Greening of Ad Networks

May 20, 2007

An interview with C.J. Kettler, Founder and CEO, LIME 

Green marketers are challenged to efficiently and effectively target consumers that are receptive to their message.  Green marketers are not alone in their quest: According to a Jupiter Research report regarding the European market, “targeting audiences better” is the primary challenge faced by more than two-thirds of advertisers when planning and buying online media.

Moreover, targeting green consumers presents an extra challenge for marketers, as green consumers (or simply, consumers receptive to green messages) may transcend demographic groups while demonstrating inconsistent purchase behavior within and across product categories. 

Many consumers do self-identify by searching under related terms or by landing on relevant green sites.  In order to expand advertising reach, however, marketers must find ways to either target consumers higher up in the purchase funnel in order to impact awareness or intercept those already receptive to the message lower in the funnel in order to impact consideration and purchase. 

Yet, the reality is that there is only a small, albeit growing, list of green sites where marketers can directly reach consumers today.  Of these sites, some cater to “committed greens”, while others reach those that are more “curious” – representing a larger, more mainstream audience today – than committed. 

Marketers and media planners trying to reach either the “committed” or the “curious” have a few options:  

Portals: Portals tend to provide broad access to mainstream consumers interested in general content.  Some portals have created green content areas on their portal – including Yahoo! Green, which provides users with green news, consumer tips and content related to environmental issues and activism, and MSN’s Live Earth, a microsite that will broadcast global concerts on July 7th to build awareness about climate change.

Such green content allows portals to tag visitors with cookies that identify them as having a green affinity.  By doing so, portals such as Yahoo could then target these consumers with eco-friendly messages when they visit other pages on the portal, and perhaps charge a premium to advertisers in order to do so. 

Ad Networks.  Ad networks – including traditional players such as Advertising.com, ValueClick and 24/7 Real Media (recently acquired by WPP) – bundle and sell ads across a variety of publisher sites within their network.

 

Such networks typically offer either “run of network” or more “targeted” ad serving opportunities.  Run of network typically reaches a broader audience across a wider range of sites, while a more targeted buy enables more precision in terms of who, where and when the message is delivered.  While these sites offer access to mainstream consumers, they may have limited ways to identify green consumers (ie, specific sites in the network, content on a page).

Increasingly, green networks are being created to aggregate access to green sites.  Three networks exist today:   

GreenAds offers access to sites and blogs across five socially-conscious themes including “Sustainability and Environment” and “Green Business” (B2B).  Network sites include publishers Grist Magazine and E Magazine.com, as well as blogging site TreeHugger.  Advertisers can place ads on this green network on either a CPM or Cost per Click (CPC) basis.

BlogAds offers a “network” of 50+ environmentally friendly blogs under its “Environment and Sustainability” category. Ads can be purchased on individual blogs or across the network. Unlike on more traditional ad networks, BlogAds allows advertisers to purchase ads on individual sites for a flat fee that is set by each owner.  Blogs in the network include Inhabitat, Green Options and WorldChanging (as well as blogs like TreeHugger which is also listed with GreenAds as many of these deals are not exclusive).

New entrant LIME recently launched a green ad network that currently includes six sites: Mongabay, EcoGeek, EcoSherpa, TheBeautyBrains, SavvyVegetarian and Eco-Chick.  With a mix of green blogs and content sites, LIME’s ad network provides marketers the potential to purchase ads either on a CPM or run-of-network basis.  LIME – an umbrella brand that appeals to those interested in living a balanced lifestyle – has the potential to be a formidable player in this space: LIME has plans (and the backing of Steve Case’s Revolution Living) to scale its green network significantly over time. 

Recently, I had the opportunity to speak with C.J. Kettler, Founder and CEO of LIME.  We spoke about the growing consumer interest in a “green, healthy lifestyle”, the launch of LIME’s green ad network, and the evolution of LIME as a digital lifestyle vertical and media company.  Here is what she had to say:

 

MG: What was the impetus for LIME’s green ad network?  How did it evolve form your current offering?  Where would you like to see it go? 

CJK: From the get go, LIME was conceived as an umbrella brand.  We wanted to build a company at the intersection of Web 2.0 and media.  As an umbrella brand, we can be home to the grassroots and community that is building this green lifestyle, as well as provide content of our own and establish LIME as a brand. 

MG: Why is this the time to launch a green ad network?   

I think it is pretty clear.  We have been talking about a green, healthy lifestyle since we started this company two years ago.  People start to look at me inquisitively, tip their heads and say: “Yea, it does feel like this is happening now.”  I would say, literally, two weeks ago is when the tippng point tipped. 

MG: Well I guess I had the right timing for this conversation! 

CJK: It felt like it must have just hit.  There were nine magazines covers about being green. All of a sudden the world woke up.   

And it is okay to say “green”.  Two years ago there was a lot if trepidation in terms of what green really meant.  But now, it is very much accepted as a word that is okay to use; it has positive implications. 

It is also a lifestyle that touches on more than just global warming including the food that we eat, what we buy, how we live, what inspires us.  So, it is much more a pervasive lifestyle idea or way of life. 

MG: Do you think that this interest in green is “sustainable”? 

CJK: [Laughs] I think it will.  It is coming from a real cultural shift.  It is not just a fad.   

Most of the talking has been about ways to save electricity with compact fluorescent light bulbs.  Now, you look at people who are beginning to talk about the difference between local and organic food.  You look at people who are worried about the price of gas and its impact on their summer vacations.  Carbon offsets are now something people are talking about.  All of those cultural factors speak to this shift in lifestyle. 

MG: What is your offering to advertisers?  How are you unique in the market? 

CJK: Well, we just launched so we announced with just six sites.  And already in the next coming weeks we will have quite a few more [sites] to announce as part of the network.  Our goal is for it to be quite large and aggregate the voice and following in the market place.  What is different about our network is that we are building it from the bottom up with grassroots sites that already have a voice and a following. 

Clearly, the advertisers are looking to reach this audience because we see new products being launched in this category – whether that may be new products, product extensions or large multinationals buying more endemic companies to create brand extensions.  Kashi was bought by Kellogg, General Mills bought Cascadian Farms, and Colgate bought Tom’s of
Maine.  What we are beginning to see is that the major marketers are also recognizing [green] as a market segment that is important to them.

MG: Do you have a sense as to the demographics that you are able to target through the network and/or the purchasing power that they have? 

CJK: We do not have our own specifics yet; we rely on market-based data.  On our own site we know that we have a pretty even split 60:40 female.  The sweet spot for age is 25-39, though we sell to advertisers 25-54. 

MG: How about household income?  

CJK: We know that the audience is more affluent.  It costs more to buy organics.  It costs more to remodel your home in a more energy efficient way.  In automotives, the price differential for hybrids is worth it because people often want to make a statement. 

For the advertiser, it’s almost as much about brand alignment as it is about targeting a market segment.  Again, while that are looking to introduce new products in this overall lifestyle category, they look to do it with a brand that speak to this marketplace, in a way that is a “curated” experience, if you will. 

MG: Do you think these people are early adopters or mainstream consumers? 

CJK: I think they are somewhere in between.  I think we have seen the early adopters and that is probably who we have been speaking with in our first year of service.  And we are very clearly seeing that [LIME] is very much a mainstream brand and [green] very much a mainstream lifestyle.   

MG: How do you differentiate yourself against other ad networks like 24/7 Real Media, portals like Yahoo which can tag your affinity when you visit their green content pages, or behavioral targeting companies like Tacoda? 

CJK: I would describe it as the difference between being broad and only an inch deep versus being narrow and very deep.  When I look at a company like Tacoda, they have a wide variety of audience segments, they are aggregated segments across an entire network of sites.  What we are doing is focusing on one segment alone but going very deep with that segment. 

MG: What is your long term vision for your green ad network and how does it fit within your overall strategy for LIME? 

CJK: We think that the world is moving to this idea of more digital verticals.  When we first came onto the web, we used giant aggregators like Yahoo and AOL.  And now, we are seeing the world divvied up, to some extent through these curated communities where one can not only read text, be entertained by video, and view podcasts, but also connect with community and shop for products that are relevant to your lifestyle.   

We have really built one at LIME – as a media company and as this digital lifestyle vertical that aggregates the voice of this green living movement.  It is really a kind of a destination if you will.  Our vision statement says it all: we want to be where the new green lives.

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Brewing Direct Mail Backlash

May 8, 2007

This past week HSBC launched its “There’s No Small Change” campaign offering Green Kits full of eco-products and offers to new customers that sign up for a checking account and HSBC’s automatic bill payment option.  Such an offer is a win-win-win: customers receive a high value offer, HSBC acquires new customers that have built-in switching costs via the automatic payment options and the environment is healthier due to reduced paper consumption.

One of the reasons why such an offer may resonate with consumers is the growing acceptance that paper-based communications are not environmentally sound.  Such changing sentiment could foreshadow a backlash by consumers and advocacy groups that may force marketers to rein in all paper-based marketing efforts, including the $56 billion US direct mail industry.

Today, direct marketers rely on DM as a core channel to send targeted information to customers (from an in-house database or purchased from an external list).  What happens then if consumer backlash against the mounds of direct mail received each day results in a national “Do Not Mail” list, eliminating the ability of marketers to send solicitations without permission?  Sound fantastical?  Well, here are a few thoughts to consider:

First, the “Do Not Call” campaign was one of the most successful campaigns in history, resulting in 62 million consumers signing up in the first year alone.  As of September 2006, more than 132 million people were registered on the list.

Second, a “Do Not Mail” registry is gaining traction.  According to the Direct Marketing Association, “Do Not Mail” legislation has been introduced in more than 14 states so far this year that would create state-based registries.  Nine of these initiatives are still active (of which 5 are in Northeastern states where there is also real concern about limited landfill space): 

States

Status
CT,HI, MI, MO, NJ, NY, RI, VT, WA Active/In Committee
AK, CO, MD, MT, TX Postponed/Withdrawn

Inevitably, such a registry (or the threat of one) will cause marketers to rethink paper-based channels, increasing their reliance on electronic communications (eg, websites, email, e-statements, e-catalogs, desktop widgets).  It is also likely to decrease the footprint of any remaining direct mail efforts (eg, use of post-consumer recycled paper, reduced frequency and size of package).  

Smart green marketers should interpret pending legislation as a call-to-arms and take proactive steps to reduce their addiction to paper-based channels before they have to go cold turkey.


Launching Sprig into a Rising Tide of Green Consumerism

May 2, 2007

An interview with Mark Whitaker, Editor-in-Chief of New Ventures, Washingtonpost.Newsweek Interactive 

Consumer spending on green products is growing: the 2007 Cone Consumer Environmental Survey cites that nearly half (47%) of all Americans purchased eco-friendly products in the past year.  Such green products included:

  • Products with recycled content (62% of consumers who purchased green)
  • Energy-efficient home improvements (56%)
  • Cleaning supplies (48%)
  • Organic or other third-party certified foods/beverages (24%)
  • Energy-efficient cars (13%)
  • Green apparel (10%)

Given the choice, American consumers say that they prefer to purchase more eco-friendly products.  Yet, there are stipulations: when while most people say they will buy green, they typically do so only when product “price, accessibility and attributes” are similar to green alternatives.  (“The Rising Power of Green Spending,” Kenan Institute Asia, December, 2006) It is not surprising then that online business models are emerging to capitalize on this growing interest in greener consumerism including:

Shopping sites: Amazon recently added a “Sustainable Living” section, joining existing sites including VivaTerra and Organic Fair Trade that sell greener products directly to consumers. 

Shopping advice sites: Online publishers – including Washingtonpost.Newsweek Interactive which launched Sprig last week and National Geographic which recently acquired The Green Guide – are joining existing green shopping advice sites such as Great Green Goods and Ideal Bite to inform consumers on green products and lifestyles.

 

Sprig – short for “Stylish People are Into Green” – is a compelling online shopping advice and lifestyle site offering original content and news on stylish products that happen to be green.  The site’s goal is to become the Daily Candy of green – and then some. With a robust web site that aggregates green products – 1,500 at launch and counting across the food, fashion, beauty, home and lifestyle categories – and provides exclusive editorial content, Sprig promises an engaging shopping platform for the growing audience who values green style. 

Last week, I had the opportunity to speak with Mark Whitaker, Editor-in-Chief of New Ventures at WashingtonPost.Newsweek Interactive.  We talked about the decision to launch Sprig, its growing target audience and the emerging interest in green consumerism. 

MG: What is the impetus for Sprig and what will it offer consumers?

MW: Sprig is the convergence of two things.  First, a willing appetite at the [Washington Post Company] board level to do more investing online.  Last year we generated $100MM in revenue [online] with 250 employees devoted to the channel.  That is where we expect the growth. 

Second, we were approached by an editorial business team that had been involved with Organic Style at Rodale.  [The magazine] had folded for a variety of reasons.  They came to use and said: “We think that the idea of having a publication that identifies great products that are also environmentally friendly would be a great service.  And this is the moment.” 

And if anything, it is better done online.  One, the online [channel] is more environmentally-friendly.  Two, people who are forward thinking about the environment are also more likely to be online.  And three, it offers instant delivery. 

MG: Who is your target and what are you offering? 

MW: We plan to target women as the primary consumers and decision makers about these products.   

The original concept was focused on the newsletter. You know the Daily Candy? 

 

MG: Yes. 

MW: The Daily Candy has shown that model of short daily newsletters – devoted everyday to different products that makes you feel like you are getting the latest information – works.  The newsletter is a very viral thing both in terms of the technology and with its target: women as an audience are evangelists and tell each other.  They have shown that has worked.  Let’s take that kind of model and apply it to this space. 

But, then we decided to be far more ambitious and launch a website and have it more than an archive of our newsletters.  [The website] will have video 2-3 new clips a week, ranging from consumerist profiles of companies to “how-tos” with interviews with green experts.  Green celebrities that we interview will fill out an online questionnaire that we upload with pictures that they send to us.  We will also allow them to go into our database to identify products that they like, to create sort of a celebrity wish list. 

For consumers, we will also have a template that users can use to create your own page.  They can fill out the questionnaire, upload pictures, fill out the questionnaire, pick products from the database and [create] a profile page that looks like our expert pages. 

What I think is really the killer app in this is the interactive, searchable database of green products.  We are hoping to have as many as 1,500 products at launch and then keep adding to it.  For each product, we will have a blurb about why we think it is a good product and what is an environmentally friendly product, along with the name of the product, company, price information and a link to the [product] site. 

MG: How do you leverage the data? 

MW: That is a very interesting question.  What we know we are good at is selling display advertising against quality content.  But, obviously, we have the potential to experiment with other things like more targeted advertising.   

The other thing that is interesting about this space is that more and more products are coming onto the market.  The two principle editors say that when they go out to the shows, the increase in good products has grown exponentially even compared to a year or two ago. 

MG: Do you feel that you are bringing style to the green market or green style to the mass market?

MW: I think it’s more the latter.  Until recently, there were many people that thought green style was an oxymoron.  We do not think that is true anymore; we think it is one of our core convictions behind the site.   

Some elements within the traditional green community won’t [embrace the site] because so much of it is about shopping and consumerism.  By definition, Sprig will not be for them.   

But, we think the real opportunity is with people who are becoming aware of [green] but don’t quite know what to do.  If they are in a position where the do not have to sacrifice anything – style, quality – they will be interested.   

This is not a site that will overtly push a lifestyle on you; it is going to give you options.  One of our mantras is that the world may be better off if 95 percent of the people became 5% more green than 5% of the people becoming 95% more green.   

MG: You are providing consumers with a place to find green products.  But you also may be spurring supply because you are providing a low cost channel for suppliers to test and distribute green products.  Is that not the case? 

MW: That’s right.  To say upfront that we have that effect would be presumptuous.  Some people would say that we are being “light green”.  That may be true, but the fact of the matter is that by being light green we will encourage more mainstream producers to actually start producing new products. 

One thing you will notice is that in terms of the aesthetics: [Sprig] is not about shouting green at you.  If you go to most of the existing green sites and publications, the color green almost become a cliché. 

We wanted something that felt distinctly like a brand.  We wanted a design and color palate that evoked what we were talking about without being heavy-handed and literal.  We also wanted to project out ten years and said: “What if green is universal then?’’ And calling yourself “green” does not really give you something extra.  So we are hoping people will embrace [the brand] not just because it is green but because it is cool and they like our tastes and aesthetics. 

MG: Why is this the right time to launch Sprig? 

MW: I think that we are at the front edge of the wave.  You can see the wave building, but it has not crested yet, and we are jumping on at the right moment. 

MG: You say that women are your primary target.  Tell me about their demographic makeup?  

MW: [Our target] is based on both demographics and psychographics.  It is women with a fairly wide age band.  But, elements within each age group will connect with us for slightly different reasons.  It is for younger women who want to be hip and stylistic.  They are also a generation that cares about the environment.  If there tends to be an activist movement on campus, that tends to be it.  So they are attracted to it.   

There are also enlightened baby boomers who are getting more into this.  The Laurie David [co-founder of Stop Global Warming and a producer of An Inconvenient Truth] type.  Or, in between people who have been turned on to it because they are mothers and are concerned about what is good for their kids.

MG: Are these women purchasing green products today or are you going to open up a whole new world for them? 

MW: I think it will vary.  Some people will be very knowledgeable, but given the depth of our [product] database, we will introduce them to a lot of products they didn’t know about. 

But then I think there will be some people who have literally never really thought about this.  We want [the brand] to be accessible to those who do not think of themselves as green. It is almost like it is the kind of site that they would want to shop or check out anyway.  And all of this stuff is good for the environment.  That’s cool.


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