Gian M. Fulgoni is Executive Chairman and Co-founder of comScore (NSDQ: SCOR) Inc. Previously, he was President and CEO of Information Resources, Inc.
Its high time our industry provide large branding advertisers with metrics that prove that the web offers just as much—if not more—ROI as traditional media. That’s the best way to convince them that it’s OK to shift large portions of their ad spending to the internet.
Consider the following. In a recent blog post, Young-Bean Song from The Atlas Institute (part of Microsoft (NSDQ: MSFT) Advertising) pointed out that if we separate advertising into its two main forms—direct response and branding—and look at the percentage of all measured media that online represents, we see that online direct-response advertising dollars have flowed strongly onto the internet, capturing 30% of all measured direct-response ad dollars) while branding is performing poorly, with only 5% of measured media branding dollars going on online.
Why has the internet failed to attract branding dollars?
I lay responsibility squarely at the door of the “click.” Used since the early days of online advertising as an indicator of the effectiveness of an ad, the click originated simply because it could be measured. But not everything that can be measured matters. In fact, the use of clicks on display ads as a meaningful metric sets the internet up for failure as a branding medium. Doubleclick reports that click rates on display ads today have fallen to approximately 0.1%, an unfortunate reality that has created serious doubts about the value of online advertising in the minds of advertisers that have experimented with the internet as a branding medium. Its now clear that a publisher would have to be insane to continue using click metrics to try to persuade branding advertisers to turn to the internet.
If the industry can move beyond the click, the future of online branding advertising is bright. By using appropriate metrics, the ability of online display advertising—whether in the form of static display ads, rich media or video—to build brands can be shown to rival or even exceed the effectiveness of traditional media. In a white paper Whither the Click (published in the June issue of the Journal of Advertising Research), we summarized the hundreds of studies weve conducted using the comScore panel and comparing the behavior of panelists exposed to brand display ads with the behavior of those who did not see the ads. Even in the face of negligible click rates, time and again we observed statistically significant lifts among the ad-exposed consumers in the number of visits to the advertised brands web site, the number of trademark search queries, and the sales of the advertised brand, both online and offline.
While these metrics are vital for understanding the true effectiveness of online advertising, reach and frequency (R/F) metrics are also important tools for media planning and analysis. Traditional brand advertisers have been using such metrics for decades, and these metrics should also be central to online media planning and analysis. Let me be clear. Im not arguing that R/F metrics can indicate whether a particular media plan has worked—that can only be determined by measuring the success of the plan in building brand sales, taking into account the particular creative that was used. But R/F onsiderations how many people were reached with ads and how many times—are vital when deciding how to structure a plan and critical when one is trying to understand, based on the sales results, why a plan worked or didnt.
One problem is that measuring an ad campaigns reach and frequency on the Internet is not as simple as it is for traditional media because there are so many different locations from where an ad can be delivered on an individual web site. For that reason, R/F needs to be measured at the ad-placement level, not at the site level. To that end, this week comScore today announced an offering with Microsoft Advertising to provide R/F planning and analysis tools at the ad-placement level based on Atlas ad server data and comScore panel data. We believe this is a much more precise approach because it shows the reach of the ad campaign that can actually be achieved, the true potential frequency, and the specific demos of that audience. Campaigns planned at a total site level can overstate reach, understate frequency and may not deliver the desired demographic.
Perhaps Ted McConnell, Director of Digital Marketing Innovation at Procter & Gamble, put it best at a recent conference when he said: Call me old-fashioned, but P&G thinks its rather important to know what we say, to how many people and how often.
When traditional media thinks about branding advertising, it focuses on creative, reach and frequency. These are time-tested factors. Its time for online display advertising to go back to the future.
By Gian Fulgoni