advertising – latoga labs

ad:tech less tech, more ad

April 18, 2008 Leave a Comment

Earlier this week I dropped in on ad:tech in San Francisco. ad:tech is an interactive advertising and technology conference and exhibition that happens in different cities around the world through out the year.. This past week it was happening in San Francisco and I borrowed a badge from a friend to take a look at the exhibit floor.

This conference was focused around online advertising. The most surprising, maybe I should say annoying, thing to me was the overload of all the advertising. Unfortunately, what you encountered the most was the overloaded, poor messaging that is typical of technology trade shows. I walked thru the entire exhibit floor and all the vendors and booths blended together after about 15 seconds. I was annoyed by the large percentage of vendor’s booths who failed the 15 second test…after 15 seconds of reading their signage, I didn’t understand what they provided or why I should care.

Of all the vendors exhibiting at the show, there were only two that really stood out from the crowd: Casale Media and Hydra. And the reason they stood out was their booth design. Both utilized the concept of empty space to draw you into them. A concept that you would expect more companies who would attend an advertising based trade show to understand.

I almost hate to say it, but I think ad:tech needs more ad people and less tech people.

Unfortunately, there were a number of great sessions on social media, advertising, and the building of brands in the digital age that I wish I could have attended. Maybe next year…

Super Bowl Advertising Correlation

February 1, 2008 1 Comment

I read an interesting article in today’s Wall Street Journal that talked about the correlation between advertising in the Super Bowl and stock performance: Super Bowl Sponsor’s Stocks Tend to Outplay S&P 500 in Week Following Big Game (login required). Researchers from the University of Wisconsin found a correlation between the companies that advertise during the Super Bowl and those same companies stock prices during the week after the big game. Those companies that ran ads during the bowl outperformed the S&P 500 during the week following the game in 10 of the past 12 years.

Does this mean that the $2.7 million for a 30 second spot is worth the money? For some, it might. As long as you have discretionary marketing budget to spend on that advertising, you can capture a lot of eye balls during the game. The one time during the year when you don’t want to Tivo the game to miss the commercials.

This reminded me of the 2000 Super Bowl. At the time, I was working for a company that produced software to manage the web traffic on the largest websites of the day. One of our new customers was a startup called OurBeginnings.com (yes, during that era when companies name was also their web address). They spent a large portion of their funding to do a Super Bowl advertising launch for their online invitation and card printing service (think wedding invitations and the name starts to make sense).

The week leading up to the game was a scramble to get their new data center and infrastructure installed, tested, and operational. During the game, we had a staff of people watching the site from different parts of the country, myself included. It was quite amazing to watch their logo come up during the 15 minute pre-game session they sponsored and then watch the traffic to their website go up. The most impressive was the 30 second ad spot they bought; as soon as it finished playing and as fast as I could switch my eyes from the TV screen to my laptop screen, I literally watched the website traffic go up and to the right. We were monitoring the site in real-time and I witnessed the spike as it happened.

The image to the right is a screen capture that I took of the statistics the next morning. It is quite amazing how the Super Bowl ads can have such an immediate impact on the viewers. The large spike is right after the 30 second ad ran and you can see that the volume of visitors is considerably above average for the few hours after that spike (click the image for a larger view).

So, I’m not surprised that those Super Bowl ads were impacting people still for a week after the game. Just think about how many times you have talked about the best ads from the game during that week? I’m sure there are a lot of marketing executives who love to point to this study to justify the investment.

(Oh, about OurBeginnings…just like Pets.com, Ameriquest, and others that have advertised during the Bowl and then disappeared…they went out of business about a year later, after having passed up a $40M acquisition offer. 🙂 )

Update: I was reminded by my friend Richard Lewis, who was the CTO of ActiveIngredients which was behind OurBeginnings, that they sponsored a 30 minute segment of the pre-game show, ran 5 ads during the Super Bowl (the first one aired is what generated that huge spike), and were offered $45M for the company.

The Future of Newspapers

January 28, 2008 Leave a Comment

Close on the heels of my side box comments about NewCorp’s influence being felt at the WSJ.com, I listened to an interesting discussion on KQED’s Forum about the Future of Newspapers on Friday. It was an interesting discussion that included Phil Bronstein, the departing editor of the San Francisco Chronicle.

The discussion about how newspapers make money and can continue to make money today was quite interesting. Especially when you extend the same concepts to online services and this mentality of free advertising supported services. My biggest complained about my recent visit to WSJ.com was that there were all these animated advertisements that started to jump out at me. It was very distracting and frustrating, I felt like I had to work extra hard just to find and to read the article I went to the WSJ.com to read.

We find ourselves in an interesting catch-22. Ideally, you create a product or service that others find valuable and willing to pay for. With advertising, you create a product or service that can attract a lot of eyeballs and then sell advertising to support it. Who cares if the product or service is hard to use or requires you to spend more time on it than you should to accomplish a task…that’s more eye balls, more clicks, more advertising revenue.

I have thought that mixing the internet advertising technology with the newspaper would be the best way to support that business. Have customer configured ala-cart services and advertise within those services that helps pay for these services. Customers get to read what they want and the advertising helps pay for it. But, how do you allocate the advertising resources out to pay for the content? that could lead to popular content thriving while the meaningful, but less popular, content being starved.

So then, how do you pay for the services that our society as a whole really needs? How do newspapers pay for the in depth reporting on social topics that are important (even if us readers don’t realize it yet)? Is it enough to have the popular content pay for the not so popular content?

This is a constant battle that most founders and CEOs of web2.0 like startups are dealing with every day…pay for service or advertising paid service. The parallels continue…