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!

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.

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.

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