Last year was a long time coming. In 2009,for the first time, online advertising spending outgrew television advertising. For years now, online spending has been growing hugely – bar a small dip in growth during the worst of the recession last year – while spending in traditional media has been in constant decline. What’s going on?
Traditional interruption advertising means deciding how to extol the virtues of your product and putting that message in front of your potential customers, wherever those customers are most likely to stop what they’re doing and look at your ad. Whether it’s on television, in a newspaper or on a billboard at the side of a road, the purpose of these ads is to jump in front of people and shout “HEY!” – which leaves you with three problems.
The first is that you have no way of actually knowing if anyone is looking at your adverts, let alone paying them any attention and ultimately making a purchase. The second is that the advertising market has long reached saturation. Modern consumers are increasingly clever at avoiding, or just plain ignoring, adverts that disrupt their lives. Advertising clutter has desensitised consumers so much that the average person has trouble remembering more than two or three of the thousands of messages we’re bombarded with every day.
The third is that it’s hard to effectively target the right people at the right time. Conventional wisdom says that if you target the right demographic then you can sell more. So, the proliferation of niche channels, platforms and magazines should be an advertiser’s dream – but modern advertising says that effectiveness is about targeting your audience not by who they are, but by what they’re doing, and this is where the web wins. That’s why online advertising is doing so well.
When you’re advertising on the web you can target specific social groups down to the individual, wherever and whenever you want. Search marketing means that you can advertise right at the point consumers are looking for a product. Services like Google’s Double- Click display advertising based on interests and browsing history, ideally showing the right advertising at the right time. Advertisers can track who’s looking at their adverts, from the moment the page loads to the last click at the checkout. This accountability sounds great to brands because it means they can accurately and cost-effectively track the relationship between advertising investment and return.
Unfortunately, the embarrassing result of all those carefully tracked clicks is that the average click-through rate for online ads and banners is less than 0.2%. And that’s the number of people who spare one measly click – only a small percentage of even those users will actually go on to make a purchase. So what does this mean for online marketing?
Well: the web has democratised advertising, branding and information to a huge extent. Advertisers used to be able to manage perception of their brands and products much more tightly; now there are thousands of citizen journalists, reviewers and bloggers all sharing their opinions on products and companies, not to mention great swathes of sites that specialise in comparisons, reviews and pricechecking. When you’re buying, for example, a new television, it’s simple to read through reviews and recommendations online then compare the prices of shops and suppliers, all with just a couple of clicks.
So does this mean that the only things that sell are the best products, from the cheapest suppliers? No, obviously – but the shift in ownership of information is a powerful thing. Products, and the brands behind them, are under huge pressure to do what they say and live up to their own marketing hype. Flaws in products are quickly spotted, dissected and talked about; brands are watched, discussed, reviewed and reported on. A recent example is the iPhone 4’s reception problem: before the internet, unless you knew someone who was left-handed and held their phone a particular way, then you’d probably never have known there was anything wrong. But the internet has enabled the rapid spread of users’ stories and experiences, which quickly turned into a big story that has not only put people off the product, but also damaged Apple’s brand.
Against this background of exhaustive reviews and information it can seem like advertising and branding are evolutionary dead-ends. It’s true, having a good product is critical – but in a saturated market, branding is more important than ever. The flip side of the huge variety of reviews and opinions on offer is the danger of information overload. Successful branding creates an emotional, sometimes almost irrational connection between brand and audience that consumers use as shortcuts to navigate the sea of information. But the question is: how best to build a brand amid the clutter?
Forward-thinking brands have turned towards new aims: engagement, and democratisation of their own brands. Engagement doesn’t just mean getting customers to engage with a brand – it means brands actively engaging with their audience, moving away from one sided interruption advertising towards a more conversational approach that offers tangible benefits to the potential customer. Engagement advertising should aim to do something positive for the audience, something useful, or funny, or interesting, that has a value other than promotional.
For example: some brands, like McDonald’s, have stepped into the arena to tackle and openly discuss negative publicity – their Make Up Your Own Mind site attempts to answer comments like “I have read in a newspaper that your McNuggets only consist of fat and chicken penis” with a straight face. Brands ranging from giants like HSBC to local bakers in London have benefited from engaging with their customers in different ways; HSBC restored interest-free graduate accounts in response to a Facebook campaign, and Poke’s Baker Tweet notifies Shoreditch’s hungry Twitterati whenever a fresh batch of cakes leaves the oven.
One thing’s for sure: branding and advertising are here to stay, but the same seas of information that make strong, effective branding more essential than ever can also serve to highlight the gap between brand and reality – and it’s this dissonance that can do the greatest damage. Brands now share the responsibility for the creation of their brand with the wider web, and how they engage with their audiences – with fairness and generosity, or more of the same old one-sided – will determine who succeeds and who fails in this new landscape.