Business Models

Cherchez le buyer: Thoughts on UX and advertising

It pains me to have to admit this: I know a lot about the intersection of the user experience field and the advertising industry. Working in New York, I’ve met (and counseled) lots of people who work at both traditional and digital agencies. I’ve been recruited for many agency jobs. I even worked for Razorfish, a company that—much to my chagrin—decided to become an advertising agency halfway through my tenure. I work with many, many publishers, and in order to understand their business, I had to learn the advertising business.

I’ve been poking at the problem of how to integrate user experience processes into advertising agencies for a while. I ran a survey on this very topic last year. I gave a talk at the 2009 IA Summit on what user experience designers need to know about the advertising business model. I’ve consulted with traditional advertising agencies on how to restructure their creative group to better integrate UX (no link there, but I bet you wish you could see my findings.) I talked about how advertising works online at length on my recent Big Web Show interview with Jeffrey Zeldman and Dan Benjamin.

Normally I wouldn’t wade into the murky waters stirred up by a fractious, link-baiting blog post, but unfortunately this muck is the water I stand in every day, and I’ve already got toenail fungus from it, so I guess I might as well engage in a pissing contest in it too.

Follow the money

What I haven’t seen in any of the debate about Peter’s post — the most important thing, and certainly the first question any user experience professional should ask is: Who’s the user of the advertising agency? Who’s the buyer? And what do they want? Advertising agencies exist, in all their dysfunctional glory, because there are still people who choose to pay handsomely for their services.

What are these people thinking? Why don’t they love the internet the way we do, and shift more of their traditional advertising budgets online? Why do they choose to spend their multi-million dollar online budgets on Flash microsites? Why don’t they get that they need to engage customers through better product and service design, not just through glossy campaigns?

Given the economics of our industry, I believe this is the 64 billion dollar question. And we as user experience people should be doing everything in our power to persuade these buyers to consider our point of view. Thinking our potential clients are stupid because right now they choose to work with advertising agencies is probably not a good start.

Hate the ad, love the business model

UX people hate ads. Trust me, I get it. They’re annoying. They’re distracting. Users hate them. So UX people hate them.

I can’t say this strongly enough: if you’re a UX person, and you’re going in to talk to your clients with a snotty, condescending attitude about advertising, then you’re not doing your job. Advertising isn’t the only business model on the internet. But it’s the most important one. Look around you: publishers, startups, Facebook, Google—all based on advertising.

If you hate ads, then figure out a way to make the experience of ads better. That’s your job, isn’t it? (Also, there’s good money in it.)

UX is organizational change

You know what’s the easiest UX job in the world? Running a small UX consultancy. (She says, as the head of a boutique UX consultancy.) Your clients come (mostly) pre-qualified: they seek you out because they know they need your services. Small size means you can be picky about your clients, and picky about your employees. You only have to work with people who already grok your values.

You know what’s the hardest UX job in the world? Trying to change the culture within an entrenched, traditional business. This isn’t just advertising: it’s financial services, healthcare, media, government… any business that isn’t already on board with user-centered design. News flash: this is most of civilization. It’s going to be hard.

To me, being a UX person working in an advertising agency sounds a bit like being a Log Cabin Republican—an admirable attempt to try and change the system from within, though not something I’d personally have the stomach for. But that’s why I have so much respect for people like Abby the IA.

Advertising is no better and no worse than any other traditional industry that doesn’t get UX. But if you want more money to go towards UX design, the best place you can look is to try and take it away it from marketing and advertising budgets. Believe in UX and hate advertising? Fight the good fight, and take their money — even if it means working on the inside.

Business Models

SURVEY: User Experience in Agencies

Take the survey now: UX in Agencies Survey

Do a Google search for “traditional agency” and you’ll find a page of results debating whether and how full-service agencies can integrate digital skills into their mix. As agencies change with the times, they build in new practices and disciplines, hire new people and explore new ways of working.

How agencies embrace digital skills and processes is a big subject, so I’ll limit myself to one area: how do agencies incorporate user experience into their existing toolkit? (If you’re needing a definition of user experience, there are many; Eric Reiss’s is a good one.)

Over the past ten years, many traditional agencies have hired user experience people — from bringing in one lonely information architect or usability specialist, to building whole teams of interaction designers and content strategists. Some even place senior UX pros at the same level as creative directors. How effective has this approach been at integrating user experience principles and values into the agency?

At the same time, digital agencies have grown larger (and more bureaucratic.) Many digital agencies brought UX into the fold early, and it’s likely that a large digital agency also has a large UX team. But digital agencies aren’t immune from challenges in integrating UX, creative, and strategy practices. How does the breakdown of roles and responsibilities work in digital agencies?

I’m working on a benchmarking report to examine how user experience fits into traditional and digital agencies. I’m exploring questions like:

  • How does UX fit into the overall organizational structure?
  • How do UX people work with other disciplines on project teams?
  • What makes for effective collaboration (and what are the barriers that prevent it)?

If you have ever worked for an agency and would like to contribute, here’s a brief survey:

UX in Agencies Survey

If you have a lot to say on this subject, please let me know so we can talk via phone or email.

Business Models

Why Web Ads Suck

I’ve been researching and writing about the advertising business model for a while now, and for one simple reason: I hate online ads. They suck.

And yet, I’ve come around to believing that despite its flaws, advertising is only chance we have of making any real money off the internet. Or, to paraphrase Winston Churchill, advertising is the worst business model for the internet, except for all the others that have been tried.

Brian Morrissey of Adweek asks Are designers to blame for bad Web ads?

There are any number of reasons that web ads are terrible, but most of them sit far upstream from the beleaguered agency art director asked to churn out banner ads each week.

Advertisers Don’t Spend Enough
If you want better online ads, why not pay more for them? When you pay more for something, you often get better quality. CPMs for online ads are between 1/7 and 1/10 of print ads. That means that for every dollar an advertiser like Chanel will pay to get my attention in a magazine, they’ll pay only a dime to show me something online.  Do you expect to get the same quality from your $10 sushi from Whole Foods as you would get if you spent $100 at Nobu? It’s a chicken and egg problem — advertisers want to see better returns before they will spend more — but the advertisers will have to start paying more before quality will improve. Lower CPMs are the main reason that traditional media businesses are floundering; even if publishers devise a somewhat-palatable way for users to pay for content it still won’t make up the difference.

Measurability is a Double-Edged Sword
The saving grace of web ads — measurability — is also their downfall. Publishers tout measurability as a key reason to shift to online media, yet the metrics used to evaluate success are too simplistic. Click-through is a terrible way to measure people’s interest and engagement. People will click more often on things that are annoying, but that doesn’t mean they like the ads. Take the example from those subscription cards in periodicals (“magazine seeds”) which were previously the most intrusive form of advertising known to man, before the invention of Eyeblaster. Subscription marketers know that if you put five cards in a magazine, you’ll get more subscriptions than if you put four cards in — regardless of how much you annoy the people who don’t subscribe. Similarly, the more irritating you make your ad, the more likely it is someone will click on it. If that seems like a flawed way of doing business, don’t blame the designers who are encouraged to make obnoxious ads. Blame the system that focuses on click-through metrics to the exclusion of more meaningful evaluations. (If you still think that measurability is the end-all-be-all of the internet, and you haven’t read Doug Bowman say Goodbye, Google, now would be an opportune time.)

Industry-standard Sizes are Too Constraining
I’ve designed sites for dozens of newspapers, magazines, and blogs, and I can confidently say that having a limited palette of ad sizes (and thus grid structures) to work with really constrains your creativity. The only ad format anyone wants to buy is a 300×250 rectangle. The IAB and other industry organizations put Soviet-style pressure on publishers and advertisers to force them to conform to a single standard. The argument for standard sizes is that it widens adoption, since advertisers are assured of being able to place their banner on as many sites as possible. In practice, it retards growth, because sites are unwilling to branch out to new formats. I’ve been advocating the half-page ad (300×600) for years now, but few sites have re-architected to support it, and so agencies don’t design for it. I asked one client why they didn’t run more of the larger ad size, and he replied “We can’t run it unless 12 of our competitors run it. And they don’t.”

Advertising is About More Than Awareness
Much has been said about how the traditional marketing funnel has been turned sideways and inside-out by the internet. Not enough has been done to educate clients and creative teams about how to change the way they work to engage and persuade people throughout the transaction funnel. Everyone still focuses on banner ads and microsites, which are the equivalent of bus sides and TV commercials. Says Bob Greenberg of R/GA in Art & Commerce: Funnel Clouding (also from Adweek):

I suspect the reason agencies haven’t tackled consideration and preference is because they are far beyond their capabilities rather than simply outside their comfort zone. Real engagement requires entirely new teams of people—like information architects, data analysts and an army of technologists of various stripes. The traditional teams found at agencies simply do not possess the skill sets needed to tackle areas that are deeper inside the funnel, where purchase decisions increasingly take place.

You get flashy, glossy microsites because you’re dealing with an industry of advertisers and publishers that haven’t had a chance to develop and assimilate a new set of values. The digital agencies are schizophrenic, emulating backwards as often as they strive to set new standards. And the cult of measurement ensures that content, tools, and guidance that go beyond mere banner click-through just don’t “count.”

Is it any wonder that online ads suck? Frankly, I think it’s a wonder that agency designers do as well as they do.

Business Models

Ad relevance is the next big cash cow

Umair Haque argues that the way to beat Google (and, presumably to be the next internet company with eleventy billion dollars) is to serve ads that are more relevant. Google got part of the way there, can Ad Block Plus go farther?

Ad Blocker Plus is on the verge of turning into an open network that (finally) does the same as Google does: massively boost ad relevance, stripping out the useless junk — by factoring in whether or not people find ads useful or not. Ad Blocker plus is, almost unwittingly, making the world’s first reverse ad network. It doesn’t aggregate more ads to push — it aggregates people’s preferences about ads, so better ads can be chosen.

via How to Challenge Google (And Win) – Umair Haque –

Business Models, Presentations

Designing for, with, and around advertising

One day in 2005 I woke up and discovered I worked for an advertising agency. This came as kind of a shock to me, particularly since I was working at the same job I’d always had, leading the user experience practice in the New York office of Razorfish. But through various acquisitions we’d become Avenue A | Razorfish, and now we were in the business of making ads and selling ad space.

I had a tough time reconciling this with my focus on delivering the best possible experience for users. In fact, it’s one of the things that led me to leave and start Bond Art + Science in 2006. But in the intervening years, I have had the opportunity to work with many publishers — large and small, print and online-only — and have gained new perspective on advertising as a business model.

This talk, given at the 2009 IA Summit in Memphis, is my attempt to explain why user experience designers should open their hearts to advertising as a revenue model, and find ways to meet the needs of both users and advertisers.

Business Models, Content Strategy

Content + Commentary

I’ve worked with many publishers over the past few years, and one of the biggest challenges traditional media brands face is in adapting to social media and user generated content. Even opening up articles to comments from readers is a perilous step to some.

Our team at Bond Art + Science decided this was a worthy subject for some research and analysis. This report evaluates the landscape and makes recommendations about how to benefit from the new media landscape.

Content + Commentary: How Media Brands Invite, Manage, and Benefit From 
User Commenting and Participation Online

Business Models

Superfantastic dataset of advertising expenditures broken down by category

I’ve been looking around for  a while trying to find data that compares advertising spending on the internet with spending in other channels. And did I ever find it!

U.S. advertising expenditure, for various media and type categories across the years 1919 to 2007, is now available in a dataset convenient for extensive analysis. These data quantify the rise of advertising on radio, on television, in telephone directories (yellowbook), and on the Internet. They also quantify less widely discussed media for advertising, such as direct mail, billboards and outdoor advertising, and advertising in business papers (trade press).

via purple motes » U.S. advertising expenditure data