Wednesday, March 27, 2013

The 2 Types of Ads

Farhad Manjoo:

There are generally two kinds of marketing messages in the world—“direct-response” and “demand-generation.” Direct ads are those that call on people to take an action more or less immediately—click to visit a site, call an 800 number, order something from a catalog. Google’s Adwords, the little text ads that show up alongside your search results, are a form of direct ads. Adwords are supremely measurable—advertisers pay Google for clicks, and they can track how many of the people who click end up buying from their site. Adwords are also extremely effective; because they’re shown to you when you’re looking to buy something (when you have “high purchase intent,” in the jargon), people who click on them frequently end up buying. Consequently, Adwords have made Google the most successful advertising company in the history of the world.

Yet in the larger advertising industry, direct-response ads like Google’s are something of an anomaly—a way to sell certain products at certain opportune times, but not the way that most marketers approach their jobs. Instead, the vast majority of the advertising world is structured around “demand generation.” These ads aren’t trying to get you to take some action right away. Instead, they’re trying to plant an idea in your head—to introduce you to a new product, to get a name stuck in your head, to improve how you feel about a company. (That’s why demand-generation ads are also known as “brand advertising.”) Other than infomercials, pretty much every ad you see on TV is a demand-generation spot. That’s true of ads in print magazines, on the radio, at bus stops, on billboards and most of the banner ads on your favorite news websites, too. According to some estimates, demand-generation ads account for more than 80% of the money spent on ads.