A recurring part of the Bubble Years of the online
industry was the buzzword. One
could not turn to news articles concerning the internet or listen to a pitch
from a salesperson without hearing these magical words that boosted profits
and expectations more than any actual hard data ever could. In a market
poised on the brink of a returning bubble atmosphere, online marketing is now
rapidly re-discovering its love for the buzzword. Two particular buzzwords
are contextual and behavioral. These have both been around since the
late 90’s and already have reputations within the industry with both
advertisers and publishers. However, these terms have re-incorporated
their place into the common parlay of the industry and have consequently
taken on new interpretations from both publishers and advertisers.
The most basic reason for the re-interpretation of
contextual and behavioral marketing by the industry is the failure of banners,
pops and email to sufficiently provide publishers and advertisers with
stable and reliable leads and revenue. As
mentioned in a previous
DM Digital Thoughts article, online direct marketers continue in
a mindful push to find the “Nirvana Factor” that leads to the path
of bliss and profitable relationships. To that end, 2004 is shaping up
to be a year of optimization where advertisers and publishers are searching
for new methods to sustain their profits and grow their businesses. This
theme of optimization,
transparency and value is seen no where more than in the contextual
and behavioral markets, where the attraction comes from these areas’ abilities
to produce large ecpm’s and relevant leads.
To look at the re-evaluation of contextual and behavioral
markets in 2004, optimization must be carefully considered. How large of an impact will
these two areas make on the industry in general, and what does that mean for
advertisers and publishers? Definitions (which are still relative)
aside, these areas must be addressed as their popularity in the marketplace
grows.
Publishers: For publishers, the contextual and behavioral markets pose
a significant optimization formula that must be figured out by each publisher
in relation to the data or audience in their inventories. Or, publishers
can incorporate programs such as Google’s AdSense into their formulas
to incorporate contextual advertising. The entry into this market does
not present a high barrier for them. Publishers are often alienated by
the more established contextual players in the industry who rely on downloads
and other applications which can cut the publisher entirely from the revenue
made. This is an interesting area which will be discussed further
in a Trends Article soon.
On the other hand, behavioral marketing takes a much
more concentrated effort from publishers in order to achieve the results
needed for long term positive results. Specifically, they have to look deep into their own data and
figure out ways to optimize and offer ads that are relevant to the behavioral
tendencies of their users through incorporating vertical solutions. This
is easier said than done, and the processes can take months to plan and even
longer to incorporate. However, the rewards are great as publishers are
already reporting incredibly high late 90’s era ecpm’s from marketing
efforts that incorporate the sort of behavioral marketing tactics that value
consumer preferences. Of course, this must be done.
Advertisers: Advertisers face a different set of circumstances for incorporating
contextual and behavioral models into their efforts. Companies who were
once large scale buyers of email media, such as eDiets, are now facing hardships
in moving their revenue models away from the traditional email, banner and
pop mediums. As they struggle to shift away from less effective
distribution channels like bulk email, banners and pops (which face a short
lived future with the introduction of the next Microsoft IE update).
Advertisers in our industry will need to gain core
competency in buying media outside the email/banner/pop markets. Advertisers must realize how to
take advantage of the contextual and behavioral markets in such areas as search
or desktop advertising. For most advertisers, this will be a new and
challenging process as these forms of media often mean the gaining of new knowledge
and new relationships with companies and individuals who are more familiar
with the contextual and behavioral markets. These new strategic relationships
will mean that advertisers must look outside their traditional channels of
distribution and find contacts with whom they can grow relationships with that
will facilitate their entry into the playing field. In an industry where
contacts are of the utmost importance, this sort of undertaking can be uncomfortable
and tricky for advertisers already complacent with their models. However,
stepping outside these boundaries is essential for continued success.
This year is the year of optimization. By finding alternatives from
bulk tactics, both publishers and marketers can increase their effectiveness,
reduce redundancy and grow their businesses. However, these strategies
require a great deal of time, thought and human resources to perform correctly
and equitably. But, in a market that has seen the depreciation of
the long used avenues of lead and sales generation, these means of generation
and distribution must be considered and incorporated.
Sam Harrelson is the Co-Editor of the Digital Moses Confidential. He
can be reach at sam@digitalmoses.com
