Advertising online has many advantages over advertising in print and broadcast media.

• Interaction: readers can instantly respond, whether by clicking or forwarding info in an ad.
• Accountability: every action can be tracked, whether clicks, purchases or subsequent visits.
• Iterability: ads can be changed frequently and tested in real-time.
• Targeting: whether in geography, interest or keyword, web ads allow unrivalled specificity in targeting.

Impressed by the reach and unprecedented science of online advertising, the private sector is flocking to online ads. Advertising online should exceed $20 billion this year in the United States. That’s roughly 8% of all U.S. advertising and up more than 25% from ’06. Corporate America is convinced of online’s efficacy: banners perform 40-80% better than TV, magazines, and newspapers in brand recall and in generating interest in a brand. At the average effective cost per thousand impressions of $3.50, banners are 80% cheaper than TV and newspaper.[i] And with search, advertisers can hit specific info-seekers for as little as 10 cents per lead, connecting at exactly the moment when each individual is primed for action.

Online advertising should be a no-brainer for politicians and causes, right? After all, during the ’06 election, an estimated 60 million voters – better educated, affluent and more active than the average Americans- went online for political information, and 22 million of them said the Internet was their primary source of political information.[ii]

But political online advertising still lags significantly. Candidates’ spending online accounts for between zero and five percent of their total ad spends.[iii] When candidates do advertise online, they focus on the metrics – like trackable Return On Investment (ROI) for fundraising - where online most obviously trounces offline. Thus, pursuasion, politicos’ real goal and the rationale for the bulk of traditional advertising, is ignored.

Despite strong evidence that online advertising can deliver significant messaging and branding benefits for politicians,[iv] most political online advertising focuses on list-building and money raising. For example, Presidential campaigns raised $22 million online in Q1, but spent only $1.7 million on online advertising, with the bulk of this devoted to list-building and cash raising rather than pursuasion.[v] To the great frustration of online advocates, money raised online almost inevitably goes to pursuasion TV ads rather than being spent online.

The political “net lag,” both in spending and lack of focus on persuasion, presents a historic opportunity for Progressive causes and candidates. By building a knowledge base now, Progressives can grab an early lead and build a lasting edge. What should Progressives do?

Categories of Online Advertising

Online advertising breaks out into five big buckets: search, display, classifieds, e-mail, and referrals (or affiliate).

This memo focuses on interesting subsets of the first two categories.

Search: Much as advertising in the yellow pages allows advertisers to hit people precisely at the point where they are looking for information, search Advertising is a method of placing online advertisements on web pages (especially search engines) based on specific information sought by the viewer.

Display: Display ads are graphical units that run adjacent to content, something like billboards beside the highway which, if clicked, lead to more information or shopping opportunities. Ads can be traditional units shaped as “leaderboards” (728 pixels by 90 pixels), or “islands” (160X600.)[vi] Other unique units, like “blogads” (150X200 plus additional text) can work better in unique environments like blogs.

Here are examples of two Internet Advertising Bureau standard units (IAB) units, leaderboards (top) and island ads (right side) on CNN.com.

And here are example of ads customized to appear on the blog DailyKos.com.

Advertising can be purchased based on cost per click (CPC), cost per thousand impressions (CPM), cost per acquisition (CPA) or on a sponsorship basis (per time period). Search advertising is generally associated with CPC, while display is usually priced by CPM or sponsorship.

Search

Search ads allow advertisers to promote their product in proximity to results returned by searches for specific words, or “keywords”. A search implies an intention to take further action, so the best ads resemble an answer to a question. For example, in the following example, the implicit question is “who are Presidential candidates?” and campaigns seek to answer with their own candidate’s name. Most often, these ads are in text format.[vii]

As is evident in the ads above, money raising and list building are the focus for search ads. Republican John McCain's presidential campaign raises about $4 for every $1 it spends to raise money on Google. McCain's campaign has been aggressive in running text-ads pegged to some 2,500 key words, including McCain's own name, the word "president," and the names of his main opponents.[viii] The Obama campaign runs ads beside mispelled searches for “Barrack” and “Barrack Obama,” all those who click are dumped into signup forms. Romney has bought ads for searches for McCain and “McCane,” and again, these all dump into signup forms.

Attempts at persuasion in search are rare. In one excellent example, The Drum Major Institute, a New York State public policy group, graded each of the state’s legislators in 2006, and then used AdWords to link each legislator’s name to his or her grade when searched in Google.[ix] The estimated cost per click was five cents, and the ads were extremely cost-effective, since they were most likely seen and clicked either by constituents or legislators who were “vanity Googling,” i.e. searching Google to see what others are saying about them.

It’s astonishing that, at least on July 10, 2007, no presidential campaign, Democratic or Republican, has ads running against Google searches for terms like poverty, unemployment, social security, Iraq, Bush, immigration, global warming, environment, jobs, or health care. What a wasted opportunity to connect with activists and future voters who are seeking information on these issues.

Pros:

1) pay as little as $5 per day, and 5 cents per click

2) target niches/categories that your competition can’t imagine

3) experiment easily

4) further target your market so that only people from zip codes you’ve specified can see your ads

Cons:

1) ads may appear in the wrong context, for example, next to text saying “not Hillary” rather than “Hillary”

2) ad text is limited to 95 characters (Google)

3) ad format is limited and search engines can limit your ability to use politically charged language

4) analysts think that up to 1 in 6 clicks is fraudulent, which gets expensive if you are paying per click. (When ads appear on search engines, the most likely cheater is an advertiser’s competition. When PPC ads appear contextually in publisher content, the mostly likely cheater is a rogue publisher.)

To get started with search: Although Yahoo and Microsoft offer well-developed tools, it’s best to start with Google's AdWords (https://adwords.google.com/). Buy keywords like your name, your candidates’ names, issues you want to be heard on, and your past accomplishments. Seek specific multi-word combinations (“Ohio democratic candidates” rather than “democratic candidates”) to reduce your cost and competition.

Blogs: advertising to influentials

If search advertising enables buyers to hit solitary individuals engaged in solo pursuits (buying goods or searching for information), advertising on blogs lies at the opposite end of the spectrum, providing access to tightly knit groups of people who are gathered to brainstorm. As influentials and insiders gather on blogs to trade information and analysis with each other, blogs have begun to “set the agenda for agenda setters.”[x] While this audience also can yield substantial ROI in names and list building, it is uniquely suited for pursuasion.

Political advertisers should target the roughly 200 blogs which accept advertising and focus specifically on Democratic issues or influences. Many of these blogs rival traditional publications in audience reach.[xi] Readers on core political blogs are extremely politically engaged, with over 93% reporting voting in the 2004 election and 62% saying that they contributed to a cause or candidate in the last months. Political blog readers live in their own media ecosystems, with half reading blogs more than 8 hours a week, versus less than 4% reading newspapers or magazines that much.[xii] Most importantly, while only 4% of the average Internet users leave political comments online,[xiii] up to 60% of readers of a blog like DailyKos leave comments and 21% are themselves bloggers.[xiv]

While it’s easy to identify influential blogs, it’s much harder to know how to create messages that will engage their readers. Passive consumers of information are becoming active pursuers and creators of information and traditional “push” advertising is ignored or reviled.

As an advertiser, you need to:

• Most importantly, think news: blog readers are news-hungry and respond strongly to new information rather than messages.
• Create an emotional connection with your audience
• Iterate compusively: too many advertisers stay with the same ad week-in, week-out. As the attached examples above show, small changes in creative can have dramatic effect.
• Avoid the least common denominator, using ad images and text that connect with each specific audience.
• Deliver fun or controversial content: people are more likely to click, share and act
• Don’t be too slick. Blogs are hand-built and the best ads show the fingerprints of a human creator.

Pros:

1) blog readers are online activists, giving money, leaving comments and blogging, at a rate far higher than other Americans and online users.

2) ideas and facts articulated by blogs are often picked up by traditional journalists and pundits

3) because ads bought on blogs are not driven by algorithms (as with Google) but human decisions, bloggers and their readers more often notice and comment on their advertisers.

4) because blogs don’t have the expensive overheads of other media, blog advertising is usually cheaper.

5) ads appear constistently for a set period, ensuring that your message penetrates a community.

6) ads can run on niche and local blogs

Cons:

1) bloggers can react negatively when excluded from purchases. For example, when Hillary Clinton’s campaign purchased ads on a slew of liberal blogs, a few blogs who were not included in the purchase complained publicly.[xv]

2) advertisers can’t control what bloggers say about you.

To get started advertising on blogs: For political blog advertising visit (http://web.blogads.com/advertise/liberal_blog_advertising_network). Ads can be uploaded and purchased with a swipe of a credit card. You can see examples of good and bad ads here: (http://www.blogads.com/examples/nominees?topic=advocacy).

What’s next for Online Ads?

Just as search birthed its own ad unit and marketplace, it is also likely that other fast-growing content categories will spawn their own ad units in coming years. (And until they do, it is likely they will fail relative to other media.) It’s too early to pick winners among prospective ad types, but the content areas worth watching include:

• Video: While the biggest platform for online video, Youtube.com, was only founded in February 2005, it already has 44 million unique users and terrifies conventional television broadcasters. Nonetheless, no uniquely effective standard unit has yet emerged for video advertising. Somehow the combination of commercial video and Youtube’s giant community of commenters hasn’t yet jelled. For example, it seems likely that Chevy was not happy to find that the first comment on its front page video on fuel economy was “Yey, first comment bitches.” Few of the other comments were helpful either:
• Podcasts: Podcasts are do-it-yourself radio programs--audio files that anyone can create for iPod users to download. Recently, big media firms like ABC and Infinity Broadcasting have launched podcasts. [xvi] There are more than 90,000 podcast programs listed on search engine PodNova, but to date podcast advertising has been limited.
• Widgets: Widgets are small modules that can be loaded onto multiple sites or “adopted” independently by users. Widgets blur the line between an ad and a personalized service, somewhat like the glossy calendars insurance companies distribute annually. Because a widget provides a service – information, game, tally or newsfeed -- users are more likely to interact with it longer than a regular banner ad, thereby increasing brand loyalty and longevity. Allowing users to share the widget with others provides free distribution and placement.[xvii] The widget’s advertising value comes either in its branding or the “biased” value of its functionality... for example stressing insurance quotes from a sponsoring company.
• Social networking: Sites like Myspace (67 million) and Facebook (20 million active users) and Youtube [xviii]allow individuals to create their own identity pages AND to splice these pages with information from friend’s pages. Since word-of-mouth is the holy grail of marketing, the social network’s visible webs of friendship and influence should be powerful in the long run for marketers, but no one has yet figured out how to consistently tap these webs of influence in the present. For every one Dane Cook (the profane stand-up comedian with more than 1 million MySpace friends[xix]) there are 100,000 MySpacers with just a handful of friends. So a politician or cause definitely can’t rely solely on this “put up a Myspace page” strategy for proactive promotion and outreach.

Firms to talk with: The opportunity is huge, but so are the hurdles. It’s tough to hire qualified staff, since the trade is young and competition intense. Participants must grasp myriad ad formats, idioms and metrics. Finally, and most importantly, the pace of change is intense and unrelenting. While many online advertising tools are “self-service,” an effective strategy often involves complex juggling of multiple tools. Many advertising firms whose DNA was forged in dealing with broadcast and print media simply do not yet understand the dynamics of advertising in search and social media. With this in mind, the following firms can provide great advice and execution of online advertising. (This list is by no means exhaustive, but provides a good starting point.)

• EchoDitto: www.echoditto.com
• Fenton Communications/Donor Digital: www.fenton.com
• Grassroots Enterprise: www.grassroots.com
• MSHC: www.mshcdiect.com
• Netroots for Democracy