Online advertising needs to represent more than added value

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Two online businesses, Vevo & Pandora, topped the latest Jack Myers Survey of Advertising Executives on Online Media Value and Sales Organization Performance.  Not only are they relative newcomers to the online advertising market, they unseated several of the country’s largest cross-platform media brands as the favorite sites among the New York City media community, according to Myers’ research.


So what is it that makes these sites more appealing to advertisers than the longstanding media brands they unseated? The rankings are based upon obtaining the highest scores in five evaluation categories:

• Sales Organization Quality & Customer Service;
• Clarity of Offer & Value;
• Personal Contact & Relationship;
• Safe Advertiser Environment; and
• Premium Content

While the Myers’ study reflects the opinion of agencies representing many of the country’s top advertisers, scoring well in these five areas is also critical for local radio and TV stations looking to generate sales from small- and medium-sized enterprises in their communities.  As noted in last month’s “Ideas Working Now -The Financial Manager’s perspective” column from MFM, research conducted by Borrell and Associates found that local businesses are looking to spend more of their ad dollars on online and mobile opportunities.  More importantly, they are looking for experts who can help them navigate their way through the maze of emerging opportunities, particularly with respect to social media advertising. The good news is that these local businesses are likely to turn to account reps they already know for help in mapping out their 2012 spending, according to the Borrell survey. 

If we examine the differences between online sites like Pandora and Vevo and sites maintained by national and local media brands, we can spot some of the differences that help to make them more appealing. Remember the old saying attributed to Jack Wanamaker, “I know that half of my advertising doesn’t work. The problem is, I don’t know which half”?  It reminds us that when it comes to advertising, as with any other investment, businesses are looking for the best return on each dollar they spend. 

Wanamaker’s quip resonates because there’s that sense that it’s possible to improve performance, the primary focus of the Myers’ research.  What is it about these newer online sites that creates the perception they are better performers?  As Mary Beth Garber, EVP of Radio Analysis and Insights for Katz Radio Group recently pointed out, more than 95% of the time spent listening to broadcast or online radio is to AM/FM radio station broadcasts, with the remaining 5% allocated between all digital radio listening, including sites like Pandora, so it isn’t about reach. 

A similar conclusion could be drawn concerning Vivo, a content channel hosted and streamed on YouTube featuring music from Universal Music Group and Sony Music Entertainment.  According to recent research from comScore, VEVO represented 57 million of the 42.6 billion videos viewed in the U.S. during the month of October. That would amount to a share of just .1% of all online videos.  As the Myers’ research indicates, the appeal of these sites isn’t about their market share; it’s about the clarity of what they are offering and the value advertisers are saying they received in exchange.

These findings provide strong evidence that local radio and TV ad packages can’t simply be cross-platform sales where the online or mobile portions represent added value for the money being spent to for on-air media placements.  In order for our businesses to garner the increasing share of advertising dollars that will be spent on online and mobile advertising over the next few years, we need to show results that are based upon more than our market share. When it comes to a truly integrated, cross-platform ad buy, something that an online-only site can’t offer, we need to demonstrate the “whole is greater than the sum of the parts.”

But to do this, we’ll need to show the contributions achieved by each component of the ad buy. This will help to provide the type of clarity that allows an advertiser to see how their online purchase would compare with alternative options for their online ad spend. 

This approach also requires empowering account reps with the knowledge and measurement tools they need to truly become valued advisers in crafting customized ad campaigns that can clearly and reliably identify the ROI for each of their clients.  If a local political campaign is looking at what they can accomplish via a targeted purchase on Pandora, local reps should be able to show not just how well they can offer the same results from an online buy, but how their solution can dramatically improve on that investment though broadcast ads that are designed to drive traffic from the targeted voter to the desired online and mobile destinations.

At MFM, we are focusing on educational programs that are designed to achieve these types of results for our members and the media industry as a whole. I hope you will share your successes with us as well as let us know how our industry experts can help you to improve the value provided to your advertisers and, as a result, the financial performance of your company.

Mary M. Collins (pictured above) is President & CEO of MFM – the Media Financial Management Association and its BCCA subsidiary, which provides credit reports and related services for ad-supported media businesses.