Search Vs Social – the long tail of ad revenues

Google and Facebook together took away 64% of the total US online advertising spends. And Facebook had around 65% of the overall online display ad-spends. These are incredible levels of consolidation in the ad spends among the leaders.


Enough has been said and discussed about

While one cannot argue with the numbers and the line of reasoning, I somehow felt that this discussion has ignored the long tail of ad-revenues or the lead generation aspect of these platforms. These reports are focused on big co’s with big media budgets who may typically have brand-building as the key target.

Let me explain this in some more detail.

There is no doubt that for Google or Facebook, the big marketing dollars would come in from big spenders like Ford, Coca-Cola & Pepsis, Samsung, Levis, Red Bull, Wells Fargo, Amex etc.

But if we were to evaluate these platforms from a start-up point of view (small budgets and maybe need to do lead generation instead of brand building), the story is very different.

1. Social targeting is profile based, too many bidders

On Facebook, the same user may be targeted by multiple brands, because there is hardly any other context. E.g. a 35 yr old male who lives in a metro and has liked multiple lifestyle brands would be a good target for many.

We do NOT have additional context for the specific session on FB when the ad is being displayed. One FB session is hardly different from another in terms of the intent or maybe when mood based marketing algorithms evolve things would change.

This means, each of the target users FB session will appeal to all the brands. Multiple brands would be vying for that same ad-impression, which in turn means higher bid rates and CPMs etc etc.

And this means that small budget advertisers would be elbowed out of the platform by big budget cos.

While this article on Forbes also has the same conclusion, the logic used is very different.

2. Search has deep context, removes non-relevant advertisers

Search on the other hand has hugely relevant context. E.g. a user looking for Mortgage loan options on Google will be targeted by Financial Services brands vs someone searching for Fine Dining Options in India.

And this means, that as an advertiser you are just competing with other competitors or maybe some adjacent industry players.

Bid rates would be lower and even with small budgets one can get the message out to a relevant audience.

3. Lead qualification is efficient on search

If one is looking at online advertising for lead generation, chances are search may be a better platform.

Before the Facebook fans pounce on me, let me qualify my statement.

Many of us run “boring” ventures – we pitch services that consumers may not want to share. And/or we do not have the creative bench strength to get a funny/interesting message out. Our content strategy may still be a WIP. Realities of life.

If the message/ad we create has low viral coefficient (i.e. we do not expect people to share it much), Facebook may not be the best platform. Coz then we are burning marketing dollars to talk to a prospect who may not be primed for our services and who is also not helping spread the word.

Google, on the other hand is a very different story. If a consumer is online actively writing into the search box key words that resonate with your offerings, you may have a very interested customer. Intent is high.

Also, my guess would be that the long-tail ad-spends are stickier.

But all this is just my 2 cents on how small ventures, start-ups and SMEs should look at spending their advertising money online – across the broad theme of Search Vs Social Marketing for the long tail in particular.

What do you think?


Building a brand’s buzz through conversations

Baat karne se baat banti hai !

In today’s connected world, conversations are the key for a brand’s buzz . Its no longer sufficient for brands to just advertise, and inform about their awesome products and services. They need to do way more. Brands today need  a better way to engage with their end customers. To build a better connect – one conversation at a time.

Interestingly, a lot has changed about the very nature of these brand-centric conversations. With growing digital channel adoption, consumer discussions are now getting captured on blogs/forums/review portals and easy to track. Add to this the exponential growth in social media and internet-on-mobile (more people share within the first 5 mins of their experience) .

While most conversations are still happening in a way where its difficult to track or measure them, brands now do understand the critical aspect of tracking/managing these conversations.

As marketers we need to ask ourselves these 6 questions about brand-related conversations –

conversationsLife cycle of a Conversation

Conversations have a natural life – their impact decays over time.  Once a conversation is started, it might grow (if it catches the customer fancy) or as in many cases, die immediately after birth. Even the ones, which spread and create a lot of buzz, finally start seeing a decay- when fewer customers want to join in or spread the word.

Hence, brands need to

  • Start new conversations every now and then
  • Find fresh themes/content/ads are needed which keep the consumers engaged
  • Evaluate the relevance of a message in its immediate context
  • Identify what resonates with the target audience , thereby leading to longer life cycle of the message

Whats been said in the conversations

This parameter, though important, suffers from the fact that we are not able to track most of the conversations – the ones that happen in real world.

Consumers tend to write and talk more about their negative experiences about a brand, rather that the moments when the brand came close to wowing them. Its probable that slightly positive experiences do not motivate the customers to overcome the hurdle of writing/sharing. E.g. a friend of mine had a great experience at the Carnation Service Center in Noida. Though I have heard him refer to that incident twice, I guess he was not motivated enough to go online and talk about it.

Now that the data-bias is known, if we focus only on digital conversations, brands today have a whole suite of listening products available, which tell them about the location/communities/products that are creating the buzz.  Many brands also spend a lot of effort in seeding these conversations- they might call them viral campaigns, paid-bloggers or social media enthusiasts – these efforts help the brand build more dialogues around their chosen positioning.

How many are talking about it

The brand’s buzz should help increase reach apart from the recall-value. A good indicator is to measure how many people are talking about the brand.

Please note that this parameter needs to be seen in two ways

  • How many individual conversations are happening – do more people trigger/initiate a conversation? An engaged customer is more likely to trigger a conversation. So higher the number of concurrent new conversations, deeper is the engagement. Its also a function of what kind of catalyst the brand provides. We have seen how Apple Launches get covered/re-covered in every media, how Amul keeps coming up with interesting takes on current affairs, to spark new conversations.
  • How many participants are there, for each conversation – is it popular, going viral ? We are past the time of – “Forward this to 20 people to get xxxxxxx” kind of gimmicks. In today’s world, a message needs to resonate with the individual, for it to be shared further.

But as we identified above, most consumers do not end up talking about the brand. Call it inertia or lack-of-incentives, most brands are unable to get their happy customers to become a brand-ambassador.

Who is talking

Who initiated the conversation, was it the brand, or the paid-blogger or was it a genuine customer?

Even if it was a genuine customer, is this customer a fan-boy/girl, is she been with the brand for a long time? Does she hold a significant equity in her community about the industry that the brand represents.E.g. I have noticed that celebrity endorsements work really well in sports, but would it be as powerful if Sachin Tendulkar tells us that he prefers a Rolex over a Tissot.

Who is listening

This one is slightly tricky. Many would question the need to have this, once we have already identified who is talking. But if we add the “platform” or the “conversation-setting” angle to this, we get a clear context of what impact a certain conversation would have on its audience.

A negative review on the Official Facebook page with 100K fans, means that it has the potential to fireball, simply if many more raise their hands saying they too had a similar issue. And most brands have teams/solutions to manage this.

On the other hand, a person referring to a brand in her stream is probably not even noticed by the brand’s service/social-media teams. But it has been found that negative or positive reviews shared with friends are decision-changers. McKinsey reports have claimed that across all the stages of a customer’s decision cycle, referrals play the most significant role. If thats really the case, brands should focus on getting happy customers to talk about them to their individual friends.

Looking at both the speaker and the listener, we could have the following scenarios :

  1. Brand talking about itself – ads
  2. Customer talking about a brand – Testimonials/Celebrity endorsements/Reviews/Ratings
  3. “Real” Customer talking from her own experience – Customer’s Social Updates

I would assume that while brands have Pt 1 covered amazingly well, and Pt 2 reasonably ok, most of them still are struggling with Pt 3. And this is the real opportunity that we have in the world of Facebook and Twitter.

What does it lead to

At the very minimal, a conversation helps re-inforce the brand and at the extreme maybe cause an impulse switch. A smart marketer would build/manage conversations which lead to some increased commitment by the customers, and hopefully a commitment that they wear proudly.

Going the last mile in integrated advertising

Just came back from a Mahindra showroom here in NOIDA. Its a mess out there with the much hyped launch of XUV 500. There were almost 6 guys trying to check out each of the 3 pieces of this new toy that Mahindra claims will put them in a truely global league.

XUV 500And looking at how things were being managed there, I was thinking about all the debates that keep happening about spends on Digital media Vs traditional ones. Unfortunately, even my friends from the digital world are more concerned about spends on advertising, not on making the customer experience superior. No one is managing the moment-of-truth.

Here’s what happened:

  • We could barely manage to see the interiors of one version of the vehicle
  • The staff was overwhelmed with the customers within the showroom, they just couldnt give you enough time to answer your queries
  • One bloke had an Acer tab on and was happy to show us the features, when we asked for a brochure. They also had a wall mounted touch-screen display operated my another chap
  • Test drives had a queue and one had to leave his/her number at the dealer to get a chance behind the wheels
  • No idea/clue on delivery dates. I really appreciated the frankness with which the customer expectation on this critical parameter was managed
  • Booking amount was very clearly communicated. Its Rs 40K, but you could do a token Rs10K and deposit the other 30K in 2-3 days. Smart move looking at the popular response.

I saw a huge missed opportunity here, esp in terms of leveraging the digital channels to stay connected with the customers.

  1. If only the chap with the tablet had asked for my email id and at the click of a button sent me a ebrochure. I might even have liked the Facebook page button on it 🙂
  2. They could have checked with me on test drive and done the same. Many like me didnt leave the mobile number. Its only SMS that TRAI has managed to stop as of now
  3. If I was on their email list, so many more things could have happened- sending me updates on delivery dates, early positive responses from customers etc etc.

I feel that in a dealer led model, the parent brand/company needs to bring the digital tools right at the dealers showroom and manage the conversation from there on. Its only then that we would have leveraged the true power of customized communication. Other wise its just ads and Facebook pages that will keep happening.

I hope some of the ad agencies are listening to this and would build this in, in their next pitch.

Facebook advertising will not grow too fast too long

facebookI have been looking at the countless ads & “LikeUs” banners that keep popping up on my Facebook account and I am tempted to feel that all this jubilant rejoice about the advertising/branding power of social networks might just be a temporary phenomenon. I feel that there would be a fatigue soon & think there are multiple sources for that to creep in.

  1. Almost every big brand & local business seems to have its own page on Facebook. This means that the number of brands competing for your attention online, in all probability include all the brands you live with. This would make the CPC/CPM rates go high. Bidding and ad placement is not contextual- its only demographic targeted. Local and small businesses will not be able to participate for long, they can just hope to do a small time campaign to get few “fans” on their pages.
  2. Little or No Context. The fact that Google ads grew so fast was that they could figure out what you were searching/reading/browsing & hence target brands/products/services relevant to that. I think Facebook has a serious limitation here. Most users, I suspect use it to track what friends are thinking/doing and in a smaller # of cases they would be looking at pages relevant to hobbies or for information about places/brands etc. Facebook would have to change this behaviour the other way round to build sustainable advertising revenues.
  3. Advertising OverLoad. I think with most brands embracing Facebook, an average user might now be following five times as many businesses & brands as she did last year. But I can safely assume that her time on Facebook & specifically on brand pages has not increased proportionately. Are you really spending so much time tracking all the brands you follow on Facebook? Not just the time & attention, there is a genuine problem of discovery also- the same issue that most mobile app stores face once they grow too big. How do you keep track of  all the updates from all the brands.
  4. No proxies for customer profile. When we advertise on the net, chances are we can do some sane assumptions about who would see the ad. E.g. if I look at MoneyControl, I can be confident that many of these customers would be active investors in the Equity market & hence probably a good target for a broking firm. There is no such proxy on the social network giant. How do I get similar info on Facebook – Say income bracket etc. I have seen college kids subscribe to luxury brands and it must be a big worry for the marketing manager there to understand how the clicks he pays for are done by relevant people only.
  5. Decreasing value of ThumbsUp. There was a time when I would have noticed/opened/read most of the likes done my some of my friends on Facebook. With the new flood of likes, I have my own sense of distrust and feel that any of us like too many things/updates. If this is Facebook’s entrypass for brands into each user’s network, the value is fast decreasing. Most users would not honor the “Likes” of their friends as they used to before.

Well I have nothing against Mark or the biggest virtual country that has been created, but I sincerely hope some of these issues are being addressed by those smart boys back in the Valley. I would really want to see FaceBook become and stay a stable advertising medium.

Apples iAds coming soon

Apple iAdsApple just announced its official foray into mobile ad networks – iAds. This is sure to change a lot of things in the rapidly growing mobile ad industry. Google’s acquisition of AdMob might have given them a headstart in the space but with Apple sitting on a huge consumer base the battle of giants will be interesting to watch.

More so coz the iAds would be reaching to the now best-selling iPads too.

Value of Marketing

I remember my MBA days when I thought I had made a very smart decision to not take up any marketing courses. I felt as if it was all jargon-wrapped-common-sense. Why sit through classes(& worse exams) for something you can pick up by just keeping the eyes and ears open.

And for a long time I thought I had made a very sane choice. Eight years on, with some experience behind me, I still believe marketing cant be taught in classrooms. But I have definitely learnt to respect the power it has. Most start-ups are selling CVs or the product or the process or the technology. But the one who succeeds is the one who learns to sell the umbrella brand under the guise of all above.

The 3G rollout is a classic case. The sarkari co’s do have the first mover advantage, they have been spending money in telling people about 3G services too (have seen ads of MTNL Jadoo in Gwalior !) but they have failed to create the hype about 3G – that am sure the Vodafone ZooZoos & Airtel endorsers would !

Update: The new Airtel ad(har ek friend zaroori hota hai !) has surely shown how advertising can be a powerful tool in building a superior brand.

Why entertainment Sells?

On my recent trip into the Kumaon region, I noticed that almost every second house had a DTH connection – with the dish antenna being flashed at every bend on the road. I remembered noticing the same during my trip into N Sikkim last year & I was wondering as to why there is such a high penetration of DTH in hilly areas.
Is it that local Cable system becomes costlier with the houses being few & located far off? Or is it that these people are willing to spend more for entertainment than their plain cousins.

entertainmentI think its the latter. In most of these places, the sun sets early & there is a definite need to kill time. What do these guys do in winters? They cannot gather around in the village center every evening, burn wood & make jolly. A TV set with 10-15 channels provides an easier way to while time while sitting in the warmth of the home.

And I am kind of convinced, that any service/product that reduces actual or perceived time will typically have a high adoption rate. Here’s my small list to prove the point
– Cars- reduced actual time to travel from A to B
– Telephone – reduced actual time to communicate between people.
– Entertainment- Reduces perceived time- it seems to fly faster
– Mobile Phones- No need to travel physically to a phone. It was like a double benefit

What say you? Do you agree with this line of reasoning?

Mobile Advertising & the Indian market

Advertising on the small screen aka the mobile handset has been a hot area for quite some time. We have seen multiple models come – some to stay & many more to just fizzle out after their two moments of glory.

The excitement is well founded, its a screen that probably gets the maximum impressions and has the highest reach.

Mobile AdvertisingWhat makes it even more interesting is the numerous models all of which seem to have found their individual niches. Some of the more prominent ones that I found are listed below:

1. Google’s forte- Advertising on mobile search. This model just replicates the adwords to a mobile context. To get the advertising $ the pitch is that the consumer is actively looking for that specific product/service (as highlighted by the searched keyword). Moreover the consumer can not only browse to the advertisers webpage, but could immediately call or SMS an advertised number

2. Banners on WAP sites- This is akin to the online adnetworks with a twist that the banners & the sites being referred to are now optimised for viewing on the mobile screen. AdMob was the largest player  in this segment & GOOG justified its acquisition of AdMob with a detailed note.

3. Ads within Applications: Here again AdMob is supposed to be a big player, but the biggest player of them all is the iPhone. iPhone not only has the biggest app library but has shown other handset manufacturers how to make this a dominant revenue line.

The above models currently have a low adoption in India due to low % of handsets with GPRS connectivity and low penetration of mobile apps. What has worked in the country is good ol SMS. Here again there are multiple models

4. SMS/MMS ads sent to users. This promises scale to the advertiser and pure pain to the consumer. Coz everytime the new ad reacher her, her phone would ring/buzz. Moreover most of the advertisers are not the bigger brands offering great deals.

5. Ads in half of the SMS text- This is typically clubbed with alerts (to cross subsidise) or with free online SMS offered(e.g. Way2SMS) to consumers. Advertisers have issues with both the options. In the first the consumer is more concerned with the alert content rather than the ad e.g. if I get an alert from HDFC Bank about the balance in my current account I am probably not too keen on the Life Insurance being pitched to me at that point of time. In the 2nd option, most advertisers will NOT want to spend money on getting consumers who are sending free SMS online (or so I am told !)

SMS Gupshup which is touted to be the biggest mobile ad network in India, provides multiple channels that a customer can subscribe to. Here the main lever to get the consumer is the content & they use the ads in a contextual fashion (since the content & advertising logic both sit on their servers, its easy to match).

Vodafone (in its previous avtar as Hutch) had experimented with an operator owned full screen broadcasting model. Their technology provider Celltick was capable of targeting consumers basis the cell tower & showing rich media ads through their proprietary broadcasting technology.

Which model will finally become a dominant one in the Indian market?

Will Indian market also get polarised in terms of handset, in which case the handset provider will control this segment?How can Nokia drive more of its clients to its Ovi Store?

Can the operator control the ad ecosystem? They seem to be in the most advantageous position as they control the maximum touchpoints with the consumer.

Will 3rd party operators control the market? Can they build a model which is neat, scaleable & engages the customer in an exciting way?