October 2008 - Features: Banner Appeal

Have you already done your research on Internet banner advertising? Is so, Part 2 of this two-part series can guide you through the next step: developing your media and creative strategy.

By Anthony Sziklai

Last month, I presented the basic principles and concepts behind Internet banner advertising, as well as options for where you might want to focus your online marketing efforts. In Part 2, other marketing experts weigh in with their best practices for developing your media and creative strategy.

The main deliverable of this exercise is the media plan, which outlines what you want to accomplish, how much you want to spend and the methods you intend to use. Specifically, you should include your goals and objectives, budget, target audience(s), the types of media and ad units you intend to use, the publishers you are interested in and the success metrics you are going to use to measure the effectiveness and return on investment (ROI) of your campaigns. It is generally a good idea to start allocating budget and defining audience delivery expectations by publisher, as this will help you when you start generating request for proposals (RFPs).

If you are a DRTV marketer and want to run a combined DRTV/banner mega-blitz campaign, an integrated media plan is essential. According to Sandy Schultz of Oldsmar, Fla.-based Ignite Media Solutions (formerly Advanced Interactive Sciences), “something important to consider in your overall media plan is that online media can help maintain high order volume throughout the entire week. While many traditional DRTV advertisers rely heavily on weekend airtime, the prime days for online marketing are typically Tuesday through Thursday.”

Nancy Duitch of Vertical Branding in Los Angeles agrees, adding that “a marketer has to determine their global strategy prior to any online marketing campaign. Since Vertical Branding’s goals are to build brand equity and drive retail sell through simultaneously, we utilize TV for reach and frequency, and the Internet for more targeted marketing to increase conversions and profitability.”

For Culver City, Calif.-based Alena Internet Corporation, it is all about developing an online strategy that can stand on its own. According to Joshua McCleary, “to be successful in the online media game, you need to develop a robust media plan and understand it inside out. Establish an aggressive buying and optimization strategy internally, and the willingness and ability to test without fear of initial loss. This is what has made Hydroderm the brand that it is today. We’ve sold over 5 million units of product utilizing this type of marketing approach.”

Once you or your agency has developed a media and creative strategy, you are ready to start sending out RFPs to the different publishers and ad networks that you want to advertise with. An RFP should contain your campaign goals and objectives, start date, duration, budget, target audience(s), audience delivery and share of voice expectations, the types of media and ad units you intend to use, tracking and reporting requirements and the proposal due date. If you have the information available, you may also include which specific placements you are interested in and the impressions, share of voice and rate that you want per placement.

Since many of the large publishers and ad networks don’t offer CPA, you need to let them know that you are running a large-scale direct response campaign that has to generate sales. Many of the large agencies will back your CPA or CPO goals into their CPM proposal to show you how their media will perform.

According to Jeff O’Connor of Digital Target Marketing in Merrillville, Ind., it is essential to know your baseline conversion metrics in advance. “Before evaluating any proposal, first take your CPO goal and plug in your average click-through rate and conversion rate to see what CPM you can afford. This should be your bid strike price. Assume your goal is a $20 CPO. If CPM = $1.50, CTR = .01 and Conversion =.01, for a $1,000 spend you would generate 6,666 clicks to the website and 66 orders with a CPO of $15.00,” he says.

As you start engaging publishers, remember that the mega-blitz requires big thinking and bold spending. Go after ad units, placements and targeting options that will generate maximum impact and high response rates. According to Schultz, “24-hour display ads on the home pages of the major portals and 24-hour roadblocks within the networks enable you to secure 100 percent share of voice and hundreds of millions of impressions in a 24-hour period. The 24-hour display ads and roadblocks also have a same day and residual effect on the performance of your search and incremental ad activity. Scheduling heavy network inventory in subsequent weeks of the display ad will also further the reach and the positive latency effects of the placement.”

Schultz also points out that “the challenges of the large display ads and roadblocks are often the high costs and associated spend commitments within the network. To get these kinds of placements the agency or company must have established relationships with the portal and associated networks. However, if you are able to afford the media and put together an offer and creative that allow you to back into your effective CPA, these ads can be huge drivers in revenue and the key component of any media plan.”

According to Johnny Mathis Jr., CEO of Livemercial Inc. in Valparaiso, Ind., “roadblocks are only one part of the equation. It is equally important to advertise across a range of endemic sites using more targeted placements. This includes advertising on sub sections within major portals (e.g., Yahoo! Health if you are selling a nutraceutical product). More planning and implementation-intensive than running a few 24-hour display ads or roadblocks, an endemic site blitz will often yield higher conversion rates and stick rates.”

Once you have narrowed down the different publishers’ proposals, you can start negotiating with them for more favorable pricing and terms. If you are working with an agency, you will probably have some leverage. But even if you are buying directly, you need to always assume that you can get concessions. As the old saying goes, you only get what you negotiate.

Following are some points to consider when negotiating with a publisher, ad network or agency:

Discounts – No matter what rate the other party gives you, always negotiate a deeper discount. First-time advertisers are often sold inventory at rates close to rate card, so know this going into the negotiation.

Impression guarantees – This is an important negotiating point that concerns the number of impressions that the publisher will guarantee for a given campaign. If the publisher fails to deliver the agreed upon impressions, you should get a refund or make-good. In addition to guarantees, you might also want to implement daily impression caps to minimize waste/cost.

Performance guarantees – If you have requested your CPA or CPO goals to be backed into a CPM proposal, make sure that you get a performance guarantee (e.g., a number of guaranteed sales). Some of the larger publishers will flat out refuse to give you this, but you may be able to get something for a direct response test.

Non-delivery and make-goods – As mentioned earlier, make sure you get terms for non-delivery of impressions. Publishers are constantly juggling multiple advertisers and trying to optimize their campaigns.
This can lead to inventory forecasting mistakes, pre-emption and under-delivery of impressions. A make-good is a credit or re-serving of impressions to make up for under-delivery. Make sure that your make-good impressions are at least twice the number of under-delivered impressions.

Free test or bonus impressions – Ask for a free direct response test or bonus impressions to sweeten the deal. While you might get laughed at by some sales reps, it never hurts to ask. Bonus impressions are often rewarded for large buys or loyalty over time. Make sure you negotiate bonus impressions for signing up, as well as for ongoing commitment levels.

SOV – Share of voice (SOV) is a metric that tells you the total percentage you have of an audience or category that you are targeting. Like impression guarantees, SOV is a key negotiating point. Make sure you are getting enough impressions or are using the right strategies (e.g., roadblocks) to totally dominate the audiences and time periods that you are targeting.

Frequency caps – Another key negotiating point, especially for direct response, is frequency capping. Make sure you limit the frequency of your ads to reduce waste and banner overexposure.

Payment terms – Typical payment terms are net 30, but you may be able to get more favorable terms. Your chances are better once you have established yourself as a mega-blitz high-roller.

Get out terms – Make sure you negotiate favorable get out (i.e., exit) terms, especially if you are new to this game and not sure how your campaign will perform. You can get 24 to 48 hours if you negotiate well. Note that many publishers have strict cancellation terms that require 30-day advance written notice.

According to Ken Osborn, CEO of Liquid Focus in Bridgeport, Conn., “it is extremely important to negotiate short-out clauses. If you can spread out your buy over a longer flight period, arrange for an even disbursement of the ad dollars (daily caps) and negotiate a short-out clause, you will greatly limit your risk. If a buy isn’t paying out and you’ve set things up properly, your million-dollar buy was limited to a few hundred dollars of risk.”

Renewal terms – It is often wise to negotiate renewal terms, especially if you are confident about a campaign and want to lock in rates. Publishers often raise rates when there is high demand, so you need to think ahead (e.g., is there a political campaign on the horizon) and negotiate while you have the advantage.

Exclusivity – Most publishers won’t give you absolute category exclusivity, but once again it never hurts to ask. The bottom line is that you don’t want competing advertisements on the same page as your ads.
If you are buying 24-hour large display ads and roadblocks, you probably won’t encounter this problem.

Indemnification clauses – This is standard boilerplate material for most advertising contracts. It is a good habit to read and understand each indemnification clause to make sure there are no hidden gotchas.

Reporting and analysis – Make sure that you will be receiving detailed reporting and analysis of your campaigns. This includes placement-level performance analysis.

Ad network transparency – When dealing with ad networks, one of the major issues you will encounter is transparency into how individual sub networks and sites are performing. Make sure that you request this information in order to optimize your campaigns and eliminate waste.

One of the most important aspects of banner advertising is the banner content itself. While you are finalizing your media plan and sending out RFPs, you should start the process of developing your creative. If you are working with an agency, odds are that they will have an internal creative team who can help you develop your banners. If you are going it alone, it is a good idea to contract a design house or graphic artist who has experience with direct response campaigns. Unlike branding or brand response campaigns, direct response campaigns require creative that not only grabs people’s attention, but holds it. In a world where people are endlessly bombarded with advertising messages, this point can’t be emphasized enough.

According to Grant Gordon of Infomercial.tv in Venice, Calif., “your creative must be so effective as to shift the consumer’s focus for a short time, and interesting enough to encourage them to take action. Some brand advertisers have developed incredibly clever ways to engage users (National Geographic and Land Rover are two great examples). While not necessarily suited for direct response, these brand campaigns will help you develop an eye for creative that is impactful and memorable.”

Examples of creative best practices for direct response include animation to show how a product works; obvious call-to-action text and buttons; and creative that is tailored to site content for better targeting. Always develop multiple versions of creative for testing and optimization, and make sure you adhere to IAB standards and publisher specifications to avoid unnecessary problems later on.

After you have finished negotiating with the publishers and are ready with your creative, you can begin executing your campaign. Start by filling out, signing and faxing the necessary insertion orders. Once you have done this, you need to send copies of your creative to each publisher for processing and approval, which may take a few days. The person in charge of this process is your ad trafficker, who will also need to make sure your ads are implemented on an ad server with the correct click-through links and third-party redirect tags. This information is often sent to publishers as a written set of instructions, but sometimes can be set up directly via a web interface. If you have your own internal ad server (as some savvy marketers do), you can implement your ads and optimize/re-target as needed. This provides for much more flexibility and control.

Finally, though this article is not about website design, it should be noted that landing page/microsite design is a key consideration in banner campaigns. According to Digital Target Marketing’s O’Connor, “having three to five microsites is not unheard of for a banner mega-blitz. Contextually targeted banners reach people further along in the purchasing process, so their microsites should be narrowly focused. Conversely, a run of network placement may need to go towards a microsite that has many demographic ranges and promotion focuses to convert the sale.”

According to Livemercial’s Mathis, “a common mistake is forgetting that the success of an online direct response campaign depends as much on the backend as it does on the front. The creative must be powerful enough to drive someone to click on the banner, but if it takes them to a landing page that can’t convince them to stick around and buy the advertised product, then there really isn’t any point in launching the campaign in the first place. Integrating banner ads with microsites is the ideal combination because it lets consumers complete their purchase with two clicks-once on the banner ad and once more to submit their order. If you’re asking them to do more than that, you risk abandonment.”

After implementation, you immediately begin the fine-tuning or optimization phase of your campaign. Optimizing your banner creative is an essential part of this process. While you can use focus groups to provide feedback on your banners, you really need to run media to determine which creative elements or calls to action work best. Before testing, make sure you produce multiple versions of your creative.

Subtle differences in an ad, such as one person’s face versus another, can have a big impact on click-throughs and conversions. Once you have done this, run a test and start tracking which ads perform and which don’t. Creative testing is a systematic process that measures direct response lift from one ad or set of ads to another. It is something that you should constantly do.

According to Schultz, “having the flexibility to test and change multiple ad creative and landing pages in real time, throughout the day is essential when you are a mega-blitz advertiser. It is critical for success.”

Another creative consideration is the number of different ads you are going to cycle to reduce what is called “banner burnout.” High-frequency campaigns can be very effective, but they need to be managed with a sensitivity to how often users see the same ad. Too much exposure and you can actually drive down (versus lift) click-throughs and conversions.

According to Liquid Focus’ Osborn, “it can’t be stressed enough how important it is to make several creative ad units and properly rotate them. Just because you like one ad doesn’t mean that it will perform. Let the consumers vote with their actions. That will tell you what is working and what isn’t. You can learn a lot from your ads using different messages, colors and other factors. You may find that the product itself is the main attraction, or that Susan Lucci pulls more, or that a certain offer or premium works best.”

In terms of optimizing banner placements and targeting, you need to constantly evaluate how you are doing at the impression-level and tweak as you go. This is not unlike DRTV, where it is common practice to weed out non-productive stations or dayparts. To help with this process, some publishers offer what is called “yield optimization.” This is where the publisher’s ad server attempts to identify which impressions are working and automatically shift more creative to those impressions to maximize response yield. This can be a very powerful tool, especially if you are in test mode, or have numerous criteria.

As you optimize, you will often need to re-negotiate with the publishers and ad networks to get them to cancel buys or change impression, placement, rotation and other attributes of a campaign. Both cancellations and change requests typically require written communication.

According to Schultz, “generally the post-buy negotiation will include re-negotiating rates for placements that are close to the target CPA while also re-allocating spends from non-performing positions to the top performing placements, or towards testing additional targeting. In many cases you will want to request the publishers and ad networks to pause a campaign while you work with them on re-allocating the inventory.”

An essential aspect of online advertising is campaign performance analysis. If you are running a mega-blitz, you need to keep your finger on the pulse of all of your campaign flights and placements. You can’t leave it to your agency, publishers or ad networks to interpret how you are doing. You need to get your head into the data.

Most agencies and large publishers will give you online reporting tools for validating campaign effectiveness. Impression-level reporting and total transparency is key, especially if you are working with ad networks. As a direct response marketer, you should also get post-impression reporting, including CPA, average order value, stick rate and lifetime value-type metrics.

Schultz says that “an important consideration is also in how you evaluate the overall success of your campaign. With a mega-blitz there will always be components that drive more cost-effective orders than others. When committing to an online marketing strategy, you will need to be open to evaluating your success on the overall CPA of all online marketing initiatives during a select period vs. each item individually.”

Many DRTV marketers will read this article and draw the conclusion that they should add banner advertising to their media quiver. If they are doing search engine pay-per-click or performance-based affiliate marketing, their impulse will be to do a few small banner tests.

A word to the wise: if you test with the intention of opening the flood gates and running large-scale campaigns, you might make banner advertising work for you. If you dabble, you will definitely fail. Much of the negative press relating to direct response banner advertising comes from small, half-hearted buys that didn’t convert. If you want to reach the lean-forwarders and multi-taskers, you have to think big, buy big and mega-blitz.

In many ways, it all comes down to budget and resources. As Steve Howard of Howard-Boscher observes, “marketers with limited online budgets are probably better off putting their dollars into more accountable media such as affiliate marketing or new media, such as viral advertising and ad widgets. Banners only work for those who have the budget, time and resources to carefully craft a robust campaign and manage it with continual optimization and measurement.”
The Internet banner mega-blitz is a mass marketing tool for serious mass marketers. It is not cheap, but it can generate DRTV-scale results if done properly.
Anthony Sziklai is president of Moulton Logistics Management in Van Nuys, Calif. He can be reached via e-mail at [email protected]. Part 1 of this two-part series can be found in the Archives section at www.electronicretailermag.com.

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