@ OMMA: ComScore CEO Fulgoni: Key To Online Ads Is Search, Video Is 'Silver Bullet'
This story was written by Amanda Natividad.
I'm here at OMMA Global Hollywood, in Hollywood, where Gian Fulgoni, executive chairman and co-founder of comScore (NSDQ: SCOR) kicked off the morning with a keynote on online media marketing. His solution when it comes to branding and maximizing advertising effects: search and video. The key to making money? Not click-through rates, but reach and frequency.
"Not everything that can be measured matters, and usually what matters is not easy to measure," explained Fulgoni. While the click did have its value back when rates were at 5 percent, click values are now at a fraction of a percent. "We can measure a whole slew of stuff, but we have to make sure we're measuring what matters." What matters is tracking cookies. Citing research from Yahoo (NSDQ: YHOO) and Doubleclick's cookie deletion behavior, Fulgoni said 30 percent of internet users delete cookies in a month; these users do so on an average of four times a month, which can result in seeming like a unique visitor each time the user visits the same site. Not taking this behavior into account causes a 2.5 time overstatement of uniques and reach in server logs, with an understatement of about the same amount in frequency. In an admitted plug for the company, Fulgoni added, "At comScore we think our numbers aren't affected by this bias since we don't measure with cookies."
Fulgoni continued with the notion of undervalued measurements by talking about the undervalued impact of search, particularly its latency and offline impact, search in consumer packaged goods industry and its impact on branding. A 2006 study comScore conducted with Google (NSDQ: GOOG) shows that online search yields 63 percent latent offline effects, the key here being that advertisers need to focus on what causes these effects over time. In another study by Proctor & Gamble, Yahoo and SEMPO shows that half of all internet users that went to consumer packaged sites did so through search. These searchers, who are on average younger, more affluent, well educated and female, have shown that they can be influenced to switch brands based on factors other than price27 percent of searchers cited price as their main reason of switching brands, while 38 percent of non-searchers did so because of price.
With all this talk about the importance of users' visiting frequency and search behavior, what relevance can click-through rates offer today? Fulgoni: "Click-through rates are awful today. We're now at 0.2 percent while rich media is at 1.12 percent. In 2002 it was at 0.41 percent with rich media at 2.5 percent." He suggests advertisers can increase CPMs with behavior-targeting, user-generated content and video, especially the latter.
Fulgoni pointed to huge numbers of users and streams, with 138 million streaming video users in January. Three-fourths downloaded at least one video in that month, with 70 videos per user per month on average. "This might be the silver bullet, if you will, that's going to allow us to get those branding dollars and move them aggressively online."
By Amanda Natividad