October 29, 2012

Online Advertising Through The Wrong Lens

It seems to me that advertisers and marketers still don’t understand a basic concept about using the web.

After 15 years they are still committed to plopping their thought template for traditional advertising over the web and expecting it to fit.

It doesn't.

The models they have in their minds are wrong, and to a large degree account for the dismal performance of most online advertising.

The key to understanding online ad success is to forget about the distinctions between marketing and advertising and sales promotion and PR. These distinctions may be relevant in traditional advertising but are red herrings on the web. The important thing to understand is the difference between creating demand and fulfilling demand. If you don’t understand the distinction, please read this.

Thus far, the web has been shown to be good at fulfilling demand and weak at creating demand.

The most obvious evidence that the web is lousy at creating demand has been the startling inability of web advertising to build brands. As we’ve asked here many times, after 15 years what mainstream consumer-facing brands have been built by display advertising, or social media, or YouTube, or “content”? You can count them on one hand. Or one finger.

On the other hand, the reason Google and Amazon are so successful is that they are utilities for fulfilling demand. Whether you call them advertising or not is largely irrelevant. Google is an ad supported site. Amazon is a store. But they are both in the business of fulfilling demand. When people already have some idea of what they want, they go to the web. And largely to Google and Amazon.

Facebook, on the other hand, is not where people go to fulfill demand. They go there to screw off with their friends. Which is why advertising on Facebook has been so remarkably ineffective.

If you are a marketer, you are far more likely to be successful if you use the web for fulfilling demand rather than creating it. When people are already interested in you, the web is where they go.

Stop thinking about the web the way you think about your advertising. It ain't like that. Think of it as a store. Think of it as the yellow pages. Think of it as a brochure. But don't think of it as television.


Massimo said...

But, to be honest: how many big real brands - of cookies, or toothpaste, or banks, insurances, new car brands etc - have been created in the last 15 years, online OR offline? What I mean to say is: the web arrived when most of our brands had already been created.


Nonsense. The digital age has been one of the most fertile eras of product and brand development.Ever hear of Blackberry, or Verizon, or Quizno's, or Palm, or Viagra, or T-Mobile, or Claritin, or Comcast, or TiVo, or Samsung, or...you can Google just as well as I can.

Massimo said...

I did some very basic research on Wikipedia. Apart from Verizon, which got that name in the year 2000, all the other companies you mention pre-date Y2K...


You're confusing when the companies were formed with when the brands were built.

Anonymous said...

Are there any examples of major brand budgets that tried to build by actually using online only?

Anonymous said...

we got some newbies here

Unknown said...

true to some extent, but it depends on the buying cycle. online marketing can effectively capture and convert consumers in a research phase - it is just more difficult.

Bethany Leonard said...

Thank you so much for this wonderful insight. It may be hard for anyone who doesn’t exactly know the difference between online and traditional marketing and advertising. It is actually a lot simpler online, only the people doing the job are making it seem complicated.

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dusty bottoms said...

i'm thinking Netflix is the only real digitally-born brand. and they did it through pop-ups, which everyone hates.

The Czar Dictates said...

@Dusty: Good call, but here's a funny anecdote: I actually put off getting Netflix for years, in the hope that a reasonable alternative would come along, precisely because the pop-ups were so damn annoying. That's right: I'm a Netflix customer despite its online "demand creation", not because of it!

The Czar Dictates said...

There's another dimension (or maybe another perspective on the same dimension) that is really important to the difference between Google and FaceBook: intentionality. People go to Google with a specific intention, and Google's business model is to intercept that intention and divert it somewhere that makes money from them; but ultimately, Google only succeeds if it serves the intention. People go to FB to, as you say, screw off or post a link to the latest cat video or... To make money, FB has to not merely divert the user's intention, they have to displace the intention. Or in brief, Google makes money when it helps you do what you were trying to do. FB makes money when it distracts you from what you were trying to do.

Different way of saying the same thing? Maybe. Personally I find the lens of "intention" to be really useful, especially in understanding why mobile advertising is such a complete MCF.