Groupon says its focus is on the bottom line, rather than top-line growth.
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“Offline advertising of online properties is necessary,” says Brooks, executive vice president of business development. “Though the penetration of digital music usage and the demographics are broader than most people think, there is still some fear of technology. It’s incumbent on us to educate people that using digital music is not scary or hard to do. You can take it with you, mix it up and have fun with it. That’s a message we need to get out.”
BuyMusic.com’s TV ads captured that sentiment by depicting a diverse group of people singing along to portable digital music players, in a deliberate spoof of Apple iPod ads that depicted digital music users as exclusively hip, young, and in-tune. BuyMusic.com’s ad tagline, “Music downloads for the rest of us,” underscored the point.
Brooks estimates the media buy, which initially ran aggressively and then tapered down over six weeks, was about $1.25 million. BuyMusic.com contained costs by producing the three 30-second spots mostly with in-house staff. The ads were considered so entertaining by some cable outlets that they ran them repeatedly at no charge when they needed filler. “For $1.25 million, we got about $6 million in advertising,” says Brooks.
While not disclosing numbers, Brooks says the company compared traffic to the site from regional markets where the cable TV ads ran to traffic from areas where the ads did not run and found the spots “effective.” She points out that the initial campaign was more about education than the product specifically. Future TV advertising, plus an online campaign it plans to launch this year, will incorporate a more aggressive call to action, she adds.
“The future of this business is in the person who loves music but hasn’t really committed to digital music interaction,” says Brooks of the TV buy. “Those people are probably on the couch in front of the tube.”
EBay is one of the biggest advertisers on the Internet, but still, it was finding that its Q4 wasn’t on a par with that of traditional retailers and it wanted to push itself higher into consumers’ minds for holiday purchases. That desire made eBay one of the first of the crop of current online retail companies to pursue TV advertising in a big way when it launched a campaign on both network and cable TV in Q4 2002. The humorous “Do it eBay” spot, a full-blown production number created by ad agency Goodby, Silverstein & Partners, sought to position the company as not only unique, but a better way to shop.
Decisions happen offline
Senior director of brand marketing Annette Goodwine says TV reaches consumers when they are in a different mindset than they are when online. “Certainly eBay is strong online, but we know that a lot of shopping decisions are made when people are not online. We felt that to increase our unaided shopping awareness and the notion of considering eBay for items people may not have considered eBay for before, it was important to be elsewhere,” she says. “So the purpose of TV advertising is not only to get people who are already online but to get people who are later adopters.”
EBay’s media buying strategy has evolved over the year since its TV campaign debuted. Goodwine says it’s found that cable TV, about a third of the cost of network television advertising, delivers better against the target market, both in terms of the overlap with the population of regular online shoppers and programming that targets special interest groups. By Q4 of 2003, the TV campaign was running on cable outlets only, supported through the year with print ads in long-lead special interest magazines such as Sports Illustrated and Vogue. For the first time this year, eBay also experimented in the holiday season with newspaper inserts focused on the consumer electronics category in Parade, the Wall Street Journal and New York Times.
Goodwine adds that there was initially some question within eBay as to what value TV would deliver. “Offline advertising is much more effective than online in terms of general brand building. But in terms of moving the numbers, which is what we’re all about here, there certainly was conservatism around what the television buy would bring,” she says.
A year later, traffic numbers suggest that eBay has settled that question for itself. EBay’s traffic has climbed steadily in comparison to Amazon, whose traffic has dropped over the past year during which it’s bypassed TV advertising in favor of other types of promotion. “We attribute that to television,” says Goodwine. Yet eBay, which spent undisclosed millions on the TV campaign, remains on the fence about increasing its TV spending. Compared with other television advertisers, “We’re not a large advertiser and we don’t know that we need to be,” says Goodwine. “Being relatively new to the space, we’re still figuring that out.”
The big reach
Goodwine’s comment underscores the position of other online companies that are beginning to experiment more aggressively with offline advertising: They’re still figuring out what works. What’s certain is that while online pay-for-performance advertising may be cheaper and easier to track, the big reach of TV and radio and the hang time of magazine and newspaper advertising are hard to ignore for online companies with growing financial stability who are now intent on building brand.
Online advertising and any success online retailers have experienced with it have played a role in the increasing interest among some in adding offline media to the mix, says Jupiter analyst Evans. “Retailers can see what kind of performance they’re getting there and extrapolate that to the other media they can’t track in the same way,” says Evans. “They’re telling themselves they’re not going to throw out any particular medium or use any particular medium just because it’s there, but see what they need to accomplish and which medium can help do that best.”