Maroon Ventures Blog

Via Greg Sterling, Dynamic Logic research shows consumer reaction to ads in various media. Perhaps surprisingly, consumers are a lot more amenable to ads in traditional media than new, and newspapers are at the top of the heap with 42% of respondents having a “somewhat positive” view of newspaper ads.

Is it time for print to start borrowing some of the measurability that’s common online? Why don’t more papers use 800-numbers in ads so they can track the actual phone calls their ads drive? How about the ability to track e-mail or web responses using proxy server technology (think of something like Tiny URLs in print ads that help the paper measure how many people are going to the advertiser’s site based on what they saw in print)? Online products have been doing this for a long time.

It would be really interesting to see someone buy one of the myriad newspapers on the market based on a pro forma that would allow for a sane, easy to understand rate card that completely rethinks some of the gouging that’s created advertiser disdain for newspapers.

Yes, newspapers have lost much of the marketplace status they once held. But most of them still have significant classified franchises and ad volume. And they have substantial, albeit dwindling, local audience. Cutting rate (sorry, Mark, someone had to say it) might be the right, if counterintuitive, way to re-establish some of that clout with advertising that consumers actually like. What if you coupled this with a compelling online strategy that isn’t afraid to put advertisers on the web — even at the expense of the print product if it makes more sense for the advertiser?

Maybe it’s not too late for a truly innovative — even disruptive — approach to print advertising. But it probably will have to come from someone arriving fresh to the industry with a sober view of the current economics it faces. Recent “fresh” arrivals haven’t followed this route …

Dynamic Logic research results

I am. Drop me a line if you want to get together to compare notes, hear about Maroon Ventures’ schemes for world domination or just get caffeinated …

I’ll be participating in the Optimize and Monetize panel on Friday, Sept. 12 from 2:30 to 3:45. Here’s a PDF schedule for the entire conference, and here are details on the Optimize and Monetize panel …

“Master the art of online advertising and understand what works for your site. Are you using excess inventory to your advantage? What do advertisers need? What do marketers think when they decide what to spend and where to spend it? Where are you going wrong?
“Panelists: Ken Doctor, news industry analyst for Outsell; Mark Rose, director for sales strategy, Tribune Company; Bob Benz, partner, Maroon Ventures.”

I don’t like to toot horns that are reasonably in my proximity but this is a milestone to which I have to draw attention.  Yahoo! recently announced that it has provided over 100 million referrals to the newspapers of the Newspaper Consortium. Multiply that by a reasonable 2.5 or 3 subsequent pageviews, then multiply that by the number of ad positions on each page and that quickly nudges the total number of impressions generated by the Yahoo! partnership into well over 1 billion. Not to mix metaphors but that’s some serious wind folks. 

Here’s the beauty of it - this is a two part solution. Pageviews and impressions are meaningless from a revenue standpoint. It is what you do with the added traffic that matters. That brings us to AMP.

For years now we’ve been dealing with the placement oriented sale. That is to say, advertisers lust to appear on business and travel sections/pages of newspaper websites but for general news, opinion, sports, etc, not so much. Essentially, advertisers were making the correlation between what type of page a user is looking at to the type of potential customer the user is. Call it Cro-Magnon behavioral targeting. AMP changes that.

With AMP, newspaper inventory can be sold based on the behavioral targeting profile of the user regardless of the section the user is reading. So while such “windfall” traffic used to be regarded as low revenue because essentially you are monetizing these pageviews at a remnant or low CPM, now it can be effectively monetized at a premium or super premium CPM based on behavioral targeting. All the while delivering a superior advertising product to newspaper advertisers. Couple that with the national sales pressure brought by Yahoo to target non-local users and you not only create a lot of wind, you will create a lot of very profitable wind through this relationship once fully launched on AMP. And this thing is just getting started.

Okay, i’ll get down from my soapbox. Something to think about though…

P.S. I am still in iPhone bliss - wonky keyboard and all.

Greg Sterling discusses Local and the Future of Ad Serving on his Screenwerk blog, and it’s definitely worth a look.

In short, he argues that sophisticated ad serving platforms are moving us much closer to true one-to-one marketing, and the end result will be the ability to mix and match creative on the fly to target specific demographics and behaviors in a very complex — yet easy to execute — process.

“It’s a bit of a “Zen” thing,” Sterling writes. “First there was simplicity, followed by complexity and then there will be simplicity on the other side of complexity.

“In other words, all that the agency and marketer will eventually have to know about digital marketing (including mobile) is that they want to target women, 18-34 who live in New York, San Francisco or Chicago and are interested in certain product categories. They’ll create their ads accordingly. Then they’ll deliver electronic data feeds of their creative and the platform will determine what to show when. They won’t have to figure out much tactically or mechanically. The complexity of the entire system will be in the ‘black box’ of the platform and buried for both the marketer and the end user, who will just see an ad and respond or not respond.”

Ken Doctor is a smart guy, and I enjoy reading his assessments of the industry. But I think he’s overreacting a bit in his recent post on the turbulence at Yahoo! and its impact on the newspaper consortium. Without a doubt, the papers I’m talking to are concerned. But they also realize there are several important things that are playing in their favor:

1. On Yahoo!’s search deal with Google: Ken is right that it’s unknown what the newspapers will get here. But it’s important to note that when the deal was negotiated, the guaranteed revenue was based on how Google, Yahoo and other contextual ads were performing on newspaper sites. Even if the Google ads were made available to the newspapers, there’s a strong chance the newspapers have a better deal as it’s currently structured than they would with Google contextual ads instead of Yahoo!

2. On the turbulence at Yahoo!: Yes, they are seeing a lot of turnover. But where AMP is concerned, we’ve seen nothing but razor focus and dedication. Yahoo! has staffed this effort very adequately and has significantly increased staff to work with the newspapers. With one exception, I’m not aware of any Yahoo!’s who are involved with the consortium who have moved on to other companies. In addition, Yahoo! is doing a bang-up job on AMP. It’s freakin’ impressive and I believe it will be a game changer for newspapers

3. On the contention that graphical and text ads will converge, Ken does have a valid point where yield is concerned. I don’t think the two ad formats will merge. They serve significantly different purposes. The real merger comes on how pages are monetized. A product like AMP might be able to look at all the available advertising opportunities on a page and decide which mix of graphical, text and other formats will drive the highest effective yield. If it happens to be a Google ad, so be it. Where I think Ken misses the point is that the potential to serve Google ads via AMP wouldn’t be detrimental to Yahoo! It’s actually to their advantage to have a mechanism that can make these decisions on pages across the Internet, helping myriad content providers to get the highest yield possible on their pages, regardless of the inventory served to get that yield. If I’m getting the highest yield possible, I’m not sure if I care if the ads come from Google, Yahoo!, Microsoft or the TV station I compete with in my market.

4. While Yahoo!’s woes do cause turbulence, I don’t think it calls into question the deal newspapers did with Yahoo! If anything, it makes the newspapers a key player in these talks and a force to be reckoned with regardless of the outcome. Without going into details, the Yahoo! deal has considerable change of control language baked into it (as every good contract does), and I think the newspapers are well protected.

Was the deal with Yahoo! a bad idea, or “playing with fire”? I really don’t think so. Yahoo! has been a stand-up partner thus far and I believe that will continue. The deal was a calculated risk, as are all major partnerships. But I wouldn’t call it playing with fire. If Yahoo! were to change hands, it puts the newspapers in a good spot to be a player in whatever emerges. I’m not saying I”d want Yahoo! to change hands. I think the newspapers are better served as things stand. But I wouldn’t rule out the possibility that the newspapers emerge stronger in a change of control.

In short, don’t count Yahoo! out. They still have incredible audience, great technology and smart people. And their current leadership strongly advocated the newspaper deal. Hang on to your hats. This is going to be an interesting ride.

Full disclosure: I was one of the newspaper execs who helped negotiate the deal with Yahoo!, and Maroon Ventures is acting as general manager of the newspaper consortium.

Josh Bernhoff over at Forrester just released some interesting research around a recession’s impact online marketing buying habits. That is to say, they asked over 300 interactive marketers the following:

Assuming the economy is in a recession in the next six months, how would you change your investment in interactive marketing overall?

The results are pretty interesting. The most recession proof marketing channel was Social Networking followed closely by User Generated Content, Email Marketing, Blogging and everyone’s favorite, Search Engine Marketing. The most vulnerable to recession? Display Advertising. What does this mean for companies such as Yahoo! and the newspaper industry who have invested heavily in being a key player in the display advertising space? My take: not much.

The reason lies behind who Forrester asked.  They asked interactive marketers. My belief is that these are interactive marketers who are pushing predominantly online brands and products. Such brands and products lend themselves to non-traditional advertising channels with an emphasis on buzz and measurable conversion (hence SEM). If you put an “channel age” next to each of the channels in the survey, you’d probably find that the newest channels are on top while the oldest are at the bottom (with the exception of Email Marketing - hmmmmm). Simply put, these interactive marketers aren’t your usual display advertising purchasers anyhow. I argue that if you had asked 300+ car dealers the same question, the result would have been very different. 

That being said, we’re not out of the woods yet. The perception behind impression based display advertising persists - been there done that. Newer pricing models such as CPC and CPA need to be leveraged even to the most brick and mortar advertisers. Additionally, target target target! Educate your advertisers. Provide data. Try to measure ROI. That’s how you beat a recession - prove that it is working. 

The Silicon Alley Insider’s Henry Blodget has a gleeful post today lauding the demise of the newspaper industry. Their loss, he argues, is interactive advertising’s gain.

“The $42 billion that was spent on print newspapers in 2007 isn’t going to vaporize–it’s just going to go somewhere else,” he writes.

Then he guesses the breakdown will look something like this:

Surviving newspapers, 25%, magazines, 0%, TV, 0%, Outdoor 5% and Digital 70%

But I wouldn’t count those dollars before they’re hatched, Henry. The Internet’s assault on newspaper ad revenue is as much about value destruction as it is about switching dollars. Think about Craig’s list, where advertising that used to cost money is now, for the most part, free. Think of the major job and auto boards, where ads now cost several hundred dollars instead of the several thousand that advertisers paid for newspaper reach. Maybe advertisers are finding new ways to spend those dollars on interactive campaigns. But I think they’re really just pocketing much of the difference.