US Online Advertising has Record Year

I'm a big fan of eMarketer and have followed Geoff Ramsey's company for the past 5 years since meeting him at a Interactive to the Max conference in 2003. At that conference Geoff noted a projection by Jupiter Research stating that online advertising would hit 14.8 billion dollars by 2008 in the US. At the time revenues were only 7 billion. As Geoff presented this forecast a theatre of some 200 digital marketing enthusiasts chuckled and began to chatter about the possibility. Doubling revenues in 4 years seemed a bit crazy by any standard. It's 2008 and looking back we can now say that Jupiter was way off!In the past 4 years online advertising spends have tripled!

According to a recent eMarketer report, spends will reach over 25 billion in 2008 for the US market. To put this into context, the US market spends about 149 billion dollars a year on advertising according to TNS Media Intelligence. If you include all aspects of online advertising(Display, Search, broadcast video) as capture in the eMarketer figure, online ad spends will represent almost 16% of the total this year. Assuming network television spending stays flat as predicted, it is likely that online advertising will exceed television in 2008. If Geoff had of told us that story 5 years ago he probably would have had everyone laughing in the aisles.

Despite a struggling US economy, online advertising is well positioned to continue to grow over the next 5 years. According to Forrester Research, it will triple again by 2012 hitting 61 billion in the US. This growth will be driven by the boom in online video advertising as more people use tools like YouTube and Google Video to connect with their audiences.

In order to realize this growth and benefit from it, advertising agencies will have to change how they deliver. The Internet is a consumer-centric medium and although many may debate it, the user is in control. In order to connect online advertisers have to engage the viewer and deliver a relevant message at the appropriate moment. They will have to listen, learn and communicate with the consumer. In order to achieve this level of engagement advertising agencies will have to change how they go to market. Forrester suggests that the future agency model will be a "Connected Agency" where the delivery of the message will move from "Push" to "Pull". Advertisers will no longer broadcast they will "intercasting", engaging consumers in direct conversations through communities and listening closely to their opinions and perceptions.

What is Digital Marketing?

It's sort of funny, but not so much. Turn to the person sitting next to you and ask them to give you a short definition of digital marketing. If you're all alone, write down 2 sentences that you feel defines the term. My experience is that most people don't know. What's even more frightening is that most marketers don't know. Everyone has their own opinion, but few can express it in a concise fashion. They struggle with Internet Marketing, Digital Marketing, Interactive and Online Advertising often using the terms interchangeably. Does anyone know the true meaning of Digital Marketing?

The definition on wikipedia.org states - "Digital Marketing is the practice of promoting products and services using digital distribution channels to reach consumers in a timely, relevant, personal and cost-effective manner." But hold on, that could change as all good Wikis do. Google it and it's pretty evident we like to give out a lot of awards for Digital Marketing - maybe the judges know the meaning! A quick scan of the jurors for the 2006 Canadian Digital Marketing Awards (Came up 2nd on my Google search) and it would appear from their titles that they're not Digital Marketers. Maybe "Yahoo Answers" has some insight. When I type in "What is Digital Marketing?" Yahoo returns 120 answers, obviously a few other people are confused. The top answer is from the "Marketing Profs Daily Fix Blog" written by Alan Wolk. Wolk finishes his blog with the line - "So I'll throw the question out to all of you: What is digital advertising?". I would have thought that Marketing Profs would know the answer.

It appears that, like everything online, the true meaning of Digital Marketing is not clearly defined and like the online medium, it's still in a phase of metamorphosis. For now, at this moment, I'm confident in stating that Digital Marketing is any type of marketing that involves or contains an element of technology in the delivery of the message. Technology could be a digital billboard in Time Square or a website. If it's selling and it contains bytes of data it's Digital Marketing! Ask me again tomorrow and I'll likely have a different perspective.

Nike Plus just does it!

Phil Knight, Nike's CEO and founder, has been at the cutting edge of advertising for the past 15 years. Campaigns like "Bo Knows", "Just do it" and "Air Jordan" represent ground breaking strategies that have changed the face of the advertising industry. I recently watched a documentary on Knight produced by CNBC. The show highlighted the history of the company's successes and towards the end they interview Dan Weiden of Weiden & Kennedy the agency responsible for Nike's advertising. Dan made some interesting comments on the future of the company's advertising investments.

Weiden who is credited as having to hard sell Knight on the benefits of using television advertising, gives a candid explanation for why he feels the brand achieved its incredible success. One of the most interesting points Weiden noted was the invention of the tag line "Just do it", 3 words that are now synonymous with the brand. The line was invented to unify a series of television commercial that were in Weiden's word disconnected. "Just Do It" was the common ground used to tie these together. Its original intended use was quickly eclipsed by an overwhelming viral explosion of popularity created by the general public. People saw the tag line as something much bigger than that. It became part of a social and cultural statement that help change people's lives.

At that time the power of the right words and the right medium help fuel a ground swell of brand identity for Nike. Today, because of media fragmentation and changing consumption patterns the company would have a much more difficult time reaching the same level of critical mass seen in the "Just Do It" campaign. Weiden noted that the changing media landscape has Nike investing heavily into online communities. One of the company's recent successes, Nike Plus is an integration of high tech and digital marketing.

Going back to Nike's roots of running, Knight and his marketing geniuses devised an online strategy that leverages the tight knit running community and brings them online. Nike Plus is an integrated solution that allows runners to measure their running achievements and share the results with their group or the whole Nike running community. Its simplicity and integration with the Apple Ipod has help the community to become the world's largest running club. As of February 2008 the site has logged over 14 million runs equating to 50 million miles.

So why is Nike Plus working? It's community is simply an extension of something that has existed in another form for the past 50 years. Having been involved with the running community for more than 30 years, Knight recognized the opportunity to create a unique online experience. Nike Plus does a great job of marrying technology to lifestyle and the basic competitive instinct. With the help of graphs and challenges Nike Plus members can work on achieving their own goals or satisfy their competitive thirst by challenging others in the community. What makes this so uber cool is Knight didn't really invent anything new. He simply extended a behavior that has existed in the running community for years and made the playing field global. What once use to happen in a local running club is now happening online and the world has become a bit smaller as result.

When searching for info on Nike Plus I came across a great You Tube ad that exemplified how the delivery of Nike's advertising is changing. The ad is focused on technology and the Nike Plus experience. Nike product is subtly promoted through the changing wardrobe, but the objective is clear. Drive runners online to learn about Nike Plus. It's a courageous investment that has obviously paid off for the brand.

Both Weiden and Knight realize the power of this approach to the Nike brand. As a result Nike is investing more money in identifying new opportunities to build online community. In a very recent interview on e-consultancy Chris Shimojina, Nike Digital Marketing boss, was asked about Nike's approached to social networks. Chris answered "Nike is very active in making sure we have the right digital channels cultivated. But we are still learning. I don’t think we have quite cracked the code yet. Social networks are a growing channel and we need to understand it better. You have to have an idea of a product story that matches your core market. Start with the right product, listen to your customers, test and learn." Despite the company's success with Nike Plus, they still see themselves as just learning how to leverage the social media space. As I struggle to convince the world of the potential in the social media space, it is somehow comforting to know that a marketing giant like Nike still hasn't "cracked the code"!