State of the Industry Conversations

After a bit of a delay, State of the Industry Conversations returns with an answer (one, among several) to a previous guest question.

For all of those who missed the original post:

Question:

We have been experimenting and optimizing our online campaigns, but are repeatedly disappointed in the click through rates (.01% to .5%) and conversions coming from our banner advertising. We have a tested several strong CTA’s such as vacation give-aways, free gas, and great price points. We have tried behavioral targeting, content targeting, and run of network on travel research sites. We have utilized ad networks and purchased direct from the publisher. Are our expectations too high, or have others found the secret to successful banner ads when promoting travel to their State?

Answer:
(Submitted via LinkedIn)
From a CTR standpoint, yes .01% can be abysmal, but a .5% in the travel category can indicate good performance. Try running a test to see what gave you the higher CTR…then do more of that. However, I think the real answer is to look beyond the click on a banner. Take a look at your entire digital media mix. Make sure you are employing tools that allow you to track the effect of a banner view or click on your organic search, paid search and email conversions. If you think about your online marketing in regards to feeding the funnel, you realize that your banner campaign is feeding the top of the funnel by building awareness and consideration. The bottom of the funnel is where people are converting and this will typically take place on a search click. Measuring path-to-conversion will make you feel much better about how your banner campaign is feeding the top of the funnel (just as is your offline media - generating awareness, consideration and intent).

Use a tool like Quantcast to understand if your media is driving the qualified audience to your site and compare your efforts of driving traffic (i.e. awareness) to other state travel destinations. When it comes to booking travel online it is mostly being done at hotel and travel websites and third-party booking engines like Orbitz, Expedia, so make sure your expectations are properly set with regards to conversions.

Use a page-tagging analytics tool that allows you to measure how much traffic you are driving to your hotel and destination partners by tracking outbound links. Consider engagement as a metric. How much time are people spending on your site after they click? Consider using richer media that allow a travel seeker to engage with your brand in the banner without leaving the site they were on.

Also, consider cost. Depending on what you are paying and how many impressions are driving a .01% CTR, you may be getting a very efficient cost-per-qualified lead to your site.

Thoughts// While at first glance the question seems to fit in perfectly with our engagement discussion, if the ads in question are not only resulting in a low CTR (start of the funnel), but also a low conversion rate (end of the funnel) that would point to an issue beyond a simple mis-use of analytics.

So, assuming this fellow reader is following her results throughout the advertising process, what is going wrong? Is banner advertising being ignored by everyone? Are people outside of your demo (see our post, Who is Clicking on Your Banners...Probably a middle-aged, sweepstakes-loving, Midwestern woman who likes junk mail and the Packers) the only ones paying attention to your ads? Are display ads too often looked at as the entire 'interactive strategy'?

Personally, I am starting to pull further and further away from display advertising while looking (and demanding) for an integrated advertising plan that places my message in front of the audience at key points.

With those thoughts, let's open it up to the group:

State of the Industry Conversations

To run banner ads or not to run banner ads, that is the question.

State of the Industry Conversations
Bringing the Travel Industry together…one question at a time

Question:

At this time, what percentage (in your best estimate) of your online / interactive marketing plan is devoted specifically to display ads (or banner ads)?

What percentage of your online / interactive marketing plan will be devoted to display ads 1 year from now?

Answers:

Post your answer in the comments field below or via the Answers section of LinkedIn.

Note: You do not have to be a member of Blogger to post a comment to the Travel 2.0 blog. Anonymous comments are allowed, however we would appreciate if you signed the comment with your name.

State of the Industry Conversations

This week, we have our first guest question for our Conversations series. I am sure this is a common question in offices and conference rooms across numerous states.

We will open the question up to our readers first, then thoughts from myself and Mo.

State of the Industry Conversations
Bringing the Travel Industry together…one question at a time

Question:

We have been experimenting and optimizing our online campaigns, but are repeatedly disappointed in the click through rates (.01% to .5%) and conversions coming from our banner advertising. We have a tested several strong CTA’s such as vacation give-aways, free gas, and great price points. We have tried behavioral targeting, content targeting, and run of network on travel research sites. We have utilized ad networks and purchased direct from the publisher. Are our expectations too high, or have others found the secret to successful banner ads when promoting travel to their State?

Answers:

Post your answer in the comments field below or via the Answers section of LinkedIn.

Note: You do not have to be a member of Blogger to post a comment to the Travel 2.0 blog. Anonymous comments are allowed, however we would appreciate if you signed the comment with your name.

Travel Trends - .travel, JetBlue, Privacy

.travel To Open Up Registration (Read, we need money) - Like a few of you, I received an email this week from EnCirca or the company one of the companies behind the .travel domain extension. The email basically stated that as of December 21st anybody with a travel related business can apply for a .travel domain name. The email itself was pretty comical, with lines such as 'anticipated December 21 Land Rush for .travel' or '.travel domain names are ideal for search engine marketing.' Good stuff.

While the .travel domain idea looked good on paper and in theory, it has not worked as designed in the real world. People have not caught onto the idea that a domain extension such as .biz, .travel or .jobs is the same as .com. Seriously, most people cannot even grasp the concept of .net, let alone .travel or .asia. With search engines becoming more than just a simple website, but an embedded action in our thought process for locating information, the need for a certain domain name and domain extension is dwindling.

Now, if you are like the Arizona Office of Tourism, you might own a few of these key domain names...such as arizona.travel...just to prevent someone from squatting or worse, using that domain in an undesirable manner. But you can call off the plans to switch over your whole advertising campaign and interactive strategy to yourdestinationhere.travel. It's already over...before it really got started.
http://encirca.com/

JetBlue Goes Wireless - As we have discussed previously on the Interactive Trend Report, the next big frontier for in-flight entertainment, or annoyance depending on your point-of-view, is in-flight wireless access. Earlier this month, JetBlue announced a basic pilot program (no pun intended) to test wireless access aboard one of there Airbus A320 jets, dubbed BetaBlue (how clever). While this service will be a reality for airline passengers in the near-future, it appears that JetBlue's wi-fi still has a few bugs to be worked out. But, with American Airlines, Virgin America, and Alaska Airlines all preparing to launch wireless access during the next year, you are not too far away from checking your email from 40,000ft. Or at least checking your favorite blog...this one!
http://blogs.zdnet.com/

People Don't Truly Care About Privacy - A very good post from Seth Godin, discusses the some of the latest news surrounding the idea of internet privacy and privacy in general, and why people don't really care about it. To quote from the post:

There's been a lot of noise about privacy over the last decade, but what most pundits miss is that most people don't care about privacy, not at all.

If they did, they wouldn't have credit cards. Your credit card company knows an insane amount about you.

What people care about is being surprised.

Exactly. Facebook's attempt at targeted ads encountered vocal opposition because the private information being collected was being used in an irresponsible manner...i.e., they surprised people. We all know we are being watched, just don't remind us of it.
http://sethgodin.typepad.com/

Who is Clicking on Your Banners...Probably a middle-aged, sweepstakes-loving, Midwestern woman who likes junk mail and the Packers

Advertising is the bread and butter of the web, yet most of my friends claim that they never click on ads, typically using a peacock tone that signals their pride in being ad-averse. The geekier amongst them go out of their way to run Mozilla scripts to scrape ads away, bemoaning the presence of consumer culture. Yet, companies increasingly rely on ad revenue to turn a profit and, while clicking on ads may be declining, it certainly hasn't gone away. This raises a critical question: Who are the people that click on ads? >>Full Story

Thoughts// Okay, so maybe they are not all Green Bay Packers fans. But according to some recent data from AOL they are probably middle-aged women from the Midwest. This story, which highlights those findings, asks the question how and why social networking sites such as MySpace and Facebook rely so heavily on this type of advertising for revenue. And, since we all seem to 'hate' ads, who actually does click these ads?

While this conversation is very interesting on its own, it does lead nicely into another conversation I have been having internally over the past few weeks...what type of measurement stats should we be monitoring? If the majority of the clicks are coming from one, single demo, how valuable are those clicks? If the clicks don't lead to a conversion, should you value those clicks the same as ones that do?

To steal a quote from the article 'the ad world is obsessed with clicks because they can measure those.'

As more and more reasons mount to move away from the page view statistic (see online video, AJAX) and as this trend begins to come into the mainstream (see Nielsen/NetRatings dropping the page view stat in favor of time spent) we as marketers need to begin looking at different metrics to help measure the effectiveness of our campaigns.

Tangible statistics or, as Mo's team at Travel Oregon likes to say, engagement statistics such as (for a DMO) guides / brochures ordered, time spent on pages, time spent on key pages, search terms, downloads, email database sign-ups, blog stats or account-based pages used in conjunction with visitors and unique visitor metrics can begin to reveal a more realistic picture of who and what your website consumers actually are and what they are doing.

With that kind of information and data, you can actually start advertising and marketing to your target audience rather than everyone.

Score One for Consumers....

Under mounting pressure from its community and various consumer privacy groups, Facebook has moved to scale back its ambitious plans to publish accounts of its user’s purchases and other commercial actions publicly to their various friend groups. As of late Thursday, Facebook users must now proactively consent to alert friends whenever they take various actions, such a renting a DVD or purchasing a pair of sneakers. >>Full Story

Thoughts// Would you like your social network of friends alerted about every recipe you've saved on Epicurious.com, every flight you've booked on Travelocity or every movie purchase on Fandango? Facebook's controversial new ad platform "Beacon" was supposed to do just that...essentially telling your friends about your "vote of confidence" for these brands; and yes, these brands have a partnership with Facebook.

Sound big brother to you? More than 50,000 Facebook users did. In the face of a flurry of protests by both users and privacy groups, Facebook has scaled back the program. Users now have to explicitly give permission (opt in) before their purchases are announced to the world.

I suppose we could forgive Facebook for this misstep. In the midst of a meteoric growth in terms of users, third party applications and not to mention it's "media darling" status, perhaps Facebook forgot the carnal rule of digital marketing...it's PERMISSION based!

So Many Ads, So Few Clicks

Can more targeted pitches on Facebook and other sites reverse the shrinking response to online ads? The truth about online ads is that precious few people actually click on them. And the percentage of people who respond to common "banner ads," the ubiquitous interactive posters that run in fixed places on sites, is shrinking steadily. The so-called click-through rate for those ads on major Web destinations such as Yahoo! (YHOO ), Microsoft (MSFT ), and AOL (TWX ) declined from 0.75% to 0.27% during 2006, according to Eyeblaster, a New York-based online ad serving and monitoring firm.

Thoughts// A compelling but not so surprising article from Business Week about the realities of online advertising, and frankly any mass advertising program. The article chronicles the decline of click through rates of general "mass" banners ads through the story of an online parcel delivery service and their efforts to reach out to the "me 2.0" generation of Facebook users which received a woeful 0.04% click through rate.

Out-of-Context Ads Prove Effective

New research casts doubt on the long-held belief that advertising is most effective when placed near content related to the product.

Yahoo! and MediaVest recently studied a group of consumers passionate about a particular subject area. Product ads displayed out of context had roughly the same impact on brand preference as identical placements shown next to related content. >>Full Story

Thoughts// Not the most ground-breaking study, but still some important data about contextual versus behavioral targeting. Logically, behavioral targeting should be a step-up from contextual targeting. Behavioral targeting takes advantage of a person's interests regardless of what website they may be browsing, while contextual targeting places ads on websites with similar content.

The article does suggest that 'the long-held belief that ads shown in context are more valuable than those seen out of context', which is almost correct. It should note that the ads shown out of context are not merely shown on an unrelated website, but to target consumers on an unrelated website...which is a big difference.

Even with these study results, advertisers should conduct their own research on which type of delivery method produces the best ROI or click-thru rate. In addition, even if your ad is targeted at the right audience, a more important factor may be the creative execution of the ad itself.

MySpace Launches Targeted Ad Program

News Corp.'s MySpace social networking site is using personal details contained on users' profile pages and blogs to sell highly targeted advertising, the company said Tuesday.

The Web site started the first phase of its "interest targeting" experiment in July, culling likes and dislikes from its users' pages to sell ads in 10 broad categories such as finance, autos, fashion and music. >>Full Story

Thoughts// The announcement that MySpace will begin behaviorally targeting users based upon their MySpace pages could become the first real test to determine the threshold of how much information consumers are willing to give in order to receive targeted, relevant ads. While most online users have been behaviorally targeted already, one would assume the vast majority of this group is unaware that any targeting has taken place. However, in the case of MySpace there is the potential for a connected, vocal group to educate the majority of users on how their profiles are being searched for keywords...and for those users upset with the practice to move on to another social networking site.

While most behavioral targeting takes into account which pages you have previously visited and then serves ads for those companies (basically), the MySpace model will actively search out and look for keywords that you have used in blogs, quotes and descriptions of yourself on your MySpace page. So, if you have just wrote a blog about your upcoming vacation to China, a company such as Orbitz (for example) could use that information to run targeted, China-related banners (for flights, hotels, etc.) on your MySpace page. Talk about a targeted message.

As the investors and parent companies of these popular web companies look to monetize and recoup investments, how will advertising programs such as this one affect the reputation of these sites with there members? Will MySpace users accept this type of advertising or simply move on to the next, new site?

Behavioral Targeting Gets Social

Social-networking Web site Facebook Inc. is quietly working on a new advertising system that would let marketers target users with ads based on the massive amounts of information people reveal on the site about themselves.

Eventually, it hopes to refine the system to allow it to predict what products and services users might be interested in even before they have specifically mentioned an area. Full Story>>

Thoughts// A nice piece last week in the WSJ about how Facebook is building an algorithm that will allow advertisers the ability to target advertising to users based on their interests and personal connections. Essentially what this means is that all the little tidbits about yourself on your profile and information mined from applications on your profile (e.g. TripAdvisor’s "Where I’ve Been" ap) will now be used to show you more relevant ads.

With more than 1 million people flocking to Facebook each week, the media drumbeat around the site has certainly been deafening (can you say IPO?). Besides the WJS piece on its targeting service Mark Zuckerberg (founder of Facebook) is featured on the cover of Newsweek in an article about its relevance as its moves beyond the borders of college. All this probably leaves you wondering what’s going on with MySpace. MySpace is clearly the category leader in terms of sheer users (70 million at last count) and already offers a somewhat limited behavioral targeting platform. However, as pointed out earlier in this report, it just maybe that these two spaces may not be competitors after all.

It’s an Ad, Ad, Ad, Ad World

It is only a matter of time until nearly all advertisements around the world are digital. Or so says David W. Kenny, the chairman and chief executive of Digitas, the advertising agency in Boston that was acquired by the Publicis Groupe for $1.3 billion six months ago.

Now Mr. Kenny is reshaping the digital advertising strategy...the plan is to build a global digital ad network that uses offshore labor to create thousands of versions of ads. Then, using data about consumers and computer algorithms, the network will decide which advertising message to show at which moment to every person who turns on a computer, cellphone or — eventually — a television. >>Full Story

Thoughts// An interesting article in today's Times about ad giant Publicis' ambitious strategy to build a "behavioral network" in hopes of delivering personalized messages to consumers, across multiple platforms. While the concept is brilliant, the proverbial "devil" might be in the details; i.e. how do you build and manage an integrated, multi-platform (TV, computer, mobile) behavioral network that profiles users' watching and surfing habits and track their response to specific ads. 1984, here we come!

Travel Trends - Email, MySpace, Tacoda, AOL

Addicted To Email - According to a recent survey, the typical user checks their email an average of 5 times per day. In addition, 15% of those surveyed consider themselves 'addicted' to email. And most users have more than one email account...half (52%) have two or three accounts, while 22% have four or more.
http://www.mediapost.com

29,000 Sex Offenders Identified On MySpace - While certainly not a shock to anyone familiar with the ease of registering on MySpace, the news that the company has identified 29,000 sex offenders that were members of the site does cause a great deal of concern for companies using MySpace as a promotional tool. As with any ad campaign or marketing effort, attention must be paid to how the medium will affect the consumers and in this case, the repercussions of using such a public forum to deliver a brand message. The scary part of this story is that these 29,000 are only the users who registered with their real names.
http://www.adage.com

AOL Buys Ad Firm Tacoda - AOL has purchased behavioral targeting ad firm Tacoda. The deal, which brings AOL into the ad network buying frenzy, could mark an important turning point for behavioral targeting. In the past, most major portals steered clear of such ad delivering methods due to consumer privacy concerns, but with AOL clearly supporting behavorial targeting, the technology may finally clear the privacy hurtle once and for all.
http://www.cnet.com

When Fewer Clicks Are A Good Thing

There may be times when a declining click-through rate on a behaviorally targeted campaign is a good sign. When Advertising.com ran a comparative test of three campaigns that used both run-of-network and BT techniques, Brent Halliburton, director of network strategy, was surprised at the results. The targeted ads demonstrated lower CTRs than untargeted ads, and yet at the same time they showed much better results on the back end. This week, Halliburton walks us through that research and explains what it means to media planners. >>Full Story

Thoughts// A very interesting article and interview from the Behavioral Insider about the drop in CTR (click-thru rates) during behaviorally targeted campaigns. Although the research does not initially make logical sense, the hypothesis put forth that the BT ads are 'wedding out the window shoppers' does begin to explain the results. A timely and useful article as advertisers begin to really question what all of those clicks mean.

How Marketers Hone Their Aim Online

When Pepsi-Cola North America wanted to make a splash on the Web this spring to promote its new low-calorie vitamin-enhanced water, Aquafina Alive, the beverage company didn't run ads just anywhere on the Internet. It placed ads only on sites it knew would be visited by people interested in healthy lifestyles.

Pepsi was using an increasingly popular online advertising strategy called behavioral targeting, in which marketers analyze consumers' online activities to figure out who is most likely to be interested in its product -- and then place ads on whatever sites those consumers are visiting. >>Full Story

Thoughts// Nice piece in the WSJ about the increased use of behavioral marketing, focusing on Pepsi's use of Tacoda network to market its new Aquafina product. I totally echo the sentiment of the article; Travel Oregon used the Tacoda network for our 365 campaign this spring and were blown away by the results.