Why Google Going to the Dark Side Is Bad for Advertisers

Over time, the simplicity of Google’s results page has clearly eroded. In the beginning, Google’s clear user interface was beloved to search users for its ease of access and clarity. It was easy to spot ads, because they were clearly marked. The Google SERP today is visually very noisy, with lots of distractions.

Over time, the simplicity of Google’s results page has clearly eroded. In the beginning, Google’s clear user interface was beloved to search users for its ease of access and clarity. It was easy to spot ads, because they were clearly marked. The Google search engine results page today is visually very noisy, with lots of distractions.

Google rolled out its new UX on mobile several months ago, and — in mid-January — applied the changes to desktop search. Contrary to the company’s claims that the new design “puts a site’s brand front-and-center, helping searchers better understand where information is coming from, more easily scan results and decide what to explore.”

But the change, in fact, blurs the user’s ability to easily differentiate ads from organic listings. These most recent changes have taken the desktop search engine results page into the dark side, for its UX exhibits “dark patterns” in how it differentiates advertising from organic results. This has a significant downside for advertisers, organic search marketers, and their audiences.

Dark Patterns

Coined by Harry Brignull, a London-based UX designer in July 2010, “dark patterns” are user interfaces that are carefully crafted to trick users into taking an action. Although the current layout places a bold “Ad” indicator next to text ads, and shows favicons next to organic brand listings, it is easy for the user scanning a search page quickly to overlook the ad notation or confuse the ad notation with the similarly placed favicons. Many users choose not to click advertisements, preferring to skim the listings for the page that most clearly suggests the answer to their search query. Savvy users know that the ad may not, in fact, deliver the most relevant page for their query and are wary of paid advertisements.

Google has made it harder for the user to rapidly differentiate, particularly on noisy desktop pages, paid ads from organic content. This new layout is not as distracting on mobile, where the small screen makes each listing stand out. The smaller screen visually reduces the clutter, forcing the user to focus on each result card.

A single search for “high heels shoes” on a desktop yields a cluttered page that includes “sponsored” shopping ads, ads (marked with bold Ad indicator), a set of accordions with “People also ask,” a map and local listings box, and finally organic results.

With all of this distraction, the user is likely to click unintentionally on a poorly differentiated ad. In the future, it will be easy for Google to slip more ads into the pages without creating user awareness of the volume of ads being served.

Why Is This Bad?

When the user cannot clearly differentiate an ad from an organic listing, the advertiser pays for clicks that are unintentional. This depletes the advertiser’s budget, without delivering sales conversions. It is too early to tell the exact levels of the unintentional clicks, but it is my clear bet that there will be a significant volume of them.

Contrary to claims, the new UX is not good for the user. It forces the user to slow down to avoid making a perhaps erroneous decision. Rather than enhancing the user experience, the user will be less satisfied with the results delivered.

For organic search marketers, the redesign makes it imperative to have a favicon that works and clearer branding in the search Titles and Descriptions — because the actual link has been visually downgraded. It is now above the Title.

It is expected that Google will continue to test new ways to demarcate ads from content, but the continued blurring of paid and organic results only really benefits Google.

Is Quality, Sustainable Marketing the Key, or Is Bigger Better?

We are certainly increasingly “digitally distracted.” How can we not be, with a smartphone in hand, WhatsApp, LinkedIn, Facebook, and the toxic Twitter — binging and buzzing with notifications of everything from “the boss wants you in his office right now” to Aunt Mary reminding you of her birthday?

Is bigger better?

That’s a question being asked a lot lately; not only by marketers, but in almost every sphere of our existence.

“In a digitally distracted mediascape of fragmented attention — engagement is the name of the game for publishers now. Whether it is deepening direct connections to consumers, delivering real impact for advertisers, or building trust in your brand — quality matters now more than quantity.” Or so proclaims MediaPost.

There is a plentiful cornucopia for thought in that well-crafted come-on.

We are certainly increasingly “digitally distracted.” How can we not be, with a smartphone in hand, WhatsApp, LinkedIn, Facebook, and the toxic Twitter — binging and buzzing with notifications of everything from “the boss wants you in his office right now” to Aunt Mary reminding you of her birthday? There are endless and equally compelling “bits and bobs,” all demanding attention, preferably immediately or ASAP.

There certainly ought to be an app — there probably is one or more that I don’t know about — which sorts through all that incoming traffic, assigns each a priority — based on some measure of quality — and only passes on the ones that matter. The app would pass on the ones which make my digital distraction worthwhile, the ones that truly engage. It may seem simplistic, but perhaps there is a good reason people get engaged before they get married.

But could an app be clever enough to identify quality, or even define it? Quality definitely has something magical about it, the same ephemeral, but indescribable quality which inspired Supreme Court Justice Potter Stewart’s memorable definition of hardcore pornography, “I know it when I see it.”

Some years ago, at a ceremony thanking an American Ambassador for her support of a local NGO, she was presented with “a small gift.” Looking at the little blue box, the Ambassador smiled, thanked the giver and exclaimed: “You men really don’t understand. There is no such thing as a small gift from Tiffany.” She was instinctively crafting what could have been a great slogan for the store: It’s not the size, it’s the Tiffany that counts.

Since forever, commerce has been driven more by growth than quality. How few have been the examples of CEOs’ quarterly statements praising the company’s reducing revenue, even when accompanied by increased profits. It certainly goes against our capitalist cultural mainstream. “But will it scale,” ask the moneybags in evaluating whether the newest idea will become a unicorn? Perhaps something really is changing which will deliver the ability to “engage” to the forefront, rather than simply being able to “attract.” Then the unicorns of tomorrow may no longer be measured just by size.

We all know that almost any amount of attraction is for sale at so-much-per-thousand. Simply by spending more and more on marketing, we can even become household names. If there has ever been a particularly obscene example of this, one need look no further than the mega billions being spent on the 2020 U.S. election campaigns. In an age of “fake” news, will all of this expensive attraction be the best investment politicians can make in suspending voter disbelief and establishing a meaningful engagement with voters? How much of that spend will promote the truth and how much believed? Will the engagement be strong enough to be sure the prospect will vote the “right” way, whichever way that is?

Like what is in the Tiffany box, one of the rarest of gems existent today is the truth.

In a thoughtful column here a week or so ago, provocatively headlined: ‘The Truth Is, There Is No Truth — Let Alone in Advertising,’ Jeanette McMurtry wrote:

One thing we marketers need to also face is the how the “truth” we are putting out there is being received …

If anything has come out of the “fake” news movement, it’s that we are learning not to believe hype and claims that can’t be substantiated …

Marketers can overcome this jaded vision of the world and brands in business today by addressing truth firsthand. You can do this by creating more interaction between your brand and consumers online and in the real world. Let customers experience what you are all about — your products, your persona, your values — more than reading your carefully crafted statements.

Despite existing technology that lets us truly interact one-to-one from great distances, something still seems to be missing. It’s the magic piece of the puzzle that moves us from attraction to engagement, that wants us to comfortably spend time together. That “something” may be the “quality” of truth, in its broadest sense.

If quality and truth are not synonymous, they are at least comfortable bedfellows. As Jeanette says, the truth about “your products, your persona, your values” is much more likely, in these changing times, to lead to the kind of engagement which will generate better (although perhaps not bigger) profits.

If we look around us, sprouting like spring flowers are small, specialized retailers and e-tailers, none of which is ever likely to rival Amazon or Walmart in size. But they’re much more likely to establish that magic sense of engagement, which comes not only from being able to parse all the data out there; but, far more importantly, to fashion enduring customer relationships grounded on a firm foundation of truth.

F500 Advertisers Strategize Better, But SEO Still Offers SMBs Growth Opportunities

Recent research has shown that many small advertisers spend all of their marketing budgets online. These businesses, like poker players, go all-in: investing their entire marketing budget on Google and Facebook ads.

Recent research has shown that many small advertisers spend all of their marketing budgets online. These businesses, like poker players, go all-in: investing their entire marketing budget on Google and Facebook ads.

Large businesses approach the online space differently. They apportion their considerable advertising dollars across online and traditional media, seeking synergy in their efforts.

Small business owners often wear many hats and cannot, or rather do not, spend a lot of time on developing marketing strategies. They simply have too few people trying to do too many tasks. Neglecting to budget resources, whether time or money, for localized SEO has significant opportunity costs for these businesses.

Put the Customers Ahead of Rankings

The mobile-first Google environment gives small local businesses chances to shine in search that previously were unavailable. The big brands crowded them out at the top of the listings.

Today, by strategically optimizing the site for the business location, a small business can show up for targeted local searches more easily than it ever has before. The key to this visibility is to make sure that the site offers what an out-of-town searcher might look for as well, as the local clientele.

Create a customer-first, local-first approach to achieve success.

Here is an example of a customer-first, local strategy:

I recently sadly had to look for where to purchase funeral flowers to send to a funeral home in an area that I was unfamiliar with. I found a florist in the area by searching for “flowers for funeral + place name.” Not only did the florist’s site include content on flowers for funerals, but it even had confidence-inspiring photos of some of its work. The phone number was prominently displayed, and I immediately called and made my purchase. My curiosity was pricked, and I asked several questions and found out that the shop was local, not part of a chain, and had carved out several niches in the flower market, including flowers for funerals. Although very busy, the owners had developed a marketing strategy and developed their site to bring in the right customers.

As fate would have it, I encountered another florist in another town, griping about how online is hurting her business. The local shop did not have a clear strategy or even an up-to-date site and was relying on online ads for marketing. The contrast was sharp.

Glom Onto the Free Stuff First

SEO is more than just optimizing the site. For small businesses, there are search freebies that should not be missed. Here are just a few.

  • Google My Business is free. It takes a few hours to set up a business listing. This is the table stakes, so to speak, and many businesses set up a very basic listing and fail to flesh it out or keep it up-to-date. Accuracy is important, particularly for small businesses that have storefronts. It is always amazing to look at a listing and realize that it does not reflect current hours of operation. Additionally, for businesses that are tucked into strip malls, listings that include storefront pictures help bring live customers to the businesses.
  • Yelp and TripAdvisor offer free listing services that any qualifying business should take advantage of to improve its online visibility. Both are large sites and often dominate the top search listings, so the old adage applies: If you can’t beat them, join them.
  • Facebook Pages combined with Facebook Ads create a powerful one-two marketing punch. Just as with Google My Business, it is important to go beyond the very basics and create a page that engages and informs. I am an avid, but awful, golfer — and my personal Facebook feed includes postings from several golf courses. One simply posts pictures, no engagement required. They are merely pretty pictures, and do create an urge to go play the course. Another course recently posted a short post, asking folks to rate — by difficulty — the three Par 5 holes on the course. This post drew instant engagement with many ratings, comments, and likes as responses. This lively engagement created a desire to play the course, just to test out those difficulty ratings that I had assigned. Both courses post regularly on- and off-season, so they always have a share of mind. Both are small businesses looking beyond the ads for their online marketing.

How I Cut the Cord and Learned to Love OTT

Just how many months — no, years — does it take for a logical, clear-headed, money-conscious, well-informed consumer to overcome inertia, cut the cord in his home television habits, and move to OTT?

Just how many months — no, years — does it take for a logical, clear-headed, money-conscious, well-informed consumer to overcome inertia, cut the cord in his home television habits, and move to OTT?

I’ll let you know when it happens.

Yes, I’m one of those Americans — a dwindling number, but we’re still a force. Being charged a couple hundred dollars every month with our stripped-down, no add-ons triple-play (phone/TV/Internet) packages, because there’s no cable competition (in my building) and Spectrum knows it. We don’t even have access to Verizon or AT&T, or RCN, either. Such a dilemma.

Thank goodness for Mom and Dad. They don’t pay my bills. But they donated to me their Roku device when they upgraded their own TV sets. They also added me to their Netflix account as a gift, and now my viewing habits — finally — are changing. Scheduled television via cable at home is clearly on the wane. On linear TV via cable, I watch local news and live sports, mostly — and even some of that I can stream.

As stuck as I am in my ways … I’m about to go bold. And do the deed. Snip! (Well, we’ll see.)

In the meantime, advanced television is clearly on the rise.

“Ad spend on over-the-top (OTT) streaming video will increase 20% this year to $2.6 billion, according to a Winterberry Group study of U.S. ad spend data,” reports eMarketer. “Despite OTT’s surge, it’s still small — compared with the $69.2 billion that Winterberry Group estimates U.S. advertisers will spend on linear TV. For some advertisers, measurement challenges prevent them from investing more in OTT.”

A recent Direct Marketing Club of New York program included a panel of experts who parsed some of the challenges. With OTT, you have two worlds colliding — traditional television and traditional digital — and the user (me) has an expectation that online video, if I’m to watch it as programming, had best carry the quality of linear television. I even want my online video advertisements — hey, it’s ad-financed content on many platforms — to carry the quality of a TV ad, rather than a GIF. Still, I’m open to new ad formats here — I’m starting to enjoy 6-second ads, thanks to digital training. And I’m actively searching and browsing, often on a second device concurrently, some of it prompted by content and ads.

We Need Industry Standards …

What metrics matter to whom? Audience reach and eyeballs may coo the traditional TV media buyer (and seller), who simply wants those same or similar metrics digitally. And that may be fine for CMOs who live and breathe “passive” awareness, but addressable television’s real prize is data: user data, dwell time — and demographics — that shed light on a brand’s customers, one device or cross-device, and one view or continued view (start viewing a program on one device, and finish viewing on another) at a time. Here, “active” engagement metrics matter, such as clickthroughs, conversions, and attribution. These data drive the algorithms that target and tailor the advertising.

And remember the Big Data “ouch” when mobile, social, and local users flooded the market? Same goes here: “Data is overabundant, non-standardized, and non-harmonious,” said one panelist. We need to codify, standardize, and become screen-agnostic in our reporting. Certainly, people expect viewing on a TV to be different than viewing on a smartphone. Marketers need to know device use metrics to see how ad delivery may need to differ. Yet the user metrics do need to be agnostic — audience and engagement metrics need to be settled upon for the marketplace to trust, verify, and grow. That’s because in OTT and Advanced Television, “data is the most important ROI.”

I didn’t have to finish my blog at any particular time today — thanks to TV on demand, anywhere. Oh wait a minute, I gotta shut my laptop: the season finale of “RuPaul’s Drag Race” starts in 10 minutes, and I’ve been looking forward to it for two weeks! Inertia, indeed.

Consumer Engagement, But Not Yet Marriage

How many times have we been asked (or asked ourselves) to come up with a valuation of a minute of a prospect’s time and attention, AKA consumer engagement? Almost all advertising is bought and sold using some version of the metric (cost per person, mostly expressed as CPM) and yet no one seems to have nailed an equation that can reliably be used as a baseline.

How many times have we been asked (or asked ourselves) to come up with a valuation of a minute of a prospect’s time and attention, AKA consumer engagement? Almost all advertising is bought and sold using some version of the metric (cost per person, mostly expressed as CPM) and yet no one seems to have nailed an equation that can reliably be used as a baseline.

It’s not that marketers haven’t tried. The most recent expression was reported in Media Daily News at the end of July. Advertisers and agency executives were researched to determine what they “considered” (perhaps better described as their “best guesses”) on the per-minute value of engaged consumer attention and they came up with $1.81. They even produced a bar graph to add verisimilitude.

consumer engagement chart
Credit: Peter J. Rosenwald

This didn’t impress one skeptical reader who commented wryly: “With a sample of 300 people AND no hard guidelines as to how anyone in the survey determined ‘value’ other than for a very narrowly-defined universe, this is just cocktail party fodder.”

Even after a couple of martinis, it would be hard to derive much value from this yardstick of consumer attention. As so-called “opt-in” and “rewarded” advertising models — which let the prospect have some free content before “opting-in” through a paywall or some other device to more content — are becoming increasingly fashionable, it is not surprising that marketers are trying to put some metrics in place to value them.

This illuminates the fact that in today’s multimedia marketplace the “value” of a minute or some other measure of someone’s time, and perhaps even more importantly, attention, depends on a basket of variables that will be unique to each prospect or cluster of prospects. If we can discover which ones are critical to the purchasing process and at what point they influence the customer journey, we may have the beginning of metrics which will intelligently inform our marketing actions. The question is how we get there and the answer remains elusive.

First we need to know what we mean by “engaged consumer”? We all have lots of experience with commercial messages (Wendy’s “Where’s the beef,” for example) which can be described as highly “engaging,” because the creative brilliance attracts the attention of viewers. But that attention has no value whatever for say, vegetarians.

How much the marketer would be willing to pay for an engaged customer, someone who has demonstrated interest in the marketed category and hopefully has the resources to purchase, is more to the point? The Lamborghini dealer should be willing to pay quite a bit more for that engaged minute than the corner taco vendor.

In a September column addressing marketing metrics and suggesting that we stop chasing our tails, I tried to put a figure on the real cost of reaching the target audience for an advertiser like Pampers. Using a $25 CPM cost of a TV spot reaching only women and, after eliminating all women who were neither in the last trimester of pregnancy nor had children under two years old, I came up with a ballpark figure of $208 per thousand. In fact, with a normal average viewing frequency of five times, capturing the engagement of each one of those thousand women for 30 seconds should be worth about $1 ((208*5)/1000), twice that for 60 seconds of attention, not far off of that $1.81 guess.

But will the “engagement” lead to a committed relationship, a marriage if you will, of consumer and brand? Certainly, if the prospect can opt-in or be rewarded with truly relevant and valuable content by clicking to visit the advertiser’s website, and the website can elevate interest to purchase, and the product satisfies and stimulates repeat purchase, the investment in getting that initial 60 seconds of attention will have a quantifiable value.

But putting a figure on that value is as likely to be correct as predicting the length and quality of the marriage.

As a friend of mine says, instead of trying to figure it all out in advance, just start dating.

No, B2B Media Doesn’t Have an Ethics Problem

It broke my heart when I read the recent blog post “B2B Media, The Ethics Virus & The Pursuit of Consumer-Grade Experiences,” which argued the majority of B2B/trade publishers have a problem of selling out editorial integrity to advertisers. In the piece, Publishing Executive editor-in-chief Denis Wilson wrote, “If you think your organization is immune (from editorial integrity issues), I’d wager you’re a minority or just wrong.”

It broke my heart when I read the recent blog post “B2B Media, The Ethics Virus & The Pursuit of Consumer-Grade Experiences,” which argued the majority of B2B/trade publishers have a problem of selling out editorial integrity to advertisers. In the piece, Publishing Executive editor-in-chief Denis Wilson wrote, “If you think your organization is immune (from editorial integrity issues), I’d wager you’re a minority or just wrong.” Also, that “B2B media has an especially nefarious legacy of playing fast and loose with the journalistic craft.”

I may have taken the post personally, having been a B2B publisher on and off for 40 years. I never sold a word and, must admit, I have no memory of thinking my competition did either. I do not suggest all B2B publishers are beyond reproach when it comes to bending to advertiser pressure. I do say the vast majority do not do so, nor do they have a culture of selling out.

When I came up in the business, there were storied trade publishers like McGraw Hill, Chilton, Gralla, Penton, CMP and many others. There were fat magazines with solid content that industries relied upon, such as Variety, Automotive Week, Billboard, American Banker and Aviation Week. I used to read Crain publications like the old Ad Age with as much enjoyment as consumer books. Women’s Wear Daily, famously known as WWD, had such quality journalism it gained a significant consumer readership.

In the post, Wilson talks about how B2B publishers today are finally learning “quality original content drives audience engagement and monetization.” Those publishers mentioned support my view the industry was built on quality content.

The ASBPE Focus on Ethics

Ethics was indeed discussed at the ASBPE conference. As Wilson points out, that is to the credit of the journalists in attendance. I heard everything Wilson did, but recognized that those few stories of difficult advertiser pressure were presented not as the norm. The example of one publisher giving into ad pressure was worthy of discussion, because that publication had never crossed a similar line before.

We heard about when the rigid wall between church and state required an editor to stop dating an advertising sales assistant or be fired. Another example described when a feature story was written about an industry problem for which a big client happened to advertise a solution. The advertiser relationship had not driven the story. The fact the publisher had to pull their hair out over whether to run the ad opposite the story opener speaks to their integrity. They were worried that although ad and story had no causal relationship, it would simply look like they did. In my opinion they made the correct decision to run the ad opposite the opener, that it was helpful to readers and no lines were crossed.

Yet Wilson and I reached different conclusions as to why ethics was discussed so prominently. To me, it was a reflection of a profession that thinks that is how important editorial ethics are, not to cure endemic problems.

Think back to all the articles Publishing Executive and other media publications ran when native advertising first became a thing. Despite most of us having published advertorials in the past, there was overwhelming pushback that native adverting crossed a line. It was not just theoretical venting. Truly, a majority of B2B publishers during those days told me their staffs would not let them entertain the notion of native. The knee-jerk resistance speaks to a culture not in the habit of doing things for advertisers.

Editorial Contributions

The article correctly acknowledged the importance of editorial contributions from industry experts who happen to work for advertisers or potential advertisers. I’ve been an editor and publisher my entire career, but today as I write for Publishing Executive I am a vendor. My instincts have me steer clear of writing about what I sell and Wilson and I discuss anything I fear may be too close to the line. That has worked out well.

In his post, Wilson attributes industry contributors to low budgets. No doubt that is a huge driver; but there is more to it. I was associate publisher of a trade book called Modern Horsebreeding in the ’80s. Guess who knew much more than all of our writers? The veterinarians and pharmaceutical companies. We did occasionally run articles by their experts — there were no such thing as blogs — though never once tied them to advertising.

When I published a magazine and then website about RFID technology, we were thrilled to get some deeply knowledgeable pieces from industry experts. Sadly, most were not advertisers. But this was terrific content and simply had nothing to do with advertising. If a prospective advertiser really liked that we ran their engineer’s helpful information, great. We’ll take all the good vibes we can get with prospective advertisers. Conversely, when an advertiser complained that we didn’t run their content, we would invite them to suggest a topic. We provided written guidelines they must adhere to, advertiser or non-advertiser. We edited each piece and were glad to consult as they worked on it. I believe approaches like these and those of PubExec are the norm.

The Opposite Reality

From what I have seen, advertiser pressure is something ad salesmen feel more than it being a routine reality. I personally sold ads for decades and ran ad sales teams. Ad salespeople are always hopeful the magazine runs articles plugging clients; it’s in the blood. They sometimes whine to editors about running more copy on their clients. In my experience, editors mostly ignore them with thinly veiled pity.

One speaker at ASBPE said advertisers were purposely overlooked and not written about to avoid the appearance of corruption. As Wilson wrote, “the sticky politics of accepting vendor contributions wasn’t worth the trouble.” In my experience, this is far and away the bigger secret we all carry: advertisers tend to get screwed. We heard how one company mandated that editors not use advertisers as sources for stories. I have personally seen multiple situations where editors avoid calling executives at advertiser companies for quotes out of fear it would look like the publication was kissing advertiser butt.

Big advertisers are often the larger companies in any given industry. These same companies have the biggest budgets for research. These companies are often actually involved in many newsworthy issues and situations because of their commercial reach. It would be self-defeating to avoid tapping their knowledge; yet because of the fear of appearing unethical, I have seen this time and time again.

Advertisers, too, might surprise you. I will never forget at my RFID publication a news investigation that we ran on the cover slammed perhaps the largest company in the industry at that time. They were not advertisers and I thought, well, we’ll never see a dime from them. But it was an important, well-reported story. To the lasting credit of an SVP of Intermec, he told his ad department to place some cover ads in our new magazine. He felt the industry had to support quality journalism.

I repeat: Of course I have heard stories of pay-to-play. The few I’ve heard are memorable because they are rare, not pervasive. One former VP of editorial told me long ago he was made to run feature interviews with some advertisers. Again, that stood out in his mind because it was the opposite of everything else in his career.

I am not saying B2B publishers are ethical saints. Wilson made some excellent suggestions in his post on what editors should watch out for. However, I do believe the B2B publishing industry overall is not rife with virulent ethical lapses.

How to Negotiate a Risk-Sharing Marketing Contract

The marketing service company’s smooth and promising presentation assures me that hiring it will certainly grow my business. “Trust us,” they say, “We have a winning strategy and we’ll all celebrate the fantastic results.”

marketing negotiations
“Salary Negotiations,” Creative Commons license. | Credit: Flickr by MIke Kline

The marketing service company’s smooth and promising presentation assures me that hiring it will certainly grow my business. “Trust us,” they say, “We have a winning strategy and we’ll all celebrate the fantastic results.”

I want to believe them, but they come at a high price and we are not rolling in cash during these difficult and fast-changing times. If I were the potential client and they offered to minimize my front-end cost and share the risk of under-performance, I‘d find their proposal very attractive and credible. I’d feel comfortable sharing success with someone who is willing to share failure.

Entrepreneurs know that a strong component of commercial success depends upon getting their businesses noticed and engaging customers to buy their products or service. They also know or should know that this marketing and advertising task can consume substantial resources. If they can get their marketing partners to share this investment, through some form of split of the generated revenue, it can be a definite win-win. That’s why revenue-sharing and other forms of remuneration are becoming the new normal.

The historic 15 percent “commission” system was the basis for agency remuneration in the days of “Mad Men,” but tougher times have diminished the number of martinis and brought with them far more competitive systems of compensation. Now they are being asked — compelled, in some cases — to put their money where their mouths are: to mutual benefit. Some of the world’s most successful direct response copywriters have done this for years, and the winners have earned enormous sums from grateful clients who tried and tried, but were unable to beat the controls they created years ago.

Some years past, on a conference panel, I asked an advertising sales director of Globo TV (Brazil’s largest media company) what value he put on a 30-second commercial slot that Globo had failed to sell. Looking at me as if I were an escapee from a gringo nut house, he said it was obviously worth nothing. What, I then asked, if a potential advertiser were willing to guarantee to pay? Say, 35 percent of the normal price for any unsold advertising spots, a standard procedure in the U.S.? He emphatically said he would never even consider it. If he still has a job, it is unlikely he would take that view today, when Google is gorging itself on 80 percent of the fall in broadcast and print advertising.

To make revenue share work, the agency, consultancy or service provider needs to carefully do its homework. This “communicator” will first need to be able to assess the real cost of the time of the professionals who will be involved in the project.

Peter Rosenwald's Chart 1

Using a matrix like this, which sets various ranges of monthly compensation, assumes 1,800 (or some more appropriate number) of working hours per year, it’s easy to see the “Actual Cost Per Hour” for each category of professional. But we all know that 100 percent of the hours will not be billable. (Sometimes, there really isn’t much to do but chat on Facebook.) So we make a guesstimate of the percentage (here, 60 percent) of billable hours and increase the “Cost Rate” accordingly.

And of course we want to make a profit. (That’s the name of the game, isn’t it?) So to establish a minimum “Bill Rate,” we gross up the “Cost Rate” accordingly. And finally, we can round it up if we wish.

The professional responsible for pricing this project only has to input the number of professionals in each category and the estimated number of hours each will have to spend on the project and ZAP, the professional costs (including the percentage for hours not billable and the profit-loaded (29.3 percent) quotation amount for the professionals) is ready and waiting.

Collecting the other costs for the project, data, media, etc., (with or without mark-ups depending on policy and competitive pressure) and then adding them to the professional costs provides the essential baseline for a revenue share negotiation. You know your real costs and you know these costs with profit and the amount you would quote as a fixed fee. The old wise adage says; Never gamble more than you can afford to lose. That wisdom should inform what “revenue share” you are prepared to accept.

Peter Rosenwald's Chart 2

But that’s only from the communicator’s side.

What does the “marketer” have to know? And more importantly, what does he need to share with the communicator?

The answer is simply how much he can afford to get an “open,” a clickthrough, a lead or a final sale. Which of these he wants from the communicator depends upon his briefing of the communicator and whether the marketer knows his historic metrics for the journey from advertising through to the final sale. Keeping it simple, let’s assume that the marketer knows his numbers and has an expectation of selling 500 units at $850 each. He can afford it, but is unlikely to want to pay 10 percent of $85 per unit sold.

Peter Rosenwald's Chart 3

Because the communicator knows that to make his profit objective, he needs $26,125 or an alternative revenue share and must have a minimum of $19,592 to break even, he is well prepared to enter into a revenue-share negotiation.

Let’s look at it this way.

The communicator’s leverage for negotiation is the spread between his cost $19,592 and his quotation amount $26,125. To make its quotation amount, the communicator needs just $52.25 per sale. To cover his cost, he only needs $39.18. If the communicator receives $52.25 per sale, he only needs 375 sales to recover his costs. If the actual sales number is above 500, say, 550, the communicator will receive his full quotation amount plus 50 times $52.25, or an additional $2,612.

The question for the communicator is how much to ask for? Sixty percent of the $85 allowable would give $51 per sale — just short of the $52.25 needed to make the quotation amount at 500 sales: 50 percent would be $42.50. Not bad. Looked at from the marketer’s side, with no up-front cost, sharing the $85 allowable on a more or less equal basis should seem fair.

Peter Rosenwald's Chart 4

I’d argue for $50 per sale as a good compromise, but each negotiation is different and each person will have to define his own limits. Hopefully, the use of these tools and this methodology will help.

Peter Rosenwald's Final

Programmatic Advertising Is Running Amok

Having spent many years in the direct marketing business, I’m usually amused by examples of target marketing gone awry. My personal favorite happened when I was on Amazon purchasing a cell phone bracket for my bicycle.

Target stock imageHaving spent many years in the direct marketing business, I’m usually amused by examples of target marketing gone awry. My personal favorite happened when I was on Amazon purchasing a cell phone bracket for my bicycle. Amazon’s algorithm generated this suggestion:

Amazon wants Chuck to be a pirateNow I don’t know how frequently the pirate boots and the tri-corner hat are bought together with the cell phone mount, but I have to say that the combination was tempting for a few minutes.

The fact remains that direct marketing is not perfect. Many years ago, I made a donation to my alma mater, Rutgers College. The student on the phone asked if I wanted to designate my gift to a particular part of the University, and when I said, “No,” he said, “Well I’m in the Glee Club and we could sure use the money. Will you designate to the Glee Club?”

“Sure,” I said.

For decades now, I’ve been getting mail addressed, “Dear Glee Club Alumnus.” One day, I will attend a Glee Club reunion, certain that many people will remember my contribution to the tenor section.

While these harmless examples of imprecision are humorous, there’s nothing funny about the current exodus of major advertisers from the Google ad network and YouTube. Programmatic ad placement is a boon to target marketing, but like most direct marketing, it’s not perfect.

Major advertisers are in a tizzy over how to control where their ads appear … and the Google ad network is scrambling to get control over placement, as they should be. Advertisers need to protect their brands from appearing in an environment that can harm them.

Just a few examples: Ads for IHOP, Cinnamon Toast Crunch, “The Lego Batman Movie,” “Chips” and others have recently popped up among nude videos from everyday users or X-rated posts from porn-star influencers. Ad Age 3/6/17

A Nordstrom ad for Beyonce’s Ivy Park clothing line appeared on Breitbart next to this headline: NYTimes 3/26/17

Chuck's take on Nordstrom appearing on BreitbartHere’s a great attempt at an explanation for this juxtaposition:

“What we do is, we match ads and the content, but because we source the ads from everywhere, every once in a while somebody gets underneath the algorithm and they put in something that doesn’t match.  We’ve had to tighten our policies and actually increase our manual review time and so I think we’re going to be okay,” Schmidt told the FOX Business Network’s Maria Bartiromo. Fox News 3/23/17

Appearing next to hate speech is particularly problematic for brands:

Google-displayed ads for Macy’s and the genetics company 23andMe appeared on the website My Posting Career, which describes itself as a “white privilege zone,” next to a notice saying the site would offer a referral bonus for each member related to Adolf Hitler. Washington Post 3/24/17

The Wall Street Journal reported Coca-Cola, PepsiCo Inc., Wal-Mart Stores Inc. and Dish Network Corp. suspended spending on all Google advertising, except targeted search ads. Starbucks Corp. and General Motors Co. said they were pulling their ads from YouTube. FX Networks, part of 21st Century Fox Inc., said it was suspending all advertising spending on Google, including search ads and YouTube … Wal-Mart said: “The content with which we are being associated is appalling and completely against our company values.”
Ads for Coca-Cola, Starbucks, Toyota Motor Corp., Dish Network, Berkshire Hathaway Inc.’s Geico unit and Google’s own YouTube Red subscription service appeared on racist videos with the slur “n–” in the title. Wall Street Journal 3/24/17

And as difficult as it is for the ad networks to control, brands have their own challenges trying to protect themselves from undesirable placements. Different departments running different campaigns with different agencies cause ads to appear on corporate blacklisted sites. BMW of North America has encountered that issue because its marketing plan does not extend to dealerships. While the company does not buy ads on Breitbart, Phil DiIanni, a spokesman, noted that “dealerships are independent businesses and decide for themselves on their local advertising.” NYTimes 3/26/17

Clearly our technology’s ability to target has outstripped our ability to control it. And while it remains to be seen what controls will be put in place, it’s likely that, as always, target marketing won’t be perfect.

A Night With the Olympics Advertisers

The Olympics are the marketing event of the moment. I’ve certainly watched my share of the sporting events, but I hadn’t yet sat down and focused just on the ads going on in the show. So last night, I decided to focus on the most interesting part of these games: the commercials!

The Olympics are the marketing event of the moment. I’ve certainly watched my share of the sporting events, but I hadn’t yet sat down and focused just on the ads going on in the show. So last night, with Katie Ledecky and Michael Phelps swimming for medals (including one of Phelps’s biggest races), and the U.S. Women’s Gymnastics going for the team gold, I decided to focus on the most interesting part of these games: the Olympics commercials!

One thing that really jumped out to me was how much the commercials continued the themes of the Olympics: Inspiration, hard work, preparation, precision, performance, rewards. Especially inspiration.

And at the same time, I was surprised by what I didn’t see: Couch potatoes.

I’m a sports fan. I watch a lot of sports in general — and I basically list football as my religious affiliation. I’m used to my sports coming with a heavy dose of junk food, beer and soda commercials, many of them playing to my urge to relax, stuff my face and watch the game.

ChesterCheetahThere was nary a Cheeto to be seen during the Olympics! Hershey is a named sponsor, but there were no candy bars being munched between the events. Even the Reese’s Cup ad was active and inspiring.

In fact, these commercials made me feel downright lazy (even though I was working on this blog post throughout it).

Coming into the games, NBC Olympics CMO John Miller was criticized for saying, “The people who watch the Olympics are not particularly sports fans. More women watch the Games than men, and for the women, they’re less interested in the result and more interested in the journey.”

While the criticism is justified in the broader context, watching the commercials sheds some light on where he was coming from from the point of view of marketing the Olympics.

These commercials clearly weren’t targeting sports fans. They were targeting people who tuned in to be inspired. And I think a lot of them hit the mark.

A quick word on calls to action: I expected to look for these, but as the commercials rolled out, I found I wasn’t catching many of them. Many of the car commercials ended with strong CTAs, especially BMW’s, but for the most part the commercials pushed a hashtag, or didn’t even attempt a next-step push. Given the inspirational tone, I think that makes sense. This night was more about branding and relationship building.

Here’s what I saw last night.

Lead-In Olympics Commercials

  1. BMW Olympic sponsorship
  2. Polo by Ralph Lauren Olympic athletes spot: Olympians identifying themselves, talking about overcoming obstacles.
  3. GMC precision commercial: “The Precision of Professional Grade.”
  4. Hillary Clinton Campaign Ad: “How do we make the economy work for everyone?” Emphasized charging companies that move overseas an exit tax. (A little ironic for the iconic international games, perhaps.)
  5. Toyota Corolla: Middle age couple, wife sees girls “dancing” in the next car and asks why he never takes her dancing anymore. Turns out the girls were freaking out over a bee. (Mental note: Corolla not bee proof!)

Thoughts: Cars, premium clothes and the front runner for president. Wealthy, white and, if I may say it, female-leaning ads.

The Olympic coverage starts with intros, context and story set-up. The kind of thing Miller was talking about.

Olympics Commercial Break 1

  1. Chobani: #NoBadStuff. US Women’s soccer commercial with the message, “Don’t listen to them [your naysayers], listen to you.”
  2. Tylenol PM: “We give you a better night, give you a better you.”
  3. Coca Cola: Soft cover of Queen’s “Under Pressure” with an Olympics/people-are-awesome type of theme.
  4. Bridgestone Tires: Gymnasts moving along the road in 2×2 formation as a metaphor for tires. Puncture-proof tires. Worldwide Olympic partner.
  5. Pop Tarts: Elect the candidates “Crazy Good” commercial.
  6. BMW i3 smartcar: Aimed at hip, city dwellers. “Once the fun starts, it never stops.”

I didn’t time them, but the commercials seemed really short: Flash a few images, say the catch phrase, move on.

First Sport: Gymnastics – GOAT?

https://twitter.com/alex_abads/status/763000344339161088?ref_src=twsrc%5Etfw

More Gymnastics. Introducing the team, Brent Musberger calls Simone Biles The Greatest of All Time. He does it as an after thought, like it’s been said so much it’s boring. Like they say it about Muhammad Ali.

I’ve never heard that during an Olympics for a first time Olympian. I’m not disagreeing at all, but it’s weird from a sports broadcasting point of view. In years, announcers were reluctant to anoint someone the greatest ever. No one would say it until some time had past and it was clearly unassailable.

Again, I don’t disagree (as you’ll see), but it feels odd hearing it said as she’s going through her first Olympics. Feels like part of the marketing message, not the reporting.

Olympics Commercials Break 2

  1. Visa commercial showing athletes going to Rio and highlighting all their payment products.
  2. The Voice TV show preview.
  3. Apple iPad Pro: “What else can it do?” I didn’t know it was Apple until the reveal at the end.
  4. NBC Network “Watch the RIO Olympics … starting August 5” commercial. Running on August 9. Kinda weird, almost certainly an ad spot they weren’t able to sell. Olympic rap in it was pretty sweet.

More Gymnastics

Olympics Commercial Break 3

Chevrolet presents a closer look at Rio, spotlighting the Taijuka rainforest in Rio. Very short, commercial length, but providing interesting content nonetheless.

  1. Chevy KBB awards commercial follows that story. (It’s been in heavy rotation for a while.)
  2. Hellman’s Mayonnaise commercial showing how to cook a “strange” sandwich. Tagline: “What’s Your #Strangewich?” Successfully made me want that sandwich! Focus was on the making, not the eating, though. Like the “Tasty” viral recipe videos.
  3. Nike: Chris Mosier 1st transgender “duathlete” to make the men’s national team. Totally about him going for it, even though he never knew it was going to work out. Barely mentions Nike, but he’s wearing Nike gear. Classic Nike ad.
  4. Reese’s Cups: Lindsy Von “Do summer like a winter Olympian” by eating a Reese’s Cup. Brilliant. Now I want a sandwich and a Reese’s Cup!
  5. New Movie: “Arrival.” Amy Adams sci fi movie. Looks right up my alley; I want to see it. Neither my wife or I had ever heard of it before, and we do follow those pop culture channels.

Gymnastics.

Olympics Commercial Break 4

  1. NBC Sports Olympic Gold map showing kids how to find their path to the gold today. Interesting. I’ve never seen that before. Definitely aimed at parents and kids watching the Olympics.
  2. Disney’s Pete’s Dragon movie commercial. Fandango plug in it.
  3. “The Good Place” TV Show commercial.
  4. Repeat of the Toyota Corolla ad.
  5. BB&T branding commercial: Trust-focused. Welcomes clients of National Penn.
  6. BMW X1 commercial with sports fans going to a game. Most typical sports commercial I’ve seen yet.

The commercials have definitely gotten longer. Maybe the time is cheaper now, but I think they’re also taking into account that people are settled in and watching. You can take your time a bit more, they’re paying attention to the message.

More Gymnastics

Olympics Commercial Break 5

  1. Samsung Galaxy Note 7 commercial w/ Christoff Waltz: About how Americans multitask, work super hard, “Do more before 8 AM than the rest of the world does all day.” (We don’t, but still.) At the end, he realizes the hard work pays off and moves into a big house in the American Dream.
  2. Dodge Ram “Guts Glory Ram” commercial: Good poem, “Idols are all around in the unseen corners of the world. No monuments are built in their honor, or mountains adorned with their face, because heroes aren’t driven by fame. They’re carved from courage.”
  3. Commercial for upcoming NBC TV show “This Is Us.”

More Gymnastics. Simone Biles is carrying more muscle mass than I’ve ever seen on a gymnast. Aside from her shorter stature, she’s like the Serena Williams of gymnastics: Bigger, stronger, worked harder, better. Looks like she could jump out of the gym if she wanted to. Still feels weird for someone to be the GOAT during their first Olympics, but I can see it. Or maybe a princess?

Olympics Commercial Break 6

  1. Exxon Mobile ad talking about how a non-car company works so hard to make cars better. Good branding.
  2. “Timeless” TV show commercial coming this fall. Been seeing that one a lot.
  3. Dunkin Donuts Cold Brew coffee commercial. First fast food commercial I’ve seen, and it’s a fast food commercial about being on the run. Definitely targeting go-getters tonight.
  4. Repeat of the Polo commercial.
  5. Inspira Health Network commercial. One call, one person, 1-800-InSpira. Longer commercial again, really laid out the whole idea (which is important since Inspira has to convey the concept of a “healthcare concierge”).
  6. Dunkin Donuts commercial. Theme is working hard, long days and late nights toward athletic success. Olympics themed, “America Runs on Duncan.”
  7. DICK’S Sporting Goods, official sporting goods sponsor of Team USA. Another commercial with a good “poem,” of sorts:  “There are trace amounts of gold in every human body.” “The highest concentration is in the heart.” “Only some of us have the strength to dig it out.” I’m moved.

Olympics now sponsored by Nationwide.

More Gymnastics.

Why Contextual Advertising Is Still Hard

Contextualized advertising is serving the right message to the right person at the right time. Standing in the way of that goal are several hurdles. Among them: user personalization, segmentation and a deluge of data

Contextualized advertising is serving the right message to the right person at the right time. Standing in the way of that goal are several hurdles. Among them: user personalization, segmentation and a deluge of data.

Mobile personalization can create additional complexities that we don’t generally see on the PC side of the world. This can be both a challenge and an opportunity, but adds some new dimensions to how we work to connect with consumers.

This difficulty in leveraging user behaviors makes micro-segmentation more difficult. This is where real value from contextualized ads is found. As close to one-to-one as you can make an ad, the more value it has for the recipient. Having segments that are too large can decrease the overall impact of the ads for a given consumer.

Advertisers can improved their segmentation by sifting through omnichannel data sets. While there’s great progress in this area, attributing online, real world and mobile actions to an end result remains elusive to some of the industry.

New Tools Making Contextual Advertising Easier
New data tools, optimization techniques and leveraging exchanges are all emerging to make contextual advertising easier.

Algorithms that can recognize and contextualize mixed data sets are paving the way for more relevant contextual ads. You can target based on location (information that’s automatically provided by a mobile device), behavior and by predetermined personalization rules. So, someone is now seen as a specific category of user based on what they do, where they are and other relevant data. Messages can be personalized based on these characteristics to get the right ad in front of the right person.

Once a user can be tied to a mobile number, this opens up a world of contextual opportunities. These IDs can be closely tied to segment and location, and passed along to real-time-bidding (RTB) exchanges. Here, brands and advertisers can serve a contextualized ad to the correct mere moments after he/she makes a trigger action. Where as before, this data would be aggregated and analyzed monthly or weekly, we are getting close to the point of real time analysis and optimization.

The Impact of Future Technology and Contextual Ads
The “Holy Grail” of contextual advertising is connecting relevant ads that are optimized for a single individual. Technology is heading in that direction.

Wearables will feed advertisers never before accessible biometrics that could indicate when someone needs a sandwich or bottle of water before the person realizes it.

Interactive TVs and cross-screen attribution will pull together all parts of a person’s day. Ambient qualities, like time of day or weather, will become data points that advertisers can assess and use to target consumers.

As these technologies, combined with faster servers, make valuable contextual advertising an everyday occurrence, we will see a shift in the advertiser/consumer relationship. It will become more symbiotic. Users will be able to decide with what and whom they want to interact. Those advertisers who can use data to provide users the greatest value will prosper. Those who can’t make sense of data will suffer as consumers take their business elsewhere with a quick click on an iPhone.