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Online Advertisers Spent 23% More in First Half 2011, But They Continue to Want Ads Targeted to Lower-Income Click-Happy Types

According to the latest from the IAB and PricewaterhouseCoopers,

Display-related advertising — which includes banner ads, rich media, digital video and sponsorships — totaled more than $5.5 billion in the first six months of 2011. Display increased 27.1 percent over the same period in 2010, substantially exceeding the previous year’s growth rate of 16 percent. Digital video once again commanded double-digit growth — up 42.1 percent over a year ago, and moved close to the $1 billion mark with $891 million in half year 2011 revenue.

Good news, right? The numbers do paint a rosy picture for “display advertising,” which is often considered the “brand advertising” side of digital. Just because the ad unit is graphical, though, doesn’t mean its intent is brand building. (More of my thoughts on the difference between “graphical ads” and “display advertising” here). When you break down the IAB / PwC data based on the contract structure — whether the advertiser is buying impressions (on a CPM basis) in order to affect brand metrics, or it’s buying clicks (on a CPC basis) to drive transactional or direct-response metrics — you get a different picture. David Kaplan at PaidContent explains it this way:

The latest figures for online ad spending looked pretty good for the first half of the year, but as the Interactive Advertising Bureau’s report shows, even though display is rising, the “premium” impression-based ads still have a long way to go to catch up to performance-based ads, which tend to be of the cheaper, “click here” variety.

This is troubling, and not just for publishers who prefer to get paid for every impression they give away to an advertiser. It’s also bad news for the advertisers. If, through the structure of the contracts they sign, they motivate publishers and ad networks to push ads to people more likely to click on them, they are incentivizing their partners to deliver their ads to end users who are less likely to have disposable income to buy their wares. Those click-happy types (Natural Born Clickers, as they are called in a series of Comscore / Starcom studies) — the 8% of internet users that are responsible for 85% of the clicks on display ads — aren’t the audience that most brands want to reach. They are more likely than the average internet user to make less than $40,000 and to visit gambling and get-a-job sites.

A bad, self-reinforcing cycle appears to be underway. Advertisers demand that publishers and ad nets sell them inventory on a per-click basis — because advertising on the internet doesn’t impact brand metrics among the upscale audience they’re targeting. Meanwhile, to make the economics of those CPC contracts work out, publishers and ad nets are forced to target the lower-income (perhaps unemployed) audience that is more likely to click on banners.

Federated Media’s FM Signal Chicago Recap

In his opening remarks FM’s @johnbattelle says mobile strategy is nothing if not paired with local, social and real-time strategies.

A few presentations later my boss, Luminate CEO Bob Lisbonne recommends you better start thinking about your image strategy too. I may be biased (hey, he signs my paychecks) but I think he’s on to something. Some stats he shared: 10% of the pictures ever taken were taken in the past 12 months (by my count this was the most tweeted/RT’d stat of the conference), roughly 40% of the pixel-space on the web is image content, and over in Facebook we’re uploading 70 billion photos a year. Yet images are still “black rectangles of pixels” to the search engines. According to a post on Google’s blog, among the ironies of computer science is:

We can write a computer program to beat the very best human chess players, but we can’t write a program to identify objects in a photo or understand a sentence with anywhere near the precision of even a child.

When you give users the opportunity to interact with images — let the mouse into an image to get relevant content or services — 20% are doing it.

Meanwhile Liz Ross at Mediabrands says the big cultural events, say Mad Men or Glee, are still created by TV. Digital can’t yet create media opportunities at scale.

Yet Old Spice launched its most recent campaign on YouTube. While the campaign’s creative began as a conventional TV spot — using YouTube as the launchpad was a practical decision, says P&G’s Charlie Chappell, since Old Spice couldn’t afford to run it on the Superbowl head-to-head with a rival product from Dove — it evolved into a social media phenonomenon. “I’m on a Horse” was followed by “Response,” where the handsome and funny star of the original spot created messages that directly addressed Twitter influencers and Twitter commoners, delivered via @Replies. The result: Within 3 days, 40 million people had watched various Old Spice videos on YouTube — that’s more people than watched Obama’s victory speech. P&G attributes a 27% boost in Old Spice sales to the campaign.

Before it was over, even Grover got into the act.

According to Vitrue’s Jenny Heinrich, though, digital advertising is still tremendous pain in the butt: The ease of buying TV means that trafficking and administration costs are 2% of the media investment. For digital it’s 26%. And digital isn’t just expensive on the front end, says Shopkick’s Cyriac Roeding, it’s still less efficient for retailers to point a customer to its online store (where conversion to sale ranges from sub 1% to low single digits) than to its physical location (nearly half the people who walk into a clothing or electronics store make a purchase).

Social media, though, is giving brands an opportunity to make friends for life with customers and new prospects, even as consumers are becoming less inclined to tune in to advertising. One of the first 10 accounts followed by a new Twitter user is a brand, says Manilla’s Jessica Insalaco. While nearly 80% Facebook members follow fewer than 10 brands, the fact that hundreds of millions of consumers are inviting brands into their newsfeeds at all is significant. We hate ads, but we’re willing to be friends with brands.


(Word associations by veteran agency exec Sean Finnegan.)

On Yahoo: Former head of sales at Yahoo Wenda Harris Millard says her old company has become obsessed with math (and chasing Google) and has lost touch with the art of the media business. Given that “many CEO candidates view Yahoo as a falling knife” they wouldn’t want to attempt to catch, Battelle asked Millard how they’re going to emerge from their funk. Pshaw, she said. Yahoo still has 680 million users, and plenty of senior execs love a challenge. “Look at me, I went to Martha Stewart when she got convicted.”

Videos of the full presentations are here.

Coke’s Pour It On Campaign Back in Rotation

When the CMO of Coke includes this anti-Coke PSA in her presentation at the 2011 IAB Leadership Meeting, you’d think every Coke agency — including small ones that work on regional co-op campaigns in partnership with groceries chains like Safeway — would know about it, and would avoid using materials from the original “Let It Pour” campaign in subsequent ads. Well, apparently not. This billboard is back in rotation in San Francisco.

Billboard at the corner of Valencia and 24th Streets.

Facebook’s 140 Billion Photos Represent 4% of Photos Ever Taken By Humans

“Ten percent of all the photos we have were taken in the past 12 months,” says Jonathan Good on the blog for 1000memories, a photo organizing and sharing site.

Digital cameras are now ubiquitous — it is estimated that 2.5 billion people in the world today have a digital camera[6]. If the average person snaps 150 photos this year that would be a staggering 375 billion photos. That might sound implausible but this year people will upload over 70 billion photos to Facebook, suggesting around 20% of all photos this year will end up there[7]. Already Facebook’s photo collection has a staggering 140 billion photos, that’s over 10,000 times larger than the Library of Congress…. In total we have now taken over 3.5 trillion photos.

Facebook’s 140 billion photos is 4% of the 3.5 trillion photos every taken by humans. In ten years, that number will be one in five (at least).

Luminate Makes Ad Age List of Top 10 Startups

Woo hoo! Thanks, Ad Age. From its 10 Startups to Watch report:

There are more than 3 trillion images on the web, Luminate execs like to say. And while the diversity of those images is enormous, there’s no straightforward way to identify and capitalize on the contents of those images. Enter Luminate. Launched as Pixazza three years ago by Jim Everingham, the company’s mission sounds simple: “To make images more interactive,” as Chief Revenue Officer Chas Edwards put it. But in practice, it’s anything but simple. Luminate uses a combination of image-recognition software and human research to tag products and attributes found within images across the internet.

Kantar Media Report on US Ad Spending, First Half 2011

Kantar Media’s report on US ad spending for the first half of 2011 (full infographic) shows the Q2 year-over-year investment up 2.8% over 2010, slower growth than in Q1, which was up 4.4% over last year. TV is still the biggest piece of the ad-spending pie, but growth is coming from national syndication (up 18.5%) and cable (up 11.8%), not the big networks (down 7.6%). Internet advertising added up to nearly $12 billion in the first half, with 57% coming from paid search. The five biggest spenders: Progressive, Verizon, Experian, GM and AT&T.

Viral, Bacterial Billboard Promotes Contagion

The promoters in charge of the Canadian release of Contagion (the movie) designed billboards that reveal the movie’s title over time — as fungus and bacteria grow in various moldy colors. Awesome. From Adverblog.

The Shelf-Life of a Tweet

This chart comes from the Bitly Blog, in a post on the half-life of a link posted to Twitter or Facebook. Half-life, in this case, means the point at which a shared link has received half of the clicks it will ever receive. The half-life of a link on Twitter is 2.8 hours, and for one shared on Facebook it’s 3.2 hours.

These numbers make sense, right? If you’re following a few hundred accounts, by the time you look at Twitter, Tweetdeck or HootSuite, Tweets published more than a few hours ago (or a few minutes ago, if you follow especially chatty types) have been pushed to that cobwebby, unvisited place on the Internet called Page 2. As Search Engine Land’s Danny Sullivan puts it:

On our @sengineland Twitter account, we tweet a story as soon as it’s posted. However, many of our Twitter followers might easily miss this, if they’re not online, busy and so on. That’s why we schedule a “second chance” tweet for most major stories to go out a few hours after they originally get tweeted.

An interesting data point from Bitly’s report, though, is that the half-life isn’t a whole lot longer when you share a link with a friend directly, via email or instant message. In that case it’s 3.4 hours. That’s 21% longer than the half-life of a Tweet, but in real numbers it says we’ve lost interest in a link sent directly from a friend only 36 minutes more slowly than a linked pushed out to everyone in Twitter. So maybe the shortness of link half-lives isn’t caused by social-media dynamics — we follow too many accounts, our friends blab too much, and thus we approach social newsfeeds in skim mode. Maybe it’s a broader internet thing: Whether you see a link in Facebook, or your mom sends you one by email, if it arrived to you before lunch, it’s old news by mid afternoon and not worth your time.

That’s good news for Twitter’s evolving ad strategy, which will make it easier for brands to achieve reach and (more importantly) frequency with their Promoted Tweets, but bad news for thoughtful publishers who expect you to wait until tomorrow morning for the analysis.

The Mean Men of Coffee Advertising

Shaun Clayton created this montage of TV-commercial husbands being jerks to their wives for serving bad coffee — or, more likely, serving coffee from a brand that didn’t pay for the commercial in which they star (via Boing Boing).