The Praized Blog

A month ago, I posted some details on the Google Print Ads test. Jeremy Mayes, a search marketer from Illinois, had been invited to participate in the latest wave of Google Print Ads tests running in US newspapers.

The results are in and here are Jeremy’s main findings from his blog:

1. “In the grand scheme of things the overall traffic delivered via our ad was low - less than 1,000 visitors total” (he had a tracking URL)
2. “Visitors who arrived at the site via the newspaper ad generated 70% fewer page views than visitors who arrive via PPC channels”
3. “Visitors who arrived at the site via the newspaper ad spent 30% less time on the site than PPC traffic”
4. “Visitors who arrived at the site via the newspaper ad registered at the site at a rate almost identical (just a touch lower) to those who arrive via PPC.”

He commented: “so overall the newspaper test delivered a small set of visitors who had metrics that were below average when compared to PPC traffic.”

He was nice enough to post a .pdf document that shows the ad (the Chefs ad in the lower right) and I thank him for that!

What it means: not really surprised the traffic delivered by the ad was low. I believe there’s a lot of inertia between looking at a URL in a printed ad and typing the URL in your browser. That’s why the phone number is such an important data element in any efficient local ad. And that’s also why trackable phone numbers are key to measure real ROI in any local media (print and online).

Catching up on my backlog of reading material, I just found this interesting analysis in McKinsey Quarterly (registration required):

Summary:

“McKinsey research finds that bottlenecks in supply could limit the pace of online ad growth and raise prices over the next 24 months. The study also suggests that a dearth of ad agencies that can manage both traditional and digital campaigns could further slow the shift in spending to online ads. ”

Here are the best excerpts:

Video Ads:

“According to many of the video suppliers we interviewed, very little unsold advertising capacity remains today. Assuming that marketers don’t increase the number of ads they place in each video stream, the maximum supply of video ads is currently about $600 million a year—far less than future demand, which we expect to reach $1.4 billion to $3.2 billion in 2007.”

Paid Search:

“The situation is similar for paid search. Annual growth in the overall number of searches is slowing, from 30 percent in 2004 to 20 percent in 2005. Without significant changes in consumer click-through rates or in the prices advertisers are willing to pay, we estimate that the maximum current value of paid-search advertising is about $7 billion. Meanwhile, our analysis (…) suggests that advertisers will want to spend $9 billion to $12 billion on paid search in 2007, up from around $5 billion in 2005.”

Banner Ads:

“Although the inventory of banner ads—$4 billion to $8 billion—appears more than sufficient to accommodate the likely demand of $2.5 billion, advertisers probably won’t be interested in much of what’s available. The complex task of spreading media spending across thousands of small Web sites, many with different ad formats, means that advertisers tend to return to heavily trafficked sites, where supply is at a premium. Even on the big portals, marketers are leery of having their ads placed near consumer-generated content that might be objectionable. In fact, advertisers currently direct 96 percent of their spending for online display ads to pages that represent just 30 percent of overall Web traffic. ”

Additional findings:

• “Most advertisers expressed frustration at the small number of ad agencies with the skills to manage both traditional and digital campaigns. Many advertisers have no choice but to employ separate agencies and to coordinate cross-media efforts themselves, which makes it more challenging to manage—and evolve—their marketing mix.”
• “The absence of a widely accepted independent metric for digital media (such as the NielsenTV ratings) makes it difficult to compare the results of online campaigns and to measure their impact—an uncomfortable fact for marketers considering major spending reallocations.”

What it means:

1) This analysis supports the need of traditional media to capture more traffic within their network of sites in order to fulfill the growing appetite of advertisers.

2) It also shows us the opportunity in video ads. It seems like there’s a massive gap between supply and demand in that ad format (not surprising given the popularity of TV advertising).

3) It also shows us the opportunity in the Long Tail of advertising, which might explain the rise of blog ad networks like Federated Media and B5 Media.

4) As the study says, “audiences and vehicles are highly fragmented” I wonder if fragmentation and lack of inventory in local online ads prevented the segment from growing as fast as people expected in 2006?