A fishing fleet without nets

ComScore released another solid piece of work yesterday.

As readers of this page will remember, comScore has been outspoken on the failings of the ubiquitous click as a metric. Some of that in this report, but much more as well.  From my perspective, the most interesting thread in the report ties together a couple of their numbered points.

First, as comScore correctly points out, cookie-deletion creates real problems for cookie-based targeting and measurement approaches. comScore data shows that 30% of all US internet users delete their cookies monthly or more often. Furthermore, many computers see routine use by multiple users. These factors create “noise” in targeting that often results in much lower true composition against the target than is claimed or described. Consumers’ ever-growing concern about privacy will only make this worse. Probably much worse. More evidence (if any was needed) that measurement of campaign impacts against meaningful metrics is critical – especially when a targeting approach sounds like magic.

Secondly, comScore highlights the tradeoff between targeting and scale. This tradeoff is intuitively obvious, but often overlooked. Equally often, credulous buyers willingly suspend disbelief in favor of a nice-sounding pitch.

Consider the example of one of our clients, with a large online footprint of some 25 million accounts.  Of these 25M, this client has actionable cookies on <5M, with data of varying depths and value (and all of these cookies, of course, are subject to the churn challenge presented above). So this client can (and does) employ the most sophisticated targeting and re-targeting approaches on all of these 5M customers. But what about the other 20M customers they can’t talk to this way?  What about the 100M adults that aren’t customers yet? 30-spots?

For the online advertising to grow to its full potential (and necessary size as “offline” media erodes), we must more fully develop a broader approach to complement our myriad fine targeting approaches.

Sometimes it is best to fish with a hook, other times with a net. As an industry we need a good supply of both.

Look for more on this topic in subsequent posts, but wanted to make sure to call out comScore’s work while it was fresh.  Worth a read.

Simplifying the Narrative

Josh Chasin of comScore can definitely count me among his fans.  He wrote a great article late last year on the limitations of CTR as a metric.  A couple weeks back he wrote another great one that I have been looking for a moment to comment on.  Between the upcoming product launch and the 1 year old I finally found a little time, somewhat belatedly.

As I read it, the main theme of Josh’s most recent article was that as an industry we have inhibited the migration of brand-focused budgets online with complex and conflicting narratives, which cause advertisers essentially to throw up their hands and look for reasons not to spend.  I couldn’t agree more.  In fact, I don’t think Josh would object to framing this as a different angle on the same idea I discussed in a post last year (Josh – feel free to comment if I am taking your name in vain).  Regardless of the angle we each take on the story, we’re clearly in violent agreement that the narrative needs to be simpler.

Josh is also quite correct that the 30-spot is an extremely compelling creative format, next to which a hastily-assembled static banner can look, well, flat.  However, as I have previously noted, within 5 years about 80% of households will have the capability to fast forward through that compelling creative.  Online creative formats get more compelling every year – it’s not hard to imagine a well-made pre-roll, rich media or even animated flash creative execution comparing favorably to a TV ad that is watched at 10X normal speed with no sound.

Even before DVRs reach their inevitable tipping point, the research shows that online advertising drives sales at least as well as TV.

One area where I might diverge with Josh just a bit is on the “scale” element of the narrative.  As he correctly points out, a single highly-rated TV show generates gobs of inventory.  Let’s use his Two and a Half Men example.  The 6 rating means 18M unique viewers, which when multiplied by the 15 spots per episode yields the 270M impressions per episode he mentions.  Breaking that number down in the context of a particular campaign, however, makes it more manageable.  Even if a marketer was comfortable with a frequency of 3 during the half-hour sitcom, that would translate to about 50M impressions.  If it was truly necessary to deliver those impressions in a half-hour period, that’s a pretty big buy for online – possible, but big.  If, however, we allow those impressions to be delivered over a week (i.e. between the beginning of this episode of Two and a Half Men and the beginning of the next one), it starts to look a lot more manageable.  So I would argue that the scale is there, it’s just not as “instantaneous” because web content consumption is less “event-based” that TV consumption.

This all assumes, however, that we’re talking about the type of objective targeting that is possible to do buying a prime-time TV spot – i.e., context, demo, geo.  The myriad other online targeting techniques that continue to proliferate, creating “monstrous” complexity as they do, just can’t deliver anything like that type of scale; we’re not delivering 50M impressions in a week to 18M “competitive peanut butter bakers” any time soon.

For me, it all points back to Josh’s bottom line.  Online has the audience, the content, the creative and yes, the metrics.  A decade of burgeoning complexity has moved lots of DR money online, but brands are still waiting for the simple, efficient, repeatable scale of TV.

If we give them a simpler narrative, reflecting a simpler process, the money will move.

Again, I would suggest our goal needs to be, “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.”

What do you think?

The (Ad) World is Flat

I wrote a recent post in which I outlined our view on convergence in the online media market.  At a high level, we believe there are two major forces at play in the media market:  (a) increasing standardization of “online” media formats and (b) device convergence blurring the lines between what are today thought of as “online” and “offline” media.  Because of these forces working in parallel online display, online video, mobile display, TV, print and even billboards end up not that far down the line as one big (huge) 12-figure market.

In addition to expanding the market for online players, these twin consolidating forces will drive several broad and related trends:

  • Trend 1: Niches Vanish. Differentiated solutions for big, general problems will drive the most value (for customers, companies and investors) in this future, merged media marketplace.  That means focusing less on the medium and more on the customer’s business objectives, solving problems that exist in and across all media.  Solving format-specific problems will mean limited opportunity, as it will increasingly be the case that relatively small improvements within the pool of media that has already converged will be more important than even a major breakthrough in a specific medium that has yet to be “plumbed to the main line”.  And while we’re on the topic, that plumbing itself is more trade than investment.  It can create speculative value in the short-term, but gets marked to zero quickly as industry-driven, open standards emerge.
  • Trend 2:  “Good” gives way to “Best”. Building on the notion that niches vanish, the bar will quickly rise for what capabilities qualify as “differentiated”.  This dynamic echoes globalization.  In a global market, the best athletes (literally and figuratively) can earn dramatically more than the best athletes from previous generations.   However, those with less differentiated skills are increasingly marginalized – there’s a reason why millions of manufacturing jobs have moved to China.  As best of breed vendors in each medium begin to jump format boundaries and compete aggressively in a converged media pool, only the strongest, most customer-centric solutions will survive.
  • Trend 3: Higher Technology Hurdles. Scalable differentiation requires technology, so this rising tide of convergence also raises the bar sharply for technological sophistication.  As Warren Buffet famously said, when the tide goes out you see who has been swimming naked.  Well, as this tide comes in you’re going to see a lot of folks who can’t swim at all sink to the bottom, surprised by the speed at which the water rises.  For example, there was a time when a network could be run as a bucket shop, substituting hustle and excel for real technology.  That model won’t float in the media mainline.

So who wins in this world?

  • Data and Data Infrastructure. Information and insights are always valuable, and become ever more valuable as size of the spend across which you’re deploying them expands.  As more and more media becomes effectively “online” media and thus more dynamically targetable, the value of targeting technology and data itself increases.  This will benefit targeting technology providers like Blue Kai and Exelate, but will also benefit data owners like Acxiom, Facebook and Expedia.
  • Measurement. While I believe online media have over-emphasized measurement relative to other elements of the online media value proposition, this is a moot point in a converged media world.  It is true that measurability is a particular strength of online media so as more media comes “online” it will create opportunities for measurement vendors like Nielsen, comScore and Vizu to innovate, expand and drive increasing value for customers.
  • Supply  Side Platforms (SSPs). The fact that it will be technically possible for an increasing number of players to join this media mainspring does not mean each of them will have the knowhow and capability to do so competitively.  There is a space to help the “supply side” players– content owners and media companies – connect into the media mainspring, and make the most of it.  Folks like Rubicon and Yieldex have opportunities here, although the technology bar will be particularly high in this space.
  • Demand Side Platforms (DSPs).  Finally, we come to the “demand side” – the buyers of media. Last, but by no means least as demand drives the market.  Similar to the supply side there is a space for broad platforms to help manage and optimize campaigns over a diverse and complex online media inventory landscape.  As I have previously mentioned, there are fundamental differences between technology required to service DR objectives in the spot market and technology required to service Brand objectives in the futures market.  Most of the energy here has been focused on the DR/Spot side, but we’re going to see that change rapidly as major consumer brands get into the game for real.   For DR/Spot, Turn and Efficient Frontier are well-positioned and aggressively pursuing this opportunity.  Appnexus also has an interesting “meta-DSP” play.  For Brand/Futures, Brand.net is the clear leader, with market leading technology and strong customer traction.

Winners mean losers and the main theme in the “loser” category is the ad network shakeout – widely and frequently predicted over the last 5 years – finally materializing.  Here we go:

  • Single-Format Players. Those players whose businesses are built primarily on execution in one format and who don’t have best of breed capabilities that are broadly applicable to all media will wither without the shelter provided by format barriers.
  • Naked Swimmers. Demand side players that have substituted people for technology will get increasingly squeezed between agencies and exchanges.  Supply side players will find themselves with stiff competition from large exchanges in providing more/easier functionality for publishers.
  • Non-Aligned Exchanges. Between Google and Yahoo!, the market already has more than enough basic spot-market transactional capability.  Microsoft will likely also make an additional acquisition to accelerate their internal efforts, but once it does the music will have stopped.  With these huge, technically sophisticated, players already ramping quickly it’s too late for new entrants.  Only one current player will get picked up, and the rest better have a very strong DSP or SSP option or they’ll find their game over.

While this next wave of evolution poses serious challenges to many current players, it unlocks tremendous opportunities for those players with the right capabilities to ride the wave.

As always, I welcome your thoughts and comments.

The click isn’t just resting…

An article in today’s eMarketer nicely summarizes some recent comScore / Starcom USA research showing that fewer and fewer users are clicking on ads and those clicks are concentrated in an ever smaller share of the user base.  Not good news for fans of CTR as an “optimization” metric – and there are still too many of these.

The article includes a priceless quote from John Lowell, Starcom USA SVP and director, research and analytics, “A click means nothing, earns no revenue and creates no brand equity. Your online advertising has some goal—and it’s certainly not to generate clicks.”  Don’t mince words John.  Tell us what you really think.  We’ve seen the same with our own offline sales measurements, by the way.  CTR is not even remotely correlated with offline sales lift or associated campaign ROI.  Here’s an example of the lack of correlation from some recent campaigns:

CTR vs. ROI

Reading Lowell’s quote and considering the fact that this is still even a topic for discussion reminded me of Monty Python’s famous Parrot Sketch.

Advertiser: “I know a dead metric when I see one and I am looking at one right now.”

DR Network: “No, no it’s not dead.  It’s just resting.”

Your brand depends on page-level media quality

For anyone who may not have checked imedia today,  I wanted to steer you towards my featured editorial piece on page-level quality.  Online media quality is obviously a critical issue for brands, and one that Brand.net has focused on since day one.

Brand.net doesn’t just buy from a carefully screened and curated set of top comScore sites.  That’s just where we start. Brand.net doesn’t just report on the pages where your ad was placed adjacent to brand-damaging objectionable content. We keep it from happening in the first place.  Our industry-leading SafeScreen™ platform is the gold standard for active, page-level quality management and is included free of charge with every Brand.net buy.

Starting with the best sites and applying active page-level filtering technology to each impression.  That’s a real quality solution.

The Bottom Line is Online Ads Work for Branding and Sales

Last week MediaPost picked up a press release on some comScore research showing that online ads can be effective in driving offline sales.  Just as effective as TV in fact.  This came as no surprise to us at Brand.net.  We have seen similar results in our work with clients measuring offline sales impact in response to online campaigns.

This recent release apparently builds on some earlier research discussed by comScore Chairman Gian Fulgoni in his keynote to the OMMA metrics conference in San Francisco at the end of July (covered in another MediaPost article, from which I borrowed my headline).  In his remarks, Fulgoni gave some rough treatment to CTR (similar to a post last week from Cory Treffiletti).  I was on panel at the same OMMA conference.  The panel focused on Brand measurement and the moderator (Dan Beltramo from Vizu) asked each of the panelists to answer a few questions to get the conversation started. One of the questions was, “What is the most misused metric for Brand Campaigns?”. All 4 panelists including yours truly answered, “CTR.”, to which Dan readily agreed. The fact is CTR isn’t correlated with attitudinal measures that Vizu focuses on. Nor is it correlated with ROI as measured by offline sales impact vs. online campaign spend.

The moral of the story is that well-executed online advertising delivers results throughout the marketing funnel and those results come through in the metrics, when the metrics applied are meaningful.

Microsoft continues its push into online branding

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!

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