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SoC070, "Advertising's New Complexities," discussed the impact that a dramatically changing media landscape and the emergence of new media types are having on advertising. Reaching the same number of users today that a company reached ten years ago now requires more media channels, more talent, and lots more money. As the rate of change in the world of advertising continues to accelerate, advertisers as well as third-party service providers are experimenting with an approach that promises to generate a highly interested and engaged advertising audience: Enable consumers to search for advertising proactively and select what they want to receive.
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| Enable consumers to search for advertising proactively and select what they want to receive. |
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Google (Mountain View, California) has proved that moving away from traditional push advertising on the Web (involving ads such as banner ads or pop-ups) can generate interest from consumers—and a high revenue stream for Google. During normal use of Google, users specify search terms or keywords that Google uses to locate material on the Web. But Google also displays so-called sponsored links, which are advertisements, alongside the search results. Users have the option to select links that promise to provide services or products related to the topics that they have just searched the Web for. Advertisers pay Google on the basis of the number of click-throughs that the ads bring to the sponsor's Web site. According to the Economist (1 October 2005, page 72), such pay-per-click advertising (at Google.com and many other Web sites) generated $2.3 billion in the United States during the first half of 2005. That amount is 40% of U.S. online advertising and 3% of all U.S. advertising.
Companies are now trying to extend the model to include phone-call responses to ads. Ingenio (San Francisco, California) developed a pay-per-call implementation in 1999 by placing toll-free phone numbers of local businesses on the results pages of search engines. Ingenio's model saw limited success possibly because a response required the user to go to the phone. Emerging voice-over-Internet-protocol technology that transmits phone calls on the Internet (sometimes through a microphone in the computer) could establish the necessary phone connection through the click of a button on the computer screen. America Online (Dulles, Virginia) is now partnering with Ingenio, and Google is also working on pay-per-call capabilities and business models.
The concept of search-and-select advertising in which consumers initiate and control their exposure to advertising is moving beyond Internet-based applications, although the concept is currently still at an experimental stage.
- eVisure (Richmond, Virginia), which is currently in beta-testing stage, allows consumers to find a product that they have seen on television or in the movie theater. For instance, by typing in Hitch (the movie with Will Smith and Eva Mendez), consumers find a list of featured or placed products, including product descriptions and where to buy them.
- KFC (Louisville, Kentucky), a subsidiary of Yum! Brands (Louisville, Kentucky), has unveiled a commercial that turns the potential threat of digital-video recorders (DVRs) into an advantage. DVRs generally enable consumers to skip commercials, an obvious threat to advertisers. But KFC's spot contains a hidden message (a coupon) that is visible only if one repeatedly views the ad in slow motion. The hope is that viewers will use the DVR's capabilities to watch the commercial several times instead of skipping it. Many advertising agencies and broadcasters are looking for ways to restrict DVRs' capabilities to protect their traditional ads. "This is taking the opposite approach—rewarding viewers for taking the time to engage and be interactive with the television," says Tom O'Keefe with Foote Cone & Belding (New York, New York), the ad agency that developed the spot.
- Anheuser-Busch Companies (St. Louis, Missouri) plans to develop a direct-to-consumer channel: the Bud Screen. The channel will feature podcasts of a mix of content and promotion for Budweiser.
- Southwest Airlines (Dallas, Texas) allows users to download Ding!, software that sends online alerts for short-term discounts on airfares. Southwest claims that the campaign has generated 1.3 million downloads and $50 million in sales.
| Search-and-select advertising encounters guarantee interested and engaged consumers, increasing the likelihood of ad success. |
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In all the campaigns, the advertisers hope that consumers will proactively search for and select advertising content by going online, rewinding the DVR, or downloading podcasts or software. The approach promises a number of benefits for advertisers. First, the approach copes with challenges posed by new media, such as the DVRs' capability to skip commercials. Second, advertising exposure becomes time independent in contrast to a broadcast commercial that can miss much of the advertiser's intended audience. Third, advertising encounters generated with the search-and-select approach guarantee highly interested and engaged consumers, increasing the likelihood of purchases.
Despite these advantages, the concept has two substantial drawbacks or challenges. First, advertisers will have to educate consumers about how to search for or where to find the company's information. (KFC's commercial, for example, requires consumers to know about the hidden message.) Second, companies are likely to attract only consumers who already know about and have a positive attitude toward the brand—attracting new segments of consumers to the brand will still require more traditional campaigns. Search-and-select advertising is an intriguing concept, but whether it will generate success in the real world comparable to the success of sponsored links on the Internet, where search and selection (clicking) tie in closely with each other and the nature of the medium, remains a question.
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