On Display and Conversational Marketing
From the outside, it appears as if there are two sides to the FM business. One is what we call Conversational Marketing (CM). These are complicated, high-touch, highly-integrated social media executions that involve many moving parts between FM, our publishing partners, the brand, its agency, and the audience. The other side of our business is what is often called “display advertising” – where we sell traditional “ads” placed next to the the great content and communities created by our small number of partners. (Did you know we have, conservatively, more than 24mm uniques in the US, and nearly 45mm worldwide? Yeah, we don’t toot our horn as much as perhaps we should – and those numbers miss a good number of the sites we represent).
Anyway, CM and display are related in very important ways. But more on that in a minute. First, we want to address some confusion that has cropped up recently. Earlier this month, FM announced a minor restructuring. We explained that this restructuring was due to our renewed focus on CM executions. Some took this to mean that FM was moving away from display advertising. One writer even went so far as to say that we were “abandoning” display advertising. No matter the cause or source of the confusion, I’d like to make it clear that this is not the case.
FM does in fact sell display advertising – a lot of it. But that’s not all we do. The CM business model is not simple, and it’s not always easy to explain. But the connection between display and CM is direct: we work with brands to create media executions that are truly valuable (like WePC, MomSpeak, American Express Open Forum, or Toshiba’s Laptop Experts), and we then use display to distribute, amplify, and announce those executions.
We do a lot of innovative things inside that display real estate – like RSS feeds, widgets, video, even chat. Yet we also sell a lot of straight display ads, just like any other major publisher. However, it’s our belief that a business that sells only display advertising, particularly in a down economy, is heading for a commodity game. That’s why we reorganized – focusing on our unique ability to deliver results well beyond the banner.
We know that display advertising works. But it’s clear that the real estate any website gives to display has to deliver value to both the audience and the advertiser. As I’ve argued before, algorithms don’t replace community. There are hundreds of companies competing to deliver that value through behavioral and contextual algorithms, and we work with those we consider to be the best. Combined with CM, display becomes more than just ads adjacent to content, it becomes an invitation to a value exchange between marketer, publisher, and audience. In the coming weeks, expect more from us on these issues. It’s an exciting time to be in the media business, to be sure.
John
I think you are on to something important here but it’s not yet clear why your CM campaigns need display inventory on FM partner sites. Why couldn’t you recruit audience to the CM campaigns out on the net anywhere at much lower cost to your advertiser partners.
As an FM partner, I don’t want you to do that, but I don’t get a sense from this post why they are linked.
Fred
Fred–
I’ll take a crack at answering for Battelle. If I’m following you, the heart of your question is:
Why do CM campaigns need premium display inventory if less expensive inventory — aggregated thru an ad network for targeting via context matching algorithm or a behavioral targeting bot — is available?
The short answer:
Display advertising that appears in premium content performs better. Display advertising that appears in premium *conversational* content — quality plus engagement — performs even better than that. Display advertising that appears in premium conversational content, and also incorporates conversational content within the creative — now that’s the unique value that FM brings to the table.
A more detailed answer:
A human understanding of context matters. AdBrite or Google AdSense can deliver you college-educated women, but that same demographic is vastly more valuable when it’s reading Vanity Fair or Dooce. Vanity Fair and Dooce readers are more deeply engaged with Vanity Fair’s / Dooce’s content and ads than they (*the very same people*) are when they’re scanning news or clicking through celebrity photos on random sites they’ve stumbled across. The best media brands (Vanity Fair, Business Week, Oprah, etc) and the best blogs (Boing Boing, Dooce, Silicon Alley Insider, A VC, etc) compel their readers to *lean forward* when they’re reading. And that’s a mindset that is hard for a context-targeting engine to identify.
Quality content is part of it. But it’s more than that. Some brands are better at fostering a conversation than others, and those sites are more valuable advertising platforms for brands.
For example, last year the IT jobs site Dice.com ran a campaign where the creative invited readers to “rant” about their tech jobs, right inside the banners. The campaign ran on leading tech blogs (via FM) as well as on IT sections of CNET. The demographic profile for readers of the various sites was about the same, as was the quality of the content. (Some might argue that CNET had the quality-of-content advantage.) But readers of the IT blog sites were twice as likely to interact as readers of CNET sites. The more conversational atmosphere created by the blogs translated into twice the value for the advertiser.
Other CM campaigns are directly shaped by authors and content creators. A recent campaign by Comcast’s Fancast unit invited visitors to write reviews or memories of favorite TV shows (the shows, mind you, not Comcast’s products or services). As part of a paid CM campaign, they enlisted several FM authors — Boing Boing’s Xeni Jardin, NOTCOT’s Jean Aw, Dooce’s Heather Armstrong, among others — to do the same. Comcast then created custom ad banners that pulled excerpts from the TV-show reviews. The “content ads” performed exceptionally well, especially when ads running on Dooce featured content written by Dooce’s Heather Armstrong.
I remain bullish on the premium advertiser value (and premium CPMs) created by A VC!
That makes perfect sense:
audience + content + context
produces the greatest interest and opportunity for “conversation.”
37signals and its partners have also recognized the value of this approach with their “The Deck” ad network (http://decknetwork.net).
The Deck is all about putting the right advertisers with something relevant to say in the right environments with the best audience.
So, all of the basic elements for conversational marketing are in The Deck.
What’s interesting about what Federated Media is doing, IMHO (in addition to defining this kind of advertising in general), is it works with companies to think more actively and broadly about conversational marketing, and the Dice and Comcast approaches are a great example of that.
I love this approach.
But it also raises the question that if one has satisfied all of the basic requirements of a next-gen ad network – quality advertisers, ads, publishers, and audiences – then how much more engaging are these higher order, interactive conversations?
How much more value is generated for advertiser and audience, and what does it cost? Is there a way to personalize the conversation along the lines of Dice and Comcast in a way that scales?