When retargeting first came on the scene, networks would typically lump campaigns in with other run-of-network buys and category-based creative: single, flat, non-rich creative was delivered to a narrow audience with no attention to frequency caps. Today’s process is much more sophisticated for ecommerce sites and, therefore, more effective: dynamic ads delivered to highly targeted consumers that drive significant sales.

The same early use of retargeting is now being seen with brand awareness campaigns. The efficacy of retargeting for ecommerce really requires its own set of campaigns and success metrics and the same is true for using the discipline to building brand awareness.

Advertiser profiles

So, how might we measure the effectiveness of retargeting in creating incremental engagement? I propose that success could come in two forms for two different types of brand advertisers:

1) For advertisers who are not providing a reason for the consumer to visit their site again. This could be due to a lack of promotions or content to drive them back. Success is typically measured by creating additional engagements in an ad unit.

Rich content, calls for interaction with social tools, promotions in the ad are all effective ways to do this, but a well-run retargeting program works to reach the entire lost prospect pool at the right frequency caps, right time of day, geo-location, etc. Success is then measured by creating the highest amount of ad engagements at a targeted cost per.

2) For advertisers that want to drive interaction with the brand and increase the engagement on the site itself. Advertisers who have significant content and offer reasons to return to the site fit this model well.

Automotive manufacturers, for instance, are ideal for this form of success measurement. Most car makers want consumers to continually drill down into the site and offer them opportunities to modify/create the exact car they want. In order to determine success, these advertisers must identify how to measure if these are incremental engagements.

Research determines incremental success

This second group – those advertisers that have a lot of content and offer reasons to return to the site – would be well served to use A/B testing to measure if sophisticated retargeting programs can achieve this engagement.

Controls groups are established to understand the average number of pageviews a prospect creates, how often they visit the site and the length of time between visits. Once a retargeting program begins, advertisers can measure the increases to the metrics.

Successfully increasing the number of pageviews and visits while decreasing the time between visits are both excellent ways to understand if the brand is achieving its objective.

Giving retargeting a seat at the measurement table

Marketers would not consciously choose to take their email database and send untargeted campaigns without paying attention to frequencies. Retargeting is no different.

Each advertiser has a finite number of consumers that have chosen to take time out of their day to engage with the brand. Running basic retargeting programs that deliver flat creative to the same people hundreds of times in a given month is likely to damage a brand far beyond the consumers seeing the ad units.

Retargeting campaigns that have their own focus and specific metrics can help to ensure success for both ecommerce and brand building initiatives.

The metrics, now available for clients, have the ability to identify when cookies are deleted and adjust metrics accordingly, enabling more accurate cookie-based measurements that Mediamind claims can be more precisely compared to online and television GRPs.

According to comScore, cookie-based measurements typically overestimate the number of users by 2.5 times. Using the metrics internally, MediaMind determined it has a global reach of 700 million uniques.

MediaMind has also become the first third-party ad server to receive accreditation by the MRC under four metrics: ad serving, rich media measurement, broadband video and audience reach measurement.

Earlier this week, MediaMind reported its fourth quarter 2010 profits were 26 cents per share ($5.5 million total), short of analysts’ target of 28 cents and last year’s 39 cents ($6 million). However, revenue increased 15% year over year to around $26 million.

Things move fast. And as we look ahead to 2011, we see five biggies that will significantly change both how we market to consumers and how consumers will interact with brands. Game changers, every one.

1. Evolving and converging form factors. Witness the melding of communications on a variety of devices and screens. Televisions providing internet access. The proliferation of tablets as video viewers, experiential gaming devices, and even TV remotes. The adoption rate of smartphones reaching critical mass and providing the much-anticipated potential for mobile marketing.

Not only does this evolution give us a bevy of connectivity, it also allows the opportunity to adapt our knowledge of how these devices relate to the brand experiences we create. We predict that this convergence will continue to evolve marketing opportunities beyond what is imaginable today. Pairing the right content formats with the right form factors will be critical.

2. Metrics matter more. With all of this potential coupled with tentative marketing budgets, accountability is going to be huge for marketers. Before spending a dime, we will be doing more research to gain audience insights.

In fact, we’ve already begun to see increases in usability studies for web, mobile, and on the tablet, coupled with primary research about audience attitudes and usage. We also see a bigger importance placed on metrics. With so many avenues available, proof of success will be paramount to repeatable processes.

3. Mobile. For real this time. For years we’ve heard about the promise of mobile marketing. For many brands, 2010 was the year it all began. 2011 will be the year that the mobile ecosystem can no longer be ignored by any of us.

At a very minimum, your customers expect your site to be mobile friendly. In the U.S. alone, 17% of the people have a handheld device that allows them to access the Internet. The more sophisticated the experience, the higher user expectations are pushed.

To marketers, the mobile space offers unique advantages and a rich array of channels that can be leveraged in integrated campaigns, all of them targeted at the smartphone, a highly personal device that brings with it a level of intimacy and a sense of personal power.

We predict that marketers will begin to acclimate to these mobile marketing channels, launching unique testing campaigns with the potential to lift brand perception and drive sales. This trend will begin more strongly in the consumer market and then, as it’s been with the greater mobile adoption, move into the business-to-business space.

4. Get serious about social. Social media was yesterday’s “new media.” What it’s become is a must-have part of the mix for consumer and business-to-business brand campaigns. We are already seeing social media participation trending upward, while personal use of email is trending downward. This shift is more evidence that we need to be following our audiences and engaging them where and when they spend their time.

It’s time to shift from a mind-set that places the centralized website as the end all be all. Instead, in 2011 we recommend that the centralized website should be seamlessly integrated with social media channels. Say hello to the baseline marketing standard for all brands: social.

5. Digital wallets. Our final prediction will have the biggest impact on businesses. As devices converge, we also see them becoming digital wallets. In 2010 this began to play out as three of the four largest U.S. mobile phone carriers formed a joint venture to allow subscribers to pay for retail items using their phones, instead of credit cards or other more traditional methods.

In addition, TV remotes will power television commerce (T-commerce) from living rooms everywhere. If you have an internet-connected TV, you’ll soon be able to shop online, on your flat screen. In fact, PayPal is working on something right now.

So hold on and watch as 2011 turns into one of the most interesting and fast-paced years ever for our industry. Converging communications channels; proliferation of devices; consumers connecting with business associates, friends, and family via social media; and the impulse of purchase coming to a device near you are big changes. Don’t blink.

Gross rating what? Because I had no knowledge of the traditional advertising before joining Adotas, I was dumbfounded when someone drop that acronym on me about a year ago. Um, is that like a click? Like a bunch of clicks? No, no, I was quickly informed, its a metric based on the percentage of a target audience reached multiplied by the viewing frequency. It’s also what TV advertisers know best.

So I’m a little surprised that Nielsen only introduced a GRP-like measurement to the online space last week with Nielsen Online Campaign Ratings. The new system merges traditional Nielsen TV and online panel data with aggregated and anonymous demographic info from partnering online data contributors to deliver better accuracy and accelerated reporting (only a few days after a campaign begins) across a wider spectrum of the web.

Thus advertisers will be able to holistically assess their advertising efforts across reach of TV, online and mobile. While currently focusing on the U.S. market, Nielsen plans to expand the service globally and will seek accreditation by the Media Ratings Council.

However, ad network operator Goodway Group notes that Nielsen’s measurement system was only introduced and is not fully operational, while Goodway’s Death Star is ready for action right now. In fact it’s currently recorded 166 GRPs at a 63.88% reach and a corresponding 2.59X frequency for a client in Salt Lake City.

In partnership with ad verifier Adometry, Goodway is also building a system to blend in audience verification with GRPs called targeted rating points (TRPs). Goodway will be able to provide TRP counts within age and demographic segments that can be compared against conversion data.

However, the majority of online marketers have no idea what impact these activities have on their brand or sales.

It’s time to get smart about social media. Social media today is reminiscent of the early days of other online channels or media — from websites and email, to search engines and behavioral targeting — no one knew quite what success looked like and some of the early experiments were not only unoptimized, some were just plain awful. Eventually, the experimental approach gave way to a more sophisticated, metrics-based approach and soon CFOs began to notice the healthy ROI’s coming from these online channels.

Social media is on the same trajectory. Many brands are beginning to set goals around social media engagement, which often include measuring the number of fans, followers, impressions, comments, reviews and other variables. Comparing how you’re doing against competitors and market leaders is easy and tools allowing brands to monitor the conversation in the social media sphere are becoming more sophisticated and ubiquitous.

Marketers can track mentions of their brands, as well as the posts of other brands and companies. All of this can help justify the time and expense of pursuing a robust social media strategy, but still falls short of providing solid ROI data. Now tools are emerging that take a giant leap forward.

Marketers wanting to take their social media campaigns to the next level need to ensure that they are using tools that are not only able to track posts and reposts, but can also track all the way through to clicks, orders and sales. This takes understanding the impact of your social media to a whole new level.

Marketers can know which types of discounts and offers from specific posts and tweets are driving the most sales. Or, if brands have several accounts on Facebook and Twitter, they can determine which types of offers to which specific audiences are performing the best.

Tools with these capabilities can help marketers understand which product features and benefits are driving the most sales through social media messages. As messages are retweeted, they are tracked and measured, which adds to the overall picture of a campaigns’ effectiveness.

By tracking sales and order performance, marketers can optimize their social media activities based on ROI and traditional direct marketing principles. Time and resources spent on social media just got much easier to justify. Very soon marketers will be able to report to the CMO and CFO that social media ROI is higher than expected and even higher than other online and offline marketing channels — and the data will be there to prove it.

“Figures often beguile me,” Mark Twain wrote over 100 years ago, but it expresses the frustration and analysis paralysis of many digital marketers today. Why is measurement so difficult when we employ armies of brilliant analytics people using extremely sophisticated tools? There are three primary obstacles:

1. Too Much Information (TMI). The web is so data-heavy, it’s easy to miss what’s really happening. Numbers may not lie, but they can mislead if you aren’t looking at the right ones. Every day, digital marketers wade through immense volumes of marketing program data, scouring reports of clickthroughs, open rates, costs per action, or new engagement statistics, most of which don’t answer the core question about what a marketing initiative is contributing to your business.

2. Unmeasured objectives. Too often marketers haven’t mapped out specific digital metrics that align with their business objectives. When you can’t connect the dots of marketing activity to goals, you don’t know what to look for, so you look at everything, crunching excess data and reporting too many metrics. Measurement should indicate progress toward business goals, and point out actions to help achieve them.

3. ROI overemphasis. ROI is revered as measurement’s Holy Grail because it draws a direct line from investment to impact. In practice, calculating ROI is sometimes impossible – information is unavailable, consumer behavior is too complex, multiple influences can’t be separated, or costs aren’t properly allocated. Focusing solely on ROI drives a cycle of unrealistic measurement expectations and disappointment. Tactical performance metrics are also needed to guide improvement, with or without ROI.

“Not everything that can be counted counts, and not everything that counts can be counted.” — Albert Einstein

How do you transform raw data into knowledge and insights that identify business opportunities? As digital measurement evolves, here are some immediate steps to help:

Focus on the critical few, not the insignificant many. Focus, focus, focus on the few metrics that matter most. Just because you can, doesn’t mean you should, measure and report everything. Take your top objectives and assign 1-2 priority metrics against each. Take a reductionist approach to marketing analytics, prioritizing valuable information, and separating measurement wheat from the chaff.

Make current metrics more precise. Some metrics are simply inaccurate. Attributing actions to the last click over-credits Paid Search, and ignores display’s impact (22% lift on search conversions — Atlas), so ascribe some assist to all marketing exposures leading to a final action. Engagement must be specifically defined for your business, because if your site goal is easy registration or checkout, Time Spent on Site is the wrong engagement definition, although it might be perfect for a brand site.

Avoid direct response only. Action metrics speak loudest, so 30% of total direct response dollars are spent online, but over 90% of branding spend is offline. Digital rushed to deliver direct response and sales-attributed metrics, but largely ignored impact on awareness, attitudes, and branding. It’s time to avoid solely focusing on actions like the click, and consistently incorporate brand impact, qualitative site feedback, and content engagement metrics.

Identify proxies. You often can’t track ROI or the direct path to a sale, but can measure behavior that’s strongly connected. One marketer conducted site visitor research and discovered that a specific download was highly correlated with a sale. They then reoriented their marketing to drive that download and measure success against this new-found proxy.

Continuously learn and improve. Structure your programs to monitor success constantly — from launch, through implementation and afterward. Set aside 10% of your budget to test potential enhancements, so you can quickly deploy all effort only to initiatives that work best. Some call this “failing immediately” because you almost instantly know what isn’t performing and eliminate it.

Assess all key initiatives. Take a comprehensive measurement view, establishing at least one key metric for each area of focus. Define success metrics against each business objective, marketing tactic, and key target or constituency. Spell out top metrics for each stage of building a customer relationship — Awareness, Engagement, Action and Retention. Incorporate all metrics categories — qualitative, quantitative, financial and customer profiles.

The pressure to measure and the volume of data sometimes seem overwhelming. Do your best to calculate ROI, but don’t ignore other key metrics that indicate whether your marketing programs are performing successfully against your business objectives.

Hence why online expert marketplace LivePerson has scooped up the Israel-to-San-Fran startup for $3 million. That price tag seems unfortunate considering that Nuconomy has raised $3.3 million in funding since launching in 2006.

Its Studio product aggregates data not just from traditional metrics like page views and unique visitors, but also social media elements like Flash and AJAX — all real-time. LivePerson appears to be particularly interested in Studio’s targeting capabilities.

Nuconomy boasts an executive team with ex-Googlites and Microsofters and had some big names funding it, including WPP — which had an acquisition deal fall through, according to TechCrunch.

The online advertising industry notoriously relies on “the click” to determine display advertising effectiveness. Unfortunately, recent research shows that not only are click-through rates on the decline, but they are certainly not the best — or only — measure for online marketing campaigns. Research has proven the devaluation of the click, indicating that just 8% of people are responsible for 85% of all display advertising clicks.

Add to that the recent spotlight on click fraud and invisible ads and the problem is greatly amplified. Today, click fraud has impacted many brands and publishers, including The New York Times and even Microsoft. Companies invest significant marketing dollars in online advertising and click fraud can cost brands not just ad dollars, but also credibility. In October, ClickForensics reported the overall industry average click fraud rate for Q3 2009 was 14.1%, up from 12.7% for Q2 2009.

Also concerning is the fact that because campaigns are often set up to auto-optimize to the highest click-through rate, campaigns may inadvertently multiply the fraud. As advertisers, publishers and ad networks are getting smarter, so are the attackers. A recently uncovered click fraud ring run out of China involved 200,000 IP addresses and racked up more than $3 million worth of fraudulent clicks in just two weeks time.

So, what does this mean for marketers? Ultimately it means it’s time to figure out what comes next. How do we quantify and qualify the success of online advertising campaigns? Can advertisers take classic metrics like reach and exposure to the next level without the click? Is it going to be all about the impact of creative, or will placement ultimately reign in determining the next step in measurement?

Until the industry settles on this shiny new toy — a universally accepted metric of success — it’s time to get back to principles from Marketing 101. We need to develop metrics that are specific to campaign objectives. Measures that prove the value and effectiveness of online campaigns. To do this, we must focus on the quality of a click versus just a click itself.

While there is no single, universally accepted answer (today), fortunately marketers can employ a range of metrics beyond the click to gauge value and effectiveness. Here are just a few that we’ve seen become more prevalent in 2009:

• Evaluate site traffic including time spent and pages consumed to ensure that it’s qualified — that the right people are doing the right things.
• Gauge post-click actions such as sales, registrations, subscriptions, and memberships.
• Analyze campaign data such as interaction rates and times, engagement, brand lift, online sales, and offline sales lift. Increasingly sophisticated reporting options can provide deep insights into what meaningful behavior campaigns are delivering.

Ultimately, these metrics are merely an indicator of whether or not users are taking the desired action for each campaign.

Historically, marketers have looked to ad networks to deliver targeted reach and scale with great efficiency. As networks offer more advanced research and analytics capabilities, marketers are now leveraging networks to go beyond the click — applying metrics that were once reserved exclusively for publishers and portals.

It’s encouraging to see this shift as the benefits from a network — combined with the right measurement metrics — can prove to be one of best ways to quantify and qualify the success of online advertising campaigns.

Ultimately, one size does not fit all. Finding new ways to measure success requires a deep understanding of what drives a business and what marketers really need to know about their customers — and their clickers.

Fast-forward ten years and it’s easy to see that a lot has changed. Today, there are companies with market capitalizations exceeding 100 billion dollars which have only been around for a few years (say hello Google).  There are semi-celebrities of the online media world such as Nick Denton, Perez Hilton, and a slew of YouTubers.  There are different size ad units, new consumer driven formats in the form of blogs, pod casts, video and social networks.  There are new ways of doing business and yet there are still some things that have not changed – some online marketers irrelevantly focusing on “hits” rather than other, more important, metrics.  As I see it, a hit don’t mean sh*t.

Every element of a web page when loaded from a server is recorded as a “hit”.  This includes graphics, text, interactive items and the page itself.  Go to the home page of Yahoo! on any given day and you’ll likely come up with 150 to 300+ “hits”.  The reality is that a “hit” is a useful metric in determining loads being exerted by a server and that’s where its significance ends.

Today, online marketing is rich with the ability to track the micro-details which go well beyond “hits”.  When considering the important metrics you should be tracking – the ones that allow for more meaningful insight from your web site, ask yourself the following (and by no means is this an all-inclusive list):

1. How many unique visitors and total visitors am I seeing over a given time frame and what is the trend of these two numbers?

2. What are the referring sources of my site’s traffic and which sources yield the most desirable traffic?

3. How much time are my visitors spending on my site? 

4. Which areas of my site are visitors spending the most time and conversely, the least time on? 

5. What are the exit points on my site? 

6. What are the pathways or funnels that users navigate through and what does the data tell me that can help me to improve my site’s flow and navigation? 

7. What are the actions/conversions taken on my site and are these desired actions?

8. Am I tracking only click-through conversions or am I tracking view-based conversions as well?

9. How am I reconciling the online activity with offline transactions?

While some of the questions are easier to answer than others, taking the right steps to answer these questions will give you more control of your campaigns, your web site, and ultimately yield a bigger payoff in the end. 

So, the next time you are watching your favorite news program and the reporter mentions a celebrity that lost custody of her children and how when they broke that news, according to the reporter, it resulted in 17,000 hits to their web site in one day – grin and know that you are steps ahead of even the big media behemoths and that even they don’t always get the facts right.

That’s dangerous. Because measurement — if it isn’t ignored — drives change in particular directions. And if you are measuring only the conversion efficiency of your site, then pages and tools that drive to conversion will get all the attention. Pages and tools that may drive significant brand value will be ignored or even dropped. In the long run, this will lead your site to be poorly optimized — even when stakeholders are aware of the multiplicity of functions on the site.

This phenomenon of measurement driving misoptimization is surprisingly common. It appears regularly in Search Engine Marketing — whenever companies choose to optimize to clicks. And the potential for it exists whenever measurement has been focused on only one part of a larger picture. The inevitable human and organizational tendency is to optimize to the numbers you have.

So if you believe that branding/marketing is a significant function for your website, it’s imperative that you bake those concepts into your measurement in a way that will drive intelligent decision-making. To do this, you need to come up with a measure of branding/marketing that is:

• Weighted Appropriately vis-ÃÂ-vis Online Conversion
• Designed to encourage appropriate optimization
• Measurable using your tool set

I’ve ordered these starting with the most difficult first. Getting a handle on the value of a brand impression on the web is far from trivial. Many organizations have done media research in the past to understand the potential value of an “impression.” But such values — when taken from traditional media — may not apply particularly well to the web site. In addition, web site engagement is much more variable than with other forms of media. When a consumer watches TV or hears a radio spot — they pretty much have the same experience. Granted their level of attention may be dramatically different — but there is a sameness to the experience (as well as an outright impossibility to measure differences in engagement) that make it both necessary and plausible to establish a single value to the impression. The same cannot be said for the web — where the depth of engagement on the site is both visible and dramatically different by user.

There are several studies underway to try and measure the “brand” impact of various pieces of the web channel — including banners, search, and the web site. These studies track consumers over a long period of time for a single property and strive to measure the effect of each type of consumer interaction. Without denigrating the value of such studies, you should be cautious about assuming that whatever results they document are necessarily germane to you.

All too frequently, a single case-study becomes the conventional wisdom for an industry — with few people understanding just how variable real-world experience can actually be. A perfect example of this is the issue of Organic Cannibalization. When we’ve actually measured this, we’ve seen real-world experience ranging from organic listings actually supporting paid listings (as conventional wisdom says they should) to significantly (to the tune of 50% or more) cannibalizing it. And we’ve measured effects at pretty much every level in-between (See here for one example of this).

On a similar theme, a recent study of the effect of TiVO on buying habits (Advertising Age, March 5, 2007) revealed a wide range of impacts by brand — from significant declines in advertising effectiveness to virtually no impact. The researchers had theories why this was the case (type of program advertised on, effectiveness of advertising, cost-competitiveness of the market space), but these are really only guesses. And, as with so many real-world cases, the deep implication is that there was no one right answer applicable to every advertiser.

This drive to explain everything with one simple rule is everywhere. If you listen to reports on the stock market, you’ll hear the same impulse to simplistic explanation (and with a much higher nonsense factor) — the market was “spooked” by some piece of news or was “reacting to comments” by someone. Maybe. Maybe not. There’s always something to explain a movement, but in a market movements will inevitably occur and some outside fact can always be found to match. Variation happens.

So depending on the importance of this issue to your business, it may be worth investing in a tracking study of your own. If that’s too elaborate, then you’ll have to be satisfied with building a value answer out of a subjective weighting of key factors: the known value of a traditional media impression, survey research on the brand impact and satisfaction from web site usage, and the long-term study of website usage and retention.

Once you’ve decided on a relative weighting of branding/impressions vs. conversion, you’ll have to decide how to measure for that value. The key, in making this decision, is avoiding a measure that encourages misoptimization.