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UW Guest Lecture Deck - MKTG 555

Here is the deck I used for the University of Washington School of Business class  (MKTG 555 - Entrepreneurial Marketing and Management) I guest lectured at yesterday. It's part of their Center for Innovation and Entrepreneurship program, and I spoke about "marketing your small business across the new landscape of the Web -- Online Marketing v2.0".

UW Biz School Lecture - Fall 2009

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Entrepreneurial Online Marketing

For the 3rd time now, I guest lectured at the University of Washington -- at a class on Entrepreneurial Marketing taught by my good friend Deb Hagen. Whereas in previous classes I covered SEO, search engine marketing, social media marketing and online advertising in general, this time I focused mostly on online marketing. And I covered both "paid" online marketing (advertising) and "earned" online marketing (social media).

For the latter, I gave two local examples, plugging Seattle 2.0 and Meteor Solutions. Marcelo has done an outstanding job using social media and SEO techniques to expand the Seattle 2.0 audience, pageviews, etc. As for Meteor Solutions, I really like how Pete and Ben have teamed together to create a truly unique service for helping marketers measure the sharing of URLs across an online audience.

Anyway, here's the presentation I used in the classroom:

University of Washington Guest Lecture - Entrepreneurial Marketing

View more presentations from Jordan Mitchell.

Latest from the World of Online Advertising

Catching up on some blog posts and thought I'd note a few things that caught my eye:

• Roughly 8% of the total ad dollars in the US is spent online, while consumers spend about 30% of their time surfing the Web, according to MediaPost.
• About 85% of total ad dollars spent online in the UK is performance-driven, compared to 50% in the US.
• ValueClick launched ActiveAds, which allows marketers to display customized messages in ad creative w/out the need to develop and manage multiple creative units. Some launch though ... there is nothing on their Web site about this!
• eMarketer forecasts global ad spending on social networks to increase 17% in 2009 over 2008, revised down from their previous estimate of 32%. Increase in US only social network advertising is expected to be 10.2%, reaching $1.3B. MySpace and Facebook account for two-thirds of this in the US.
• According to Nielson Online, time spent on social networks and blogs grew 3x faster than the overall Internet rate, and are now the 4th most popular online category -- AHEAD of personal email (and behind search, portals and PC software).
• Read in eMarketer that 41% of US Internet users surveyed said they paid more attention to advertising that was personalized. And nearly the same proportion of respondents (39%) said they were more willing to click on such personalized ads.

Data Mining is the Future of Advertising

Loved this comment from the Chris DeWolfe (CEO of MySpace) in an interview with TechCrunch:

Michael Arrington: Thanks very much for your time. I know you are literally running to a session. What’s your session on?

Chris DeWolfe: It’s on data mining.

Michael Arrington: Data mining? That sounds really boring

Chris DeWolfe: No that’s actually the future of advertising.

Couldn't agree more. Nor could Neal, I'm sure!

Can Display Ads Outperform Search?

Fred's views of "predictions" match mine, as does his prediction. In this post (where the comment stream is even better than the post), Fred predicts:

display advertising will get so cheap and the tools to target it will get so good that it will be shown that it can outperform search

I wrote about this at the beginning of 2008 in my post CPM Rates Will Rise, They Have To (which means either I was exceptionally wrong or exceptionally astute), where I posited that high CPC rates (in SEM) and better targeting/technology will be the major forces behind a rebirth in display advertising. In any event, the comment thread in Fred's post was rich in opinion and dialogue, which led me to comment: 

CPM rates are already extremely low. I don't think remnant rates are going to fall much more. And an average CTR of .1% means that banner blindness can't get much worse either. In other words, I think we're at the bottom for eCPMs and CTR (for the majority of inventory out there), and as Fred points out, the tools will pave the way for a rebirth in display.

As I wrote last year, high CPC rates (SEM) and better targeting/technology will be the major forces behind a rebirth in display advertising. If you're a marketer seeing your bid rate for keywords exceeding $2 per click, the effective CPM rate you're paying is high. At .25% CTR, you're paying $5 CPM. At 1% CTR, it's $20 CPM. If you're paying $2 CPC rates , all you need is a measely .05% CTR to put $1 CPM inventory on par (which is what 83% of the inventory is selling for, and also 5-10x the price of most social media inventory these days)!

Display offers >25x more volume than search, and new targeting techniques for CPM ads will shift dollars back towards the display market -- assuming ad networks rise to meet the market opportunity. I think they will, slowly but surely. They have to, in order to grow their business.

I was very pleased to see his reference to the estimation that Google has over 1.3M advertisers -- I've been looking for that data. We've also seen at Others Online that display ads are the only advertising format to monetize social networks -- text ads don't work at all. So in order for display to make a big comeback, it has to cater to this long tail of advertisers. Which means to me there are three ingredients necessary to offering advertisers the performance of search:

1. Targeting - Advertisers must have access to deep and more standardized targeting. Proprietary categories/channels/audiences are arbitrary and non-standardized. Keywords are the lingua franca of SEM and SEO, and everyone knows what they mean. In the absense of a search query, the targeting can only be based on context (targeting content) or affinity (targeting the person).
2. Self-service buying - Long-tail advertisers want to dabble first with low $ amounts, and the friction needs to be taken out of the process -- they need to be able to place a buy in minutes, as they now do with AdWords.
3. Ad creation tools - Indeed, part of the friction is the design/dev of the ad creative. Tools must make this as easy as creating/optimizing text ads.

WideCircles is Comment Spam

About two weeks ago, I started seeing a sharp increase in comments on the Others Online blog. The comment (content) was different, the people were different, but the comments all took a similar form. Here's an example:

The advertising network business is going to go through a gut-wrenching shakeout,and its just about getting started.The problem ...<snip> ... according to those in the know are very fickle.
-----------------------------------
rosejenifar
Best DUI

Every post ended with the same dotted line, a name, then a term for SEO purposes. At first I thought it was just a couple people from the same company visiting our blog (word of mouth), then I received more comment spam, which I reported as such to TypePad.

Then we received a partner application form from WideCircles. I went to their site and thought "hmmm, social media marketing ... could be an interesting partner." Then I saw their examples and knew they had been the ones spamming our blog. Now their robots are spamming our partner application form too (I continue to receive completed partner applications from them).

Since they've done a great job with their own SEO, it's pretty tough to find a non-WideCircles site listed in a Google search, so I thought I'd write a post. Maybe it will be indexed soon and educate others.

Come on people, don't fund this sort of shady business by buying automated comment spam. Other people see right through it, and social media is NOT about fake comments -- it's about authentic comments.

The Power of "Mommy Bloggers"

Just read some interesting findings about moms who blog. They're not just blogging about their daily lives and personal experiences, they are sharing opinions and launching conversations about brands. As a result, they are increasingly building brand awareness and influencing consumer behavior.

From the report:

• 96% of moms value recommendations they find on Mom Blogs
• Over 78% of mommy bloggers now review products and services
• 94% of moms rely on other moms to make purchasing decisions
• More than 60% of mom bloggers consider making money important and want more connectivity with companies
• 37% of mommy bloggers have been contacted as resources for the press

Drop in Social Media eCPMs and Forecasts

Just read two separate data points regarding social networking advertising, and the struggle for advertisers to figure out how to make it work -- resulting of course in a hindrance on average eCPM rates earned by social media companies.

First I read that eMarketer has lowered their estimates for US social networking ad spend in 2008, from $1.6B to $1.4B. They claim the economy is partly to blame for this decrease, as companies cut experimental ad dollars first. As important, they claim that social networking sites are still trying to figure out what works. Net net, it's the same reason -- the ROI isn't there yet for advertisers.

Next, I read PubMatic's AdPrice Index for May which is real data (not a forecast). They found that eCPMs earned within the social networking category of sites dropped 47% , from $.37 in March to $.19 in April. Average eCPM for large Web sites (>100M pageviews/month) dropped from $.38 to $.18, and 95% of all Web sites with >1M page views per month earned less than $1 eCPM. (Keep in mind that PubMatic's data set is only remnant inventory, not direct sales.)

I've been talking a lot lately with social media companies, and they are indeed having a tough time monetizing their page views. Ironically it's such a rich source of information in terms of describing an audience and their affinities, yet it's so undervalued by advertisers. What they need are tools to help them harness that information and segment their audience into concise targeting parameters.

Social Media Research

Great stuff on social media usage, activities, trends, numbers, etc.

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