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GroupM Report Urges Marketers Online

May 16, 2007  •  Post A Comment

Ad spending on the Internet is already the fastest-growing category as advertisers shift funds from traditional media—television, magazines, newspapers—to the Web.
At this week’s upfronts, the powerful broadcast networks are promising their clients that they, too, have digital solutions, because advertisers want more than the 30-second commercials that historically were seen as the most powerful selling tool money could buy.
It may seem advertisers are rushing headlong into cyberspace, but a new report from a major media-buying agency contends that marketers are not using interactive advertising to full advantage.
“Online is already a mainstream component of consumer behavior and media consumption,” said Rob Norman, global CEO of GroupM’s interaction division. “The fundamental purpose of communication strategy remains unchanged, but marketing must urgently harness interactive media and the behaviors it induces.”
He urges marketers to panic, but just a little bit. “Panic is a natural response to any structural change in consumer behavior or communication,” he said in the report. “But be assured that the fundamental purpose of communication strategy remains unchanged.”
That purpose is to reach consumers at the right time with sufficient force to induce an action. Marketing communications also needs to engage consumers to better persuade them of the product’s attributes.
With interactive marketing, there’s also a transactional aspect, in which consumers can reach out and grab the product or more information about it.
While the marketing concepts stay the same, interactive media “exaggerates the potential to succeed. It also exaggerates the potential to fail,” the report adds, a scary concept.
Marketers today need digital media to replace audiences that are harder to get in traditional media, in particular to add frequency in communicating with light television viewers.
GroupM’s report looks at what it called addressable electronic media. “These are channels in which we can target messaging at the individual level in the knowledge that the recipient of that message can respond directly to us or engage him- or herself with a deeper content or brand experience,” the report said.
(This definition excludes digital and on-demand television, for now, according to GroupM, as infrastructure and privacy issues have so far limited the potential for TV to achieve full addressability and also have limited the potential to deliver fully interactive content to the television itself.)
GroupM doesn’t see the Internet itself as a medium.
“We prefer to think of it as a platform or even a parallel universe,” the report says. “Every marketing function has its place in the online environment, from message creation to product distribution; from sponsorship to PR; from direct mail to direct and indirect selling; from trade marketing to merchandising. It is a network of opportunity which needs to be mapped for brands and their stewards.”
Ads in an interactive format require a different way of looking at media placement.
“When we buy a page in the March issue of Vogue, we have a reasonable expectation that we can go to any newsstand in the country, pick up a copy and find our ad. Equally if we buy the first spot in a break at 20:15 in a Champions’ League soccer game in France, we can happily switch on and watch it in Paris, Perpignan or Pau,” the GroupM report says. “If, on the other hand, we buy 1 million impressions on Yahoo Finance, we cannot actually witness them in this linear, real-time dimension. Yahoo manages its inventory in a completely different way and ‘sells’ what appears to be the same space to many advertisers. This is mass personalization at work.”
GroupM says the difference poses a crucial question: “Is it essential we embed our message in the context of Yahoo’s finance editorial? Or would we actually prefer to buy cookies we know represent individuals who exhibit actual behaviors relevant to our purpose? Context versus cookie will be a critical debate in our future, particularly because the real growth in online impressions will not arise from rich-context media but from the billions of impressions generated by social networking: e-mail, IM, video- and photo-sharing and, of course, the endless volume of profiles and interactions from MySpace, Facebook and their ilk.”
GroupM also says interactivity means that media is both a marketing channel and a channel to market.
“Increasingly brands use online channels to sell their own goods and services or to promote their sale through other online merchants. Even for brands rarely sold online, the channel has become a key part of the purchase funnel and therefore a process to be managed,” the report said.
The report concludes that for every advertiser, interactive marketing needs to move front and center, “with budget allocations to match.” you try to get a sense of audience size, you’re trying to get a sense of value for these things and so Lowes is a good partner for us, so we’ll take a flier for Lowe’s on these things and we both learn and we both gain from it.

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