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Why online brand spending will create new winners in online ad networks July 14, 2010

Posted by jeremyliew in advertising, branding.
35 comments

One of Lightspeed’s consumer internet predictions for 2010 is that brand advertising dollars are going to start to flow online at scale. Two thirds of all ad spending in the US is for brand advertising, yet three quarters of online ad spending is direct response.

The recession of the last couple of years has provided a catalyst to drive more brand marketers online in an effort to seek greater efficiency in their media buys, and as they have tasted some success, they will continue to spend online as their marketing budgets recover.

Late last year the IAB put out a very interesting study about building brands online. I recommend that you read the whole thing if you are involved in the online advertising industry.

For those of you who won’t, here are some highlight charts:

Marketers believe that the internet can be a branding mechanism:

But the bulk of online advertising volume today is not considered effective for brand building:

This is because most online ad inventory has been optimized for direct response advertisers, whereas brand marketers want to see their traditional metrics (click image to see full detail):

Furthermore, brand advertisers want relationships with the media companies that they work with, not simply self service efficiency (again, click image to see full detail)

Most brand advertisers have primarily stuck with portals and big publishers who offer brand safety, reach/frequency control, reporting on the metrics that they care about and strong relationship, but often tied to higher priced media. As brand advertisers seek better efficiency from their online media budgets, they will turn increasingly to ad networks. Although there are over 300 ad networks today,  the vast majority of them have grown over the last 10-15 years by optimizing their offering for the direct response advertisers who have constituted the vast majority of online advertisers to date. I think we’ll see a new generation of ad networks emerge who are tuned to cater to the specific needs of brand advertisers, and I’m actively looking to invest in companies with this mindset.

When your brand becomes a verb July 19, 2009

Posted by jeremyliew in branding, Consumer internet.
6 comments

Sunday’s New York Times Week in Review writes about the power of the brand as a verb:

Perhaps nothing better illustrates how far behind Microsoft is in the search engine wars than a recent comment by the company’s chief executive, Steve Ballmer, about why he liked the name Bing for Microsoft’s new competitor to Google.

The name, he told The New York Times, “works globally” and has the potential “to verb up.” That is, some day, Mr. Ballmer hopes, people will “bing” a new restaurant to find its address or “bing” a new job applicant for telling events in his past.

Notes the Times:

The leader among Internet brands turned verbs, of course, is Google. Imagine the glee in Microsoft headquarters if Google lost its trademark protection to genericide. If “google” becomes synonymous with conducting an Internet search, then Microsoft could legally and confusingly advertise by saying: “Use Bing for all of your most complicated googling!”

On the other hand, when your brand becomes a verb, you know you’ve reached mass market consumer recognition, usually a pretty good indicator for value creation. So far the internet brands that I can think of that are commonly used as verbs are Google, Skype, Facebook, Yelp and Twitter (tweet). What am I forgetting?

UPDATE: Digg was a good suggestion

Online video advertising takeaways November 15, 2007

Posted by jeremyliew in ad networks, advertising, branding, business models, video.
6 comments

I moderated a panel today at NewTeeVee Live, which was one of the best conferences that I’ve attended this year. Kudos to Om and Liz for putting together a great show.

The four panelists were all CEOs of video ad networks. Jayant Kadambi of YuMe, Tod Sacerdoti of Brightroll, Matt Sanchez of VideoEgg and Matt Wasserlauf of Broadband Enterprises did a great job of discussing some of the challenges and opportunities in the industry.

Here are some takeaways from the discussion:

    Online video is a brand building medium, bought on a CPM basis.

    Ad buys today are coming from three buckets; TV budgets (the big opportunity, but further away), online budgets and experimental budgets. Video content coming from TV and other traditional video producers is most likely to win buys from TV budgets. Native online video content still coming from experimental budgets.

    To get to a scalable online video ad business, the key barriers are (i) standardization of ad units, (ii) standardization of ad serving infrastructure and (iii) standardization of measurement/metrics.

    There is tension between highly effective preroll ads and user friendly overlay ads (with a user initiated play), but these are the two most common ad units and most likely to become a standard. In-banner video is also popular.

    Big Media companies prefer point solutions for online video so that they can sell and control their own inventory; smaller online content owners want a packaged solution that delivers all elements of the value chain (ad sales, ad targeting, ad inventory management, ad serving, ad measurement) from a single provider. There is increasing pressure to create standards in ad serving from the large media companies so that multiple sales forces can sell ads without having to implement multiple serving solutions.

    Advertisers are buying content adjacencies today as a proxy to demographic targeting, but they would prefer to buy demos directly where they can

The four panelists really engaged; it was a pleasure to listen in to their conversation. You can read the transcript of the panel here.

In late stage consumer markets, brand matters more than product September 14, 2007

Posted by jeremyliew in branding, business models, Consumer internet, distribution, product management, start-up, startups.
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The WSJ today has an article about how hard it is for US auto makers to get “import intenders” to add domestic cars to the consideration set:

Just about every month, CNW Market Research meets with a group of would-be car buyers and plays a trick on them.

Sometimes the company, which specializes in auto sales trends, takes a Toyota Camry, removes any identifying logos, and tells them it’s a new model from one of the U.S.-based auto makers. Or it takes a domestic car and tells them it’s a Toyota or another import make.

Either way, the result is the same. “If they think it’s an American car, the perception of the vehicle falls dramatically,” said Art Spinella, vice president of the Bandon, Ore.-based firm. “Detroit really gets a bum rap in the U.S.”

When I was at AOL we did a similar experiment for search. We took search results from multiple search engines, stripped branding and UI, and asked users what they thought. The marks were pretty even across the board, but when branding was put back, Google was thought to have the best results ever time. PC World found similar results in April.

As I’ve mentioned in the past, there are three phases of adoption for a new consumer technology. In the first phase distribution is paramount, in the second product is paramount, and in the third branding is paramount. Competing on the wrong dimension at the wrong time may not move the needle, as Detroit is discovering.