THOUGHT (aka Centric's Blog)

Or, there ain’t no such thing as a free ad.

User-generated advertising sounds like the greatest thing since, well, advertising was invented. Have people who use your products submit their own content. Hell, have them make their own ads. They’re more than happy to sign off rights for any use you can imagine.

No more cranky creatives, no more big retainers, no more commercial directors who don’t know what this thing called a “budget” is. It sounds like a dream come true.

But.

There are big buts. Five of them, to be precise.

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Is being a middleman, say some.

Think about it. Your customers probably have more video of your products than any ad agency can shoot in a year. Real stuff. Not actors. Stuff you can’t pay to get on tape.

“But it’s amateur stuff,” you say. “No production value.”

Funny, the younger generation doesn’t seem to mind.

“But we’ll lose control,” you say. “It’s not like they shoot with our brand book in mind.”

So what? They’re real people. They don’t live in some made-up fantasyland, where everyone sings the corporate song.

Imagine a branded wiki, containing snippets from real people, living real lives, using your stuff. Now imagine paying them for their contributions, based on popularity. Now imagine declaring, “Conventional advertising is dead. This is reality advertising. Nothing between you and the experience.”

You’d be the first. The pacesetter. The company that redefined advertising, now and forever.

Of course, there are a lot of caveats. How many editors are you willing to hire? How much do you trust your audience to rate content?

More on this later.

Okay, you’re a savvy online marketer. You have paid keyword plans running at a reasonable cost per sale or lead. Your banner ads are on specific sites and networks, and they’re meeting your branding or lead-generation goals. You grow your email list by giving people a reason to sign up, and you use it effectively by sending relevant offers to your customer base. And you have the analytics in place to monitor and optimize performance on an ongoing basis.

Despite all this, your competitors can still eat your lunch.

How? It’s simple: by being first with new online tactics.

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Are you asking people to sign up for your email list on your site? If you aren’t, you’re not taking advantage of the best way to remarket to your existing customer base, and grow a list outside of that base.

“But people don’t want to sign up for lists,” you say. “They think they’ll get spammed.”

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In the old days, you could yell at the TV if you disagreed with an ad. Nobody would hear you. Today, if you don’t agree with a company’s claims, you have a whole world listening. Over half the content online is user-generated. Posts on MySpace. Videos on YouTube. Blogs. Podcasts.

And the percentage will only increase in the future. General Motors and others are experimenting with user-generated advertising. Channel101 and Channel102 are experimenting with user-generated television. Users are going to talk, more and more, with each other.

Marketers have lost control of their message. We can’t control the monologue anymore. If users decide your product doesn’t live up to your claims, they have a ready audience waiting to listen. More and more people look to personal reviews before committing to a major purchase. And there’s simply no way to own all the personal opinions on the internet.

The bottom line? The traditional notion of branding is dead.

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Conventional advertising planners have it (relatively) easy. There are multiple services that help them define the best places to advertise in a given market. There are planning services that help them manage the placements. And, once placed, many conventional advertising venues aren’t very measurable, so they don’t have to worry about metrics.

It’s seductive to apply this same game plan to online, using one of the online ad planners or online networks that promise broad exposure for very little work. And it’s certainly easy to track the results.

But when the results come in — results like 0.05% clickthrough, $500 cost per acquisition — you can salve your conscience by knowing that you have managed to buy 20,000,000 “impressions.”

Fact is, online ad planners may be fine for broad-based advertising campaigns, but they aren’t ideal for response-based campaigns. If you want to engage an audience, you have to target them, get their attention, and give them a reason to respond. Many online ad planners or networks don’t give you the ability to do any of these things.

• Targeting. This goes beyond geographic, demographic, and behavioral targeting. If you’re looking to hit a specific geographic or demographic, you need to look at that community. In a recent ad campaign, a small, inexpensive placement on an enthusiast site outperformed an entire expensive ESPN ad buy. Why? Because the enthusiasts are engaged. The brand of the enthusiast site augmented the brand that was advertised in the banner.

• Attention. Again, many ad networks fail here. Why? Well, if your ad is one of thousands circulated through, you can’t own a position. Here this visit, gone the next. Users won’t expect to see you there. You take no brand equity from the sites you are on, because you’re never there long enough.

• Action. You can have the best creative in the world, but if it doesn’t match your venue, it won’t produce the results you expect. With a broad-based network, it’s impossible to match the creative to the venue. Even with multiple creatives, you’re at the mercy of the optimization algorithms.

For maximum effectiveness, an online advertising plan must include what Centric calls Deep Venue Research. Deep Venue Research uses a combination of tools — from blog search and Technorati ratings to keyword effectiveness tools and site referrers — to identify the most effective places to advertise. Combined with some intelligent network buys and ongoing optimization of the complete campaign, this provides response rates and user engagement far in excess of typical online advertising plans.

What process is your agency using? If they aren’t employing this level of research, it’s likely your results are less than they could be.

You have the metrics. You understand what they mean. And you’re spending lots of money on paid and natural search placements. Unfortunately, you don’t have time to do more than glance at the campaigns every few weeks, and make a few frenzied changes once in a long while.

This is a recipe for failure.

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