Digital Solid: Marketing Technology ROI

This post by David Koretz, in last Thursday’s Online Publishing Insider (registration required), put it well:

According to IDC, the average user spends 32.7 hours each week on the Internet, and only 16.4 hours watching TV. So while Internet usage is double that of television, [online ad spending] lags dramatically. In 2008, Internet advertising revenue will only be one fifth the size of television advertising, a third as big as newspaper advertising, and only half of magazine advertising, according to a recent Carat report.

So what does he recommend? Among his prescriptions:

Unleash the artists: As a technology guy, it pains me to say this, but we need more artists in this industry. We need more creative folks dreaming up ad formats that create a memorable user experience and drive consumer action. We need to create new ad formats that leverage the interactivity advantage of the Web.

Most importantly … we need the type of ads that get talked about around the watercooler Monday morning.

And from new formats comes the obvious next step:

Drive transactions: The Web is the best platform for getting consumers from awareness to transaction the world has ever seen, yet few advertisers leverage the Web as a transaction platform.

Great advice all around.

Why hasn’t this advice been heeded so far? Mostly it has to do with playing it safe. Being bold means taking risks. In the recent past, marketers have been rewarded for following the path of least resistance.

Like It Or Not, It’s A New Era

But times have quite suddenly changed. The title of Koretz’s piece is Stop Blaming The Economy. His point being that the recent economic downturn could become an easy excuse for underperformance.

Along with Koretz, I suggest that this downturn should turn up the heat on innovation. For this reason (and possibly, for this reason only) this more competitive marketing environment is something that I am looking forward to.

Testing in the online world has never become easier or more affordable. It’s therefore no surprise that many assumptions about online ads are being reconsidered. Today, Enquirio and Google announced the validation of one such tenet. It had been assumed, through common sense and improved response rates, that an ad displayed in the context of similar subject matter will do better than one with no relationship to content.

What do we mean by contextual ad placement? The premise is that if I’m an executive who influences a decision to purchase construction equipment, and I see an ad as I review a construction industry portal site, I am more likely to recall the message — and the brand — than if I saw the same ad on an unrelated site.

In research by Enquirio and commissioned by Google, this assumption was validated. The research methodology included randomized test subjects, given tasks related to the content of the sites they were reviewing. Some sites contained ads that were relevant, others contained the same ads but had no connection to those ads’ subject matter.

Results were gathered in the form of questionnaire answers and aggregate eye scan heat maps of the sites being reviewed.

Two key take-aways:

• Through contextually relevant business-to-business (B-to-B) ads, purchasers are 52% more likely to associate your message with your brand
• With contextually relevant B-to-B ads, it is 28% more likely that your brand “will make the cut” and be shortlisted.

The Enquirio site has the whitepaper available for download.

A recent survey has shed light on what one breed of marketing professionals are perceiving as good bets in terms of measurable return on investment (ROI). The tactic leading the pack is email, sent to an internal — or “house” — list. This is hardly surprising, since it is a relatively low-cost way to announce new products and deals to customers and prospects. What is more interested is seeing how both organic search marketing (i.e., search engine optimization) and pay-per-click (PPC) search marketing are viewed by these same executives compared to other tactics. Here is the full run-down:

Considering the search-centric executives surveyed (these were 3,186 “in-house search marketers or agency executives,” as reported in eMarketer.com’s ROI for Select Marketing Tactics according to US Search Marketers), it’s not surprising both are regarded highly. Both are deemed as “Good” investments in respect to the return they typically provide by one out of every three respondents, and another third (34% total) considered one of these two tactics “Strongest” in terms of ROI.

This would be a glowing assessment of search when compared with other tactics, if only PPC weren’t also deemed as “highly variable” by 28% of respondents. Considering how much control one has on the risks and rewards of PPC, this makes me wonder if that measurement isn’t the voice of a minority who either hasn’t conducted a PPC campaign or hasn’t done it properly.

The booby prize goes to online advertising (”banners, etc.”), deemed “Low Value” by 43% of the group. With opinions of online ads being this negative, is it any wonder ad networks are scrambling to sweeten the kitty with more behaviorally-focused targeting?

What is your response to these numbers?