Bringing Sexy Back

The celebrated quip from legendary advertising creative Jerry Della Femina, that advertising is the most fun you can have with your clothes on, has tended not to apply to online advertising, a world of clicks and numbers that's been an effective turn-off for many ad agency creatives.

It’s an image the world’s biggest digital media companies are keen to shake off.

“We’re here to tell you that display is bringing sexy back,” declared Barry Salzman, one of Google’s most important ad sales execs as MD of media and platforms for the Americas, during a recent conference hosted by Interactive Advertising Bureau (IAB) in New York. 

“And we’re doing it with high-impact creatives, allowing advertisers and marketers to engage with their consumers in ways that were never before possible,” Salzman added.

Salzman recalled at the end of a revealing presentation outlining Google’s vision for display advertising how tough it was to get an audience with Madison Avenue in the first decade of online advertising, partly due to the limitations of online display but also because digital media owners didn’t understand agency creatives.

“We dropped the ball on that one,” he said. “Not only did creatives not want to see us or find what we had to say interesting, but we didn’t engage them. It’s only in the last 18 months that we as an industry have started engaging creative talent.”

Renaissance for display
The timing makes sense for Salzman and other executives at Google, who argue that the online ad market is on the cusp of a dramatic transformation. Dynamic rich media ads, accounting for just 6% of online ads over the past year, will make up 50% of digital display in 2015, they say, by which time online display will be a US$50 billion market, from US$20 billion today.

These are bold predictions, and will require a step change in attitudes to online advertising to come true. Nonetheless, display promises to be a major driver of digital advertising growth, and Google isn’t the only digital giant wooing ad agency creatives with the promise of something new. Facebook, arguably its biggest rival, wants a piece of the action too.

“Creatives are very excited about Facebook,” Facebook Asia’s commercial director Stephen Dolan recounted in a keynote at Media Partners Asia’s recent Asia Media Summit in Hong Kong. “These guys really see the power of, and the position and the place for great creative within social media. It brings back their ability to have a voice and deliver value.”

When Coke commissioned an agency copywriter to pen updates on its Facebook homepage for example, seeking to reflect core brand attributes as well as engage consumers, its messages spread through the social ether much faster than anything the brand had published on its page before.

Curse of the click
Dolan also thinks digital publishers must shoulder the blame for the current status quo. The dominant sales pitch – valuing media space by counting clicks on ads – may be good for marketers driving leads and sales but is less suited for the kind of engaging stories, told via traditional media platforms, that have helped shape some of the world’s most enduring brands.

“Cost-per-click strips all the value out of the stuff that makes advertising great,” Dolan said. “One of the main things that makes advertising great is its ability to build brands – to have great creative, engage with consumers and tell a story over time that takes someone from the introduction to a brand to being a customer.”

Google, the company that has benefited most from cost-per-click, wants the measure to be less dominant too, putting forward a number of other metrics, from video views to search traffic, that will surpass cost-per-click in popularity as brand-building budgets move over to the web. 

The company still believes in data, but that data will drive online brand advertising too.

Scale has sway
Both Facebook and Google have the scale to attract big brands, and are already taking share in a burgeoning market for online display. In a rare breakout during a recent earnings call, Google’s product management SVP Jonathan Rosenberg revealed that the search giant – which continues to make most of its money from consumers clicking on simple, relatively functional text-based ads – should make around US$2.5 billion from non-text display ads this year.

There’s no official word from Facebook on its revenues, though analyst estimates for 2010 have been bouncing between US$1.2 billion and US$2 billion, mostly from display. Facebook’s display ads remain relatively basic, focusing creative minds on communicating via a brand’s home page, though the social media giant is starting to introduce rich media formats in selected markets.

There are key differences in what the two rivals have to offer. Despite its best efforts to develop its own social platforms, Google has nothing like the rich repository of personal data that Facebook has collected – a potentially valuable resource for brands, but one that must be handled with care.

At the same time, Google is pushing for more data sharing and openness – the bedrock for its hugely successful search business – while Facebook shields its user interactions behind a walled garden, making it harder for marketers to evaluate versus more open platforms.

Another growth path
However, there is another, less-sexy emerging market both are well placed to tap into: online display advertising from smaller firms. Agencies may steward the large branding budgets currently captured by TV but SME marketing may represent another highly lucrative area for Facebook and Google, which have both developed self-service ad tools for big and small brands alike.

In a move that may dismay creatives, Google has bought Teracent, a company that can automatically knock together different display ads, customized according to a range of factors that include who sees the ad, where they are, the time they see the ad, and what sites they have already seen.

Such an approach should appeal to bigger advertisers while also opening up display advertising to smaller firms without the means to hire an agency, points out Ben Poole, regional head of interaction for media agency MEC.

“In digital media, the opportunity to target very small distinct micro segments of audiences, and of behavior and intent, is proliferating by the day,” Poole notes. “Somebody out there needs to be building hundreds of different creative executions that can talk in the right way to these many distinct segments.

“All brands are looking at ways to achieve efficiencies in terms of the production budget,” he adds. “If platforms can help address or match up with all the media targeting opportunities out there – fantastic.”

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