ChasNote

Last week I came across another case of the advertising robots looking dumb relative to their human counterparts.

Not that I don’t love technology and dream about a future where contextual ad-serving algorithms will mature to a point that brand advertisers can trust them as much as direct marketers do today. But we ain’t there. The tech-driven targeting engines of today’s ad networks (I include Google’s AdSense in this list) continue to put their advertising customers in awkward situations when they deliver scale (zillions of impressions across thousands of sites) without solving for advertisers’ need for quality environments and context that goes beyond keyword matching.

Techdirt pointed me to an example of Wal-Mart running ads on anti-copyright site (and illegal entity, per the Swedish government) Pirate Bay. According to Variety, the Wal-Mart ads were placed by Targetpoint, “an Israeli online ad agency that serves ads to match targeted queries on the Web.” My colleague Justin Watt brought to my attention that Microsoft is running on the same site (Justinsomnia).

I’m guessing Microsoft is another client of Targetpoint’s, because there’s absolutely no way that Microsoft (or Wal-Mart) would knowingly spend money supporting Pirate Bay. In fact I’m pretty confident that neither would allow their brands to run on the site, even if the advertising were free.

In a post last August, I disagreed with Eric Schmidt’s quote that a targeted ad is better than a targeted salesperson (see ChasNote 8/24/06). On second thought, I actually agree. But I’m still waiting to meet one!

Ben Perry’s SearchInsider column yesterday ran under the headline, “Human Intervention Trumps Technology” (Mediapost). Coming from the paid search director at iProspect, that’s quite a statement!

“THIS MAY SOUND HERETICAL COMING from a guy in my line of work, but automated bidding tools are sometimes bad for your paid search campaign. Many folks at SEM firms–myself included–spend a great deal of time banging the drum about how much you can gain from using technology to bid, and how much efficiency can be gained from using a good bidding agent. However, experience has taught me that there are situations when a bidding agent simply isn’t the right tool for the job…. Because they use the past to predict the future, any unpredictable event may cause problems…. Sophisticated technology has its advantages, but having clever humans running it is what will allow you to make the most of your investment in paid search technology.”

From the WSJ:

“But now there’s a growing recognition among some record executives and performers that the people who are downloading illegally are frequently huge music fans and that marketing to them may be more desirable in the long run than suing or otherwise harassing them.Hence the alliance between Jay-Z and Coke. By inserting promotional material into the decoy files, and then planting those files prominently on file-sharing sites, record labels and other marketers can turn what is now an antipiracy tool into an advertising medium. ‘The concept here is making the peer-to-peer networks work for us,’ says Jay-Z’s attorney, Michael Guido. ‘While peer-to-peer users are stealing the intellectual property, they are also the active music audience,’ and ‘this technology allows us to market back to them.’”

It’s a funny logic: We still may sue them, but we admit they are our best customers.

Great column by David Berkowitz at MediaPost’s SearchInsider called “Google to PPC Branding: Drop Dead.” Even as Google makes moves that suggest it wants a piece of brand-advertising pie (the addition of site-specific graphical ads to AdSense, hiring the former president of Time Mag, etc.), it continues to show an aversion to advertising that attempts to pursuade (brand advertising) in favor of ads that fulfill on existing demand (direct response advertising). He cites Google’s own advice, published at the Inside Adwords blog:

“If your ad fully conveys your message without requiring the user to click through to your site, this could lower your overall quality score and in turn signal our system to not serve your ad.”

Advertisers should intentionally hold back information from their prospective customers unless they click to the advertiser’s site? Keep their value propositions a secret to all but those eager customers who click on their ads? Wow, that’s downright hostile to the idea of building awareness, not to mention annoying.

Further, Google has refined its algorithm to remove from results pages ads that don’t receive enough clicks. Here’s the penalty for those advertisers who disclose too much information in their ads!

“This could prevent top-ranked ads that appear most prominently from providing any potential branding value. Do ads in the top three positions (when there are three top positions) contribute to branding? Do they even play a subtle role, noticeable in aggregate, on sales? Do they give consumers a sense of confidence in the search results by showing a familiar brand there? Do they introduce consumers to new brands that the consumer hadn’t previously associated with that search query? Yahoo, in its collateral, reports extensively on how search marketing is one of the most effective ways of introducing consumers to new brands, with search being even more effective than word of mouth in some circumstances.”

Joe Marchese’s guest post at MediaPost explores the conflict between the search-ad networks’ desire to expand their market from CPC direct-response advertisers into the larger market of CPM-paying brand advertisers. What has made Google and the others successful to date, according to Joe, is “relevancy,” — delivering ads that match the content on the page so that readers experience the ads as content — not traditional “targeting.” But brand advertisers want targeting, they want to coax prospective buyers into considering their products before they start researching those products on their own. To get in front of that prospective Prius driver before he or she starts thinking about a new car, brand advertisers need to target audiences based on a demographic or psychographic profile.

“So what is the missing link between the brand advertiser’s need to increase reach online, television’s reach/ad value being increasingly compromised, and search ad networks’ desire to attract these brand advertisers’ online budgets? The link is a whole new system for determining relevancy of brand advertisements–a system that will create a market for brand advertisements and facilitate the rethinking of the advertising ecosystem, taking into account brand advertisement goals as well as the intentions of the ecosystem’s participants and their effects on a market for brand advertisements.”

At FM, we use a human-powered system to bring relevancy to targeted brand advertising campaigns. It works like this: Brand advertisers buy space on FM partner sites based on demographics, psychographics and content fit, and then — not always, but more and more often — those brand advertisers are inviting FM’s authors (or their readers) to shape the creative messages. The marketers target the ads; the media creators and consumers make those ads relevant.

Contextual ad exchanges continue to create awkward moments for advertisers, but at least they’re getting funny. Or sort of funny. Here’s an Apple ad — with “PC Man” featured in a wheelchair with broken limbs — that shows up on CNN Money next to an article on the recall of faulty Segway scooters. From Adrants.

Frisco, Texas-based Mediacart, “a shopping cart ad system that runs digital ads and promotions — via high-resolution video screens without audio” may be coming to a supermarket near you (AdAge).

“One of the company’s findings: 87% of the 150 shoppers surveyed said they would choose a retailer equipped with Mediacart over one without the carts. The reason: ‘They enabled them to get out of the store more quickly,’ Mr. Kramer said, because an on-screen navigation tool allowed them to find the aisles where, say, anchovies, ketchup or razors were stocked.”

I hope the embedded RFID tags that make these ad displays work can talk to ads placed on items like potato chips!

Techdirt has a funny (but apparently true) post about an ad sales exec who got himself in trouble for removing illegal road-side ads from private and public property. Maybe he crossed the line by calling the advertisers to tell them, and, in the process, sell them his own wares?

As reported at Donna Bogatin’s blog at ZDNet:

“Google believes it is in the best interests of all to displace ad sales execs with Google ads. For Google CEO Eric Schmidt, a ‘targeted ad’ is better than a ‘targeted sales person.’”

Granted, I’m biased. But disagree with two aspects of Schmidt’s comments. First, I still see a lot of evidence that the Google bots aren’t nearly as good as they promise at delivering advertising relevance (see ChasNote 8/12/06). Two, while paid search is certainly a boon to direct marketers, it’s still not delivering to publishers even half the revenues (in rates per thousand pageviews) as those old-fashioned targeted sales people. According to the CPM numbers included in the Sept 1 Business 2.0 cover story, teeny tiny Federated Media (my employer) — with its mere 3 targeted sales people on staff in Q2 — delivered $8 average CPMs for its network of blog sites. Gawker Media does about the same (between $8 and $10), while “CPM rates on Google AdSense and competing automated systems are estimated at anywhere from 50 cents to a few bucks.”

Fred at A VC worries that mainstream fears of privacy violations (think AOL’s recent disclosure of people’s search histories) run the risk of slowing better relevancy in advertising:

“But cookies and stored search queries are good things. They make it possible for web services to deliver relevancy in advertising, something no other media has been able to deliver efficiently and reliably.
The reality is that these targeting approaches, whether they be searched based, behavioral, contextual, or whatever is next, are giving us more relevant ads. Ads will be content if this continues. You’ll be planning a trip to mexico this winter and you’ll get ads for places to stay. You’ll be thinking about getting a new car and you’ll be getting images of all of your options when you check the weather in the morning.”

At least they’re in the very early stages of giving us more relevant ads. I bet that real improvements in relevancy targeting (some examples of the shortcomings today, ChasNote 8/12/06) will tilt the cost-benefit see-saw in favor of relevant ads and away from privacy fears. Let’s get there asap!