Online advertising has been incredibly successful, but its success has mostly come from direct-response advertising. This legacy has been the online advertising industry’s greatest virtue and its Achilles heel.

Despite the robust rate of growth enjoyed by online advertisers, the industry still pines for the mega-sized branding budgets tagged for TV and print advertising. The only way that’s going to happen is if the industry owns up to its shortcomings and starts finding new ways to implement successful direct-response advertising that go beyond video and search, like the new “type-in” advertising.

Video and rich media have come a long way toward meeting brand advertising goals. But the industry’s prolonged shortage of high-profile video inventory translates to a bottleneck for most brand budgets. That excess demand leaves agencies scrambling with the old playbook, with standard display advertising and sponsorships. Thus, the majority of brand budgets are spent on campaigns that deliver single digit gains in brand effectiveness measurements. Bottom line: a 3 percent lift in brand awareness won’t elicit a “wow” from a marketer, but those are the typical numbers the industry delivers.

Unlike their direct-response counterparts, online marketers are not looking for incremental improvement. Instead they are looking for quantum leaps in awareness, message association, favorability and intent. No one should be surprised when marketers yawn at single digital campaign lifts considering the fact that they’re the folks who built their reputations on splashy TV ads. Again, the numbers just are not big enough.

That requires new thinking in online advertising. The most successful form of direct-response advertising ever is search, which is a format native to the environment. It’s time to find others. Take the new “type-in” advertising that has sprung up. Are there sweet spots for brand marketers on the Web beyond video? The type-in was born out of the CAPTCHA process (the squiggly and obscured words you type in to verify that you are human). Every time we post things on the Web, register with a site or buy tickets online we encounter the CAPTCHA process. Type-in ads ask the consumer to type in a branded message instead of the hard-to-decipher code.

My company, AnalyticsDNA, was recently hired by Solve Media, a provider of type-in advertising, to audit its campaign effectiveness studies. The study analyzed 43 campaigns that ran over the course of a year up until August 2011. Post-campaign brand-lift metrics were based on generally accepted test versus control methods. The high-level aggregated results were as follows:

  • 52 percent lift in brand awareness
  • 65 percent lift in brand association
  • 67 percent lift in brand recall
  • 38 percent lift in brand favorability
  • 24 percent lift in purchase intent

In addition, established brands (like Fortune 500 companies which represented almost half of the brand in the study) outperformed lesser known brands significantly. Big brands witnessed 76 percent lift in awareness (e.g., for new product launches), 71 percent in message association, and 45 percent in favorability. This extra boost in performance for the larger brands is likely due to the synergy with other advertising efforts both on and offline.

For us to excite and surprise brand marketers, our bar needs to be double-digit gains and outliers that show the Web is as good at branding as it is at selling. Continued innovation in the ad tech industry and solutions like the type-in will help more brand dollars reach the Web if they continue to deliver these kinds of results. Of course, the question remains whether the new ad products can scale their astounding results over time. But it’s refreshing and exciting to see experiments turn into new models.

When online advertising pivots and rethinks ways to engage consumers online we will see the trickle of brand dollars turn into a flood.

Young-Bean Song is the founder of AnalyticsDNA, a Seattle-based strategy and analytics research consultancy.

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