Greg Hills

Relevance is the key to winning on the internet. As advertisers, we’re always striving for relevance, but we’re not really competing with each other. Most often we’re competing with the adjacent content. And average click through rates of around 0.05% makes me think we’re not winning the game.

As I move around the internet, I’m seeing amazing increases in relevance. I can sign up for a new web service like Plancast via my Twitter account and OAuth, and have my first site experience informed by information about me and my social graph. I can read e-mails in GMail and have Rapportive pull in data from Rapleaf showing my correspondents’ Flickr account, Twitter accounts, and LinkedIn account. When I visit LinkedIn, they apply an uncanny intelligence to my social graph, suggesting “People You May Know” that I either do know or would truly like to meet.

Across the web, new levels of relevance are driven by data that is:

1) Persistant — The data doesn’t get erased, so it continues to get smarter

2) Portable — The data goes everywhere I go

3) Personally Identifiable — The website is speaking to me, Greg Hills, not some approximation of who I am

The data driving these new levels of relevance is organized around user names, email addresses, and other persistent, portable, personal identifiers. It is transferred largely through API’s.

Online advertising data is stuck in the ghetto of cookie based storage. How could a cookie-targeted ad compete with content that’s informed by open API’s? Its like bringing a knife to a gun fight — and their guns are only getting bigger! With the accumulation of time, user data is becoming richer. With the growing pervasiveness of API’s like OAuth and Facebook Connect, the data is becoming more ubiquitous at the same time. Advertising relevance is growing incrementally while the relevance of the content I consume is experiencing hockey stick growth.

When will we move past the cookie?

Last week I attended a NextNY panel called “How to Make Advertising Not Suck” in a great space provided by Mike Dudda of Deutsch.

If you attend industry events and haven’t been to a NextNY meetup, I certainly recommend that you give it a try. You might need to buy your own drink, but it’s a great crowd and the community spirit along with the open conversational format make for a great experience.

I’ve listed the problems in descending order of importance to last weeks’ discussion.  Relevance and ROI, two deeply intertwined concerns, dominated the evening. Relevance is defined as the proper answer to the age-old advertising strategy question: “Who, What, When?” In the past 12 months, we as an industry have made tremendous strides in providing better answers to this question. Tech companies have built great new products, agencies have reworked their organizational structures to adopt these new technologies, and clients have literally “bought in.”

We still have a ways to go, however.

Event moderator and avid kayaker Charlie O’Donnell mentioned how recently he noticed a wetsuit sale on  fashion retail site Gilt Groupe. When he tried to buy the suit, it was sold out. Charlie has probably seen hundreds of display ads since his failed purchase attempt and not one of them had anything to do with wet suits.

We’re going to achieve amazing levels of relevance that will benefit consumers and companies throughout the value chain .  But should we, as digital marketers, be so bold as to aspire to achieve more than entirely unprecedented relevance in advertising?  Yes.

Brands demand that we go beyond relevance. Online advertising doesn’t suck in general, but it does receive disproportionately small budgets relative to other mediums such as television.  One reason is that digital is very good at harvesting purchase intent for products sold online, but other mediums, like TV, are better suited for purchase intent generation.  Online is a great complement to other mediums.  Online advertising is good where TV fails (relevance, for example) and struggles where TV excels (emotional connection and narrative, for example).

Since online ads exist in a non-linear, non-interruptive, consumer-controlled medium, it is difficult for them to pass what I call the “Nick Drake test,” in honor of my favorite TV ad of all time, below. You can rename the test after the ad which speaks to you personally with the deepest level of meaning.

This ad is not harvesting purchase intent.  I wouldn’t even say that it directly generates purchase intent.  Instead, it accesses involuntary memory, aka Proustian memory, to create an emotional experience that I still remember 10 years after first seeing this ad as a teenager.  This ad certainly does not suck for the consumer, brand, or publisher.

To be sure, digital advertising, specifically conversational media, is entirely capable of creating emotional connections. To take a personal example, I was impressed when I tweeted about wanting a Kindle and Amazon replied with extremely relevant sales information.  But I was truly amazed when a human responded thoughtfully to my sarcastic reply to what I assumed was a Twitter-bot.  This advertising interaction delivered both relevance and a personal connection.  Once TV ads are digitally served, this fusion of digital relevance and analog emotion will become even more scalable.

Many companies and individuals are now focused on numbers 1-3, and the winners will win big. But that is just one battle. The ability to pass the “the Nick Drake test” at scale will decide who wins the war.