeat visitors. "NULL" in the referrer field could also mean that the visitor typed in your URL from a printed listing in a magazine or newspaper.
Activity logs can show information that a Web advertising site may not want a potential advertiser to know. This could include high levels of activity from students and other visitors who are not prospects for the advertiser's product, short attention span (where a site gets many visitors who spend very little time at the site, which suggests a low interest level), and visits by "bots" which count an impression that was not actually viewed by a human. Good activity tracking software is available to provide a potential advertiser with everything they need to know to make a wise advertising decision.Advertising measurement is performed primarily by using tracking software and server activity logs, which meter, but understate, impressions. This undercounting can be caused by "caching", "site mirroring" and "firewalls." With caching and site mirroring, the page displaying the ad is sometimes delivered once, then stored locally on the visitor's computer or the ISP's computer. When the page is viewed later -- by the same visitor or other visitors -- it is retrieved from local memory rather than from the Web site. It's faster for surfers, but prevents the tracking software from counting it as an impression delivered from the Web server.

A firewall with proxy server is used by corporate intranets for security, but it also can cause impressions to drop because it's possible for 10 or 10,000 corporate employees to be identified by the same corporate visitor address.
Tracking software can't measure the number of unique visitors so statistics, surveys, and subscription information is used to supplement the estimates. It's conceivable that a single visitor, who visited a Web site twice per hour, every hour, for a month, could register 1,440 impressions according to the tracking software.

An undercounting twist to this scenario: many ISPs assign the same IP string to each new user as the previous user logs off. So, for example, a new Chicago-area visitor from the Netcom service who visits a Web site could be identified as chi-il11-13.ix.netcom.com, even if a previous Netcom user with the same temporarily assigned IP string just left the same site minutes ago. Proxy servers and local caching also hide portions of IP strings from the server log access files. So, during a very busy time period, more than one unique visitor could visit a site with the same reported IP string, and the log will consider it a single visitor.A solution that many sites use to correct their traffic measurement is to set a cookie that uniquely identifies each visitor. This is assigned, and stored in the browser's cookie file the first time you visit the site. On subsequent visits, the unique cookie helps identify the visitor in conjunction with the IP address. Cookies are only partially helpful in identifying unique visitors because they can be turned off or the visitor may use different computers and browsers with differing cookies, which makes them a less than perfect confirmation tool.

An intelligent agent, or "bot," could automatically visit a site every hour and inflate a visitor count. Variations on intelligent agents include "Spiders" and "Crawlers," which are software programs that visit virtually every page on the Web to create indexes for search engines, but cause overcounting of traffic in the process. Spiders and crawlers are much more interested in text files than graphics files such as banner ads. If the tracking software is counting requests for a text page, rather than the ad banner, this could result in overcounting actual ad impressions. Some flawed spiders and crawlers continually request the same text page.

Virtual includes and filters can also cause misrepresentation with visitor counts. "Virtual includes" are techniques that are used to capture only a desired image, such as a weather map, without a user having to visit a page and view banner advertising. Filter software such as "Junkbuster" enables a user to strip banners and cookies from accessed pages in order to speed up page delivery. Virtual includes and filters cause a reduction of delivered ad impressions but not necessarily accurate tracking of the reduction.

Browser bugs are constantly changing but are constantly present. A browser bug can cause a request for the text portion of a page twice, but the graphics only once. The impact on the ad impression count depends on the tracking software.
Rogue bots are designed to deliberately inflate the traffic count on CGI-generated in-line GIF advertising images. These graphics are usually only displayed, and counted, when a specific Web page has a legitimate visitor as determined by the http_referer field sent from the client to the server during http transactions. A rogue bot acts as a "visitor" to a web site and sends a fictitious http_referer and a fake IP address. Rogue bots are rare.

Internet bottlenecks can cause the visitor to request the same page repeatedly until the full page with graphics is actually displayed. But the traffic counting software is counting all requests for the full page, thereby overcounting impressions.

Bottlenecks affect larger banner ad graphics more than smaller banner ad graphics. If a banner ad is large, it takes longer to load, giving the visitor a chance to move on to another page or site before it is displayed - yet the impression is still counted. But larger banner ads generally deliver higher click-throughs to the advertiser's site, so there is a trade-off. Smaller banner ads may load faster, ensuring the visitor sees them, but they may be too small to capture the visitor's interest.

Some Web users choose to run their browsers with "graphics off" to speed up delivery of pages. For these users, a text advertising message is delivered instead of a graphic banner ad. Advertisers are more frequently demanding that they only pay for ad impressions when the actual banner ad graphic is fully loaded, not just the alternative text version. Industry estimates place "graphics off" browser usage at 6 percent. Requiring the visitor to navigate a site using only graphics and not text links can significantly improve this problem.

"Cache-Busting" refers to the ability by ad management systems such as MatchLogic and Imgis to "bust" cached banner ads (to "view" inside a cache and count the number of ads delivered from the cache rather than from a server). This improves accuracy of reporting delivered advertising impressions. These cached ads previously were not counted. A controversy arises because historically, no advertiser had to pay for cached ad impressions, they were a "bonus." Now, the same advertiser finds that they may have to pay more to advertise on the same site, because the "bonus" ads are now being counted and charged for.

Some web sites are now also offering "cost per click" or "cost per click through," which is a direct measurement of response and ad performance. A click through occurs when the visitor sees or reads the ad and clicks on it, taking them directly to the advertiser's Web site. Sometimes a visitor will click, but quit before the other Web site is displayed. Click through averages anywhere from 1 to 25% of total impressions, but generally 1 to 3% is used as a rule of thumb. The overall average for click-throughs is falling to around 1 percent. Web sites try to avoid selling advertising this way because poorly designed ads won't be clicked on, reducing ad revenue. Numerous other advertising models require performance results before the Web advertising site is paid. Examples include banner ads sold based on percentage of sales, which has been done by Nabisco, and based on a bounty for every software program download, as has been done by Microsoft.The common log format is the standard for most Web servers where your Web site might reside. It exists as a text file in the log directory and can be viewed on-screen or downloaded by anyone who has FTP or Telnet access to the server files. Numerous log formats exist, each of which can be used by themselves to analyze Web site traffic. Traffic analysis software then takes this raw data and plots it for easier reading. The common log will report the following information on every visitor and what activity they performed on your site:

host/ip
• RFC name
• logname
• datestamp
• retrieval
• code
• bytes.

They look like this:
unknown-23-147.pilot.net /Webadmin/home/pub.d/delph/public_html - [02/Apr/1997:22:53:14 -0800] "GET /login_on.gif HTTP/1.0" 200 8452 "http://www.positionagent.com/" "Mozilla/3.0 (Win95; I)
" unknown-23-147.pilot.net /Webadmin/home/pub.d/delph/public_html - [02/Apr/1997:22:53:15 -0800] "GET /ad.gif HTTP/1.0" 200 22443 "http://www.positionagent.com/" "Mozilla/3.0 (Win95; I)"
" unknown-23-147.pilot.net /Webadmin/home/pub.d/delph/public_html - [02/Apr/1997:22:53:20 -0800] "GET /bg.jpg HTTP/1.0" 200 4377 "http://www.positionagent.com/" "Mozilla/3.0 (Win95; I)
" unknown-23-147.pilot.net /Webadmin/home/pub.d/delph/public_html - [02/Apr/1997:22:56:12 -0800] "GET / HTTP/1.0" 200 7047 "-" "Mozilla/3.0 (Win95; I)
" irv-ca28-44.ix.netcom.com /Webadmin/home/pub.d/delph/public_html - [02/Apr/1997:22:56:45 -0800] "GET /ord.com HTTP/1.0" 404 240 "-" "Mozilla/3.01 (Win16; I)
" irv-ca28-44.ix.netcom.com /Webadmin/home/pub.d/delph/public_html - [02/Apr/1997:23:00:14 -0800] "GET / HTTP/1.0" 200 7047 "http://www.netgambit.com/" "Mozilla/3.01 (Win16; I
" irv-ca28-44.ix.netcom.com /Webadmin/home/pub.d/delph/public_html - [02/Apr/1997:23:00:20 -0800] "GET /links.html HTTP/1.0" 200 7404 "http://www.positionagent.com/" "Mozilla/3.01 (Win16; I)
" burn-mx0508707.smartt.com /Webadmin/home/pub.d/delph/public_html - [02/Apr/1997:23:02:05 -0800] "GET / HTTP/1.0" 200 7047 "-" "Mozilla/4.0b2 (Win95; I)

Host/IP
The first field in the record is the host/IP. It indicates the hostname, or RFC name, of the visitor or an IP number if domain name server lookup is not enabled for that visitor. The example above shows the activity of three host/ip visitors. Visitors can have .com, .edu, .net, .uk and other extensions, indicating whether they originate from a company, an ISP, a university, or another country.

Datestamp
The next important field is the datestamp, which is useful when running the log figures through analysis software. The datestamp information can be used to graph peak activity throughout the day, week and month. This will show you whether traffic picked up after your banner ad started appearing.

Retrieval
The retrieval method is posted. GET /links.html indicates that the link resource page was retrieved by the visitor. Most visitors retrieve multiple files which make up a single Web page. Some counters would indicate three hits to the Web site. Others would indicate a single HTML page hit. If a banner ad also appeared on the page and was retrieved with the other three files, an appropriate counting device would register an impression.

Code
The code field indicates whether a retrieval was successful.

Bytes
This indicates the size of the file retrieved. This is important because many ISPs charge a Web site based on traffic activity as measured in bytes.

Browser and Platform
Other data in this log shows which browser and computing platform were used by the visitor.

Referrer URL
This file usually resides in your Web site log directory along with your activity file (common log file or other). If you don't have a referrer log, you will know because their will be no field in any activity log that indicates where visitors came from. Since this is one of the most crucial items of information for any Web site, you should ask your ISP to create a referrer log file if you don't have one. The set-up cost should be minimal, and you can utilize the raw file by viewing it in your word processor, although reporting software will help make it easier to follow. Often, the referring URL will be a search engine or directory. In this case, the field will also show what "keyword phrase" the visitor used to find your site in the search engine listings. Use this information to fine-tune the keyword usage in your home page.
'140.161.64.126','Student-5-2.Lab-4247.Douglas.BC.CA','http://Webcra wler.com/select/market.09.html','Mozilla/3.0 (Win16; I)','859944487'
'195.37.0.67','ext3.fh-brandenburg.de','http://www.botspot.com/newbots/ newbots4.htm','Mozilla/3.01Gold (Win95; I)','859944829'
'139.92.89.97','slip139-92-89-97.tel.il.ibm.net','(null)','Mozilla/2.0 (Win95; I; 16bit)','859944864'
'204.32.199.230','ftl-fl11-06.ix.netcom.com','http://www.exposure-usa.co m/exposure/970321.html','Mozilla/2.01E-NC250 (Win95; U; 16bit)','859944993'
'204.32.166.173','chi-il11-13.ix.netcom.com','http://personal.netscape.co m/custom/page/show_page.html','Mozilla/3.01 (Win95; I)','859945061'

This is a custom referrer URL log which provides a line showing each visitor to a Web site, their host IP and RFC name if available, the site they were referred from (any site which offers a link to your site) and the browser and computing platform. If the field before browser and computing platform (in our log, it's the third field) reports "NULL" instead of a URL, it usually means that your visitor typed in your URL directly or has it saved in their bookmark or hotlist file. Knowing the difference between a visitor who was "referred" by another site, and a visitor who came on their own will help you in your effort to determine new visitors vs. repeat visitors. "NULL" in the referrer field could also mean that the visitor typed in your URL from a printed listing in a magazine or newspaper.
Activity logs can show information that a Web advertising site may not want a potential advertiser to know. This could include high levels of activity from students and other visitors who are not prospects for the advertiser's product, short attention span (where a site gets many visitors who spend very little time at the site, which suggests a low interest level), and visits by "bots" which count an impression that was not actually viewed by a human. Good activity tracking software is available to provide a potential advertiser with everything they need to know to make a wise advertising decision.

The future of online advertising is FULL SCREEN
In a mini-keynote earlier this week, Joseph applauded industry efforts addressing his call-to-arms for larger ad units.
By Joseph Jaffe

This week I participated in the launch of Unicast’s Full Screen Superstitial. In the breakfast presentation to industry and press participants, I was asked to deliver a mini-keynote talking about the importance of creativity and the role it will play in the continued evolution of online advertising. Here is the edited transcript of my address:

As I recall, my first public platform or pulpit if you’ve ever heard me speak was the iMedia Summit in Deer Valley towards the end of 2001. On this panel dedicated to rich media, I left the audience with four bullet points I felt summarized where online advertising creative needed to be:

BIGGER
BETTER
BRAVER
INTERACTIVE

I’m still searching by the way for another word for INTERACTIVE beginning with a “B” – suggestions are always welcome! Until then, I just call it the BBBI scale.
Almost a year and a half later, which in Internet dog years would equate to about 15 media years, we’ve come a long way in some respects and in others, we haven’t moved an inch.

Proof of this assertion is evidenced when talking with and listening to traditional representatives of the marketing, communications and press communities. I feel we’re battling against an extremely strong current of misperception and misguided perspective in terms of what the Internet can do and what it is capable of doing.

This is not a medium of banners and buttons.

This is not a medium of pop-ups.

This is not a medium in which click-through presides.

This is not a medium in which Websites are enough to establish, sustain and command an optimal share of voice or presence.

And yet this is what we keep on hearing time and time again.
This is a medium that has the opportunity to reach consumers when they are uniquely attentive with a highly involving 300-second commercial capable of blending all pre-existing media formats (television, print, direct marketing) in order to qualify a lead through self-selection, reward early interest with immediate fulfillment and reduce the lag between exposure and conversion to milliseconds.
To quote the late and great David Ogilvy: “Unless your advertising contains a big idea, it will pass like a ship in the night.”

And unless online advertising is creative, engaging, relevant and even entertaining, it will pass like a ship in the night.

In my various industry engagements I often ask my audience to rate or grade the quality or standard of online advertising. The average grade is typically around a C+ which let’s face it, is not good enough.

With this in mind, I helped launch the iMedia Creative of the Week Showcase on iMediaConnection.com which became the industry’s first ever central destination to showcase the latest and greatest breaking creative in the business. No more slot machinesque, hitting the reload button ten times to see a creative; no more hit-and-hope approach of a colleague IM’ing you to alert you to a new piece of work. I may not be a Barbara Lippert or Bob Garfield yet, but I’m working on it!
So, how do we increase our grade on the BBBI scale and fulfill our quest to grow the pie or the percentage of budget allocated towards online?

For too long, I felt like a lone voice asking that question, until recently, Jerry Back, VP, associate director of research & new media at Publicis’ Hal Riney was interviewed and had this to say: “The power of online advertising should be immediately apparent at a consumer level to brand-marketing managers. Until it is, they won’t transfer their dollars. Brand-positioning advertisers want but don’t require the Internet in the mix at this moment if it can’t deliver a comparable option to broadcast and print media ad units.”

This is a two-tiered battle: the battle for the mind which is being waged in the fields of research, ROI and efficacy, and the battle for the heart which is entirely a creative war with creatives [traditional, interactive and integrated] as our generals responsible for success or failure.

Our creative generals have made strides with online creative that is so interactive, it’s positively involving, such as the breakthrough work from ABSOLUT. Their bravery has ensued in the form of non-clickable executions from the likes of CBSMarketWatch or highly page-integrated solutions from ING or Lexus. Better work is also evident across the board, with the traditional brand stalwarts like Microsoft, Coke, IBM and GE flexing their muscles and creative ability.
And as far as bigger is concerned? I go back to my panel in Utah where I retorted to the audience, you want standards? You want impact? You want comparable quality formats? How about ¼ screen, ½ screen and full screen? My outspoken call-to-arms for a full-screen product has finally been answered by a few publishers with their own solutions and now, Unicast, with its standardized Full Screen Superstitial format.

Why should we care about a full-screen unit? For two reasons – the role it will play in improving the creative product and the comparability with most major offline offerings.

Creativity is our single biggest means to achieve our branded response ends. Up until now, we’ve been cramming television commercials into banners; we’ve been force-fitting horizontal photography into vertical skyscrapers; we’ve been vacuuming entire Websites into boxes. Quite clearly, we’ve been searching for a better product.

A full-screen format is also important because for the first time in the history of the Internet, it offers advertisers an apples-to-apples comparative product to offline.

Television advertising is the most intrusive medium in existence today. And yet it is accepted as a “necessary evil”. TV’s 30- and 15-second full-screen commercials are otherwise non-clickable in the sense that they need to play to completion in order for the viewer to receive the content that they were tuning in to see. Of course, the remote control and most recently, PVRs like TiVo offer consumers the ability to hit the proverbial Close Window “X” button.

Print ads employ combinations of page and spreads. Both are “full screen”. The same can be said for Outdoor and Radio commercials: one message from one advertiser to one consumer at one time.

And now online can boast the same value proposition.

A full-screen commercial that utilizes the full real estate of the page to engage, entertain, enthrall and yes, even sell.

For the creative and marketing communities, this is a boon – the realization of an elusive search for a gold standard; a format capable of transforming the world of banners, buttons, pop-ups, pop-unders and clutter into a simple, succinct and compelling form of communication.

This is arguably the first substantial opportunity to invite the traditional community to play ball; to step up and bring their integrated expertise to the world of two-way dialogues, interactive and involving experiences.

So what about the consumer? Is this the beginning of the end? Will empowered consumers baulk at this bold move? Will they boycott the Internet in a defiant stand against Madison Avenue?
Hardly.

We only have to go back to the humble beginnings of television to see the future. In the beginning, television creative “looked” like radio; the quality was abysmal; consumers were enraged with the audacity of the corporate world to invade their homes and privacy.

But persistence, hard work and education paved the way for smarter, better and more innovative creative on the Tube – and the same will be the case with the Web. Consumers will finally be rewarded for their precious time with engaging creative that connects with their hearts and minds, is relevant and targeted. This should help us edge ever closer to the ultimate consumer response: ‘I’ll watch your advertising if you pay for my content.”

Today, the publishers that dominate the Web with the quality of their content are trusted and recognized brands just like their offline counterparts. What has been absent online is a tolerable balance of that content and the advertising that pays for it.

There is solid evidence that consumers compliment great online creative. I have countless examples in which consumers are recognizing great creative by sending in accolades in e-mail droves. I would be happy to share this with you.
Furthermore, Market Research validates breakthrough creative with brand lift across the board – greater than the current market norms or averages.

Full Screen breaks through the shackles imposed by pixel-constrained units and pre-existing technology-led formats to give the creators of advertising a full and blank canvas to work from and with. No more Harry Potter whizzing around the screen, trying to evade the weather report, latest news or e-mail message; no more Websites being crammed into compartmentalized boxes; no more pop-up Tetris where users skillfully extinguish the barrage of insect-like annoyances. Full Screen liberates creative minds free to ‘be creative’.

When faced with the choice between the current landscape of more than 4,000 different online units and formats, or the singular alternative of one message at a time from a trusted and recognized brand, the outcome should be pretty clear.
We’ve seen recent data reflecting that nine out of the top 10 rich media advertisers are now traditional brand advertisers. I’m licking my lips at the prospect of what they can and will accomplish with their top creative partners on board; with a blank canvas to work from that stretches from one side of the screen to the other; with an ever-exploding broadband populous waiting to see what is possible.

The stage is set. The curtain is about to be raised. We could be in for a show that would make Cirque du Soleil proud.

The future of online advertising is here. The future of online advertising is now.

The future of online advertising is full screen.

An Industry Call-to-Arms
In a mini-keynote earlier this week, Joseph applauded industry efforts addressing his call-to-arms for larger ad units.
By Joseph Jaffe

This week I participated in the launch of Unicast’s Full Screen Superstitial. In the breakfast presentation to industry and press participants, I was asked to deliver a mini-keynote talking about the importance of creativity and the role it will play in the continued evolution of online advertising. Here is the edited transcript of my address:

As I recall, my first public platform or pulpit if you’ve ever heard me speak was the iMedia Summit in Deer Valley towards the end of 2001. On this panel dedicated to rich media, I left the audience with four bullet points I felt summarized where online advertising creative

Beyond a Website
Marketers need to harness the power of online media to drive interested prospects to a given destination, as well as to, ultimately, drive integrated conversion.
By Joseph Jaffe

In some respect, I can’t believe I’m writing about why a Website isn’t enough for any and all marketers. However, it seems the need has never been stronger to help educate the market on why it makes sense to venture beyond the server-doors of their own Websites.

I like to use the analogy of a Website being a storefront. If you think about it, a company’s bricks store is really no different to its clicks store. After all, if a store is defined as a place to buy, browse and/or research, then where is the distinction between land and cybersea?

In reality, there are marked differences and advantages to online storefronts. For example, online possesses such characteristics as superior customer service in the form of “perfect” information, succinct return policies and inventory that’s always in-stock. There are also no dirty stores, no apathetic salespeople, no long lines.

So assuming that a client buys into the importance of an online storefront (which given Website spending certainly seems justified), why on earth would they not dedicate media resources towards promoting it?

One could ask companies where they think they’d be if they just stood in their stores and hoped people would venture in, or if they just stood outside their doors passing pamphlets to people passing by?

Their obvious response would be, “That’s why we have distributed or paid advertising” to which we should now say, “Exactly. And that’s the precise reason why online advertising makes so much sense, given your belief in your online storefront.”

Perhaps another way of stating this would be to combine two popular phrases: fish where the fish are and the shortest distance between two points is a straight line. For sure, the fish are not on your site on any given day (unless of course you’re eBay or Amazon.com). Some are searching for you and for someone like you, and for these people you have search engines. However, there has to be more to online life than a text-linked existence. There has to be a richer way to communicate specific and relevant information to prospects to tempt them to visit. How else would they find out about Gap Khakis, The Matrix Reloaded, American Express Blue or the All-new 2004 Lexus RX 330 (which without advertising would be getting awfully lonely on lexus.com waiting for cyber test drives)?

We know the so-called “fish” are online in schools, so given the shortest distance between two points being a straight line, might we not want to consider elaborating on “two points” to refer to an intended audience and a destination Website, and replacing “straight line” with “click of a mouse”?
Offline is not cutting it, especially when the sum total of support is a token three-second URL at the end of a typical television commercial.
And AT&T Wireless’ mLife campaign supports this assertion.

At the end of the campaign, online advertising was responsible for 33% of all visits to the mlife.com Website, despite only 10% of total budget being allocated behind interactive.

I would be acutely remiss if I made this best practice all about clicks or visits to a Website. It isn’t. This discussion needs to be stepped up a notch to allow for and accommodate the bigger picture of connecting with consumers in their natural environments (read: not your Website), especially with the very real reality that if they are to convert, it will most likely be offline.

Like many CPG marketers, Purina had put all of its eggs into one basket by creating and maintaining more than 30 individual product sites. Purina approached comScore to help in ascertaining the power of paid media versus a menagerie of product sites. The hypothesis here was that pet lovers were alive and kicking on the Web and that by reaching them with relevant messaging, Purina could bring them closer to the brand and closer to the point of purchasing.

Program:
comScore Networks combined its panel data with Knowledge Networks’ grocery shoppers to identify 50,000 online pet-food buyers.

comSore overlaid its panel of 1.5 million Internet consumers with the Knowledge Networks’ panel of 20 million grocery shopping households to identify 50,000 consumers whose offline buying habits and Internet usage matched Purina's target audience. Those in this test cell were randomly served Purina banner ads on sites they visited, while a control group saw different (non-Purina) ads, and then a sample of both groups was surveyed afterwards.

The results indicated significant lift in awareness and other key brand metrics as well.

When it comes to driving qualified traffic to an intended location, the contention that a standalone Website is not enough is joined by the argument that offline media (for the most part) is not enough either. The best practice in question therefore, is the ability to harness the power of online media to not only drive interested prospects to a given destination, but ultimately to play its part in driving integrated conversion as well.

Next week I’ll continue the discussion by focusing on measurement and proper evaluation of online advertising efficacy, either as a driver to a Website or as a branding vehicle. I’ll also expand on the idea of fishing where the fish are by exploring the idea of “in-context” relevancy

Online AdverGaming - An Effective Marketing Tool

The growing popularity of gaming among consumers – and interest from brands - started with online gaming. Brands like Nike, Pepsi and General Mills incorporated their brands into online games to increase sales, improve brand recall, and generate positive brand impressions.

Daimler Chrysler became so enthusiastic about advergaming that the company’s vice president of Jeep and Business-to-Consumer/Customer Relationship Management, Jeff Bell, announced last year at the Electronic Entertainment Expo that Daimler Chrysler has begun funding the production of video games. The company has launched online games such as Jeep Rescue Patrol, Dodge Midnight Racers and Chrysler Get Up & Go.

The results of Daimler Chyrsler’s efforts have been encouraging. The Chrysler Get Up & Go game was launched on the Chrysler brand Website (www.chrysler.com) on August 13, 2002. During the first week after being launched, more than 40,000 people played the game. From August 13th to August 25th, 2002, there were a total of 39,305 visits to the site, 15,638 registrations and 68% of the visitors opted in for further communications.

Craig Holland is president of Thumbworks (www.thumbworks.com), a publisher of marketing-driven applications for mobile phones and other wireless devices for consumers. He says brands can use games to influence the way consumers perceive their products. For example, a football game is very different from a surfing game. The two games will not only attract different audiences with different lifestyles but they will leave players with a different impression of the game. In this way, brands can choose what types of games they want to be associated with and thereby have some control over how players perceive their brands. “If you create a high engagement environment like a game, you have the ability to control the positioning because you’re creating this experience,” says Holland.

Brands such as Fox, ESPN, and Suzuki are now taking advergaming one step further . They have launched football, snowboarding, skateboarding, and motocross games that can be played not only on computers but on mobile phones too and come with their brands attached. In the Fox Sports Football game, “Fox” appears on the scoreboard during the game. The ESPN logo appears on the screen before the player begins the snowboarding and skateboarding games.

The Suzuki Motocross Challenge game, which came out in November 2002, is a prime example of the potential within online advergaming. Before players start each new level in the game, they see an action-oriented product photo of a

Suzuki motocross bike. Additional branding comes in the form of a small plane that flies across the sky every 30 seconds pulling behind it an airplane banner with “Suzuki” and the logo. Another Suzuki banner flies at the top of the grandstand once players reach “Factory Rider” status. In addition, a link to www.suzuki.com/ is provided inside the game. In these ways, Suzuki is able to provide an entertaining game for the consumer while subtly promoting the brand. “It’s all very much in keeping with the spirit of the game,” says Holland.
In the game, players complete a series of obstacles on their Suzuki motocross bikes. As they attempt mid-air maneuvers, players earn points corresponding to the degree of difficulty. Once enough points are gained, they are promoted to different levels. Starting out as a “Privateer Rider” in the desert, a player continues to become a “Support Rider” in the mountains and finish as a “Factory Rider”, racing in a stadium.

The challenge for Suzuki was creating a game that was fun and exciting as well as capable of lifting the brand image”, says Holland of Thumbworks.
By advertising with an online game, Suzuki aims to reach consumers it had been unable to reach through the more traditional form of advertising in publications. “Advertising in the enthusiast publications is necessary to keep a presence in front of this group,” says Holland. “It really serves the purpose of exposing the brand name Suzuki and the sport of motocross to potential new riders -- and buyers of Suzuki products.”

The impact of online advergaming is effective as it reaches many. “What is indisputable is that tens of millions of people connect to Internet every day in the workplace,” confirms Rubin. “It is a captive audience, and an educated and affluent one. This is prime real estate for Advertisers, and favorable deals can now be made that lock-in rates for years to come.”

This is the first time Suzuki has used an online game for branding. In the first five weeks after Verizon Wireless started offering a free, downloadable demo of the game on its Web site, more than 100,000 people downloaded the game. These preliminary findings are promising for Suzuki as it is primarily interested in using the game as a means of branding. Harris says Suzuki is pleased with the results of advergaming and will be evaluating future opportunities.

Online Advergaming -- A Win-Win-Win Situation
Advergaming may offer traditional advertisers a unique and effective way to spread the word and recognition about their brands, but, in some cases, consumers might be motivated to play because they are familiar with the brand. Holland says that incorporating the Suzuki brand into the game adds authenticity and encourages consumers to play because it’s not a generic motocross game.
Verizon Wireless agrees with the idea that a branded game is more attractive than a generic game and likes to work with developers who are working with brands. “It’s my position that brands matter,” says Alex Bloom, manager of content and applications for Verizon Wireless. “Customers tend to lean towards the brands.” The company currently offers subscribers the chance to download the Fox Sports Football, ESPN X Games Snowboarding, and Suzuki Motocross Challenge from the Verizon Wireless Website.

If done correctly, Holland says a game can be a win-win-win all around. It is a win for customers because they have a better understanding of what they’re getting into because they know the brand name; it is a win for brands because they have another vehicle by which to promote their brands; and it is a win for carriers because the games, downloadable for a fee, generate revenue.

Ad Tech San Francisco Coverage
Kevin Ryan provides an unconventional overview of the event, including some quotes from A-list Internet pioneers who attended a closing private Forbes.com dinner.
By Kevin Ryan, Contributor

We’re back, Baby! Some Of Us Never Left.
I remember the day I arrived at my first Ad:Tech. I was living in New York and online marketers were swirling about in a frenzy to make contacts while attempting to understand the new medium. It was a site to behold. Parties, sponsored by companies that no one gave a rodent’s posterior as to what services they offered carried on in a seemingly unending salvo. I blinked and it all disappeared, so I moved to California.

I also remember the day I arrived in Los Angeles for the event last year. The low attendance and Gloria Gayner (I will survive) attitude had me lamenting about days gone by. Someone actually quoted me as saying the experience was “Morbid and sad”. Ouch.

Ad:Tech 2003 San Francisco, on the other hand, had moxie with 2,000 people proclaiming, “We’re back, baby” and the corporeal energy of the sessions on the first day leading attendees to sing with rapture.

While it’s great to be first to report incidents such as the Google-sponsored breakfast on day two initiating famine due to unprecedented attendance, I prefer to provide analysis beyond the speed-to-read quotient, i.e. there was a lot more happening at the event.

In the grand tradition of earth-shattering Ad: Tech experiences for yours truly, I had the exclusive and most remarkable pleasure of exchanging perspective on the conference and the industry from a select few of the industry’s biggest names, immediately following the event.

Muddle
Yes, the industry is doing better than it was last year. Yes, the attendance was three times what is was at last year’s LA show. Clearly, it didn’t appear that anyone was ready for the sell-out crowd, but attendance went from standing room only to tumbleweed city as the conference rolled on. The cause of this may have been a decidedly negative buzz about the barrage of sales pitches from presenters, but despite the arguably gratuitous promotional information there was some quite notable content in the event.

On with the Show, Day One
The opening sessions of the show included a panel on building your brand with the always on-target Susan Bratton. I was happy to hear that ubiquitous brands like Michelin and Kimberly Clark provided key insights as to how to use the Web as brand vehicle. There is an inherent credibility in companies that have been around since before you could purchase their goods on the Web, and whose people wear suits to meetings and don’t dye their hair purple (witnessed in the exhibit hall) for attention’s sake.

Late morning to early afternoon breakout sessions included heated debate on tools to get a bigger piece of the budgetary pie, optimization and analytics and an afternoon keynote addressing the all-too-critical search for best-of-breed Web marketing resources.

The afternoon included a marathon session on cross-media optimization, which was scheduled from 2:00 to 4:45. This was particularly helpful to those who may have missed the road show in every major city in America. Not surprisingly, the breakout sessions were packed and most notable was the Net it Out session, focusing on the guiding principles of integrated marketing as interpreted by industry greats Modem Media, Carat, Adidas, HP, Sprint and Hyundai.

Day Two; Commence Whining About Sales Pitches
Luckily you can’t swing a dead cat in San Francisco without hitting a Starbucks so I was not among the starving on Tuesday morning. Nonetheless, Google introduced its guided missile, publisher-driven enhancement to AdSense. This could be the smartest approach to contextual search marketing yet.

By far the most entertaining keynote of the show was delivered by Bob DeSena from Masterfoods,USA. That PowerPoint animated M&M character sure was funny. What was the keynote about? Oh yeah, you will soon be able to buy M&M’s in the colors of your favorite NFL team. The TV spots we saw really showed how to leverage the power of the online space and improve customer relationship skills.

Immediately following my trip to the hotel gift shop to purchase some M&M’s, there was a smartly moderated panel on the blazing topic of search marketing. Lanny Baker, from Solomon Smith Barney, referred to the panel as the “Mount Rushmore of Search” which included alphabet soup titles from MSN, Overture, Looksmart, and Google. While the panel created a healthy buzz on the floor, my experience there personified the dynamically volatile nature of search today as each panelist offered diametrically opposed viewpoints of the next evolution in search.

As for the rest of the day, top on the list was a wiz-bang panel on removing the smoke-and-mirror component from the latest and greatest in ad formats. Thank heaven for people willing to stand up and sort out the hype.

Day Three; Everyone Left Early
The in-your-face drop-off in attendance from Tuesday to Wednesday was like staring at before and after shots of Rosanne Barr’s cosmetic surgery. The morning keynote from industry legend Regus Mckenna was painfully long winded and the 20-something audience appeared to get lost as stories about family vacations and the grandkids were interlaced with excerpts from his book, Total Access.

As the keynote continued five minutes after the scheduled time limit, I made a hasty departure to the FindWhat press conference. Rising star paid search provider FindWhat.Com announced a merger with the European provider of a similar ilk, Espotting, thereby perpetuating incessant M&A activity in the search industry. I will revisit this in my column next week.

Speaking of plastic surgery, ever wonder how to reach seekers of trans-gender related information? The B2C Search Strategies panel wins the award for most sophomoric giggles from a trade show audience. Masha Geller, I salute you for maintaining your professional aplomb while moderating the panel as the plastic surgery search-marketing topic was explored in uncomfortable detail. IProspect and client, Aubuchon Hardware, supplied the most useful information on how to effectively administer organic search marketing. The moral of the story here is; never leave Ad:Tech early.

The Floor
Exhibitor Business.Com won me over with comfortable couches to ease the aches and pains of floor warriors. Covering all of the exhibits in day two (exhibit hall opening day) was next to impossible unless you had wings to fly over the crowd. If only we had the LA, 2001 hall. In the category of trinkets and trash, anything that could conceivably take an eye out was a big hit.

You’d have to be a bovine, stupefied, fool not to notice the mother load of search providers in the hall anchored by, iProspect, Did-it.Com, Overture and Google. I counted nearly 20 search related exhibitors as I flew high above the floor. Oh, yeah one more, BlowSearch. The law of decency precludes my ability to comment here.

My companion for scouting the search marketing exhibit floor was none other than Chris Theodoros, Google’s Director of Worldwide Agency Relations, who had this assessment of the search tonnage. “It is the breadth and quality of choices offered in the search agency environment which finally gives confidence to Fortune 500 advertisers in embracing a complicated aspect of the medium.” I’m pretty sure he wasn’t talking about that blow company.

Boogie, Oogie, Oogie
The show contained multiple evening, late evening, and in my case, early morning opportunities for networking. Each day’s events included packed, sponsored wind-down cocktail hours. High on my Tuesday night list was the very classy and industry talent filled Yahoo! party after receiving a personal invite and a thumb’s down from my sea-fearing stomach on the Google boat ride. Topping the night off was the Synergy6 club gig-- the law of gentlemanly conduct precludes my ability to comment on related activities.

Final Words
Despite my skeptical nature, the hard working people responsible for delivering Ad:Tech; tasked with living up to the highest expectations, won my vote for making Ad:Tech one of the few industry events that you simply can not miss. I have alluded to life-changing events that for cosmic reason beyond my control always seem to occur around the event -- here and in my column. This year was no exception.

As attendees, speakers, and journalists raced back to their offices or to catch a plane, I found myself suffering from a phenomenon known as Post Great Conference Reality Let-Down Syndrome while choosing to stick around for still another dinner-slash-party invite.

Forbes.Com, the Rolls Royce of destination sites for reaching C-level executives and “Homepage for the world’s business leaders” hosted a post show private dinner for top advertisers and key industry personalities on Wednesday evening. Aside from the most urgent question of “How did I get invited?”, my initial thought was that the gathering and attendees simply oozed class and professional acumen of the highest order.

The precious few who privately dined together in an exclusive, elite culinary venue could have easily formed an A-list roundtable. They spoke of experiences in the early days with Billy (Bill Gates) and Mike (Mr. Dell) in developing technology that would change the face of marketing as they knew it (the Internet.) I was seated across from Jim Spanfeller, President and CEO, Forbes.com and I don’t mind telling you -- in the presence of these guys (non gender specific term), I was genuinely and uncharacteristically humbled.

As we proclaim, “We are back!,” and begin to celebrate our resurgence as a medium, I will attempt to encapsulate and paraphrase the advice and provocative thoughts offered from those who were there in the beginning, and never left.
Performance drives the medium, not the latest craze in format or delivery. Spare us the hype.

Satisfying your customers and constituent’s expectations will always be the wisest way to grow your e-business. Just make sure you’re profitable in the process.

You aren’t on top until every competitor has been buried or cremated. In the unlikely event this happens, find something else to do.

Thanks to all for a great week, and one more unforgettable experience.

5 Strategies to Get Immediate Results
When a client screams, “I need it yesterday,” don’t panic. Here are some online programs you can execute to create buzz immediately and produce results in 24 hours.
By Underscore Marketing

One of the most wonderful things about online media is its flexibility in scheduling. That is, barring any technical glitches, an online campaign can be launched almost instantaneously and taken down just as quickly.

Good for us agency folks, who are frequently put in the position of having to achieve results literally overnight. One lasting effect of the dot-com boom was the accelerated timetables for almost every marketing-related activity: three-hour media plans, two-day communications strategies and all-nighters spent “tweaking” online creative to meet a publisher’s draconian ad specs. While there is much less of a sense of urgency in the sputtering economy of 2003, we still haven’t completely reverted back to spending entire summers planning for next year’s media spend. Sometimes, we still get requests for marketing programs that were needed yesterday, and we have to fulfill on them.

It would be a shame to have participated in the dot-com media frenzy of 1996 – 2000 without having picked up a few tactical nuggets that can result in a quick surge in brand awareness, online purchasing or product trial. Thankfully, we paid attention and made note of them, even as things were moving at such a frenzied pace. Read on, fair Spotlight reader, and we’ll show you some online programs you can execute to create buzz immediately.

Kicking Things Off with a Bang
In traditional media, it takes time for reach to cume across any given schedule. In other words, it takes time for the entire readership of a monthly magazine to get their issues in the mail or pick the magazine up at the newsstand and read it. It takes time before a billboard’s message reaches most of the people who might drive by it in a given month. Online, this effect is much less pronounced and it is possible to make a huge impact with highly trafficked sites by launching a home-page sponsorship or promotion.

The classic example is the Pepsi promotion featuring Britney Spears on the home page of Yahoo!. Visitors to the site during the promotion could “peel back” the corner of the page and interact with special content, including an exclusive Britney Spears MP3. The ad unit, called a “Back Page Corner Tear,” allowed anyone who visited Yahoo’s home page during the duration of the program to be drawn in by the content.

Not only do such promotions impact the audience of the sponsored site, but they create a huge PR splash as well. There is an expectation that home-page sponsorships don’t typically last more than a day or two, so a flurry of Britney fans (and other curiosity-seekers) were driven by “Hey, check this out!” e-mails, word of mouth, and other media outlets to interact with the promotion. While such promotions generally require a sizeable online spend, they can create a huge buzz within a short period of time, and they garner quite a bang for the buck if PR opportunities can be leveraged in accordance with the promotion.

Your Customers as Brand Advocates
When trying to make maximum and immediate impact, never forget the media assets you have at hand – especially that database of e-mail names. Often, the folks who sign up at your Website to receive information about your products are fans of your brand. When there’s no time to plan and execute a standard online media campaign, consider giving these fans the first look at your new product launch, new ad campaign, or whatever you’re attempting to communicate with urgency.

This will accomplish several things. First of all, it gives fans of your brand the opportunity to wear it as a badge. If they are first to receive information about goings-on at your company, it’s likely they’ll swell up with pride at the “insider” status you’ve granted them. It’s also likely they’ll want to show several of their friends that they’re an insider. Send them something that is easily passed along to others in their address book. A “Send to a Friend” button can not only generate additional exposure for your brand, but it can also garner additional names for your next marketing blitz, so be sure to make it easy for recipients of a promotional e-mail to propagate the message.

Sure, we would all like the magic formula for turning viral marketing campaigns into the next “Hamster Dance” or “All Your Base…” but no such formula exists. What is certain, however, is that the content within a viral e-mail must be compelling enough to stand on its own, lest the first group of exposed recipients consider it not worthy enough to send to the next.

Don’t Forget Paid Search
Any new campaign or promotion will prompt folks to seek you out. Be sure they’re able to find you easily. Paid search listings will help you do the job, and they have some great advantages over online banner campaigns and such.
First, they make immediate impact. Google’s AdWords product can get sponsored listings live almost immediately. Overture typically takes three to five days.
Secondly, creative is a snap, so no waiting for banner designers to whittle down a skyscraper to the size of an 88x31 button. Simply write some short copy and you’re ready to go.

Thirdly, paid listings are very targeted, so although you might not have time to execute a full-blown media plan, at least your paid listings campaign will show up only under keywords that are relevant to your product or service. People searching under those keywords will be treated to your message. This is probably the most rudimentary form of behavioral marketing available on the Web.

Launch in Waves
Remember earlier, when we talked about online media’s flexibility in scheduling? That can be a distinct advantage when your ads need to go up quickly. In print, if you miss a material closing date, you have to wait for the next issue. Thankfully, Web advertising tends to have great flexibility in this regard. Your first step after scheduling short-term media solutions is to find out how quickly sales reps and their traffic departments can get a campaign live after you send them creative.
Assuming you’re not launching with the latest rich media prototype, you’ll find that many media reps are willing to work with you and will accelerate the quality assurance phase for new creative, expedite contract and rate approvals, stay late to upload tags to the adserver – anything they can do to get you up and running quickly. Granted, you may not have the resources to launch a monster ad campaign tomorrow, with the latest in streaming 3-D page takeovers, but you may be able to get some of your basic banner ads running quickly. Buy some time by doing this, and then launch the more complicated stuff at a later date. There are no set dates or times for campaign launches in the online realm. Use this to your advantage.

Gauging the Impact
Okay, so in the confusion, you didn’t have time to implement a brand survey from Dynamic Logic. Don’t fret. One way to gauge impact is through the use of Yahoo’s Buzz Index. If you’ve made significant impact with your short-term tactics, the Buzz Index can help you gauge how far you’ve moved the needle.
The index measures the number of searches on a given topic within a given day, and shows a trend report of that information over the course of several days. If you’ve created significant buzz, you will see an uptick in the number of searches for your product or category. Compare this to the baseline number of searches performed when no advertising is live and you’ll get an informal gauge of the impact your campaign is having.

Take a Deep Breath…
Once you’ve executed some of these tactics, take a breather. You’ve once again helped your company out of a jam. The best next step is to take measures to ensure you have a bit more advance warning next time. We’ve found the best way to do this is to put together an informal comparison between the makeup of your campaign and what it could have looked like, had you not been constrained by time. And do the medium a favor by bragging to your co-workers about how quickly you were able to execute a compelling online program. The online industry could use the positive buzz.

U.S. Online Ad Growth Underway
By Robyn Greenspan

U.S. online advertising spending is expected to account for $8.1 billion of the country's $293 billion total media budget by 2006, marking a return to 2000's Internet spending spree figures.

Aggregated data from eMarketer reveals online ad spending to reach $6.3 billion by the end of 2003 for a 4.8 percent growth rate over 2002's $6 billion, and slowly climbing to $6.8 billion in 2005 and $7.2 billion in 2005. Internet ad spending experienced 12.2 percent growth just in the period between Q1 2002 and Q1 2003 — $1.355 billion to $1.520 billion.

U.S. Total Advertising Spending (in billions)
2000 $247.50
2001 $231.30
2002 $236.75
2003 $248.25
2004 $263.50
2005 $277.50
2006 $293.00
Note: eMarketer benchmarks its U.S. ad
spending projections against Universal
McCann, for which the last period,
measured was 2002.
Source: eMarketer, June 2003

Final figures from the Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers revealed "keyword search" as the growth leader of 2002, accounting for 15 percent of ad revenues — compared to 4 percent in 2001 — and the category earned 21 percent of total ad format revenues in 4Q 2002.
"We are very encouraged by the strong revenue results for the second half of 2002. This data supports the anecdotal information and other signs that are resulting in impressive balance sheets for most of the top ad sellers and we think the industry is positioned to experience incremental and sustained growth over the next few years," said Greg Stuart, president and CEO, IAB.
Stuart credits a changing media landscape and the commitment advertisers are making to reinforce relationships with their customers as they become increasingly more reliant on the Internet.

Keyword search chiseled away at the remaining ad spending categories, with the biggest drop going to "sponsorships" — 26 percent in 2001 compared to 18 percent in 2002. "Banners" continued to lead the spending at 29 percent, down from 36 percent in 2001, and "classifieds" dropped one percentage point to 15 percent.

In 2002, consumer advertisers continued to spend the most dollars on online advertising (32 percent), with retail consumer advertisers as the largest segment (42 percent) in the major consumer category. The computing and media categories held steady through the year at 18 percent and 12 percent, respectively, while financial services gained one point to 13 percent in 2002.