Monday, April 13, 2009

Why Brand Ads & Premium Sites Won't Go Away

Last week, I wrote that online advertising was undergoing a massive and rapid shift right now -- away from media properties and towards technologies that target consumers wherever they are. Here, I want to offer a seemingly contradictory addendum to that grand premise: that brand ads and premium media properties will NOT go away any time soon.

How can I say that when I made such a strong case about the challenges they face? While the new targeting technologies and techniques will indeed challenge both brand advertising and premium content sites, the ROI of those same technologies are in fact aided by those old ways they're seeking to bypass. Quite simply, brand helps direct. Brand advertising absolutely improves the ROI of any direct response or audience targeting, and premium content sites are a great way to present high-concept brand ads.

There have been many studies supporting this notion over the past several years. Fred Wilson of does a really great job of summarizing a recent comScore research study, that effectively supports the premises that: a) branded display has a different objective that search or direct response ads; b) significantly increases the effectiveness of search and direct response ads; and c) as such, also lifts offline, in-store sales as well.

The findings of studies like this one and many others also apply to audience targeting. However, as with brand ads' positive contribution to direct response ads, you are also far more likely to react positively to a behavioral targeted or re-targeted ad when you recognize the brand in the ad. It's that simple and totally human nature: people are drawn to the familiar. And because of that, there will always be room for brand ads, and as well as for the ideal premium content venues in which to display them. We'll have to wait a few years and see where the value equilibrium ends up (i.e. ad unit CPM pricing).

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