|
Interactive
advertising actively engages the audience with the message sender.
There is currently very little interactivity in the basic types of
internet advertising. However,
great potential is developing, and activities being pursued, to create
different ways of achieving interactivity with a variety of modern digital
communication devices: from the internet, to mobile, to interactive
television (ITV), to a whole range of other devices currently emerging
from laboratories.
The
developers and companies beginning to engage in interactive advertising
are no longer concerned primarily with advertising to a mass.
They want to communicate with existing and potential individual
customers such that the audience receives the information they need at
their specific stage in the decision-making process on potential
purchases. Interactive advertising reaches beyond our traditional
perception of advertising – a blanket approach to an amorphous audience
– to actually addressing individuals.
Many aspects of directory publishers’ activity are helpful in
this process. In the coming
years, we will bring many directory publishers into interactive
advertising activities through joint partnerships and other ventures.
With
interactive advertising there is an identifiable recipient; there has
never previously been an identifiable recipient in any media.
Only with the introduction of linked lines between telephone users
have recipients begun to be identified.
That has become more important with the introduction of mobile
devices because they are personal, not household, devices; they provide
even more specificity on who is there.
This is the underlying characteristic that all the players
seriously involved in interactive advertising are seeking to exploit.
We
think of advertising in its very traditional forms: a message being
delivered by television, or a yellow pages or newspaper advert.
These are very static messages.
There are many other communication methods: in most European
nations, advertisement is only half of advertisers’ total marketing
budget, which also covers their sales promotions, direct marketing, and
personal selling. With the
move from addressing an anonymous audience to targeting individuals, these
other aspects become much more important.
Although the term ‘interactive advertising’ is used – because
that is what people understood when the first digital media became active
– it is really a broader form of marketing than simply interactive
advertising. Hence, more than
traditional advertising, it involves parts of companies that we are
seeking to promote – not simply a product or service which a company is
offering.
In
Europe today, the companies most actively moving into interactive
advertising are very clearly the hardware and software firms in ICT, which
clearly stand to benefit most as this develops.
Other companies are beginning to see interactive advertising as a
means of working very closely with their existing and potential customers.
The
internet, particularly, features the kinds of larger companies one would
expect: automobile manufacturers, entertainment firms, and travel firms,
which really want to engage more directly with audiences.
Firms are increasingly moving into wireless – primarily the
telecoms firms with much to gain from the additional traffic generated.
Media and entertainment firms are now intensifying their
interactive advertising efforts, and travel firms and others are also
exploring how they can use it in the future.
More companies will do so in the future.
Interactive
advertising uses personalised information, so it needs to be directly
related to the recipient’s interests, needs, and activities, not simply
blanketed mass messages. It
involves firms which already have an established relationship with the
recipient, where permission marketing leads to the wireless devices.
ITV is
becoming a reality: 100 countries in Europe currently have sufficiently
developed digital television systems – terrestrial, cable, or satellite
– to which interactive advertising is being added.
Again, the big firms are involved, such as multi-store fast food
companies: if you are hungry during half-time in a sports game, you can
hit the interactive button and order fast food.
Automobile manufacturers and travel companies are also very
interested.
The
supply side currently comprises the companies involved in hardware,
software, and transmission. Users
are primarily large firms; others are watching with great interest.
I
participated in a project engaging with major advertisers to understand
what they were doing. Clearly, the main thing advertisers wanted from interactive
advertising was direct communication with customers; they were not so
interested in the kinds of relationships that existing media facilitated
in the past. Advertisers want
the ability to track interactions with customers and ultimately gain more
information to, and about, their customers in the process.
Advertisers see this less as advertising than direct selling or
sales promotion, which create a closer relationship with their customers.
Advertising
takes different forms on different media.
Most people are familiar with the traditional features of internet
advertising and marketing: pop-ups, pop-unders, movement, and sound.
Direct selling also features on the internet, primarily through
email and messaging marketing. Companies
are making efforts on direct selling and branding campaigns over the
internet, principally through games, quizzes, sponsorships, among others.
These are designed more to provide overall promotion than direct
selling or traditional advertising.
Many
advert-based formats now appear on the internet.
These include banners; video and rich formats; people downloading
logos from the internet to their telephones, which is particularly popular
among highly-branded products; new uses of streaming video; floating
adverts; and other functions bringing different messages to the public.
Studies
from the last two years show that these advert formats do not generate
good responses: they are approximately only 25% as effective as direct
marketing. However, they are
very good at promoting strong brand awareness and guiding interested
parties towards other sites beyond the advertisement.
This is becoming particularly important as it departs from the
messages generated simply to attract attention, towards specific
communication on the product – perhaps ultimately generating sales.
These
studies have shown that most advert-based formats function most
effectively as part of a cross-media campaign with television, print, or
radio. Many non advert-based
formats are emerging, such as sponsorships and games, which are becoming
very popular. Sponsorship, or
co-branding, is very good for brand awareness: Nike might run a site that
has nothing to do with Nike but contains links to various other sites.
A
variety of games is appearing online – contests of all kinds – which
are particularly good as they hit the core of the idea of interactivity.
Through these games, people interact and become more involved,
playing on a regular basis and trading information about themselves in
exchange for playing the games. These
are very effective: benefits include loyalty creation and brand awareness.
That interactivity creates a mechanism through which an advertiser
can return later and provide customers with additional information over
the internet, through post, or e-post.
Email
marketing basically uses the same idea as direct mail, but is cheaper,
quicker, and more direct, generally – although many people receive email
marketing on inappropriate items such as sexual products.
There are increasing amounts of non-permission email marketing,
which raises issues of privacy and law.
Email
marketing is particularly important in allowing a company to tailor
messages to its customers’ behavioural patterns – business or
consumer. I receive a useful
email from my Volkswagen dealer every three months, reminding me to submit
the car for its service: it is very tailored; the dealer knows me and my
car; and it helps ensure I go to their office rather than somewhere else.
For
advertisers and intermediaries, one nice feature of email marketing is the
single‑click reply button to accept the offer.
Email marketing can now make use of rich formats – starting with
a text message and moving into video, or whatever sounds or functions
advertisers want to use to display products or to allow the customer to
investigate products in a different way.
One of
the effects of direct marketing is a great improvement in customer
relationship marketing (CRM), facilitating the building of much closer
relationships – particularly with B2B customers – which allows rapid
transaction completion.
One of
the problems with direct marketing is that the process can be prolonged
due to the delivery time, the decision‑making time, and the response
time. That is not effective
when the supplier wants to shift a product from their inventory.
With email marketing, suppliers can shift that product in a matter
of days – that is particularly important with business customers.
Internet
marketing is already reaching maturity; most people know about it.
However, there is great scepticism relating to it.
The proponents of the internet sold it heavily on what it would do
for everybody, but there are great problems over measuring its
effectiveness; and debates rage over who internet marketing actually
reaches. Using taskforces,
the advertising and the internet industry have worked on these issues,
reaching common terms, but there is still much work to do in that area.
There
are interesting new formats emerging for mobile devices such as
telephones, the internet, and PDAs. Several
formats exist: for GSM telephones there is wide use of games and contests;
and the downloading of ringtones and logos, which help advertisers keep
their products and services at the forefront of audiences’ minds.
Much is being done in that regard, reaching far beyond SMS
messages.
With
global devices, increasing numbers of banner adverts and other pop-ups are
emerging, made possible by new communication technologies such as
broadband. These allow new
communication formats beyond GSM telephones, more akin to messages seen in
a fixed internet environment.
There
are difficulties in the development of wireless advertising and marketing
to the variety of devices that accept it.
This is primarily because wireless devices do not all serve the
same purposes and the consumer uses them in different ways.
For a consumer principally using their PDA for tracking their
calendar, keeping appointments, or accessing email, mobile marketing may
not be desirable. However,
many young people use their mobile devices not just as an individual
personal communication medium but in a broader medium.
There are differences in what can be done, depending on the device.
Direct
selling is growing, particularly through SMS messages, but cell
broadcasting and GPS‑located advertising are now becoming more
common. To your specific
preferences, your GPS system could locate the nearest Chinese restaurant
for you and pull up a menu. These
formats are more akin to direct selling than traditional advertising
services.
Many
branding and sales promotion activities now exist, such as pop‑ups;
I am not sure these will last very long because people are increasingly
using software which limits these incoming advert formats.
I am sure these software types will soon become very popular on
mobile devices as well. Part
of the difference between the internet and mobile devices relates to the
payment for the services; in some countries the user pays for the time
spent, so they are paying for an advert.
The kinds of contracts people have with their internet provider
will determine whether these will be accepted.
Games
and contests, and branding through logos, amid other formats, are
available on all wireless devices. On
mobile devices, advertisers invested and tested in conducting most of
their research on WAP, which was rendered obsolete by the move towards
broadband mobile devices in 3G and other services.
Many major advertisers have also used SMS, and are now trying
different uses. The largest
advertisers are very clearly moving towards the newer devices: more than
20% of the top 250 European advertisers already use them in one form or
another.
Advertisers
found wireless direct advertising very good for preference building and
building awareness of advertised brands.
It proved better for targeting than any other communication method
such as magazines, which had previously been one of the best ways of
targeting individuals; and radio, the second best way to target people.
Advertisers found recipients responded immediately, which worked
well for games and contests; and it has ordering capabilities, which is
particularly useful for business devices – communicators, enhanced PDAs,
or palm computers – which allow people working remotely to order from
wherever they are. That is
particularly useful for the construction industry workers and for sales
forces.
There
is huge resistance to non‑personal messaging in mobile devices.
Wireless direct advertising was found to be most effective to
existing consumers rather than in gaining customers.
The biggest problem is that most mobile devices are small: even
with good eyesight and growing screen sizes, it is difficult to receive
much information on screen. Hence,
it is better for brand awareness and loyalty programmes than for
persuading a consumer to use a product.
Advertisers
want more on improved location systems because it has immediacy, which is
important for someone moving through a city trying to find a product or
service. Advertisers also
want the advertisements to provide added value in some form, rather than
traditional advertisements. However,
that creates complexity. Advertisers
have said they will invest more money if it increases purchase rates;
enables them to collect more information on their audience; and leads more
people towards advertisers’ websites.
This
area is developing. Markets
are not yet operating effectively; the business models have not been
developed as yet, but considerable experimentation is occurring, including
by major advertisers ranging from foods firms to airlines.
The factors that enable advertising and marketing services are
developing: from bringing people to sites, to using advertising on the
electronic programme guides, to using interactive broadcast adverts –
through your television, for example.
That is of great interest to television advertisers: if they can
move people from a traditional advert to a site, it is a very powerful
marketing tool.
ITV is
currently limited to a group of very large advertisers; it is expensive to
operate. Even making a normal
television advert costs as much as €1 million.
Setting up the systems to operate ITV is a huge task, so the
prospects for small and medium‑sized companies are limited – and
these are the core of most traditional media, including directory
publishers. In the future,
brokers are expected to make services available to smaller advertisers.
The
potential again lies in the perfecting targeting – one-to-one
communication – without wasting communications on uninterested parties.
Again, consumers’ behaviour can be tracked using data collection. DIRECTV is doing this well; Rupert Murdoch wants to buy the
company. Every night, DIRECTV
calls the computer and tells it everything you have watched, interacted
with, or bought online. The
next day, when you turn on your television, you will be automatically
taken to a particular channel, or an advert will appear which DIRECTV
knows is directly related to your interests.
Advertisers
want more multi‑platform transferability; they do not want to create
different adverts for each kind of advertising platform – digital,
interactive, and traditional. They
want to leverage their investments in advertising.
The biggest problem with ITV is that it is entirely related to
digital television; the critical mass in digital television must be
reached before advertisers will pursue it.
That is happening: in approximately five years, more than half
European households will have digital television; in 10 years, it should
be in all households.
a.
Internal Structures
There
are structural impediments on how firms handle advertising and marketing
internally and externally. Internal
structures do not work well for interactive advertising: advertisers’
advertising and marketing activities are separate from their consumer
relations’ and sales activities, and may be geographically separate from
product development. An advantage of interactive advertising is it allows
functions which pull all those together to occur.
Most businesses currently have no means of linking those functions.
There is no benefit in obtaining information of interest to the
customer relations department if it cannot reach them.
b.
The External Value Chain
The
traditional value chain from suppliers does not work well.
Most companies have acquired separate services from advertising,
marketing, promotion, and PR agencies, but they do not communicate well,
which causes problems. Another
problem is that all relations with outside agencies are often based on a
slow process of proposals, discussion, planning, and implementation.
The long preparation times for creating advertising and promotional
campaigns are not conducive to the immediacy needs of interactive
advertising. To make this
work, all the departments need to be involved together, and organisational
and relationship restructuring between advertisers and their agencies is
necessary.
Interactive
advertising remains an emerging market.
Hence, there are no dominant players, so the technology creates
opportunities for directory publishers.
However, a variety of activities will currently conflict with
directory publishers unless they operate some of these activities.
Business listings and local mobile services businesses will
increasingly feature on television – no‑one really does that as
yet, so there is opportunity but it will be taken by someone in time.
The
ability exists to reach beyond directory publishers’ traditional
activities of display adverts, links, and listings – to rich multimedia
advertising that is accessible through existing products but becomes
deliverable to mobile devices or interactive television in the future.
That provides the ability to provide linkages to deliver both
advertising messages and commerce. That
is very important to advertisers.
The
movement of interactive marketing services will help solve advertisers’
problems; they are looking for more and more advertising because mass
marketing is not as effective as it was.
Publishers will find a new revenue source from exploiting
interactive advertising, and a new means of gathering information on
advertisers and customers. That
information base has traditionally made directory publishing very
successful. In the future,
there are great opportunities in this area; publishers should monitor it
closely.
|