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Research On, Buy Off

I’m often asked a very good question: “Where is the sweet spot for presence-based advertising & marketing?” Fundamentally, presence-based advertising makes sense for those businesses that value a sales lead more than a click. Such businesses typically do not have a “shopping cart” on their online sites since their products and services are too complicated to be sold in such a manner. Generally, the ideal presence-based marketer sells goods and services that are heavily researched online, but are bought offline.

The research online, buy offline group represents a very wide cross-section of business types including such high consideration products as automobiles and other transportation products, real estate including houses and apartments. Further, many services also fit the bill including home services like plumbing, remodeling and landscaping and financial services such as accounts and financial planners and professional services including attorneys. Veteran publishers, of course, will instantly recognize the research online, buy offline has amongst their heaviest and most profitable advertisers. Automotive and Real Estate along with Homes have long kept the newspaper industry profitable — a quick look at any Sunday newspaper classified section will confirm this. Attorneys are amongst the most profitable headings in most directory publications. In the Pay for Performance Advertising arena, $125 pay per call price tags are not unheard of in the Attorney category.

So these advertisers are proven to spend money - huge money, in fact - on advertising. However, successfully marketing and selling these products online requires interaction with the prospects — Anybody gonna just stick that ‘03 Camry in the shopping cart and checkout?! Presence-based marketing enables these research-online, buy-offline advertisers to allow immediately engage their prospects allowing the mutual qualification process to complete more effectively for both parties. Advertising publishers that provide a better method for advertisers and their prospects will benefit.

Presence-based Leaderboard & Skyscraper ads


FirstAuto, in conjunction with Channel 5 Cincinnati, recently incorporated presence-based direct response into their leading-edge microsites for auto dealers. These ads are presented in leaderboard and skyscraper formats. To my knowledge, this is the first such commercial deployment of presence-based ads within these ad types.

The already impressive FirstAuto ads are in actuality true interactive microsites. The ads offer, amongst other things, the ability to select among different dealers, select inventory, and view inventory detail. Now the ads also include presence-aware indicators — see the “Have a Question” indicator at the right.

Pretty cool.

Lead Generation: Killer App?

DeSilva & Philips, an Investment Banking firm focused in Digital Media, recently published an interesting piece on robust valuations of Lead Generation sites. The author highlights the inexorable shift of advertising dollars from traditional media to performance-based, net campaigns that has created a market opportunity for 100’s of companies in diverse industries. The “lead” is the thing.

This long-anticipated shift of dollars creates pressure on traditional media publishers to turn their sites into pay-for-performance lead-based models…or else.

The author also suggests that PayPerCall (PPCall) will be a significant growth engine for lead-generation sites. Indeed, the papers note that opportunity explains “the otherwise inexplicable” eBay-Skype acquisition, commented on in an earlier post. Helping advertisers actually close more sales from these leads represents an additional opportunity for lead-generation sites.

I’d certainly add presence-based ads, including contextual placements, as technology that helps traditional media and lead-generation sites deliver those hot leads to the advertisers eager to buy them. Moreover, presence-baseds marketing & ads can help advertisers get more value from the marketing dollar by engaging visitors in real-time when they’re prepared to do so. Helping advertisers get more value for their dollar creates real value for the lead-gen sites redefining advertising & marketing.

A Publisher’s View of the Trenches

I caught up today with Jeremy Bencken, Founder and CEO of ApartmentRatings.com. ApartmentRatings, a leader in Rental vertical search with a strong renter review aspect, has been offering Presence-based leads to their advertisers for several months now.

ApartmentRatings is extremely focused on the site visitor experience and the value proposition to the advertiser. An astute publisher, ApartmentRatings recognizes that the site visitor experience is, at least partially, predicated on advertiser responsiveness. ApartmentRatings sees the flaws that consumers perceive with email and phone as direct response methods. Internet consumers, who want instant answers, no longer find waiting for the indeterminant email or phone response from merchants acceptable. Indeed, lack of confidence that a merchant will reply impedes consumer response to advertisements, at all.

Jeremy’s take: “Presence-based ads that allow a site visitor to immediately interact with the advertiser is a true win-win-win. The site visitor is happy since they can get answers right away. The advertiser is happy because they get to actually interact with their prospect in real-time which improves their sales process and prospects. And I’m happy because my two main constituent groups are happy. Talking to a real human being in real time is revelation for both parties, and exceeds both sides’ expectations for the online experience.”

But there were issues to address. Presence-based ads had never been used in the Apartments vertical. Obviously there was no precedent for pricing or business model. Further consumer response was hard to predict. Thus ApartmentRatings had to first educate advertisers on the anticipated benefits of presence-based ads. ApartmentRatings selected a particularly progressive advertiser to work with to jointly develop a revenue model that worked for both publisher and advertiser. Then Apartment Ratings had to coach merchants on how to converse with online prospects in a way that would answer their questions and not scare them away. Finally, ApartmentRatings had to prove the results to the advertisers of the initial deployments. From those early learnings, ApartmentRatings has developed programs to take to additional early-adopter advertisers.

More Leads, Better Leads: A View from the Trenches

I regularly speak with ContactAtOnce! end advertisers to gain insights into how Presence-based Advertising is affecting their business. I place great value in hearing what works and what doesn’t — directly from those selling to the customers. The insights provide great texture to the analytical and statistical canvas. I found one such conversation today with a Houston-based Apartment Locator service, IWantMyRentRebate.com, particularly insightful. IWantMyRentRebate has been buying contextual, presence-based ads on a pay-per-IM-lead basis since August.

More leads: IWantMyRentRebate tracks origination very closely and knows that of the 100 some odd leads delivered essentially all leads were incremental to their email and phone lead flow. In fact, through proprietary means they preferred not to disclose, IWantMyRentRebate determined 96% of the contextual leads were incremental — meaning not cannibalizing phone or email leads they would have otherwise received. The Apartment Locator business is highly seasonal with a drop off in fall after families have moved in time for the start of a new school year. Presence-based ads have helped offset the seasonal drop and increase rather than decrease overall lead flow.

Better leads: Close rates for the Presence-based IM leads are similar to those for phone & email based leads. However, IWantMyRentRebate views the Presence-based leads as easier to close. Partly due to the immediacy of the interaction, the true buying intentions can be discerned more quickly. And the “non buyer” can be identified — and dispatched — more quickly than with other lead sources.

Different interaction style required: IWantMyRentRebate has identified techniques that work well … and some that don’t. Generally, the prospects responding to the contextual presence-based ads are more focused on a specific property than those leads originating in other media. Thus, answering the first qualifying question or two quickly and effectively becomes even more important than in other media. In other words, the prospect responding to a presence-based ad is more focused and demanding yet rewards those advertisers that can effectively respond by delivering their business more quickly and with less effort on the part of the advertiser — in many respects the “internet-savvy customer”. IWantMyRentRebate continually refines their set of standard messages when replying to their presence-based ads to better suit to the new media.

Interesting indeed.

Pay Per Call Consumer (Non-) Value

Pay Per Call (PPCall) advertising is all the rage at the moment, particularly in the local search arena. Google’s PPCall trial has added even more fuel to the inferno. PPCall presents clear business rationale to the advertiser. Many advertisers, particularly, local SME advertisers want a “lead” — a real person they can sell something — not a click which is afterall only a means to … a lead. The “mythical typical” small local advertiser remains, unfortunately, woefully underprepared to do a reasonable job converting clicks to leads. Thus, a call has much higher perceived and actual value than a click. PPCall creates advertiser value. So far, so good.

Advertising publishers can sell “leads” for far higher prices than clicks. Their SME customers have a more innate understanding of the value of the lead than the click. The PPCall publishers that I’ve spoken to tell me that the PPCall leads are easier to sell to the SME despite price points that may be 100x or higher the cost per click. PPCall clearly creates publisher value. So far, so good again.

But where’s the consumer value? The consumer must still dial the digits, either on their keyboard or dialpad. And click-to-call is notoriously lightly used, proving that most consumers don’t want to dial their digits into a keyboard. Once connected, consumers still have the phone experience that many find, shall we say, less than satisfying. That phone experience is even less satisfying for the internet-savvy consumer. Thus, there is limited to no consumer value to PPCall.

PPCall is conceptually correct and creates a more rational economic model for many advertisers and publishers. But given no consumer value, there should be a better way. And there is a better way that delivers the same value to the advertiser and publisher and to the consumer.

Ads in IM….Or IM in Ads?

During my panel discussion at Kelsey’s ILM, Anupam Gupta Director, Product Management, MSN Communication Services and Chamath Pailhapitiya, VP & GM, AIM and ICQ contemplated advertising inserts into IM services. One potential application put forward: contextual ads that could change based on the content of the IM conversation (Anyone care to click to download Green Day’s American Idiot cut from iTUnes when IMing your buddy about the latest political development?). A concept one of my fellow attendees afterwards called “creepy”.

Conversely, presence-based advertising is all about improving the direct response process when consumers choose to respond to ads. I believe this improves the experience for the consumer and the advertiser. Improving the consumer and advertiser experience creates real value for the Advertising Publisher.

So when it comes to Ads in IM, or IM in Ads, I vote for IM in Ads.

eBay & Skype — Reducing Friction of Commerce

Much has been written about eBay’s $2.6B acquisition of Skype. Fundamental to the deal, from what I hear, is eBay’s belief that presence-based advertising, by reducing commerce friction, will increase transactions and thus, obviously, revenues. I expect eBay will introduce presence-based ads with many of their properties including eBay Motors, Rent.com, Kijiji and others. And probably sooner rather than later. So eBay is betting, in a big way, on the value of presence-based advertising. I couldn’t agree more.

The Buzz is Back

I spoke last week at Kelsey’s ILM. Wow, the attendees radiated enthusiam and interest! Pam Kelsey said many more walkups than expected showed — a sure sign. No question, Local Search and Advertising is hot! My sense from my discussions and walking around: many deals were being done. The wild frontier, the next “It” thing is here. Buckle your seatbelts, we’re in for an interesting ride.

A Billion Here, A Billion There…

We’ve all sat (ok sometimes daydreamed) through way too many presentations when the talking head stood in front of the obligatory hockey stick slide and expounded on how great everything was going to be when the “inflection point” was reached at some future point. IDC recently estimated the number of instant messages exchanged daily has reached 12 Billion. Today. You, me, us have proven in the most definitive way of all — by what we do, not what we say — that we prefer IM for many types of communications. It’s time to harness the IM phenomenon for the benefit of us all — as consumers and as advertisers.