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IQ News: Analysis - The Halo Effect

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When an advertiser wants to reach its target audience on the Internet, sponsoring content on Web sites has become the hot ad vehicle du jour. But will users really want to hear a word from their sponsors?
Is an online sponsorship an elegant, subtle way to promote a company's brand and message or is the newly hot-again marketing scheme simply an insidious, exploitative way to gain access into a user's cerebellum? According to the online companies (and many experts) who deal with online sponsorships programs, the answer is "a little of both."
Indeed, as marketers struggle to find the winning formula for advertising on the Web, a growing number of companies and Web producers have begun to eschew plain-vanilla banner ads in favor of good-old-fashioned sponsorship models. Think of it as the equivalent of the kind of TV and radio sponsorships from the 50s, set in the digital arena.
According to Jim Nail, a senior analyst at Forrester Research of Cambridge, Mass., "Sponsorship is more about a relationship than offering actual products." In Nail's view, the primary bang that sponsoring companies get for their bucks is psychological rather than directly transactional.
"In the offline world, if you're sponsoring the Olympics or the Master's Golf Tournament, as an advertiser you're looking for the halo effect," says Nail. "In the eyes of people who are familiar with what the organization does and stands for, some of it rubs off on you."
An example of this notion of "good by association" might be the recent sponsorship of the top-level Philadelphia-based Wharton School of Business site by three major companies: Merrill Lynch, the Ford Motor Company and the McKinsey Quarterly. "This thing with Wharton, it's very much borrowing the prestige of the organization," Nail says.
The Wharton sponsorships could scarcely be more discreet. On the top-level page of the site, located at knowledge.wharton.upenn.edu, below a list of links, appear the black-and-white logos of the three sponsoring companies. The logos, which are linked to the three companies' respective sites, are not visible when a user first hits the page.
The need for this level of discretion from its sponsors may stem from the fact that this is academia, and top-flight academia at that. In the business world, however, things look at lot different and sponsors are unlikely to have their brands buried beneath the front page.

The Dominant Form
A more typical e-commerce sponsorship involves a company dominating a given section of a Web site. Full-color logos, links, and interactive and offline elements are often involved, according to Andrew Susman, president of New York-based sponsorship syndication company Studio One Networks.
"Most sponsorships today consist of one site with a specific area owned by a sponsor," says Susman. "The sponsorship is becoming the dominant form of advertising on the Net. The ability to intrude is lessened and the consumer is a lot more in control." Susman has long championed the sponsorship model since his days in the trenches at Time New Media, where he created one of the first online sponsorships on Time Warner's Pathfinder proto-portal in 1995.
When it comes to the growing trend toward online sponsorship, Bonni Hamilton, regional vice president of sales at San Francisco-based online magazine Salon.com, agrees with Susman. "Sponsorship is a big thing on the Net these days. The norm for Salon is sponsors essentially owning the space on the sites they sponsor," Hamilton says.
The question, though, is why has it taken so long for advertisers to find an effective way to reach audiences online without emulating offline schemes? Analyst Nail believes that sponsorships have a much greater potential on the Web than offline. "In the offline world if you sponsor the Master's Tournament, you put signs up around it and you get a tent, but there's not much impact you can have on the structure of the event," he says. On the Internet, the possibility for shaping a presentation is more integrated and expansive because the lines between content and commerce are less clearly defined.

Pushing the Sponsorship Envelope
While blurring the lines between editorial content and marketing may worry purists who believe in the strict separation between church and state, those in the online sponsorship biz believe that there is an effective way to create an advertorial mix without completely muddying the waters.
"One of my favorite sponsorships was on Women.com," says Nail, referring to the San Mateo, Calif.-based network of women's sites. "It was for Always feminine protection products. It was a section called New Mother, New Me. "
The content was developed by Women.com, but the section was owned by Cincinnati-based Procter & Gamble. It was for women who had recently had babies. "At the end there was a not-so-subtle subtext that this event may change the kinds of menstrual periods you have, and you may need to reevaluate what feminine protection products you need," Nail says.
Nail sees this as an example of how online sponsorships can operate in stealth mode to catalyze consumer buying decisions. Users of feminine sanitary products seldom switch brands, but this special post-pregnancy section was a way to tap into the collective unconscious of thousands of postpartum women and get them thinking in that direction.
"That's where the flexibility of the Web is a huge advantage. There's an opportunity to find ways to kick-start that thought process and be there to help the consumers as they evaluate the kind of decision that might change their minds in favor of things," Nail says.
Nail concedes that hardcopy publications can do advertorials or custom publishing, but not with the same effect as online. "Online you can involve people in the content," says Nail. "P&G had a questionnaire in that section for people to go through on what kind of menstrual periods they had and how that changed." And context, it seems, is everything when it comes to getting consumers to make the switch.

iVillage Interaction
Another example of creating an environment that fosters consumer involvement is the women's auto center sponsored by Ford Motor Company on iVillage, a New York-based network of women's sites. "Ford wanted to understand what experiences women had with car buying, maintenance and repair, and what they needed," says David Blair, vice president of sponsorship and partner development at iVillage.
IVillage did a major study of women online and created the Ford-sponsored site based on the results. It turned out that when it comes to cars, women's top priority was safety, followed by maintenance and leasing rather than buying, so the company plays up these elements on the site, running features on safety and the other two topics. (The site is still live.)
"This is our sponsorship model. Build an interaction and provide more than banner advertising, provide women with information," Blair says. IVillage has similar partnerships with Johnson & Johnson and Huggies in its parenting area, and with other companies throughout the network.
The auto section of iVillage is subtle in its promotions. A wealth of information on a variety of topics, from road rage to engineering, is included. The only way to initiate actual commerce transactions is to click on one of the Ford brand logos, such as Volvo or Mazda, displayed at the bottom of the page, skip off to that site and drill down a few levels.
As part of its Ford sponsorship, iVillage solicited opinions from its members as to their "dream functionality," or ideal characteristics in a car. Users sent in thousands of e-mails, Blair claims. The company then customized a Mercury Villager van to correspond to the women's' requests, called it the "iVillager" and took it on tour to promote the company and the site.

Salon's Solutions
Like iVillage, Salon.com integrates its sponsorships, including offline promotions and other forms of media. The company also has different types of sponsorship offerings.
"We have an e-mail newsletter for each of our sites, and people can choose to sponsor these newsletters," says Hamilton. Subscribers to e-mail newsletters such as "View From The Top," which features interviews with CEOs, get smart links to the sponsors embedded in the content. Newsletter content can also be downloaded to a PDA.
Another Salon sponsorship model is exemplified by a recent partnership with Neiman Marcus. Salon ran a contest with a trip to Italy as a reward, and over 20,000 people participated, e-mailing in their names and contact information as well as answering questions about income level, the last time they visited Neiman Marcus and whether they would be willing to receive information about sales at the store.
For the people who give permission to receive the information, "now Neiman Marcus can send stand-alone ads or e-mail notifying these folks of sales and events," says Hamilton.
A model with a special twist is Lexus' sponsorship of "Brilliant Careers," a Salon section Hamilton describes as "living obits," where peoples' lives and professional accomplishments are celebrated.
"The section included e-cards, a card you could send with snippets of information on the people." The cards were co-branded with the Lexus logo. "We had an offline event in San Francisco featuring some of the people we profiled, and around 400 people attended," Hamilton says. The promotions on "Brilliant Careers" currently include an above-the-fold ad for Lexus SUVs, a more direct approach than that on iVillage's auto-sponsored section.
Hamilton sums up Salon's approach, "We use sponsorships as a true partnership--how we together can meet the needs of the client."
The fact that Lexus is sponsoring Salon content, and that Ford provides extensive how-to and information copy on automobiles to iVillage readers, corroborates analyst Nail's comment about the psychology of sponsorship: "There is an almost unconscious feeling of gratitude on the consumer's part to that sponsor."
While the "gratitude factor" is far less than with, for example, the Wharton School sponsors or public TV advertisers offline, it's still a psychological factor that works to the sponsors' advantage.

Sponsorship Psych 101
Nail points to Studio One Networks as a company that is in tune with the psychology of sponsorships, and doing something unusual. "Studio One Networks builds sponsored content, following the TV barter syndication model, and brings that to the Net," Nail says. The company creates offerings for individual companies which it hawks to the sites Studio One feels are most appropriate for the content.
For example, Studio One created Mitsubishi's Digital Living Today, hosted by Gareth Bronwyn, a founder of San Francisco's Wired magazine. The show features lifestyle plug-ins, gadgets and tips on how to manage money, and is aimed at upwardly mobile 21- to 34-year-olds. The subject matter and distribution channels, including CBS and Topix Online, a digital gadget-oriented site, tap directly into the interests of the desired audience.
Susman, Studio One's president, says there are several natural checks and balances that keep sponsored content unbiased and maintain the traditional journalistic separation of church and state, editorial and advertising.
"First, you wouldn't be able to attract eyeballs," he comments. With single sites, Susman believes it can be possible to fuzz the line. But with the syndication model use by Studio One, "we have to be neutral, can't cater to anyone." He refers to the distributors as "our police force. If we don't deliver quality, we don't get picked up."
For example, Your Baby Today, a Studio One original program sponsored by Glendale, Calif.-based Nestle USA/Carnation, is hosted by Dr. Steven Shelov, a former Today Show guest and editor of the American Academy of Pediatrics parenting series. That's an example of one way to retain credibility for sponsored sites--using recognized experts in the field.
Using reputable sources is a practical way to build traffic and establish trust, Susman believes. And trust, he says, is a key element in sponsorships.
Analyst Nail adds, "By sponsoring content or events, the sponsor's presence is woven into the content. It's not like a TV ad you can zap or a print ad you can flip past. It's integral. It's not about how, for example, Lexus has more legroom than its competitor, so it's more sophisticated.
"It gets past the mental filter."