Nice piece late last week by MediaMind’s Ariel Geifman.
The article provided a thoughtful, compact summary of a wide variety of different sources and research approaches that all drive to the same conclusion: CTR is a convenient metric, but an inadequate one at best and most often a misleading one. Obviously a topic on which we have written on multiple occasions, but I liked Ariel’s treatment and he wove in a few interesting angles I hadn’t seen before.
Worth a read.
An interesting piece yesterday from Adam Cahill of Hill Holliday, with some great thinking on how to address the quality challenges posed by the evolving real-time digital media landscape.
As Adam correctly points out, for most Brand campaigns delivering results is about more than just protecting a Brand from objectionable content. That itself is very important (and we’re very good at it, by the way), but it’s only the beginning – “necessary, but not sufficient” as they would say back at MIT. Media quality involves not just the the text of a page, but the editorial environment in which it exists. That second bit makes this an even harder technical problem, particularly when you consider that quality is a page-level issue. So we’re currently left with the false choice between audience and content that Adam correctly suggests we reject.
Let’s push a bit further though.
Without taking too much license (Adam, please feel free to chime in), I think I can safely say that “Audiences vs. content” is essentially a compact way of describing the choice between two different operational approaches. “Audiences” is shorthand for scalable, efficient, automated buying via RTB on exchanges. “Content” is shorthand for manual, site-by-site buying. In the rush for operational efficiency, “audience” buying has grown very quickly over the last 2 years while “content” buying has stagnated, resulting in well-documented challenges for many high-quality publishers.
Audience buying works great when fast, high-resolution feedback on a financial goal metric is possible.
For example, let’s assume Netflix’s goal for a big chunk of its marketing spend is profitable subscriber acquisition and they have conversion value and attribution models that they trust. Then, just as long as they have a scalable way of keeping their ads away from damaging content (porn, profanity, etc), they can pretty much ignore the editorial quality / “shades of goodness” issue Adam focuses on in his piece. The tie between editorial quality and performance will show up in the CPA numbers and cause money to move appropriately. So, for this block of DR money, Netflix can optimize based on their conversion metrics and they’re done.
For a brand campaign, the situation is different.
Brand metrics (e.g., awareness, consideration, intent) take longer to measure, they take longer to translate into financial value and that financial value is most often (95% of the time) realized in an offline transaction. This means there is no fast, high-resolution feedback on a financial goal metric for Branding, but the push for enhanced efficiency of audience buying is no less acute. What to do?
Unfortunately, today’s “solution” most often involves substituting for the meaningful data that is lacking some mix of a) meaningless, but conveniently accessible metrics like CTR or b) nice-sounding audience descriptions (like “peanut butter bakers”). Once these substitutions are made, Brand campaigns can smoothly run through the DR-tuned “audience” infrastructure. The problem is that these simplifying substitutions require a huge leap of faith at best and are very often detrimental to performance against the metrics that really matter.
The right way to leverage the new real-time online ad infrastructure for Branding is first to carefully test and measure the impact of different scalable, repeatable targeting criteria on *meaningful* metrics (like purchase intent or offline sales).
This process is conceptually similar to the Netflix example I detailed above; i.e., test, measure, optimize. However, because Brand measurements involve longer time lags and lower resolution, there will need to be some manual effort applied to the process itself before intelligent instructions can be fed into the real-time execution machine. The machine can’t do all the work itself.
It’s an inconvenient truth, but it’s the truth nonetheless.
Unfortunately, these “meaningful, but harder to get” metrics are too often not even gathered today, so the convenient lie persists.
Reading Adam’s article in this context, the richer standards for quality that he’s calling for essentially represent another set of scalable, repeatable targeting criteria added to the mix, one that he expects to have high correlation with results for brand marketers. I wholeheartedly agree there would be a lot of value there. We’ve certainly seen the impact of media quality in our own results.
But I also think it’s important to underscore the higher-level point raised here. In order for the real-time digital ad infrastructure to be complete, it needs native support for branding that is sadly lacking today.
There was another installment yesterday in the seemingly endless series of articles on the counter-productivity of CTR optimization. This “billion-dollar mistake” has been covered on this page in depth and repeatedly. With the ever-growing abundance of research on the topic you’d think that more buyers would stop focusing on CTR “optimization”.
It’s surprising how hard old habits die.
I thought this particular article was worth calling out because it suggests that the ultimate answer to the evil of optimizing for CTR is optimizing for conversions instead. That’s right of course, if it’s possible (and assuming your attribution models are correct – not a trivial assumption).
But what about the vast majority of valuable commercial activity that can’t be cleanly tracked with a pixel? Like, for example, the 95% of retail sales that occur offline? As I discussed in a recent post on the trillion-dollar O2O opportunity, this is a huge gap in the thinking behind and the capabilities of most online advertising solutions today.
Brand.net’s ground-breaking Media Futures Platform was designed specifically to attack this opportunity, driving profitable offline sales measurably and scalably.
These are the results that really click for our customers.
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?
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:
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.”
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.
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