ChasNote

Storage-maker Iomega’s current banners feature flames and copy that reads “Burn, Baby. Burn!” The algorithms of some contextual ad network served the banner alongside the news of a child dying in a house fire. (From AdRants.)

Erick Schonfeld at TechCrunch has a piece on one of my favorite topics, embarrassing moments in contextual advertising. These snafus are generally best at news sites, like this example from CNN (or this one), where news coverage of illegal steroid use in professional sports pulls along with it ads for sketchy purveyors of said steroids.

Today appears to be Racy Content Day at ChasNote. Here’s a fun image from the contextual-advertising-gone-wrong file, Circuit City ads running above the “Theyre All Whores” headline on the What Would Tyler Durden Do? site:

(Thanks, Shankman!)

According to Nielsen (see NY Times), banner ads for Mitt Romney’s presidential candidate ran 515,000 times on Gay.com. AOL’s Advertising.com, the ad network that accidentally put ads for the anti-gay candidate on the pro-gay (and anti-Romney) site, says the number of impressions was only 32,000.

Romney’s ads also ran alongside pornographic scenes of Harry Potter and Hermione Granger on fiction site FanFiction.net. McCain ads ran on liberal-leaning Huffington Post, Guliani ads ran on progressive DailyKos, Obama ads ran on Amazon alongside a book deemed by Jewish groups to be anti-Semitic.

“Part of the issue seems to be that political strategists came into the campaign season unschooled in the challenges of Internet advertising, and Web advertising sales outlets are not necessarily aware of the unique sensitivities of each presidential campaign.”

I believe the first part — political strategists may not know how online ad networks work. But the second? Oh come on. The problem isn’t that the people at “Web advertising sales outlets” like Advertising.com aren’t politically savvy enough to understand the “unique sensitives” of their advertisers. It’s that they don’t have those people on staff; the ads are targeted and served by computer algorithms that don’t know how to worry about sensitivities.

Thanks to my colleague Lester Lee for adding these images to my file on contextually-targeted ads gone bad. First, Google-served text ads for Days Inn alongside a CNN article on lawsuits against Days Inn for alleged price gouging following a recent hurricane.

Then newspaper-industry ads pitching the merits of newspaper ads over online — since newspapers are “a destination not a distraction” — alongside a Mediapost headline calling the revenue picture for newspapers “deeply depressing, ad business shifting to online.”

Oops.

Last Friday at Butler Shine’s Influx Ideas conference, Jonah Bloom presented his take on the future of advertising. One point in particular resonated for me (among many, many interesting points): A generation ago, there was no such thing as an industry serving our personal storage needs. In 2006, storing the stuff we don’t use is a $23 billion business in the US alone.

There are two ways to make sense of this development. One, an extrapolation of Barbara Ehrenreich’s argument in Nickel and Dimed, would be that housing costs have inflated more quickly than the rest of the stuff that goes in the house — so we all have more stuff than house to keep it in. Or two, Bloom’s perspective, is that our material needs in this country are more than fulfilled, we literally have more goods than we need or use. (I’m guessing both would agree that the non-material needs of the US population — say affordable health care or good public schools — are yet a long way from fulfillment for most.)

To an audience of marketers and agency folks, Bloom’s message was pointed. Successful brands need to move beyond pitching their products and services as goods to fulfill existing customer needs — the rational, direct-response side of marketing. They need to move into the emotional arena of creating “wants” that their brands fulfill. The desire, say, to be seen as hip or fashionable or smart or innovative. In West Coast media circles, this demand-creation concept is often dismissed as irrational, and the people who encourage it (brand marketing departments, agency execs, publishers and, of course, New Yorkers) as the “friction” that technology should eliminate.

I wonder what Starbucks, with their $4 lattes, and Porsche, with VW parts hiding beneath a premium brand and price tag, would say to a future of advertising based on rational thinking?

PaidContent summarizes a new research report from Thomas Weisel analyst Gordon Hodge. The headline is that Time Inc Digital (the websites associated with Time Inc magazines such as People and Fortune) will generate an estimated $175 million in revenues next year.

But this is the line that caught my attention:

“even though traffic to magazine sites is only a small portion of the total traffic at Time Warner including AOL, the effective CPM rates are considerably higher, given the targeting and brand association of the magazine content, the strong national advertiser relationships in the magazine ad sales group and the overall quality of the Time Inc. brands, says the report.”

What could be more obvious, you ask? Well, it’s not obvious to everyone selling ads on the internet. While venture capital and media entrepreneurs invest heavily in next-generation ad-serving algorithms and ad-network approaches to marketing customers, we might all benefit from a close study of our print-publishing colleagues. I’m not going to defend the printed magazine format or the traditional (and restrictive) approach to intellectual property. But if relationships built on a deep understanding of customer needs and a focus on brands over demographics drives “considerably higher” rates for Time Warner, maybe the same approach will benefit those of us on the outside.

Today’s NYT reports the launch of a new ad-supported, free Internet phone service from San Jose-based Pudding Media. The company says it will work like Gmail, where an algorithm (not humans) will listen to phone conversations and deliver relevant ads based the topics being discussed. Coverage by the Times and others suggest that fear of privacy violations is the primary obstacle to the company’s success. I think the bigger challenge will come from the advertisers.

Given that algorithms from established engineering powerhouses like Google still have a tough time understanding context in natural conversation (Google is great at understanding intent when you type a keyword into a searchbox, but much less so when they need to guess intent based on words on the page of other sites, and the former generates click-through rates that are something like 17 times those for the latter, see ChasNote 3/17/07), and given that computers are better at identifying typed words over spoken words, I just can’t imagine this will work well enough to deliver a satisfactory experience for advertisers. Especially since Pudding Media will initially sell ad space on a cost-per-action basis.

Archetype Media President Joe Marchese’s latest MediaPost column summarizes his experience at our Conversational Marketing Summit last week. He hones in on two Conversational Marketing best practices:

“the one area where there is actually consensus among conversational marketing practitioners is the rule that marketers must first evaluate how they can add value to individual or communities before beginning a campaign….”

“One of the other best practices echoed at the CMsummit is that you, as a marketer, should be prepared to finish the conversations you start. Meaning, if you launch a conversational marketing initiative, you are accepting that the other parties in the conversation have a say in where the conversation goes and when it ends. Ending conversations abruptly in the real world will get you disinvited to dinner parties; ending conversations abruptly in conversational marketing can be significantly more damaging….”

Thanks for coming, Joe!

According to CNET:

“Marissa Mayer, Google’s vice president of search product and user experience, gave her keynote presentation…. [and said] Google is making moves towards cost-per-action as a more ideal auction-based pricing model, but she also pointed out that it’s a long way away.”

That’s bad news for two major constituencies. One, websites that are part of Google’s publisher network. The current pay-per-click structure already short-changes the value of their audiences and traffic; cost-per-action / -transaction goes a step further in reducing revenues per thousand pageviews. Two, brand advertisers, who look to the leading internet media firm to help make the web a better platform for building awareness and creating demand. This news seems to indicate Google remains more comfortable in the transactional arena of direct response.