More company in the “Future”

A noteworthy installment from Cory Treffiletti on his MediaPost board yesterday.

I wrote on the topic of media futures several several times and in detail in my past life at Brand.net (the pioneer in this area), so nothing new for me in Cory’s piece.  But it is nice to see more and more folks coming around to recognize the need for and value of a futures market for digital advertising.

I specify “digital” advertising here even though (as Cory mentions) the upfront provides a futures market of sorts for “non-digital” television advertising today.  It bears repeating that format convergence means all advertising will be digital in the not-too-distant future.  The innovation in transactional models for media will continue to be driven in the market we see as digital today, then as more and more IP-connected devices ship we will see the old TV upfront model subsumed by the new futures model that was developed for digital.

Not going to happen tomorrow, but will certainly happen.

I would also highlight Cory’s point that it is large clients – many of whom have sophisticated trading operations in other raw material inputs – that will likely drive this change.  With some exceptions (Digitas and Hill Holliday notable among them) most media agencies lack the required skills and perspective.

Given this reality, I wouldn’t be surprised if the desire for a futures-driven approach to align media buying with other raw material procurement initiatives is a catalyst for more than one large advertiser to bring their media buying in-house over the next couple years.

IBM, SAP and others seeking to enter the media market by working directly with marketers should give this some thought.

Crack isn’t just a waste of time. It’s bad for you too

There’s definitely no shortage of research showing the irrelevance of clicks as an indicator of online campaign value.  Our own experience shows it and Nielsen data proves it.  This probably has a lot to do with the fact that the folks doing the clicking are a small portion of population and demographically far from the top of most advertisers’ target lists.   None of this is news, yet there remains a surprising (shocking?) amount of attention paid to click-based “optimization” of campaigns.  Perhaps it’s the crack-like allure that Cory Treffiletti from Catalyst SF discusses in a fun piece from last fall.

For all the richly deserved bad press the click has gotten as a metric, I hadn’t seen anyone focus on the angle that chasing clicks actually works against driving the metrics that do matter (much like how chasing crack limited addicts’ success in other more meaningful pursuits…).  That was the point of Monday’s article by Lotame’s Eric Porres.  Lotame’s research across >100 campaigns shows that “not only do click-through rates fail to measure what marketers are really looking for, they’re often negatively related to brand lift.”  While I haven’t seen the research myself, it looks like it was done based on third-party data from Vizu and Dimestore – both reputable survey technologies.  The findings would also comport with previous research.

The bottom line is that there is no free lunch.  There are tradeoffs that must be made when planning & managing media.  “Optimizing” for a metric that doesn’t matter isn’t just a waste of everyone’s time, it actually degrades performance against the metrics that do matter.


2010 – the year of CPG?

Interesting post from Cory Treffiletti on Mediapost this AM.  He’s predicting that 2010 will be a big year for CPG spending online, driven by better measurement capabilities to prove the offline sales impact of online spend.

I agree.

Brand.net is a clear leader in this area, delivering strong, proven ROI results on web-wide campaigns for some of the biggest CPG brands on the planet.  These were not niche studies.  The average campaign size measured was >$250K, running across dozens of sites.  So Brand.net offers the viable, scalable solution Cory envisions to tie online ad exposure to offline sales.  We offer it today and have proven that it works.

Now if you’ll excuse me, I need to go call Cory to collect that budget he promised.  It’s shaping up to be a great 2010!

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.

Purgatory for Ad Exchanges

Thoughtful MediaPost article from Cory Treffiletti of Catalyst while I was out.

His basic point is that Ad Exchanges in their current incarnations have failed to live up to the promise of “ad exchange” as a concept.  I agree.  As Cory points out, current exchanges require too much effort and involve too many compromises for both advertiser and publisher for them to become a critical piece of the advertising technology “stack”.  Current exchanges can be effective for some direct marketers where CPA is essentially their only requirement, but they fall far short of many advertisers’ – particularly brand advertisers’ – requirements.  Without some changes for all parties in the value chain, unfortunately I think Cory may be right; the pendulum may swing back towards more custom solutions.  I think that would be lost opportunity so I’d like to make some suggestions about how to improve from the status quo.

Here’s what needs to change:

Exchanges: Embrace the reality that brand marketers are essential to the health of the online ecosystem.  Many, most campaigns cannot be reduced to a CPA – an issue I have discussed at length.  In order to become critical infrastructure, exchanges must build for brand requirements as well.  This means content quality filtering, R/F management, composition management and smooth guaranteed delivery.

Publishers: Open inventory to competition from multiple sales channels.  Remove barriers to revenue and efficiency in the form of advertiser block lists.  Manage channel conflict using other tools.

Advertisers: (yes, you’re part of the problem) Embrace efficiency for some portion of your buy.  Consider that a streamlined, scalable operational process for a more standardized buy may deliver better results when considering all costs (media, headcount, serving fees, etc) than a less efficient process for a more customized buy.  For example, consider whether non-standard creative (integrations, expandable units etc), fine flighting, custom targeting with limited scale are delivering results in-line with the significant operational friction they create.

These steps are not easy, but they are essential to building a long-term scalable advertising ecosystem.  Let us know how we can help.