The Future of Display Ad Measurement
ADOTAS EXCLUSIVE — The topic of online display advertising effectiveness has been covered in many forums, including the AlwaysOn Global 250 and Stanford Summit which our company attended last week. A hot topic of our own presentation, as well as many of the discussion groups and panels, was what display advertising in its current form means and its future to advertisers, agencies, publishers and ad networks alike.
One broad definition of online display advertising refers to any form of advertisement that appears “graphically” on a user’s machine and that is not entirely text-based. It would encompass traditional “banner” ads and standard IAB ad units, along with various other types of rich media which includes in-video advertising, advertisements via Facebook applications, alternate graphical formats and other “emerging” interactive units.
This definition of display advertising makes up one major part of the triad that is the current online distribution ecosystem (the other two being search and email), and makes up a healthy portion of advertiser’s spend on the Web today.
Quite a few experts have questioned whether display advertising “works” or not; I would argue that we really only know if a subset works or doesn’t. I hear some say “we’re going to put more money towards search or email because display doesn’t work for us”. The follow–up question which usually yields crickets is “how are you measuring the true effectiveness of your display campaigns?”
Display advertising’s true effectiveness has always been a conversation akin to church and state. There are quite a few ways to actually measure components of display advertising. On one side, you have an impression-based effectiveness measure (we know it as CPM) which is inherently very broad with no true “performance” gauge. On the other side, you have a completely performance-based effectiveness measure (we know it as CPA) that is inherently very narrow with no true “branding” or “reach” gauge.
The question most advertisers have, and where we in the marketing industry must serve advertisers better, is rooted in the right way to measure the overall effectiveness of online advertising campaigns which yields a better value computation.
Advertisers historically have either been predisposed to performance-based or brand-based advertising. This thinking was adopted from the offline world, where you have your direct marketers (direct mailers, infomercials) who measure effectiveness mostly on sales generated; and your brand advertisers who appear on billboards in Times Square and the Sunset Strip. For the advertisers that do embrace virtues of direct marketing and brand marketing, its still likely that they are two separate lines in the marketing budget , which is symbolic of the bifurcation most make between the “ROI” focused portion of their spend and the unquantifiable, branding portion of the budget.
But what do all advertisers really want? What does everyone look to achieve in any advertising campaign? The answer is effectiveness. Whether an advertiser quantifies this through eyeballs, clicks, sales, brand association, PR, foot traffic, buzz, word of mouth, unique visits or downloads … all are measures of effectiveness. Most advertisers in the offline world likely measure at least a few of these in a vacuum depending on their specific goals for a campaign, yet don’t take into consideration all the other ancillary or long-term benefits that provide value because they are near impossible to measure and don’t fit neatly into a marketing budget.
I see this as an error in thinking in our bolder, newer, faster world which short-changes the online medium and is why I think online advertising is still so young with its very brightest days ahead of it. Proper measurement should be evaluated on a continuum with no end date, a rolling measurement of effectiveness, taking any and all factors into consideration including impressions, clicks and actions relating to a specific ad view, but also type — in traffic, viral marketing, blog coverage and a myriad of other actions that occur well beyond the ad view or click, yet can still be attributed to that ad campaign (or many campaigns). The great thing is that it’s possible, albeit more scary and difficult than just porting over the traditional offline measurement techniques and thinking, and a solution is probably closer than you think.
Many believe that there is a truly comprehensive measure yet to be fully introduced that can provide better insight into advertising campaign effectiveness and value. Some companies have made slight attempts in the past (DoubleClick’s “View Through”, Microsoft to some extent with “Engagement Mapping”), but the reality is that nothing has truly taken hold – yet. Some companies, like ours as one example, believe that we as an industry have not yet adopted a measure that comprehensively and accurately shows a campaign’s effectiveness and are committed to solving this by filing patents, employing Chief Algorithmists and PhD’s, and more.
The ultimate solution takes science, art and statistics, not to mention hard work, on the back end – which yields an easy to understand solution on the front end with a goal of true commitment and adoption by many. It’s in the best interest of advertisers and in keeping our industry vibrant and unique from other forms of media, and will better leverage its inherent potential.
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