Programmatic ad buying is a cornerstone of online advertising, spread by the influence of global ad networks such as Google. But MediaWorks Interactive and Ecostore have attempted to flip that model on its head—and they are shouting from the rooftops about their results.
According to the Interactive Advertising Bureau New Zealand's (IABNZ) latest online ad spend report, 8.6 percent of the $25 million spent on display advertising in Q1 2013 was programmatic. This model gives advertisers relatively inexpensive and wide-reaching channels, but Siobhan McKenna, who heads up MediaWorks Interactive, responsible for its web properties across TV and radio, says quantity doesn't necessarily equal quality—especially in the world of online advertising.
Correction: This article originally (and mistakenly) stated half of display Q1 ad spend was programmatic.
"It's easier to reach more people now than ever before, but it's become infinitely harder to truly connect," says McKenna. "Banner blindness has been a problem for newspapers for a long time and its fast become the same for digital. Google and the like make it look so cheap that failure doesn't seem expensive or risky. But those cents add up to dollars and those dollars add up to a lot of wasted opportunities that could be used on beautiful and engaging creative."
McKenna says she subscribes to the advertising-as-entertainment school of thinking. Make the advertising as engaging as the content it complements and the audience will respond with higher click through rates and lead to higher conversions. MediaWorks Interactive is guilty of displaying programmatic ads itself, but McKenna says it's shifting away to provide a "premium" end-to-end ad service.
"When a brand sees that you can be bought for nickels and dimes, it's hard to justify a premium experience," she says. For her it's also a matter of principle about keeping money in the New Zealand advertising environment. Despite a boom year for online advertising in 2012, Google New Zealand only paid $165,000 in taxes in the country. Facebook New Zealand doubled its revenue last year, but like Google its ad revenues are channeled through Ireland for favourable tax rates – it only paid $28,484 to the tax man last year.
"We need to look after each other in the local economy. It's all very well and good to funnel money offshore to save a few dollars, but it doesn't contribute to the local advertising landscape," she says. "If we don't keep an eye on where the money is flowing we may find ourselves left with little choice ... I don't think advertisers and agencies want to live in a world without MediaWorks or with diminished choice."
This stance is all well and good, but are advertisers willing to stray away from the inexpensive status quo? McKenna admits there is a lack of local case studies about alternatives to programmatic display ads because most brands are unwilling to share information to their competitors. MediaWorks Interactive set out to rectify this problem last year, by giving away a free campaign in return for a case study.
Ecostore was picked as the corporate guinea pig in its online experiment because it's a successful New Zealand company with little bureaucracy and—importantly—it has a relaxed relationship with its agency partner Special Group, preventing any sour grapes from agency land. Ecostore's director of marketing Melissa Fletcher says she wasn't about to pass up free advertising.
"At Ecostore we do everything on the smell of an oily rag. We don't have much money for this kind of work, but our brand does open a lot of doors and when we get opportunities like this we jump at it," she says.
The first component (launched in November) was a brand awareness push that included page take overs and banners promoting the Eco IQ quiz, which tested the visitor's knowledge of harmful chemicals in everyday products, Ecostore's bread and butter.
Every correct answer helped grow virtual pohutukawa branches across MediaWorks Interactive's network of sites. As more people participated, the branches grew larger and bloomed, making the campaign itself more prominent. Around 2,500 took part and the game, which was shared more than 1,200 times on Facebook
Fletcher says that around 80 percent of visitors to the Ecostore site during the campaign were new. MediaWorks Interactive, citing a mix of Colmar Brunton information, Ecostore data and its own lifestyle survey, says Ecostore's brand awareness increased by around a third, while purchase intent increased by 36 percent. Fletcher was particularly pleased with the increase in recommendations for Ecostore products, which was 29 percent.
The second phase shifted gears into direct sales, which Fletcher says was responsible for the best New Zealand January sales in the company's history with a 28.5 percent year-on-year growth. This is compared to 7.4 percent overall growth for Ecostore online in the year ending 31 March 2013.
Of course, the biggest question is would Ecostore open its purse strings to have a repeat performance or was this all just a bit of free publicity?
"I've got something else coming up where I would normally engage an agency, but I'm engaging [MediaWorks Interactive] instead ... If that's not a testament to the work, I don't know what is," says Fletcher.
For more information on Ecostore and MediaWorks Interactive's online experiment, check out their case study here.