Goodman Associates – Live

How On-Line Advertising really works

We’ve been doing this a long time and I’ve been asked to explain this process numerous times internally to people working on our digital accounts and more worryingly to clients who’s money we’re spending!

The process is pretty simple and completely linear. The best description I have ever read came from a data scientist called Antonio Garcia Martinez in his book Chaos Monkeys (Ebury Press) – who describes on-line advertising as a 3 step process:-

  1. Money turns into electronic pixels in the form of image ads or words in search results
  2. Ads turn into the Attention – Interest – Desire and finally Action (AIDA) of potential customers who do something as a result.
  3. More clicks through websites, e-commerce platforms or visits to a physical place of business and that activity turns back into money…

The knack is to make sure the second pile of money is bigger than the first!

Online advertising written in search bar on virtual screen.

Whether it be a New Homes Developer selling the dream of a retirement pad overlooking the sea or a short-term Loan broker lending an investor’s money at 30 times base rate because the credit card bill is due, the only real difference is the time-frame these sales happen. It’s the distance between Attention and Action.

For convenience the ad-industry has segmented on-line advertising into two areas.  “DR” direct response usually means the time scale between Attention and Action is relatively short and usually doesn’t involve any humans initially, at least on the advertiser’s side, until the money is paid by the customer. So buying a memory card from an Amazon AdWords advert for example won’t involve a real person until the poor picker in a massive Amazon shed somewhere gets a bleep on his handset to put it in an over sized box and send it on its way.

Tracking and attribution is simple. DR advertising is very accountable as the advertiser can usually see the moment of ‘conversion’, the point Interest becomes Action and therefore a sale as this all happens on-line.

Selling you the notion that your life is incomplete without the latest BMW 4×4 however will probably involve many, many real human people and may take many weeks or months before you sign your life away. The on-line element of that process is known as “Brand Advertising” but the end-game clearly, is exactly the same!

Brand advertising is rarely stand-alone and normally involves a combination of on-line ads in addition to traditional media like TV, radio and outdoor promotion (that’s what we do!) Tracking and attribution here is a bit more difficult and is generally a combination of media inputs however there are many systems on the market that assist in tracking the ‘last click’ action that drives the customer into the loving arms of the seller.

That’s about all most people know about on-line advertising, the rest is generally a bit too teccy for most people but worth a mention here as every time you go on line (every time!) you leave an electronic footprint that can be exploited.

Real time Bidding (RTB) is the amount of money an advertiser is prepared to ante-up to get a moment of your attention.  It’s sold by companies, most of which you’ll have never heard of that provide the fuel that powers the on-line advertising market. They know an awful lot about you thanks to the trail you have left from spending 99% (or whatever) of your waking hours connected to a device or some sort or another that is constantly reporting where you are and what you are doing by streaming literally every bit of data for analysis for their own purposes or to sell on to someone else.

It’s like a stock exchange selling bits inside people’s heads billions and billions of times a day and manifests itself in thousands of ways.  The most blatant are the ‘matched’ results of your Google search enquiry, the ad in your Facebook newsfeed or the creepy ads that follows you around the web no matter what site you are visiting. Most of the time however it’s not that obvious. RTB platforms create increasingly more sophisticated and highly tailored offers that work at a much more subliminal level. Innovation is rife in this part of the market and literally on a daily basis there are new products that develop this further.

So on-line advertising, the simple 3 step process, still does what it says on the tin, it moves customers through the AIDA (Attention, Interest, Desire, Action) process at varying speeds. The skill of the advertiser is to know where their customers are on that process and more importantly how much they need to pay to get them out the other side!

 

At Goodman we’re experts in both on-line and traditional advertising.

To maximise your return on investment and make that second pile of money as large as possible contact us today  0845 225 5555