Trio of Web firms announce new initiative to simplify online ad measurement, metrics

Is the impression—the longtime currency of online advertising—on its way out?

It could be. Three major advertising/media trade organizations, IAB (Interactive Advertising Bureau), the ANA (Association of National Advertisers) and the 4A’s (American Association of Advertising Agencies), have announced a new initiative aimed at simplifying online ad measurement and metrics. The groups have hired management consulting firm Bain & Company and the strategic advisory firm MediaLink to help with the effort. And everything is on the table, including possibly ditching the impression as a currency. The new initiative, Making Measurement Make Sense—announced at the IAB’s Annual Meeting in La Quinta, Calif.—won’t necessarily have a lot of teeth. But the three groups are hoping their efforts carry enough influence to enact serious change in the online ad industry, which continues to struggle to pull in its fair share of brand advertising, according to many prominent executives.

What the effort will entail is still unclear. During a press briefing, leaders from each of the three groups spoke in vague but grandiose terms. According to Sherrill Mane, the IAB’s svp of industry services, the goal of the initiative is “to change everything we do when we transact digital media." Why? “To make it more brand hospitable.” The group acknowledged that digital media is still not hospitable enough to brands. Digital buyers are faced with half a dozen sources when planning campaigns, including Nielsen, comScore, Quantcast and Compete. Different sites and ad networks sell using varied definitions of ad impressions. Video is even more muddled and disorganized. “The supply chain is messy and ineffective,” said Mane.

Yet these industry groups won’t have a lot of authority, other than issuing guidelines or a whitepaper that they hope will guide brands, vendors and ad buyers. But Mane and her counterparts said that this issue has major momentum, particularly the support of the industry’s leaders. “This is about getting agencies, publishers [on board] with what is best for the industry,” said Bob Liodice, president and CEO of the ANA, who predicted the group would produce some sort of results in six to eight months. “This is a standard setting exercise.” Added 4A's evp Mike Donahue: ”This is not about being reflective. This is about being actionable.”  

 - By Mike Shields via http://www.adweek.com/

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I'm a big proponent of marketing measurement and careful analysis, but it's worth a cautionary tale as sometimes measurements can lead one astray. The more finely tuned your messages are to the interests of the buyers, the more they can cause analysis confusion if not approached correctly. The core of great B2B marketing communications is relevance. If your message is relevant to the audience you are communicating with, it will resonate, if not, no matter how well written it is, it will not resonate. However, the key to relevance is understanding the interests of each prospect so that a marketing message can be delivered accordingly.

Within your universe of prospects, there may be only a small percentage of them at any one time who are the precise buyer role and executive level, at the particular stage of the buying process that your marketing message ideally targets. However, many marketers fall into the temptation to broaden out their messaging to a larger universe in order to get an overall increased effect. Whereas this may seem like a good idea, as it increases the overall campaign results, it can have the unintended effect of alienating a large segment of your audience as we discussed recently in looking at the idea of neutral results in a marketing campaign.

Equally importantly, however, is the fact that a poorly targeted message can lead to highly inaccurate marketing measurements due to the overall effect of a larger population. For example, let’s look at two marketing messages, for comparison. Message one was highly relevant to VPs of Marketing at the Solution Discovery phase of their buying process (2% of your database), and achieved a stellar 30% response rate in that segment. Message two was relevant to Managers of IT at the Awareness and Education phase (10% of your database), but only achieved a 8% response rate in that segment.

For the sake of this example, let’s assume that the general population of your database, outside of the segment to which each message was relevant, responded equally poorly with a 1% response rate.

If this campaign was targeted to the entire database, you can see quickly how the results can show a counter-intuitive message. Message one, would show a 30% response rate in 2% of your database, and a 1% response rate in 98% of your database, for an overall response rate of just 1.58%.

Message two would show an 8% response rate in 10% of your database and a 1% response rate in 90% of your database for an overall response rate of 1.7%. If you look simply at the raw numbers, without diving deeper into the analysis, you can see how the final results will be misleading and will show the reverse of what is true. Clearly, it is the definition of the list, rather than the message success itself, that is causing these results to appear as they do.

Only by first looking at the targeting of your list, including both the fit of the individual, and the stage they are in their buying process, can you successfully show analytics that correctly reflect how effective each message was within that target psychographic or demographic segment. The results might be surprising.

Its use is exploding, but ad spending in the sector continues to be a blip on the radar for most brands

Social media use is exploding, but ad spending in the sector continues to be a blip on the radar for most brands.
 
Razorfish, one of the largest digital ad spenders, compiled data on its 2009 digital ad spending. It found that social media display advertising made up just 3 percent of its clients' budgets. Non-display in social media accounted for another 1 percent. The figures pale in comparison to the time spent online. According to comScore, U.S. Internet users spent 11 percent of their time online in 2011 on social media sites.
 
The spending figures reflect that, all the chatter about Facebook, Twitter and iPhone notwithstanding, online media is dominated by traditional vehicles: vertical sites, ad networks, portals and search accounted for 88 percent of buys. Vertical sites got the biggest share of spending, 31 percent. Search was next with a 25 percent share and ad networks received 20 percent. Other emerging media remain blips: mobile accounted for just 2 percent of Razorfish's spending.
 
Like other agencies, Razorfish has found social media is less of an ad medium and more of a platform for building communities. The spending doesn't take the form of ad buys but rather the labor to build a Facebook page and staff it to respond to consumers, said Jeremy Lockhorn, vp of emerging media at Razorfish.
 
"A lot of the display media in social media is very cheap," he said. "More importantly, a lot of the money going into social is people powered, like blogger outreach. You don't see that in the media spend."
 
More money will flow into social in 2010, but Lockhorn believes it will continue to be in the earned media space rather than paid.
 
Overall, Razorfish saw signs of an online ad recovery. After dipping by 13 percent in 2008, ad spending for clients rebounded to increase by 4 percent in 2009. Razorfish expects growth to pick up in 2010. The average CPM paid was between $7 and $8. The median was $5. Razorfish said it expects CPM prices to rise in 2010.
 
Search occupied less of the spending pie at Razorfish. In 2008, the agency spent 37 percent of client budgets there, but in 2009 that dropped to 25 percent. The shop attributed that to normally high-spending clients in financial services and health pulling back budgets. Plus, at one point last year, pharmaceutical firms took down their ads after the FDA sent out warning letters. The losses in those sectors weren't offset by travel and retail, where spending was flat.

Portals fell out of favor, with spending dropping from 16 percent to 12 percent overall. Ad networks continued to hold strong, increasing from 12 percent of spending to 20 percent. Ad exchanges, which only got going late in 2009, accounted for 2 percent of expenditures. Lockhorn predicted more money would flow through them in 2010.
 
Despite excitement over new interactive formats, the overwhelming bulk of Razorfish's spending (77 percent) remained in standard display units. Rich media accounted for another 15 percent, with video at 8 percent.
 
The report, compiled based on spending data and a survey of Razorfish's media department, reveals some interesting impressions of digital media. Google, despite its efforts to be more than "just search," isn't viewed highly in other areas. Razorfish's media planners gave it the highest marks on a four-star system for search, but doled out single stars in other areas, ranging from performance display to video to mobile.
 
Looking ahead, Razorfish's list of publishers to watch includes Facebook, mobile ad network Greystripe, Hulu, Pandora and, perhaps most surprisingly, MySpace. On the latter, Razorfish praised the News Corp. property for mining profile data for ad targeting.