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Are Ad Networks Good In Recessions?

By - April 21, 2008

That’s what this Times article seems to imply:

Last year, Mr. Townsend said, many clients were happy to spend money just to raise awareness. Since January, however, “everyone’s retail-oriented. They want as many clicks for the dollar as possible,” he said.

Well, it’s fine and dandy to harvest demand for as long as you can, using ad networks. But at some point, you have to create demand as well. I sense that as we enter a downturn, the smart marketers are getting ready to do just that, as opposed to chasing ever decreasing margins down the rathole of direct response.

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  • JG

    A rathole of direct response? You mean, relevance-based advertising? When did the reason for the very existence of Google turn into a rathole?

    I guess the pendulum is always swinging…

  • http://www.think-through.com gianluca carrera

    …and as everybody will be chasing the last dollar of demand, the smart ones will be creating it at a much cheaper price in the brand segment? possible, and very smart. The market tends to adjust itself… brand might become cheaper and performance fairly expensive…

  • http://targeted.at nmw

    JG,

    I always thought that in the context of internet/web/online, “direct response” refers to spamming (e.g. via email).

    But there do seem to be more general interpretations (some are so general, that it could be considered as roughly synonymous with “advertising” in general :O ):

    http://www.google.com/search?q=define%3Adirect+response

    I find that there is a *STARK* contrast between the “ad network” model and the approach that John describes as if it were “the path to success” (or something like that):

    http://blogs.openforum.com/2008/04/18/linking-search-conversation-and-your-site

    If I understand John correctly, then I think I agree that the “customer is King” approach seems alot more reasonable than the “pork belly” approach.

    If advertisers wish to get *optimal* results — as in: very efficient, very effective, very high signal-to-nose ratio — then they will need to tailor their campaigns — actually define the target audience and design focused campaigns that are truly engaging.

    I guess Google saw the writing on the wall when it realized tht people were searching for videos — and that’s why the jumped in to acquire youtube.com (but that may very well have been a big-time waste of money).

    I also guess that all the talk about “ad networks” is primarily about the fact that no one wants to mention the Elephant in the room (so I won’t either ;P).

    If Google does not return to actually doing SEARCH, it will ultimately fail. Indeed: I have quite often argued that Google is primarily for novice searchers — so if advertisers wish to target those people who cannot type “ebay.com” or “amazon.com” into their location bars, then Google may be a good online property to do that — but advertisers should realize that they will need extremely deep pockets to do so (and even ebay itself apparently doesn’t need to do so! :O ;) ….

  • JG

    Thanks nmw; I must have misunderstood (not an uncommon occurrence — it’s just always nice when someone jumps in and corrects me/offers another viewpoint.) “Direct response” as a phrase does sound a lot like “CPC”, which is itself intertwined with the concept of relevance.

    You also write: “If Google does not return to actually doing SEARCH, it will ultimately fail. Indeed: I have quite often argued that Google is primarily for novice searchers

    How true, how true! And when is the world going to wake up and realize this? The big web search engines.. not just Google but primarily Google.. take the greatest common divisor / highest common factor approach. They are to search what Velveeta slices are to cheese: That thing that most people can stomach, most of the time.

    Where Google still needs to earn its stripes, where it still needs to prove its merit, is in its ability to do really good search beyond just amazon.com finding, as you mention. I’ve played around with their Enterprise search, for example, and have been none too impressed.

    I guess I just thought that, after ten years now of Google, we’d have something a little more powerful than what we do. When is Google going to offer a good “Roquefort” of search, as opposed to their usual Velveeta?