Facing up to fragmentation

The Web has changed both the market and consumer behaviour. Advertisers must adapt if they are to succeed in a fragmented environment, says Rob Proctor

Rob%20Proctor%2C%20EMEAThere was a time when advertisers knew how to reach their entire audience through a small number of established, high-visibility and reliable media channels. However, the media fragmentation, which has characterised the past 20 years of technological development, has shifted the balance of power between advertiser and consumer. Whereas once, consumer habits were more easily charted, tracked and acted upon, the consumer now has seemingly infinite options.

Broadcasters are working harder to hold on to their customers, mindful of declining advertising revenues, and across the board media owners have had to adapt their product offerings. In turn, advertisers are adapting; understanding that their audience has fragmented dramatically – feeding its hunger for news and entertainment from seemingly myriad sources. They must rethink their strategies and work smarter.

With a respectful nod towards the digital television market, the internet remains the battleground, offering consistently growing audiences offset by consistently growing numbers of sites frequented.

Traditional media owners have reacted quickly. Websites of deep content in tandem with the rise of online advertising powerhouses such as Yahoo! offer advertisers access to established and valuable audiences. However, having ostensibly mastered the medium, despite the successful products they are now able to offer, the evidence indicates a continued trend of audience fragmentation online: the average consumer now visits 77% more sites regularly than five years ago.

Perhaps, though, there is a silver lining to the cloud. The market used to dictate what was on offer to the consumer; the internet and market fragmentation has forced advertisers and publishers to respond to individual consumer demands.

But the very fragmentation that was once so concerning has opened up highly beneficial sources of revenue for businesses that are able to adapt. Although more popular products will sell more frequently, the sheer number of products on offer is able to produce a greater return in total. Allied to MediaScreen research that demonstrates consumers prefer – and are more receptive to – targeted advertising that is delivered in tune with their interests to specific sites, the internet’s “long tail” offers a win-win scenario for consumers and advertisers alike.

In order to evolve, publishers need to adapt: developing broader content to complement the deep content, capturing more eyeballs and, as a consequence, increasing advertising revenue. The answer for many big-brand publishers is in building vertical networks, capable of selling more space overnight. With many having previously used TV, radio and cable for the same purpose, brands are currently evolving online to become network builders, sourcing inventory from a range of relevant niche publishers that, in turn, become part of that brand’s particular network.

The beneficial result of this is that the publisher/brand is able to offer its advertisers broad content and a broader, engaged audience. Importantly, the nature of brand credibility is also evolving to complement vertical network building. With grass-roots publishers’ credibility rising as understanding of the power of the internet’s long tail grows, so the vertical networks become more attractive to prospective advertisers.

But advertisers – who have recognised online audience fragmentation and are aware advertising on niche sites offers lower margins – must quantify and qualify the nature of the audience.

Compounding the conundrum, existing advertising networks are prone to either monetise the unsold inventory of larger sites or deliver ads to users who, although they may fit the required, specific demographic, do not fit the content requirements set out in the campaign objectives. As such, vertical advertiser networks affiliated with those trusted publisher brands, that can offer their advertisers qualified editorial content in addition to the required quantity, have the opportunity to stand out in this fragmented environment.

Great brands need more to sell. Vertical advertising networks are an opportunity to provide the advertiser with a targeted, high return, niche audience in an engaging, format easily digested by the consumer.

Rob Proctor is head of business development, EMEA at Adify


Smoothies for the masses

Marketing Week

Big corporate companies and smoothie brands may not be natural bedfellows, but PepsiCo aims to drive sales of its PJ’s brand by slashing its price. The challenge now is to manage the price cut so there is no change in the perception of quality or health benefits. John Reynolds reports

Nectar has its Hoover moment

Marketing Week

Reward scheme Nectar’s botched relaunch (MW last week) rounds off a dire 12 months for free giveaways and prize promotions. The loyalty card, which allows customers to collect points at retailers such as Sainsbury’s, BP and Debenhams, has received a flood of complaints from collectors who have failed to get their promised rewards. This comes […]