A New Consumer Metric: The Engagement Index

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In just ten short years, Interactive advertising has surpassed the growth track record of every other media by tenfold. The unprecedented success of internet advertising has been powered by its unique ability to precisely track and measure results like virtually no other venue can. As increasingly sophisticated user-based identification methods are integrated with large-scale, cross-linked databases and predictive modeling technologies, tracking capabilities have, in turn, grown by leaps and bounds.

As a result of these advances in tracking competencies, advertising dynamics have also changed dramatically in the last year—especially when it comes to ad networks. New targeting methodologies are sprouting like mushrooms after a rain, and now every network claims to have a magic bullet to reach the exact audience you’re looking for. Should you believe them?

Yes and no. Clearly, there are now any number of targeting options available to advertisers — in fact, the baseline today includes capabilities that were premium services just two years ago: Geo-targeting, demographic targeting and day-parting are standard these days. And (however reluctantly) many industry professionals will now admit that even branding benchmarks, like perception and propensity to buy, can be accurately measured across online advertising venues, from broad consumer online campaigns to micro-targeted emailings. This is all good, but not good enough.

As the industry moves forward, we must remember that the crucial element that makes interactive advertising so different from traditional venues is the very thing that should be the fundamental benchmark for measuring success: Interaction.

There are many different ways to define interaction, and to monitor and measure how it is achieved. For the purposes of this piece, I will define interaction as “the purposeful engagement of a consumer with a brand through an interactive communication process which provides value to both parties.” (I stress “communication process” to directly imply a two-way interaction path, and “purposeful engagement” to distinguish a focused communication from general user browsing or untargeted advertising or content delivery by an advertiser.)

If “interaction” is indeed the key to interactive advertising, then a common and consistent index that allows advertisers to truly understand the impact of their efforts is long overdue. One idea that makes sense to me is something I call the “Engagement Index”, which came out of a conversation I had recently with Chris Batty of Gawker.

“We are always looking at ways to measure our audience at Gawker,” Batty told me. “Of course, the standard metrics of unique visitors, time spent on the site, etc., are important. But the Blogosphere is uniquely different than traditional web-browsing. We find that bloggers are much more engaged and participate in entirely different ways than do web viewers.”

It’s this kind of variance in the ways that people interact with the web that drives the idea of the as yet to be developed “Engagement Index.” To be truly useful, this index should be able to identify key attributes of different market segments so that advertisers can attune their offerings more effectively to particular users.

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