The contracting global economy is wreaking havoc with business-as-usual ideas about advertising. Brands are slashing 2012 budgets, and as far as I'm concerned, this is a good thing. With another recession brewing, the ad business needs a good, strong cup of coffee. We now have the wake-up call we've needed: The industry must let go of the cost-per-impression model. The money that's left in those slashed ad budgets needs to get spent on advertising with real and accountable results. When markets go south, CFOs are in charge, and they want to see efficient ROI -- in other words, more results with less spend.
Efficiency, however, is not what brands and companies are getting in a cost-per-impression environment. Impressions are not accountability, nor do they provide measurements of gains in sales, market share, or profits.
Marketers have the ability to reach audiences the size of the Super Bowl everyday online, yet impressions, which are nothing more than the measure of the opportunity to click on an ad, still prevail. Banner blindness is an accepted truth in online advertising: Even on the off-chance that a banner ad is noticed, it's probably because it's distracting and annoying enough to momentarily divert attention. People go online for a reason, and ads that intrude on their primary pursuit --reading an article, playing a game, or checking their social news feed -- are hardly going to compel them to stop what they're doing and happily pay attention.
The answer for marketers is investment in "zero-waste advertising" -- that is, solutions that deliver a consumer's active attention and eliminate paying for wasted, ethereal impressions.
With zero-waste advertising, advertisers only pay when someone has willingly initiated a brand experience -- also known across the industry as cost-per-engagement. To implement zero-waste advertising, measure and exchange value on a 1-1 ratio to assure that the brand, the consumer, and the publisher are all accounted for in the advertising experience. Demand a measured return based on real engagement with real people. Engage the exact audience you want to reach, based on the criteria your brand needs to succeed.
Marketers should take a cue from leading brands that are finding new ways to power cost-effective digital campaigns in social environments -- especially those that are contributing to the expected 14 percent rise in digital spending for 2012 (despite a decrease of 3-6 percent in overall ad spend).
For example, the measurable success that Bing, Best Buy, and Intuit have achieved with zero-waste, value exchange-based advertising across social media has allowed them to pioneer new ways to interact with consumers, and in turn, expand their marketing budgets. Social media's greatest appeal is its ability to convert customers into advocates and generate millions of dollars in earned media. This is a zero-waste approach -- with a multiplier that even television can't deliver.
The feature film industry has also embraced these ideas for non-traditional yet highly efficient marketing -- a smart move, since the industry needs to pay for skyrocketing production budgets.
According to a recent KN Dimestore study that included one of the major studios, 32 percent of people who completed a value-exchange engagement with social media gaming giant Zynga went on to buy movie tickets -- and in most cases, more than one. That translates to a 64 percent conversion from engagement with the movie trailer to ticket purchase. Zero-waste, case in point.
While Wall Street's roller coaster ride is shaking C-level thinking, brand evangelists need to seize the moment, rise out of the digital budget ghetto, and prove that the era of zero-waste marketing has arrived. In advertising, playing it safe during a weak economy can be the most dangerous thing to do.
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