#Bobt – Online advertising sucks aka Big Thinking in free spaces

Online advertising came in for a bit of a beating in this session that buried display ads and pushed the idea that the
concept of “free” is not viable – this was all about freemium, which
could well be the future of content of all types.

First up Mike Barlett from Skype who wastes not time telling people online display advertising sucks and, search aside, online advertising is dead.

He tempers this slightly by saying say Skype, which has no advertising on its site, spent a year looking into whether it should have advertising, but having evaluated and spoke to its users decided against doing it.

The users (not surprisingly maybe) said they would go elsewhere and the overall conclusion Skype to was that advertising would damage its brand.

All the money it makes its money come via its subs services. This is the stuff it offers in addition to the basic free Skype online telephony service.

Shows a slide showing decline of CPM in the US. Shows a slide showing a decline in rich media ads; over lays with the rise of search. Not good. On the plus side there is a slide showing the rise of online search advertising.

You only have to look at these slides to realize why publishers are struggling to gain enough revenue to support the content they offer.

Says he Bartlett says he is stunned by what is given away for free.

Now we’re talking Chris Anderson and his book free “every industry that becomes digital becomes free”.

Says he went looking to download the “free PDF”, but could not find it. Had to buy it…well you would, wouldn’t you? Oh the irony; nice or Chris Anderson – free to preach from his glass (Conde Nast) tower that is home to the (paid for) Wired magazine.

We’re talking freemium; Barlett says looking at the freemium model using that space where a banner ad would be to promote your own products and services – this is what Skype does.

Talking Rupert Murdoch and his great new idea; on first thought considered him mad as proverbial hatter as people need a taste of content (says that’s why Murdoch needs to be on Google to drive content to News Corp sites). Cites Economist giving away taster copies to encourage subscription.

Talking Spotify and how it worked to differentiate its paid model from its free model to drive subs. Says you have to try out different price points for paid services to get people to pay. Lesson there for newspapers? A pick and mix of paid options? Maybe.

Looking at a slide of web collaboration service Huddle – you get free stuff, but they have different price points. It has a basic free service, but they use that to advertise their paid for services that offer people more business collaboration services.

Display advertisings sucks; use free to advertise you paid products.

There’s your takeaway. Good work from the Skype innovation fella.

Patrick O’Luanaigh – nDreams – The games guy. Makes a joke about the palatial offices of ad agencies have (journalists know this to) in comparison to the games industry to highlight the differences between the two.

He’s talking about the success of Call of Duty Modern Warfare: 2 as the biggest launch entertainment ever. Awesome game. Killing bad guys has never been such fun (okay that is my opinion).

Like Barlett there is an anti advertising theme here. These guys are at the right venue.

Slide of Sky+ and how we increasing hate 30 TV spot ads. Couldn’t agree more. I know they get watched. But not by me. At the ad break; I hit stop punch forward five minutes on the remote – don’t even fast forward (talking of Fast Forward: brand idents; BlackBerry; high recall). But the 30 second spot ad is so diminished in stature and standing.

O’Luanaigh says agencies should make something else. And make it for less money; it can also be free. Yes, he is in the business of games so you know what is coming.

He like Barlett though is pushing the line (a good one) that you offer the basic stuff for free and then if people want extras a few will pay.

He says there is an opportunity for the agency world to capture what he calls the “entertainment middle ground”. This he says lies between the typical (dying) TV spot ad and the big selling game/film. In between those two says there is space to fill.

Gives an example of developing such a game for Brand X. The example is a mystery game for the brand, but of course it could be anything. The idea is to get people involved and entertained and it for it to be about the brand. You can play for free – but to take it further you give more for a premium. Spells out how you could tie this game into all parts of marketing and the brand. From the marketing to point of sale.

Two points he says: game has been designed around the brand not to feel like an ad. It can also generate revenue. Says brands should be aiming to make money not spend it.

To be honest, luke warm clapping. I don’t see the agency world jumping on this. They are not the people for it. I don’t think they are set up for this. That’s a problem for them though and not him.

Last up: Claus Moseholm from Go Viral. Like his central theme (his big idea) which is “earned”.

He has a reminder for the audience: it is not free to build brands. Do they copy that?

This is good. Says free is dead, earned is growing. Says you can earn: respect, love, time. Why? Because nothing of value come without being earned.

Echoes what Mike Barlett said: banners are shit. The banner really is dead. He pushes the case for video (well as Go Viral you would).

Moseholm says one of the ways to fix it is to develop branded content that entertains the audience. Again echoing Barlett. This must be real (that or these two Euro dudes are in collusion).

Says don’t put this entertainment in a banner. By that he means if you create a viral film make it good enough so people will give you free viral media. Earn your place in the world on your own merits. Earn media space; says you will see the effect of getting for free more than you paid for (plus banners are shit so why would you?).

Four things that aren’t free that will help you earn: insights, ideas, content and distribution. Says planners need to be educated to know all parts of that process.

Shows an example of FPS Bad Company. Nice promo. Not played this and I don’t put my hand up when he asks if people pay FPS. It’s great. But an inside gamer joke. It is the one the two guys running down a street to a spooky version of Mad World…until you realize that it is one of the guys in the video singing and his mate turns to him and tells him to STF and sing something else. Bit of one for the gamers as it spoofs Gears of War.

Shows funtheory.com a VW ad. Massive YouTube hit with stairs into a station turned into a keyboard – much musical fun follows from the public. Says it is built on an insight that environment doesn’t have to be dull, which is why it touched a lot of people and went on to “earn” for free its media space as it was so good. Got that?

So strong because of the content. But you can’t do that every time.

And the voters say? Moseholm wins. Rightly so I think. Although a good session all round.


  • http://www.katylindemann.com Katy Lindemann

    Agree with Claus that the most valuable is earned. So isn’t it a bit hypocritical of his company to try and pass off bought media as earned: http://bit.ly/liarliarpantsonfire