DoubleClick is making a play for direct marketing dollars, forming a specialized group in its Global Media division.
Headed by DoubleClick veteran Bill Wise, the company’s new Direct unit came about in late December, with a mission that amounts plugging a hole in the company’s media offerings.
“If you took at look at what DoubleClick Media is, it’s about taking DoubleClick’s technology and putting it to use in servicing publishers and advertisers [with] solutions for brand marketers,” Wise said. “What we haven’t done in the past is doing a great job for direct marketers.”
“So if you don’t have the capabilities to service the online direct response market, it’s almost a little risky,” he added.
The 10-person group also aims to better address the crucial role of direct marketing practices in online advertising. Despite attempts by the largest ad sellers — including DoubleClick — to encourage use of the medium for branding objectives, the down economy tends to make more mushy branding goals less justifiable. Instead, increasing numbers of advertisers are seeking a more quantifiable return on investment, which draws them toward direct marketing campaigns.
“The market has gotten smaller, but it’s also gotten a lot smarter,” Wise said.
As a result, while the rest of DoubleClick’s Global Media division will concentrate on selling to brand advertisers, the online ad leader’s Direct unit will focus on promoting Web inventory, e-mail and list rentals to direct marketers.
So far, the group has seen a measure of success, landing Capital One, Sprint and Columbia House as advertisers.
But in a unique twist for direct marketing-minded plays, the unit’s sales aren’t necessarily being priced on a performance basis. Instead, the unit will continue DoubleClick’s philosophy of selling most of its media in deals based on cost-per-thousand impressions, or CPM.
Yet while cost-per-acquisition, cost-per-lead and cost-per-sale deals would seem to be more attractive to ROI-focused direct marketers, Wise defends DoubleClick Direct’s position as a way to give direct marketers an alternative to the Web’s cost-per-acquisition models.
“The interesting thing, is if you take a look at our network and the remnant space we have in our network … DoubleClick Direct can actually add more scale than anyone else out in the marketplace,” he said. Marketers “are getting efficiency on the [cost-per-acquisition] deals they’re cutting, but efficiency means nothing without scale.”
“The metrics by which we judge the success of a campaign are by looking at the back-end … and though we’re driving conversions via leads or sales, a vast, vast majority [of the unit’s media] is on a CPM basis,” he added.
But Wise did concede that the advertising giant was looking hard at having the unit also roll out at least some if its inventory in a pricing model “in which we do absorb ROI risk.” Such performance-based arrangements have traditionally been the domain of players like ValueClick, in which DoubleClick has a partial stake.
Still, Wise downplayed the ramifications of stepping up performance-based pricing. “They’re another priority of the deal,” he said. “But I don’t care so much about pricing … As long as it’s profitable to us and meets our marketers’ objectives.”
