Valitics. Web Strategies, Net Results

The Superbowl has long been a great American tradition. There's nothing like taking a break from the winter cold to spend time with family and friends, enjoy some great food, and cheer your favorite team on to victory. And who can forget about the hilariously clever ads? They're always a joy to watch, and they've become a big part of the whole tradition. But this year, the Colts weren't the only ones upset by a game changing play.

Pepsi made a surprise offside kick of its own. For the first time in more than two decades, they pulled all of the $23 million they had budgeted for Superbowl ads. Like the Saints, they made a bold and unexpected move but ended up coming out on top. All those dollars went to Social Media; Pepsi's 2010 online ad budget is up 60% from last year. Pepsi increased their Facebook fans count by 32% over the Superbowl week, while Coke eeked out a meager 8% increase. Twitter followers for both companies grew at the same rate. The big question on marketers' minds is how online fans will translate into revenue. We'll have to wait for quarterly statements.

The three biggest benefits Pepsi will see from their online strategy are:

1. Engaging in a two-way dialogue with their customers.
2. Breaking from a "one size fits all" approach, by tailoring unique ads for different customer segments
3. A bounty of metrics that accompany online advertising, which provide proven and improvable return on investment (ROI)

Let's look at each of these in detail.

Two-way Dialogue

Print, radio, and TV don't provide any avenue for two-way dialogue. In these mediums, the principal strategy is to interrupt people from the article, song, or show and get them to listen to our message. Of course, people flip past the magazine ads, turn down the radio when ads come on, and get up to make a snack when their favorite TV show breaks.

We're hard pressed to measure how often people "ignore" ads in offline media. But on the web, we know exactly how many ad impressions we had, how many people clicked through to our site, and what they did on the site. Best of all, by using a cost-per-click model, we don't pay if our ads don't resonate with our viewers! We can show an ad 10,000 times, but if nobody clicks, we don't pay a dime. Imagine if we didn't have to pay to reach the people that get up to make nachos during a football game!

When people do click our ad, we engage with them in a variety of ways: video, chat, comments, social sharing, contests and surveys. All these types of interaction can be provided in a highly automated and scalable fashion, and for the visitor the engagement options are instant. They don’t have to remember a phone number, or drive to a retail outlet.

Unique Ads for Unique People

Another great benefit Pepsi gains from the social media shift is ad targeting. On game day, a TV commercial means all 97 million people see the same ad, regardless of whether they're young or old, rich or poor, social or introverted. With social media you can create unique ads for each customer segment, and segments can be defined by almost any criteria that people make public. Web analytics follows up with these ads, providing a proven return on investment for each customer group. With web analytics, you know that your baby boomer ads are generating $10 for every $1 invested, but college students are only creating $2 for every $1 spent.

For Pepsi, precise ROI is a little more nebulous since customers will make a purchase at a grocery store or gas station. However, there are still a variety of ways to measure engagement, which brings us to the next point.

There's a wealth of metrics that accompany online advertising. Aside from revenue and demographic data, you get to see what people are interested in, whether they think you're interesting enough to refer friends to you, the city they visit from, and every action that leads them to the holy grail of conversion -- whether that's a product purchase, a lead conversion, or clicking an ad.

An analytics program like the free Google Analytics will generate tens of thousands of data points after just a month on a website with 50 visits per day! 50 ad views from a magazine subscriber or TV watcher tells you absolutely nothing about the person unless they actually end up making a purchase, but by then the ad is usually disconnected from the purchase anyway. Even if you do collect referral sources and demographic info, you lose out on all the information from the people the ad didn't work for. With any given ad, chances are you'll have dramatically more viewers that don't take action than those that do. Figuring out how to motivate the people you aren't getting through to is a sure way to get great results.

Online ads have tremendous benefits, but this doesn't mean the end of TV ads. Even Google decided to take the plunge into TV with a Superbowl spot. The real meaning of Pepsi’s move is best summarized by time.com

To Pepsi, and to companies around the world, the days when mass-market media is the sole vehicle to reach an audience are officially over."

TV networks haven't let that message slip by unnoticed, either. Increasingly, TV is being delivered through online channels like Hulu.com: a conglomeration of Fox, ABC, and others. Ads delivered through online "TV" channels gain all the engagement, demographic, and analytics benefits of the web. Other traditional media companies, like The New York Times, are also taking efforts to stay on top of the digital distribution revolution. They were one of the first to create an iPad app for their newspaper. As the The Wall Street Journal has shown, digital distribution is crucial. By focusing on their website, they’ve been one of the few newspapers that hasn’t suffered as a result of the online shift.

The Future Of Media

So what’s the big picture for media? My prediction is that every traditional medium, including radio, print, and TV, will receive the majority of their distribution through the Internet within 10 years. If that’s hard to believe, just remember that a decade ago we didn’t have iPods or smartphones, broadband was a rarity, Google was almost unheard of, and social networks were still years away.