A Contrarian View of Digital Marketing

By George Foster, CEO, Foster Marketing

There may be no bigger supporter of digital marketing than I. However, I have learned to be skeptical about most things (I guess it’s my journalistic upbringing). Along that line, you all know the nursery rhyme, Humpty Dumpty:

Humpty Dumpty sat on a wall;

Humpty Dumpty had a great fall.

All the King’s horses and all the King’s men

Couldn’t put Humpty together again.

The common belief is that Humpty Dumpty is an egg. However, there’s another version of its origin.

In 1648, during the siege of Colchester in western England, a huge cannon, colloquially called Humpty Dumpty, was strategically placed on the town’s wall for defense. A shot from one of the Parliamentary cannons damaged the wall and Humpty Dumpty came tumbling to the ground.

The Royalists (all the King’s men) attempted to raise Humpty Dumpty on to another part of the wall, but because the cannon was so heavy, ‘All the King’s horses and all the King’s men couldn’t put Humpty together again.’

For awhile now, I’ve been thinking of applying that contrarian thinking — like the origin of Humpty Dumpty — to the value proposition of digital marketing.

We are asked all the time what kind of results we will get from our digital efforts. We mention awareness; impressions; click-throughs; sales leads; and, ultimately (hopefully) sales.

For the longest, I’ve kept articles on the changes in digital marketing, especially the rise of social media — Facebook, Twitter, LinkedIn, blogs, tracking, etc. In preparing this article, I basically threw out any article more than a year old. The uses and technology are changing so fast.

In fact, Facebook just this month filed an initial public offering which could value the social network between $75 billion and $100 billion and put the company on track for one of the biggest U.S. stock-market debuts of all time. The rise of Facebook is the subject of the movie Social Network, an interesting view.

First, let’s look at digital advertising from a contrarian view and then move to the social contrarian view.

Contrarian Idea 1: A third of ad impressions are never seen.

In a recent article on www.paidcontent.org, author Danny Frankel mentioned that, “There is a growing consensus that digital advertising, whose targeting abilities were supposed to eliminate waste in marketing campaigns, is still very much a work in progress. Barely a week goes by without another person bemoaning the lack of reliable measure of ad effectiveness.”

ComScore, a global leader in measuring the digital world and a source of digital business analytics, recently produced a study titled “U.S. Digital Future in Focus 2012.” It can be downloaded by registering at comScore. Some key findings:

  • Across all measured campaigns, 69 percent of ad impressions were classified as being “in view”. The remaining 31 percent, the study says, were delivered but never seen by a consumer for various reasons.

 

  • An average of 4 percent of ad impressions were delivered outside of their targeted geographical region.

 

  • 72 percent of campaigns had at least some of their ads running next to content deemed “not brand safe” by their respective advertisers.

Contrarian Idea 2: You can’t break up conversation with ads.

Even before the Facebook IPO, Sir Martin Sorrell, chief executive of the world’s biggest advertising group WPP, cast doubts on whether advertising will ever work on Facebook.

Sorrell said the social networks were “not the right context” for commercial advertising because they would interrupt something that was fluid and informal.

“Facebook, Google+, Twitter are advanced forms of social interaction,” he said. “We used to write letters to each other and now we correspond through Facebook and Twitter. If you interrupt that with a message you may run into trouble.”

Makes sense to me. And, Sorrell went on to further diminish the Facebook play by saying that Facebook founder, Mark Zuckerberg, had been forced to withdraw two “failed experiments” at commercial activity after they sparked a “revolution” by users.

Contrarian Idea 3: There is no revenue model

David Baker, another contrarian and a management consultant for marketing services firms, says that “the purveyors of social media are losing money at astounding rates (except when they sell the platform to someone else who can afford to lose even more money) and “everyone wants to be on the bus, but they really don’t know where it’s going.” To bear that out, in its IPO filing, Facebook showed revenues of $3.7 billion, $400 million under projections.

And, it’s interesting to read the comments on the Wall Street Journal on the Facebook filing. Among the more than 200 include:

  • “85% from ad revenue with virtually zero verifiable ROI. Fun times.”
  • “This IPO is ridiculous. Anyone who bought into this dot.com bubble 2.0 needs to have their head examined. Way over valued. There’s already starting to be a social media backlash due to privacy concerns (especially Facebook’s ever-changing policies) and new platforms every day that are going to compete with it.”

Finally, then, what’s there to love?

Lots. Digital is here to stay and growing. We are right in the middle of a major shift of marketing dollars for our clients from traditional to digital media and it looks to increase. In the same comScore study, the following points were made:

  • Social networking continues to amass online users. Social networking accounted for 16.6 percent of all online minutes at the end of 2011.
  • Bing closed out the year surpassing Yahoo! for the No. 2 position among search engines. Google is No. 1.
  • More than 100 million Americans watched online video content on an average day to close out 2011, a 43 percent increase from 2010.
  • 4.8 trillion display ad impressions were delivered across the U.S. web in 2011 magnifying the need for greater transparency and accountability in ad delivery.
  • At the end of 2011, more than 8 percent of all digital traffic was consumed on devices such as smartphones and tablets.
  • Total U.S. retail and travel-related e-commerce reached $256 billion in 2011, up 12 percent from 2010.

Thus, it’s a wild, wild wacky worldwide web ride. You need a firm that can make sense out of it. That’s Foster Marketing.


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