Sep 16, 2003
SUMMARY: If you work on the agency-side, or you're a client-side marketer trying to convince the powers-that-be to let you budget more for online ads, you may find this useful.
We asked Dan Springer who as Managing Director of Modem Media's San Francisco arm, has been helping clients such as Delta Air Lines, Michelin, Kraft, and Citibank since 1987, to tell us how he persuades offline brands to embrace online.
Online advertising budgets hover at a measly 3-4% of total media spend. But IAB studies show that the optimal amount of media money spent online might be 12-15% of total media budget.
How can the industry convince clients and CEOs to spend the "right" amount of money online?
We asked Dan Springer who as Managing Director of Modem Media's San Francisco arm, has been helping clients such as Delta Air Lines, Michelin, Kraft, and Citibank, figure out how to do interactive since 1987.
While you can't tell a client he's an offline Neanderthal, you shouldn't just wait passively for the client to figure out online on his own either. Here are Springer's top 5 tips for making clients happier with the idea of spending more online:
-> Tip #1. Score and survey visitors (don't just measure clicks)
Instead of following all visitors' click paths, Springer recommends you focus on metrics analysis to rate "qualified users" based on the activities a user does on a Web site.
For example, Michelin offers visitors to its site the opportunity to check out what tires fit their car and a dealer locator, as well as other tools. Then they track a visitor's activities and gives the visitor a score which determines how likely the consumer is to buy a tire (the qualified user rate).
They also do user intercepts to confirm the hypothesis about the qualified user rate to see if "the things we think are true are actually true."
A window pops up on the site, intercepting certain visitors and asking if they'd be willing to fill out a survey six weeks down the road. The survey asks if the consumer has gone out and bought the tires they were interested in.
"Of course," Springer notes, "we don't actually know if they bought the tire, we only know they say they've bought the tire."
Then Michelin uses this qualified visitor data to re-allocate marketing dollars to the programs which are driving the highest value visitors (for example, spending more money on certain media sites or different approaches for gaining email addresses); and to evaluate the ROI of each marketing program to determine which work best.
-> Tip #2. Avoid point-of-sale defection by giving consumers brand-related tools
"People might see a Michelin tire TV ad (the ones that show adorable babies floating safely in a car tire) and say, 'I love my children, I should buy that tire,'" Springer explains. "But then they go to the retailer who might say, 'Yeah, those are good, but you can get these for 10 dollars less and they're still good if you love your children.'"
Michelin combats that by getting consumers closer to the sale online.
Consumers can go to the Web site and learn, based on their
particular car, why that tire is so safe. They can also print out specs for the specific tire so they can bring it to the dealer.
"If they go to the dealer and say, 'here's what I want, I know why I want it, and Michelin sent me to you,' it's a whole lot harder for the retailer to push a different tire," says Springer.
-> Tip #3. Negotiate online ad buys based on response data
Don't base online media buys strictly on the demographics a site or network offers. "Use that information and do the metrics to decide if the ad really works. See how much business you got from it," Springer suggests.
Then, go back to the publisher's sales rep. Tell the rep how much your ad got you and, based on that, how much you're willing to pay. If they're not willing to work with you, go to a different publisher. (And if nobody agrees to what you're offering, Springer says, then you have a bad business model.)
-> Tip # 4. Don't try to evaluate online ads the same way offline media buys are chosen
Online marketers feel that they need to come up with reach and frequency measures, the same way TV ads are evaluated.
"I think that's a dangerous move," Springer says. "I think we shouldn't shy away from what makes interactive special."
You can tell an offline marketer that your banner has the same reach and frequency as a TV spot -- but they're not likely to go with the banner simply because you can offer the same metrics.
"Saying it's just like TV isn't going to help," he says. Show them how online is different, and ask them to give you a chance.
For example, he says, Modem Media told marketing executives at Hewlett-Packard that for half of HP's print ad budget Modem Media could generate twice the amount of leads. HP gave them the chance, and in actual fact Modem Media generated 20 times the leads.
"We like to sit around in our marketing meetings and whine that people don't demand metrics from TV, why do they demand it from us?" says Springer. "But the big part of the problem is we did it to ourselves by pushing it before it was ready."
-> Tip #5. Integrate online advertising with entire business plan
Integration should mean more than making sure that all channels look and sound the same.
"Don't just stop with advertising," says Springer. "Push it all the way to the sale. The Internet is not just an awareness medium, it's an interactive medium in the same way sales reps and call centers are."
Integrate it into the whole business model as a full business channel where you can "do the whole thing, soup to nuts," Springer says. "That's very different than, 'here's the budget, here's the campaign.'"