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Practitioners perceptions
of advertising strategies
fordigitalmedia
Yann Truong and Rod McColl
Downloaded by [Hanyang University Seoul Campus] at 11:22 01 March 2016
Philip Kitchen
Digital advertising is set to become a serious challenger within the rapidly changing
media landscape. Today there are concerns that advertising strategies based on models
and experiences developed with traditional media may need to be reviewed in the digital
market. To provide insights into how online advertising strategies might need modification, 21 in-depth interviews were conducted across organisations representing key stakeholders in the digital advertising market. Findings identified five key trends relevant to
advertisers including: a move towards permission-based advertising; higher levels of personalised advertisements; more three screen advertising campaigns; increased levels of
interactivity and the development of performance-based metrics. In the context of these
trends, nine propositions are posited concerning the effective formulation and management of digital advertising strategies.
Introduction
In 2008, global business directly or indirectly connected to digital media
was worth 2,740 billion including sales of 1.25 billion mobile phones
(+6% from 2007), 302 million PCs (+11%) and 94 million LCD screens
(+30%) according to Idate (2009). Future growth in the broadband market is assured given current PC penetration rates of below 20% (Idate
2009). In terms of usage, many consumers now spend more time navigating online than viewing television (Berman et al. 2007a). Mobile phone
usage among younger consumers is also increasing at an exponential rate
(Rappaport 2007). Despite the fact that the amount of digital data already
produced is estimated to be three million times the combined information
International Journal of Advertising, 29(5), pp. 709725
2010 Advertising Association
Published by Warc, www.warc.com
DOI: 10.2501/S0265048710201439
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Methodology
The research questions addressed in this paper concern identifying key
trends in the digital advertising market and to understand how advertisers
should respond to these changes. They were addressed using qualitative
research techniques. The choice of research methodology was justified
based on the link between the four basic elements of the research process:
epistemology, theoretical perspective, research methodology and research
method and their relationship to the research questions (Carson etal. 2001;
Crotty 1998).
The study follows a realism paradigm, which considers that there is
a real world to discover even though it may not be immediately comprehensible (Godfrey & Hill 1995). Realism is a relevant paradigm for
qualitative researchers in marketing (Healy & Perry 2000; Marshall &
Rossman 2006), particularly when researchers require a novel slant on a
phenomenon or where the intricate details of phenomena are difficult to
convey or access via quantitative methods (Carson etal. 2001; Strauss &
Corbin 1990).
The research methodology consisted of in-depth, personal interviews
across 21 different organisations within the digital advertising industry.
Major stakeholders in the field of digital advertising were selected from
a pool of companies based in France but who operate internationally.
Organisations were targeted using snowball sampling and were selected
based on their leadership position within the industry. Table 1 outlines the
function for each participant with most operating at director level and the
location of each firm within the advertising value chain.
Interviews were conducted until a convergence of views was obtained,
as recommended by Miles and Huberman (1994). That is, until no new
themes were emerging from additional interviews. Respondents were
selected using the key informant approach suggested by Robson and
Foster (1989) and each participant held a senior management and/or
director position. The interviews followed the guidelines recommended
by Minichiello etal. (1995), based on the recursive model of interviewing.
This consisted of a more conversational interaction based on the funnelling
approach, whereby the flow and the type of questions moved from the
broad to the specific (Patton 1990; Thietart 2001). A list of general topics
placed in a logical order was adopted rather than a structured question-
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Role
Sector
Company role
Participant A
Soft beverage
Advertiser
Participant B
Bank
Advertiser
Participant C
Cosmetics
Advertiser
Participant D
Internet director
Beverage
Advertiser
Participant E
Marketing director
Transport
Advertiser
Participant F
Marketing director
Food
Advertiser
Participant G
Vice-president
Advertising
Advertising agency
Participant H
Director
Advertising
Advertising agency
Participant I
Marketing director
Internet
Advertising agency
Participant J
Mobile
Advertising agency
Participant K
Consultant
Press
Advertising agency
Participant L
Director
Media planning
Media planning
Participant M
Director
Media planning
Media planning
Participant N
Media buying
Media buying
Participant O
Project manager
Adserving
Technology enabler
Participant P
Research director
Networks
Technology enabler
Participant Q
Consultant
Software
Technology enabler
Participant R
Research director
Telco
Telco
Participant S
CEO
Mobile
Mobile marketing
Participant T
CEO
Mobile
Mobile marketing
Participant W
Director
Mobile
Mobile marketing
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Findings
The literature review and interviews revealed five main trends around
which advertisers will need to be sensitive when formulating digital advertising strategies. Each of these trends is discussed in turn and include: permission-based advertising; higher levels of personalised advertisements;
three screen advertising campaigns; increased levels of interactivity; and a
move towards performance-based metrics.
Permission-based advertising strategies
The first trend which emerged was defined as the need to engage in
permission-based advertising. Respondents agreed that online advertising
will need to be less intrusive than traditional advertising, particularly for
advertising diffused through mobile phones. This view is characterised in
the following participant observation.
People dont use their mobile phone the same way they use internet or watch
TV. Their mobile phone is becoming a personal assistant which accompanies
them everywhere and keeps them in touch with others (Participant N).
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Many respondents used the term personalisation when describing digital advertising. Personalisation refers to custom-fitting ads to individuals
within a specific context. Optimised relevance would improve consumer
awareness, trial and purchase. This insight is characterised by the following respondent.
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Three-screen advertising campaigns will yield higher returnon-investment (increased reach and response) when the three
screens are used complementarily rather than independently, and
when the contents and messages are specific to each screen.
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possibility for advertisers to interact with consumers via a two-way channel, which means that a products brand experience can be individualised
and enhanced. With two-way channels, consumers can send feedback,
play online games, request information, opt-in for promotional news, and
sign-up for branded events. These technologies deliver more power to
consumers who can choose where, when and how they want to interact
with a brand rather than the reverse. The discussions highlighted some
recent campaigns which have illustrated this point. One company made
available for download a mobile phone game which offers consumers
the opportunity to save money on their energy bill every time they win
the game. Set-up boxes allow viewers to receive increased information
about the advertised product, and IPTV (internet protocol television)
can connect viewers to the Internet for online orders. Advantages for
consumers are increased involvement, enhanced brand experience, and
simplified purchase processes. For advertising service providers, interactive campaigns represent significant business opportunities but they tend
to be more expensive given their complex requirements for advanced
technologies and specialised marketing competencies. One of the mobile
marketing agencies provided several arguments in favour of interactive
campaigns:
Interactive campaigns require consumers to become active and to play a role in
the campaign. There are several examples of advertising campaigns which use
UGC as contents for their messages. Interactive campaigns are focused on users
rather than advertisers (Participant W).
P6:
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for real-time metrics to provide new and additional measures of ad effectiveness. Technically speaking, all actions performed by a consumer are
recorded into the adserver. For example, ad impressions, links clicked,
or keywords searched are systematically recorded and potentially available to advertisers. In concrete terms, impression-based metrics such as
potential audiences for television and cost per mille (CPM) for online
ads will likely become performance-based. Actual viewership will most
likely replace potential audiences measured by panels, and click-through
rates combined with actual purchase or registration will replace CPM.
One respondent noted that they already provide metrics that approach
real-time return-on-investment (ROI) data. Many other performance
metrics can be derived from online advertising: cost per click (CPC), cost
per action (CPA), cost per mille (CPM), or number of unique visitors.
Advanced technologies allow ad-effectiveness metrics to shift to these
types of measures as reflected by this interviewee:
IPTV allows us to know if an ad is being viewed and how long it has been
viewed. We can also count the exact number of viewers of an ad. Mobile
phones are even more sophisticated since we can target specific individuals,
send him/her a text message and know if the text message has been read
(Participant R).
Participants representing advertising agencies highlighted that advertisers are now interested in performance-based metrics in order to better
estimate their ROI. The development of performance metrics is critical
to industry development since better metrics will provide efficiency gains
and encourage further expenditure. New entrants in this market may well
come from internet service providers who are currently investing heavily
in advanced targeting tools and measurement tools. We therefore posit
that:
P7:
P8:
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Three-screen advertising
Consumers
P9:
Permission-based
Personalisation
Practitioners
Aggregate metrics
ROI
Interactivity
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