Sunday, October 17, 2010

Why advertisement?

The first ad in the US was printed in 1704 - an announcement seeking a buyer for an Oyster Bay, Long Island, estate, was published in the Boston News-Letter.
Since then advertisement in the US was born and grow a lot.
The USA's first television advertisement was broadcast July 1, 1941. The watchmaker Bulova paid $4 for a placement on New York station WNBT before a baseball game between the Brooklyn Dodgers and Philadelphia Phillies. The 10-second spot displayed a picture of a clock superimposed on a map of the United States, accompanied by the voice-over "America runs on Bulova time."
Ads had always two main targets. Either to build a brand awareness or to attract the consumer with a call to action. Till 1994 the action CTA was a phone number a consumer could call or some coupon in the ad to cut out and to redeem at the store.

But then came the internet.
When HotWired decided to make money from their website in 1994, they set in motion events that would come back to haunt us all: The creation of banner ads.

AT&T was the first to dish over some money to HotWired to display the beast they created, a 468 x 60 banner that came to life on October 25 1994 (source the longest domain name)

The world's first banner was quite the ugly thing as seen below, it directed the consumer to an ATT website.

Internet display advertisement changed a lot since then and gave brands much better statistics about the effects of the ads. Before then, brands had to hire companies like Nielsen to get some statistics about their TV or Radio ads. The method is simple. Take 2000 test consumers and watch them or ask questions.
But with internet it changed and the term CTR was created. Brands could instantly see how many people clicked on their ads.
Yahoo and Google figured out that a click is more important than just showing an Internet ad, because it is easier to measure how many people did click than how many people did recognize the ads.
Therefore brands only pay per click at google, which can cost as much as $200 dollars.
Almost the rest of the world is charging by reach (cost per 1000 views) and marketer then calculate the effective costs by clicks.

At the end Internet is not much different than radio, TV or newspaper.
If a product is promoted on every page the consumer surfs, then this product will burn in the consumer brain and the consumer will eventually buy the product

Trying to think in CTR only would be a very disappointing exercise. In average a click through rate is maybe around 0.12%. And then out of these people 1% might buy a product online directly.

Display ads are building brand awareness not only CTR. For Goggle it is different, they have on their search engine only text ads, it is hard to build brand awareness without logo and visual message.

Soon companies did understand that just having ads is not enough. The ads needed to be targeted to either consumer type and behavior or to content.
They learned that consumers are recognizing brands more if they are in context to the information on the website.
But internet advertisement is in the most part much more difficult and complex than radio or TV advertisement. The reason is that internet users are pro active. They search for something, they read or they communicate.
TV or radio users are just consuming. They listen and watch as a part of getting entertained or to relax. We click commercials away but we are used to them. In the Internet we feel disturbed by ads. This is the big advantage for google text ads we don't recognize them always as ads and click many times on them because we believe that behind the link is the answer of our search.

I believe brands are going to sponsor more and more articles or recipes instead of having display ads. Imagine we print a recipe we like and one of the items is named as Hershey chocolate, would we buy a different chocolate?

Facebook is a good chance for companies to reach many consumers, but being one of the ads on the right rail is not the answer. People in Facebook want to communicate or learn about friends, ads have no space for this. But brand pages within Facebook are important but only if the brands understand to communicate with their consumers. I see Facebook as an important part of advertisement. Similar like complains hotlines, they helped to get consumers trust. In the 90es was a study that companies without a hotline for complains had less consumer trust and more negative news than companies with hotlines.

Facebook is able to allow brands to rebuild trust and to let consumers be a part of a product. However brands should not concentrate on trying to sell something through Facebook. Consumers would not like this, if they get the feeling it is all about selling.

Just having a brand page in Facebook and Facebook connect on their websites is not the answer neither. Maybe now, because it is new, but not in the long run.

The Facebook page needs to be update frequently, and more important, it should not be censored what fans are writing. The Facebook page needs to have personality, spelling errors or uncommon entries are desired. Trying to run each entry through a QA and management sign off will take the personality out of the page.

The same for other social networks and Twitter and blogs. Companies need to jump over their shadow and trust their employees. No tweet will be read when it sounds like advertisement. No blog will be tagged if it is just about selling to consumer.

Biggest success for brands will come from consumer trust and believe.
It is not about how many users did click on an ad and buy a product. It is about how many consumers will remember a brand when they go shopping and it is about how many users will buy a product they would never have bought before.

Display ads can help to build the awareness and Facebook and Twitter can help to transport the message inside and outside of the digital world.

Display ads will not go away but their measurement will be different. A big reason for this are social networks like Facebook.
Internet is still young and we are still trying to figure out how advertisement should and could work the best. What will be the right format?

To be honest i have no idea, i am still trying to figure it out. If somebody has an idea please write it here, i would like to hear it, I mean read it.

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