As I work through my current events backlog after coming back to the office, I wanted to call out this press release from Microsoft re: their recent deal with comScore to provide enhanced R/F and audience composition tools for branding-focused media buyers. The release highlights a theme we are passionate about at Brand.net and have mentioned time and again on this page: online advertising lacks brand-friendly metrics and tools, which makes it too difficult for brand buyers to plan and manage campaigns in a manner consistent with the rest of their (primarily offline) spend. These metrics and tools position brand marketers to deliver real business results and are essential in helping brand budgets follow audiences online. Our friends at Microsoft were even kind enough to quote our analysis estimating only 5% of brand budgets have yet made this transition. As today’s Wall Street Journal also observed, this represents a major opportunity for all the players in the space. It’s great to see the online ad industry increasingly recognizing the brand challenge/opportunity and mobilizing to address it!
Category: Measurement
Branding needs the web…and the web needs branding
Solid article on ClickZ last week with some insightful commentary from Nielsen Online CEO John Burbank. Mr. Burbank correctly identifies lack of brand dollars online as the source of current downward pressure on rates and publisher revenue. He’s 100% right that without these dollars following audiences online, the online publishing ecosystem will degrade and that users will not like the results. This second theme was echoed by Omar Tawakol, CEO of BlueKai, in another insightful piece for AdAge. So without a robust online ad market online, online publishing will suffer. And if that ad market doesn’t include the large brands that funded quality content in other media, online content quality will degrade to the detriment of users, advertisers and publishers alike. A tragedy of the commons of sorts.
Mr. Burbank went on to make the important point if publishers want to attract brand spend, they need to help brand advertisers measure results using metrics that are appropriate to the objectives of brand campaigns. He suggests that rather than focusing on clicks, brands should be focused on “whether their ads reach the desired targets, change the way consumers think about their brands, or help sell products.” Couldn’t have said it better myself. This is something we discuss with our clients every day. We actually partner with Nielsen to help our clients in CPG measure the extent to which their online campaigns sell product offline. The results speak for themselves. Online advertising works.
I do disagree with Mr. Burbank on one important point, however. He seems to suggest that ad networks are responsible for the current challenges online publishers face. It’s true that ad networks can put downward pressure on CPMs for a publisher, but that is primarily driven not by the fact that a network is doing the selling, but that the vast majority of networks sell almost exclusively to DR buyers. Those buyers are extremely price sensitive and thus the downward pressure. If there was a healthy level of demand by brand advertisers for online content, this downward pressure would be balanced and the online publishing ecosystem would be much more stable. Unfortunately, online branding today remains too inefficient for brand dollars to follow audiences online easily and balance this equation. So an ad network focused on branding, such as Brand.net, actually helps matters, increasing efficiency for brand buyers to help move budgets from other media, while not undermining the economics of the premium publishing model. This is another topic near and dear to my heart, which I addressed at some length in an iMedia post earlier this year.
OPA branding research
Interesting article last week on Silicon Alley Insider, commenting on recent OPA/comScore study designed to help the advertising world get beyond the click. This topic is near and dear for me and I have written on it previously. Now, I don’t always agree with the OPA (for example, I’m not sure I would have gone with “The Silent Click” as a title for the research – sounds like a bad Meryl Streep movie), but in this case they are right on. Clicks don’t equal sales. Period. (Sales don’t equal ROI either, by the way). The research (slide 11) showed online ad exposure increased online sales by 7%. We’ve seen the same dynamic looking at offline sales as well; those exposed to online advertising buy more of the advertised product in offline retail stores. This is an even more powerful result than the online data presented by OPA/comScore because nearly 90% of all retail spending still occurs offline, even higher in key brand categories like CPG. Interestingly, the OPA deck stops short of presenting any actual correlations (or lack thereof) between CTRs and the other variables they discuss. So I will pick up where they leave off – in our offline sales lift results to date we have seen no correlation between CTR and ROI (offline sales lift vs. media spend). What drives ROI is a mix of Cost/HH reach and quality of content environment where ads are shown. Clicks might be useful for something, but not as a proxy for ad effectiveness.
P&G’s “Passion for Digital”
P&G is the largest marketer in the world.They are also one of the most successful. This recent article in Ad Age gives us some insights into why.
The article quotes Marc Pritchard, P&G’s global CMO:
“I’ve got a lot of passion for digital. It really is such an incredible way to connect with consumers and really have much deeper ongoing relationships with them… Our media strategy is pretty simple: Follow the consumer. And the consumer is becoming more and more engaged in the digital world.”
It’s that last part that’s most insightful for me. Keep it simple, follow the consumer. This is very good advice, as it seems too often marketers can get so focused on the dizzying array of niche products and capabilities online that they lose sight of what they are really trying to accomplish, which is exactly that: reach consumers. Lots of them. In the right environments and with the right messages. This is something near and dear to our hearts at Brand.net, because when done well it drives strong, measurable results.
The discussion of online spend ramping to the point that marketing mix models can begin routinely reading it is also an important one for 2 reasons. First because the 5% threshold they mention for an MMM read can represent a real inflection point for online spend for the CPG category – an extremely important category for the long-term health of the online ad ecosystem. Secondly, the discussion highlights that fact that marketers want to think of online as a medium in line with other media at their disposal. Online media is often sold as “special” or “different”, but the path to higher spend isn’t in forcing marketers to learn and embrace new technologies and metrics. Nor is it in driving marketers into niche strategies like BT or custom executions that are flashy, but have negligible reach and impact. Increasing online spend will undoubtedly involve new technology and learning on both the buy-side and the sell-side, but to focus on technology for technology’s sake is to miss the point. The path to long-term, significant, sustainable increases in digital spend will be paved in large part by helping marketers leverage the skills and tools they already have to better follow the consumer – a consumer who is becoming more and more engaged in the digital world.
Thoughts re: Today’s WSJ article on Yahoo!’s APT
Jessica Vascellaro’s WSJ article this morning on Yahoo!’s display ad platform, APT, caught my attention. The problem Yahoo! is trying to solve with APT – (quoting Jessica) “that it remains a big pain today for advertisers to buy display ads across multiple sites and for publishers who have lots of online advertising space to sell to find demand for it” – is exactly the problem we founded Brand.net to solve. Continue reading “Thoughts re: Today’s WSJ article on Yahoo!’s APT”
How Big is Your Ad Network?
Over the weekend, I read an interesting iMedia post from last Thursday. The author directly and convincingly challenges the importance that many seem to place on the comScore unique reach numbers as a basis of comparison for ad networks. I have been thinking about this for a while and I agree that raw reach on comScore is a very narrow gauge at best and extremely flawed at worst. Of all of his ideas, I think the most interesting is rating networks by renewal rate. I think the important high-level point there is to include a notion of quality, which has been sorely lacking in all of these measurements. In evaluating and comparing networks, is 1M uniques reached in below the fold placements on second tier social network sites the same as 1M uniques reached in branded, contextually relevant women’s lifestyle content? Is 1M uniques reached for P&G on the first of many campaigns the same as 1M uniques reached for a predatory debt consolidation company who cancelled halfway through the campaign and never came back? For some perhaps, but for most of the Ad Age 100 the answer to both questions is “no”. I would also echo the author’s point about the overlap among networks. Overlap affects the aggregate reach & frequency of a campaign, so unless a marketer is running a CPA campaign they need to push their media partners for reach commitments on a campaign by campaign basis. As the author points out, the overall reach of a network should be much less important to a marketer than the network’s reach on that marketer’s campaign. Smooth, complete delivery with tightly managed frequency should be the expectation on every campaign. High quality campaigns running in high quality inventory with high quality execution – now that’s a good basis for comparison.
Digital Marketing: Is it Time to Forget Measurement?
The following is a re-post from my guest blog column published today in AdAge. It ties in very nicely with coverage on measurement coming out of the IAB Annual Meeting, including my previous boss, Wenda Harris Millard’s keynote and this piece by AdAge’s Abbey Klaassen
Digital Marketing: Is it Time to Forget Measurement?
Why Online Advertising is Hindered by its Biggest Strength
In several recent pieces I have written about the opportunities and limitations of measurement in online media, particularly for branding. If you read those articles, the title of this byline might seem strange. For the rest of you, this title might seem like downright heresy. Please, read on before you call the exorcist.
The internet wasn’t always the multibillion dollar industry that it is today. Less than 15 years ago, most websites we know today didn’t exist. The relatively few that did were searching for business models. Some went with a subscription model, at least for a while (most notably AOL), while most content-focused sites honed in on advertising as the main source of revenue. As they did, they faced a huge challenge: how could they sell advertising against more established media with what then was an extremely short list of assets.
Recall the internet circa 1996, the year one of the biggest and best known content sites, Yahoo, went public: bandwidth was narrow, content was thin, audiences were small, creative was primitive. However, the internet did excel in one area: it was awash with data. Page views, time spent, clicks, conversions — a treasure trove of new metrics, along with some “old” ones that hadn’t been as readily available with other media.
I was recently talking this over with my former boss from Yahoo, Wenda Harris Millard, and she added that the measurability of this new medium also tapped into a broader theme in the advertising business at the time — growing dissatisfaction with measurement of traditional media. So, quite rationally, the internet advertising value proposition focused on measurement.
As the industry grew — faster than any media in history — more sophisticated targeting (behavioral, retargeting, “hyper-targeting”) and measurement (“engagement,” “search lift”) capabilities were developed. The focus on measurement evolved and became more ingrained, almost to the point of being the unquestioned orthodoxy. It was as if the core benefit of the internet vs. other media was measurement. Period.
Therefore, to sell more ads you need more measurement. (Two secondary factors, customization and short lead-times, also received significant emphasis—but those are topics for another day.)
The reason for my provocative headline is this: if today, in February 2009, we started with a blank PowerPoint slide and asked the same question that was asked some 15 years ago — how do we sell ads against more established media — would we select the same strategy? I think the answer is no.
Consider the “balance sheet” of the Internet now compared to then. Assets have grown tremendously: bandwidth is broad, content is deep and compelling; audiences are huge; sight sound and motion have entered the creative mix, through rich media and video. And the balance sheets of the other major consumer media have accumulated significant liabilities: print is facing declining circulation and, especially in newspapers, a rapidly aging demographic; radio ad sales are off sharply, while at the same time the once-promising satellite radio subscription model has proved endlessly unprofitable; TV, after getting past the “fragmentation” issue that was the obsession of the 1990s, has been covered by the huge black storm cloud that is DVR penetration. In 2008, 29% of all US households used DVRs, according to Barclay’s Capital — and that number is forecast to double by 2012 and reach nearly 80% by 2016. Those of us with DVRs watch dramatically fewer commercials. It’s just a fact.
So, if we were starting fresh in today’s environment, I would simply argue that we wouldn’t (and thus shouldn’t) lead with measurement. The measurement pitch has obviously worked extremely well for direct response; about 30% of DR-focused measured media spend is now online. But 95% of brand spending, or more than $100 billion, is still offline. For those budgets, I think our collective pitch should be more like “Your audience moved. Your marketing needs to follow them. Let us show you how the internet can deliver the same quality, scalability and value as TV.” Measurement should still be an important part of the story — we’d be foolish to ignore all the opportunities there — but I submit that it should be the sizzle not the steak.
That’s one of my missions at Brand.net: as stakeholders in the biggest, most powerful consumer media today, how do we provide the world’s leading brand advertisers the quality, scale and value of TV, the prior generation’s No. 1 consumer mass media? By making the critical, powerful, yet fragmented content environment of the internet more consistent and more buyable. And more measurable, of course — but measurable by the criteria and metrics brands have developed over decades to evaluate efficacy of 100s of billions of dollars of spend.
When we as an industry can do this, we can finally move large brand budgets online, following the audiences that are already there. This shift will in turn provide financial support for publishers to develop yet deeper, richer, more engaging online content experiences.
Some of you may still want to call the exorcist, but for the rest of you, let’s get to work.
The Importance of Brand Advertising
This week Randall Rothenberg, the President of the IAB, released a self-proclaimed “manifesto” which picks up many relevant themes to our work at Brand.net.
It’s quite long, but the first 3 sections and the last 2 echo conversations we have with partners (advertisers, agencies and publishers) literally on a daily basis. As I said in my comment to Randall’s article, there’s more confusion than information in too much of the ongoing debate about CPMs, formats/standards and the role of networks. Everyone – advertisers, agencies, publishers and networks – would be better served if we could collectively take a step back from today’s disproportionate focus on DR and think more broadly about what it takes to make the Internet work for the full funnel. In doing so we will find long-term, sustainable solutions to many of today’s challenges.
Lessons in Online Branding: Working the Full Funnel; Balancing Online Measurement With Offline Sales
This past month two of my recent byline articles were featured in the Online Media Daily section of MediaPost. I thought it was worth a quick re-post on our blog for those that don’t regularly read MediaPost. While each article stands on its own, they were originally composed together.
The first article offers a different perspective to the steady stream of Direct Response focused press which seems to suggest that performance-based and/or online-only metrics are the only important ones to consider in managing online advertising spend. I agree that measurement is important and that whenever possible we want to drive toward direct metrics (e.g., ROI). However, here’s our collective challenge: the vast majority of retail commerce–nearly 90% overall in 2008 and much higher for key Brand categories like CPG and Automotive–still takes place offline. Thus, for the majority of marketers evaluated based on their success in driving offline sales, online-only metrics are likely to be less useful than proven tools like brand awareness/favorability, purchase intent or even reach and frequency, for that matter. These metrics certainly are not perfect, but they are tested, well-understood and are useful across media. The Internet can increasingly facilitate the accurate and economical measurement of Brand metrics and there continue to be exciting advances in online measurement capabilities, but there are still some real limitations when it comes to measuring offline impact. Brand marketing fundamentals remain critical to overall marketing success, even online, and Brand marketers cannot afford to ignore the obvious value available online today.
The second article cites specific evidence to show how critical it is to work the full advertising funnel versus focus only on metrics which are easily measurable and quantifiable. I use two examples to support this point of view: (1) research published by the Atlas Institute and (2) an example from my past experience running pricing and yield management for Yahoo!’s global display business. These examples illustrate why value can be difficult to measure and also how models cannot substitute for domain experience and common sense.
As always I would welcome your comments and feedback.
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