Written by Mihai Dragan on Saturday, January 9th, 2010 ( 3 responses )
Tags: advertising, brands, interactive, interactive vs conventional, media, startups, website
The website as we know it, at least as a concept, is dying. It has been for the last 5-8 years and now its death is even closer. Let me explain.
A site on the web
If you think about the term it is composed of two words that explain what the concept represents pretty good. A place on the web. It was the perfect way to introduce the concept to the general public. People were already accustomed with the concept of “site”: be it a store, library, house – each of these were built upon a “site”. People would access this site using a address or, in the internet world, a URL.
As with physical address users would visit a certain (or more) sites, based upon their previous experience, friends recommendations and more. In the economic world brands got used to “kindly invite” (or not so kindly as some interactive advertising techniques show us) to the homepage and the user would browse around, consume content and hopefully come back.
The shift in user behavior
That was the case back in the day when the websites count reached numbers of, let’s say, tens or even hundreds of millions of pages. A lot you say. “A more recent study, which used Web searches in 75 different languages to sample the Web, determined that there were over 11.5 billion Web pages in the publicly indexable Web as of the end of January 2005″ states Wikipedia. And that, my friends, was 2005.
What is a user to do in such an environment. Browse? To hard. Visit the same websites? Extremely limiting.
The first big online brand to address this issue was Yahoo that started as a recommendation website founded by Jerry Yang and David Filo. For a short period they had a boom and people would relate to what Yahoo! as a helpful resource in the online jungle.
Things got bigger and bigger. The internet expanded and users needed even more. They needed answers, they needed something to guide them to what they were looking for. Thus Google started a long and successful journey that led to a multi-billion enterprise. Google helped by pinpointing exactly the website on was interested in. And people were thrilled.
Has the internet stopped there? Hell, no.
More and more information hit the interwebs. What was once a resource for mainly text and image documents had turned into the worlds biggest collection of data. Be it photos, documents, books, videos – the world started storing its information in the big reservoir that we call Internet.
So many options, so little time. What to choose?
Going back to basics
People relate to their closest human peers in times of doubt. Not even the mighty Google could replace a kind word or the warm advice a friend is able to offer.
But our friends were already there. People gathered in online social networks and interacted. They would recommend the things they liked asked for advice when needed.
It started with forums, continued with blogs, hit new heights in human interaction with social networks such as social networks and now we have Twitter, the global phenomenon that let people tell one another what are they doing (be it watching TV or fighting a dictatorial regime). Under 140 chars.
Follow the users
The fact is no one ever needed websites. They needed “stuff”. They were on the look for data, a nice gift to buy grandma on her 76th anniversary, a fun video to watch, the coolest hit to download. Never for a simple website.
Being focused on the industry of interactive advertising I will focus on brands and maybe offer good advice. Brands need to realize that their users and potential consumers don’t actually need another website. They need what they want. They want fast answers, they want brands to “follow” or “befriend” them, not the other way around. They have the options and they have the power to select.
Brands are not what they used to be. At this moment the vast majority of Brands are still the big Advertisers that still expect to spend money on big media advertisements and have consumers lining up to their store or website (notice I use the terms pretty close to one another. They are.).
This is not the way. Huge opportunities await those that will follow their users, build presence around their users and still maintain brand awareness and a coherent communication plan.
A short example and some advices
I reached Zynga Poker on Facebook. Played around a little bit on the Facebook app they’ve built. Downloaded the application on my iPhone and bought virtual upgrades with real money. Until today, I have never visited their website. Zynga is a startup that has revenues in the orders of tens of millions of dollars (and growing).
I will leave you with some advices I consider helpful:
- Think outside the website.
- Be present in the social media.
- Stop thinking advertising. Think relationships.
- Build mobile applications.
- Study your market. Close. Closer.
- Develop intelligent applications.
- Let people play with your brand.
- Cut the TV ad budget. Cut the radio and print ad budget. Move online.
- Let people find you on the search engines.
- Follow your consumers and let them follow you.
Written by Mihai Dragan on Tuesday, November 18th, 2008 ( 4 responses )
Tags: 2008 interactive trends, 2009 advertising predictions, communication groups, dentsu, havas, Interactive Advertising, interactive agencies, interactive agencies group, interactive communicaton, interactive vs conventional, interpublic, media convergence, omnicom, publicis, wpp
Unless you’ve been living under a rock in the last year, you have already heard about this thing called “The Financial Crisis”. I am also sure there was nothing too joyful about it.
So – what is this Financial Crisis and how are we, as interactive advertising people, affected or helped by the monster?
The Basics
First of all I will get into the basics of the Financial Crisis, nothing too complicated, just a simple “Financial Crisis 101″. Here goes:
a. The Recession is NOT the Apocalypse.
Although you may have heard some rumors regarding this, there is nothing spectacular about recession. It’s just part of the usual economic cycle.
You know when you get a lot of money, and spend it on useless stuff? You borrow some bucks from your friends, only to give them back at the next pay check. That’s exactly what happens with American economy. Only on a larger level.
b. So, are the recession and financial crisis the same thing?
Well, no. Financial crisis is the thing that happens when your friends stop giving you money because you didn’t pay them back the last time. Also – you don’t have a job and the money you make can barely give you a decent living.
That’s pretty much USA these days. The recession usually happens on a period of 10 years. The country needs some money in excess, borrows from other countries and than pays back in the next 10 years.
60 years have passed since the USA financial super-bubble started to inflate. Guess what … it went “Pop!”. The crisis has just began and it will affect a lot of people next year too.
c. Where can I hide?
The bad thing about this is that the whole world will “benefit” from it. Some will win and some will lose. In the bigger picture, you can look at the Crisis as the “wealth redistribution program”. Probably China and India (unlike the USA, they have a rising economic trend) will gain more and more influence. Probably the world will invest less in cars and more in green technology (we already see the rising demand for anything that is “green”, and it was predicted that green technology will outpace the Internet growth in 2008).
For what I am concerned I am sure the world will invest more into Interactive Advertising and less in Conventional Advertising, starting 2009. Which brings us to…
The Interactive Advertising Industry in 2009
Basically, if you want a safe place to keep your money until the times get better, look for an interactive agency that showed a profit in the last year and has a growing trend. Invest there.
What are the stats ?
I’ve put together some data to get the conversation started:
- Business to Business marketers will increase their Internet spending by 16% in 2009, compared to 6% in conventional advertising, according to eMarketer;
- Small and Medium business will increase their online buying activities by 40% due to lower costs and better services;
- Top 100 Advertisers moved 1 billion dollars to Internet from the conventional media (a huge 33% growth, as reported by AdAge);
- TV Spending is still the king but is loosing the war, with a 4.2% decrease to 66.9 billions;
- China is the country with the most Internet Users in the world (253 million users) and loves mobile (according to the Statistical Survey Report on the Internet Development in China, released in July 2008);
- Top ten UK Interactive Agencies have totaled a £ 304.608.921 turnover last year;
- 60% of the top 100 interactive agencies are independent.
These seemingly disparate data will lead us to some very interesting conclusions you might or might not agree on. Let’s see them.
We will have to learn Chinese
No self respective interactive agency won’t be able to compete in a globalized market without some .cn expertise. 253 million users (and rising) are not to be ignored. At the moment the things are not very clear there but I am sure the government will ease up on censoring the Internet, allowing it’s citizen to enjoy more virtual freedom, as well as a chance for Internet related jobs and services.
Many conventional agencies will die
It does sound a little rough but I am sure clients won’t allow too many unaccountable spendings in 2009 with the recession at its peak. Advertising spending will rise overall as the market will be more and more competitive but some agencies are just not trained for results.
The new interactive advertising
Interactive advertising has proved successful and many clients will need the same accountability in off line advertising as they have online. The theory of media convergence will prove itself in 2009. We will start seeing displays that record the users preference, billboards that target your mood and contextual TV advertising.
Global budgets handled by Interactive Agencies
Most interactive agencies are way more budget conscious than conventional ones. Clients love that and they might consider this move.
Conventional Agencies acquired by Interactive Agencies
Interactive agencies are now the Cinderellas of Advertising but the times are changing and I would bet on at least three huge take overs or mergers next year.
Huge advertising groups will start fading. At least one new Interactive Communication Group will rise.
The likes of WPP, Omnicom, Interpublic, Publicis, Dentsu and Havas will have big problems trying to hold their position in the new market, as capital is scarce, clients are ever demanding and the companies they run are inflexible. I sense that there will be at least one group with a interactive-based business philosophy that will rise to challenge the giants. Who will that be?
The world needs results in these times of economic struggle. Conventional has lost its spark and Interactive Advertising is getting better and better. These “new” (some are over 10 years old) agencies are growing at a faster rate anyone has predicted, just as the Internet does. The future holds many secrets but one thing I’m sure of: the interactive advertising is here to stay.
If you would have to place your bets, what would you bet on ?
Written by Mihai Dragan on Sunday, October 26th, 2008 ( Start discussion )
Tags: blogvertising, conventional media, interactive vs conventional, media spending, Online Media, viral marketing
The conventional advertising (TV, Radio, Outdoor etc.) is a strange beast for some of us who started their careers with interactive advertising.
For example an agency used to bill the client a certain cost keeping 15% and sending 85% to the media providers. Therefore, an agency was to get more by spending more of the client’s budget. What an incentive to increase spends.
The trend has changed in the last years with agencies charging also retainer fees to their clients. Better but not perfect.
Spend less, get more with online media
Online media lets you find new ways in managing client’s budget. How? By searching for creative ways to deliver the message. An agency should look for more effective ways than just add banners on high traffic websites.
Blogvertising is a great option with influential bloggers gaining more and more influence but it’s not enough. We also had great results with other social media tools and viral marketing campaigns. Pay per click campaigns delivers clear results. The options are practically endless and limited only by creativity and the will to search for new ways to reach targets.
All in all the financial crisis will drive clients to look for more efficient, budget-conscious agencies that care more for results than increasing media spending.
