Should I... Can I...

Have you ever pondered over striking the balance between what you can do and what you should do? Too many times in business we forget about the should and go straight for the can... and the greatest example of that is display advertising. No matter how targeted the ad can be, and Facebook is an example of allowing you to hyper-target your ad, you have to ask... is the ad an intrusion or part of the experience? Ads are at a premium on health search sites like OrganizedWisdom because the ad is extremely relevant to the consumer desire; a solution to their current malady. Ads are ignored on sites like Philly.com because the ads are totally irrelevant to the content on the page. Ads are ignored on Facebook because the ad is an interruption to the user experience rather than an integral part of it. We are trained to ignore the sidelines because that is where the ads are. We have no attention span and no interest in looking around for information buried under ads or 10 pages of content... hint, stop worrying about page views and start focusing on user experience. The greatest example of not getting it is IPhone applications. Businesses and brands by the thousands are building applications because they have an outlet where they CAN reach consumers everywhere at anytime. Here is the problem, did anyone stop to ask if consumers really want your information at their fingertips? If so, will they pay for it or use it enough so that you can charge someone else to distribute complimentary content within your application? Most of the time the answer is no, they won't pay and they won't use it more than once a month if you are lucky. So why spend time and money building an app to get buried in the AppStore?... because you can. Every time a new way of reaching consumers comes out marketers drool over the numerous ways that they can now reach their target customers. Most advertisers don't take the time to develop a real business model... how they make money, how they drive adoption, what are the success metrics in terms of usage and revenues? They jump without thinking and it becomes yet another load of dung that they threw at the wall and hope it will stick. To all the brand and product managers I leave you with this simple example. Think Orbitz; when you search you get an ad to buy a plane ticket from an advertiser. The content that the consumer wants is the ad.

Undervaluing Mobile Advertising

I had a meeting with the CEO of a very successful digital event listings network. We were discussing mobile and for him it was an afterthought, a feature on his site. We went through the revenue model for a mobile company I am working with in the space and he thought that $20 cpm was way too high. I thought to myself, either he doesn't get it or he has been trained to think that "because it doesn't cost me much to serve the ad we should charge less". I worked in media planning for a while during a previous life and I didn't see any advertiser value logic to the pricing of inventory. Their decisions were based on "here is what the market is charging, this is what we need to make per year to hit our revenue objectives, we believe our media is worth more because of some unquantifiable value proposition and this is our total available inventory" Perhaps because I have been on the other side of the table I believe in identifying the response rate by industry that the media can provide for a standard package, tying that response rate to a conversion to purchase and average purchase value per customer and then creating pricing that will drive a reasonable ROI per advertiser, per industry. This will result in a range of prices across industries, but the pricing would be value based rather than one size fits all. This would reduce the advertiser churn rate, increase the average annual spend per advertiser and reduce internal cost of sales. The point to this tangent is that the price of advertising through any medium should not be based solely upon their respective operating costs. Advertising should be based upon the value, value being revenues, that can be provided to the advertiser. I can reach 1000 consumers within 5 blocks of a venue and send them a highly targeted message and offer to visit the venue while they are in the decision making process. If 1 customer shows up and redeems the offer the business makes a profit... Think this # is too high...It has been proven that intent and location-based advertising works at a rate 3 to 4 times that of web advertising. My concern is that mobile advertising will be priced at a minimum because it can be, when it should be priced based upon the return that it can provide to the advertiser.