
Internet advertising will be relatively unscathed in the economic downturn - makimaki
http://www.economist.com/business/displaystory.cfm?story_id=12684861&fsrc=rss
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netcan
This is quite interesting.

On one hand, this article really gets it: 'above the line spending vs below
the line spending; objective cost-of-sale vs speculative cost of branding.'
From an investors' perspective, this will give you the picture. I agree with
the conclusions. I think that online advertising largely because of
google/adwords/google analytics, their competitors & the complex of supporting
technologies & services, mean that the base chunk of online ad spending is
much more robust then the average.

But on the other hand, the article seems to be written in the context & jargon
of the advertising world that doesn't get it _"awareness, consideration,
preference and loyalty"_ is part of the consumer behaviour concepts behind
traditional advertising selling 'ordinary products for ordinary people'-
washing powder, toilet paper & cars. It's really squeezed in here. Then they
mention hulu. That's dumb (IMO). Hulu is part of analog tv advertising. It
replicates the analogue environment enough to be able to take their customers
with them. I have no beef with this, but there is nothing the about.com,
facebook or even (i think) youtube can really learn from them.

The second thing is that the undertone seems to assume that big traditional
advertisers are the driving force behind everything. They were in tv-land
where there is only room for a few dozen advertisers that needed to reach
everyone & above all wanted to become 'your brand.' That has nothing to do
with online advertising. The revolution is that advertising is now in chunks
of whatever size you want. You can advertise a local auto repair shop on a
$1000 a year budget with approximately the same ROI as a as a big name
nationwide chain. That's the revolution. I'm sure coca-colas & Fords will
eventually take a big piece of this, their big companies. But it's not their
pie.

~~~
ig1
I disagree - I think the Economist is right about Hulu, Hulu generated
advertising money not becuase it's like analog tv, but rather because
advertisers want to associate their product with high-quality and appropriate
content.

There's lot of brands which only advertise on large reputable sites
(newspapers, etc.) rather than on banner networks for precisely that reason.

For a lot of companies their brands are one of their most valuble assets and
they don't want to risk them appearing alongside illegal/questionable/poor-
quality content.

No sane brand manager would touch something like youtube or justin.tv, the
suicide on justin.tv was horrific enough, imagine the reaction if it had been
overlayed with "Nike: Just do it". A few seconds of bad footage could wipe
billions off the value of a brand.

~~~
cfabbro
Do people really associate a brands reputation with the content of the site on
which they may be advertising? Internet cynicism aside, I honestly don't think
most people do because they understand how banner networks and keyword
advertising work.

Example: On reddit there was an article about a boy who ordered McDonald's and
ate it at the scene of the fatal accident he had caused. Later it was reported
he had fled police custody and on the news site that reported this, a
McDonald's commercial was featured prominently.

<http://i34.tinypic.com/20ifms7.jpg>

While seemingly inappropriate (and funny), it in no way reflects on the
McDonald's brand.

Even if the case was Justin.tv and Nike:Just do it, I think that most people
are sensible enough to see that it's just a case of coincidence.

Anyone who gets seriously offended or angry in these cases is most likely
trolling for attention or is completely clueless as to how advertising works
on the internet.

"wipe billions off the value of a brand"... really? come on!

~~~
ig1
"Do people really associate a brands reputation with the content of the site
on which they may be advertising?"

Probably. There's overwhelming evidence (in general; not web specific - but
I'm not aware of any research which shows it doesn't apply online) which shows
advertising context is critical in market positioning.

Have a look at the Tesco-Levi lawsuit from a few years ago, Levi a premium
jeans company sued Tesco a supermarket to prevent it selling Levi jeans,
because putting premium jeans alongside vegtables damaged the exclusivity of
the Levi brand.

While I appreciate the example is from a different context, I believe there's
no reason that the same principle don't apply online.

Another way of looking at it - think about the following scenario: Say a
consumer was looking at a porn site and it contained an advert for a dating
service (called A), and later on the consumer looked at their church's website
and it also had an advert for a dating service (called B). If you questioned
the consumer about which dating service was more "wholesome" I'm willing to
bet the consumer would pick B over A the vast majority of the time.

~~~
cfabbro
That's a pretty extreme case and wonderfully framed to back up your assertion,
but even it is kinda wrong IMHO.

Dating sites in particular tend to promote the values their clients hold. If
it's a dating site where "wholesome" is the clients primary value then
advertising on a porn website would be detrimental, however a company like
adultfriendfinder benefits greatly from advertising on porn websites.

What I assumed we were talking about was actual big brands like McDonald's or
Nike. They, unlike dating sites, tend not to be as dependent on their
customers moral values and so context isn't as important.

~~~
ig1
If you want a big company example look at what Burger King did to McDonalds in
the late-70s/early-80s, BK decided to position themself in the adult burger
market and move away from the childrens market. BK stopped running adverts
during childrens tv.

McD's own adverts carried on running in between kids shows, the context of the
ads (in contrast to those of BK) caused McD to seem like a childen's brand.
This allowed BK to steal a massive chunk of McD's market share.

McD's own advert harmed the McD brand purely because of context.

While there were clearly other factors at play here, the context in which
those adverts ran was a major contributing factor. You could see how the same
could apply today with regards to adverts appearing on children's websites,
etc.

~~~
cfabbro
That's true of traditional TV advertising, though I was under the apparently
mistaken idea that internet advertising was what we were discussing.

