MEDIA PERSPECTIVES - May 25, 2016

Editor's Note:

I just wanted to let my readers know that I've created a blog where I will be posting essays and articles I've written on digital and online marketing. It's an extension of Media Perspectives. I hope you continue to read and enjoy!

Here's the link: Jaffer Ali's Blog - Perspectives from a Media Contrarian

Thanks for Reading!

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Owning Your Own Online Media
by: Jaffer Ali

If you are presently marketing products via television, you make your living buying television advertising and selling products. The same goes for print. Buying media is what you are really good at, especially buying media at distressed rates. Of course direct marketing flourishes in unsold inventories.

So it is very natural to view the online space through a similar lens. When you look at the online media ecosystem, you could start licking your chops at the fact that nearly 75% of advertising inventories lay fallow. This is a polite way of saying the inventory goes unsold.

Much of it goes unsold because it is worthless.

Facebook generated over 1 trillion ad impressions for 2011. That is over a TRILLION repeating for emphasis. These impressions can be purchased for as low as $.03/M. That is 3 pennies to be theoretically in front of 1000 people. I say theoretically because it is overwhelmingly obvious that most folks on FB do not actually "see" the ads. Quickly, try to recall the last banner you saw.

At $.03 to potentially reach a thousand people, we are of the opinion that this is as close to worthless as can be imagined. Certainly it is three time $.01, but we are quibbling. Buying this media at any price is not likely to work for anyone except for the company selling you billions of impressions. At that price, I am not sure it is a windfall for Facebook either. But if you want to spend a quick $30 to "reach" a million people, be my guest.

I can see the wheels turning in your mind already. Let's do PI (CPA in online terminology) with the likes of Yahoo! and Facebook. These folks already know their media is close to worthless and know the unsold space will yield such a pitiful return with revenues shares that they rather not even go there, or sell it for prices previously mentioned.

You see as technology has advanced and we have become an "on demand" world, few people are demanding ads and are well equipped to avoid them. Avoiding ads either through technology or attention, online advertising has become a prime example of advertising evasion. I exempt search from this avoidance, but that works on existing intent and does not create demand.

What follows is not a secret to anyone reading; advertising is becoming less effective and the response to declining efficiencies in the entire ecosystem has been to increase the number of ads. The increase in ads everywhere has the net effect of exacerbating the problem. We are spawning a generation that has developed blindness to most advertising.

But not all media is created equally. Did you know what the fastest growing part of Amazon.com's business is? They are selling advertising. Amazon is one of the largest media owners on the planet. This is what I want to impress upon you. Every marketer needs to move beyond buying worthless media and emulate Amazon. This entails understanding that you own considerable media assets when it comes to online space.

So let's take a look at what owning your own online media looks like. It is my contention that every marketer who has a presence online owns considerable media. Let's start with your website. How much traffic are you generating? Each visitor represents a very special audience. It is an audience that is interested in some way becoming a consumer.

Believe me, this is a special audience. And a very valuable audience.

In August of 2011, we put a 300 x 250 banner on every page of our e-commerce site. We split the impressions 50-50 between Advertising.com and rotated banners for our own offers. Our own offers performed 3X better than Advertising.com's revenue and by November, we were just rotating our own product banners and now have eliminated outside ads and are utilizing all ad inventory for our own offers. This resulted in an extra $30,000 to our coffers in one month with only 500,000 page views. That is $6/M in revenue if you are counting and should be contrasted with buying Facebook advertising for three pennies per thousand impressions. Our own media is worth 200x that of Facebook media. Chew on that a while.

If you find yourself not having enough products to rotate in your ad inventory, then by all means sell those impressions. Remember, YOUR AUDIENCE is special because they have reached your site at least interested in buying something.

This is one example of how valuable your own media really is. You own this eyeball rather than renting a theoretical impression. Plus there is no click fraud. A dirty little secret in online media is that almost 20% of clicks are in point of fact fraudulent. Online media sellers are not overwhelmingly aggressive in ferreting out fraud because fraud makes them more money rather than less. Their goal is to keep fraud at a manageable level just to keep folks buying it.

So owning your own media eliminates fraud and will perform several times better than any display advertising you will ever buy. But is your website traffic the only media you own?

The greatest media asset you own is your customer's email address. When a customer buys something from you and you capture the email address, you have the right to send them additional offers. These people are actual buyers and represent a golden opportunity to engage them in an ongoing dialog.

When you send someone a catalog, this is media. When you send someone an email, this is media. And the cost to deliver an email is extremely low. Using PulseTV as an example, we have well over 6 million email addresses and send out daily offers. This is like owning our own broadcast station as we "reach" 6 million people daily. I put "reach" in quotation marks because not everybody opens their email daily so emails that do not get read are like banners that do not get seen.

But the difference here is that this is your own media and you can communicate with your audience daily. Sometimes you can even communicate with them twice in a day. The email address is the most important piece of data you own. In the online world, data becomes media.

In addition to mailing your own offers, more and more marketers are contracting with third parties to deploy offers. They augment their revenue by utilizing this media for other offers. It actually helps over all conversions as the more people buy online from anyone, the more likely they are to purchase from you. It is a bit counter intuitive, but it is never-the-less axiomatically true.

None of this is theoretical for us. We are practicing what we preach and several DR companies have given us their data to deploy daily offers in exchange for a revenue share to them. We also place a 300 x 250 banner in the outgoing emails and the revenue from the advertising is also shared with the marketer supplying the data.

Another way to own your own media is to create or license content and get subscribers. In this way, you give subscribers value of daily jokes, recipes, random facts, etc. for the right to include your advertising. These are called e-zines or newsletters. Over the years, we have alternated between selling advertising to companies inside these e-zines and selling our own products.

When you own your own media, you have a great deal of flexibility. Presently, we use the space inside our e-zines for our own offers. But we are actually agnostic and follow what makes us the most money at the time. So we sell advertising to others quite often.

Coming full circle here, I want to emphasize that understanding your online media assets and using those for cross marketing products or selling the space to other folks is not a replacement for buying online media. You can do both. But first you need to understand that the most effective media you can possibly find is right in your own back yard.

Original Article: Owning Your Own Online Media

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