Online Advertising Grows Up

Like gangly teenagers with raging hormones, the Internet advertising industry and its clients have spent the last few years speeding up to "inspiration point" and desperately pawing at one another in the back seats of souped-up hot rods.

Every campaign, like every episode of puppy love, was do or die, launched with all the fervor of a Romeo and Juliet-style romance. But then, clients - unsatisfied with their post-IPO stock jump, their rate of customer acquisition, or their ability to attract the next round of funding -- broke up, sometimes leaving agencies holding ownership stakes gained in a services-for-equity swap. Other times, the agencies saw it coming -- or saw that their sweethearts' earning potential left something to be desired --and they were the ones to break the tough news.

But now, we're maturing as an industry. We're growing up. And it's time to make some long-term commitments.

Like any relationship, these agreements are fraught with risks. But the rewards are great, as well. Only when you're involved in a long-term business relationship can you work to achieve truly worthwhile goals. We've passed the days when things like click-through rates, a temporary surge in site traffic, or a quick boost in e-commerce sales are satisfying. Only in the go-go days of sky-high stock prices were these momentary blips meaningful. Now, what matters most is the bottom line, and that's not something that can be manipulated in a day, a week, or even a month-long campaign.

Tying the Knot
If About.com can sign a ten-year ad serving contract with DoubleClick, it's obvious that companies are realizing the need for partnerships that last. Of course, it's important to choose your partners carefully. Look for someone with a good head on his shoulders (a strong management team), someone established in his career (good financials), and someone that also takes a long-term view. That long-term view -- in the marketing sense -- involves a commitment to building relationships with customers. We need to keep those people coming back for more.

Now that we're older, we've learned that there are a lot of elements to going beyond that "blip" on the radar screen, and we've discovered the joys of e-mail marketing. You must get to know the customer, while still respecting her privacy. You must always deliver on your promises, or at least treat her as you would want to be treated, if you're unable to deliver for some reason. You need to do more than just market to her; you should give her value-added information that makes her feel warmly toward your brand. I always looked forward to my e-mails from Garden.com (may it rest in peace), which provided me with tips tailored for the time of year, my geographic area, and the plants in which I had expressed an interest.

But banners -- and other forms of advertising -- shouldn't be left out of this long-term thinking. As new technology emerges to help us gauge the effectiveness of banners -- beyond simple click-through rate measures -- the answers we seek won't come immediately. The recent Online Advertising Report by Engage AdKnowledge found that conversions from people who saw an ad without clicking were more spread out than conversions from a click. In fact, 38 percent of those who converted after viewing (but not clicking) did so between eight and 30 days after seeing the ad. The ads were obviously effective, but those results weren't immediately apparent. An earlier study found that 32 percent of all conversions occur after an ad view without a click, further demonstrating the "branding" benefit of online banners.

No Instant Gratification
But who, now, is optimizing ad campaigns or looking for proof of results 30 days after an ad runs? We've created an instant-results industry, so there probably aren't that many out there. I'm not saying that changing this perspective will be easy. It's going to require a lot of education of clients. In a recent conversation, an agency account services guy told me that he thought the industry was in a tough situation. First, we tried to evangelize the measurability of the medium, luring advertisers by telling them how quickly we could make adjustments to campaigns. Now, we have to convince them that there's more value to online advertising than instant gratification. We have to look further out, and do tests to prove that online advertising does work -- something true believers never doubted, but something that the vast majority of people still don't believe.

Another important ingredient for these long-term partnerships? Fun. Don't let your relationship get stale and fall into the trap of simply following that same old routine. Try new things: wireless, broadband, interactive television. Dabble here and there, keep things fresh, new, and exciting. That way your middle-aged relationship will keep the sparkle and thrill of your adolescent romance.

Credits: ChannelSeven.com