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NEW ORLEANS -- What's the real value of online advertising? According to a panel of experts debating the question during the opening day of the American Association of Advertising Agencies media conference here Wednesday, it's still largely undefined, because the proper metrics haven't been put in place to measure it.
Asked by eMarketer CEO and moderator Geoff Ramsey what single word best defines the state of online measurement, the five-person panel yielded five divergent responses:
Copernicus Chairman Kevin Clancy: "Incomplete."
Interactive Advertising Bureau Director of Research Joe Laszlo: "Confusing."
Nielsen President Jim O'Hara: "Enigma."
Mediasmith CEO Dave Smith: "Inadequate."
Marketing Evolution CEO Rex Briggs: "Disconnected."
What they all agreed on is that there still is too much confusion surrounding the bounty of online metrics and data, and that nobody has managed to put it together in a way to produce scalable, actionable insights for planning and evaluating online advertising buys.
"There's a fine line between being the most measurable medium and the medium with the most measures," quipped the IAB's Laszlo.
Mediasmith's Smith also implied that too much attention has been focused in the wrong areas, and they tend to be the ones bearing the most abundant and easiest-to-harvest fruit, like online search.
"I think search is doing a good job of taking a disproportionate amount of the credit," Smith charged, adding: "It's amazing what they've done. They've sold a lot of people that the only thing that matters is the last click."
The real opportunity, Smith said, was to develop "algorithms" and tools that will finally make it feasible for advertisers and agencies to understand the precise role that different forms of online advertising have in the overall marketing funnel that ultimately leads to a click of action online.
Asked to rate the quality of online measurement on a scale of one to 10, with 10 being the best, the consensus among the panelists was that it was a "three or four."
Copernicus' Clancy said that's actually not surprising, given that the advertising industry still has not figured out how to leverage better-known and longer-term tools developed to measure the effects of traditional media.
Clancy cited a recent McKinsey study, which found that only 20% of advertisers use the tools they currently have available to them to measure the "return on investment" of traditional media buys, even though tools such as econometric models have been around for more than 15 years.
"The question is, when is the industry going to move?" Clancy asked. "The industry hasn't moved, with respect to traditional media, that much."
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Because they have "CEO" in their title doesn't make them right. I bet they have traditional marketing bias - I mean backgrounds - and don't even look at Adwords or Analtyics reports. Ask anyone that actually does online marketing and it not rocket since.
I bet they are smart people, I would be happy to teach them how to measure and adjust online ads for better ROI in under an hour if they need my help.
To that I say, those who think things are rosy in the world of online measurement are deluded.
As just ONE example, uniques are over-reported by many orders of magnitude - for example in Australia with a 21.5 m population of which around 80% are online, we end up with 42m uniques! And you expect me or any advertiser with a scintilla of common sense to believe that! Pull you heads out of the sand and admit that some SERIOUS work has to be done to sort these issues out!
The focus on 'last-click' is a serious concern as well. That is akin to saying that the check-out operator in Wal-Mart is the most important link in a CPG advertisers marketing campaign. C'mon - get serious!!
Sure online is the most 'countable' medium - but certainly less 'accountable' than the traditional electronic brodcast media are (and rest assured they still have some way to go !)
The discussion needs to not only turn to better algorithms, but to better shaping of the metrics. The data available and its uses are potentially mind-bending. More algorithms without informative and relevant output for those who are most likely to use the information (media planners, CMO’s, CFO’s) accomplishes nothing.
When I first came to America billions of dollars were spent on TV ads without any accountability at all. It seemed as if the advertisers, media buyers and TV salesmen liked it that way. If you're not accountable you can play the big swinging dick all day long.
One day someone will put a number on the wasted TV dollars. But in the meantime while searching for the holy grail of internet metrics, don't continue to under invest in the net. It's the future.
I find the comments from the "gurus" to be ridiculous. Online advertising provides more opportunities for measurement and analysis than any other form of media, period. One cannot begin to compare the opportunities for analysis and optimization using online tools like frequency caps and multi-variate testing to traditional make-believe "metrics" such as reach, frequency, and print pass-along.
Media Post recently reported that less than 50% of online advertisers analyze their effectiveness. Misguided "gurus" such as these gentlemen only serve to confuse and confound marketers who could be testing and learning now, rather than waiting for some pie-in-the-sky magic online metric. Keep telling your clients that online measurement is "incomplete", "confusing" and "inadequate"; we'll use the data to help our clients kick your clients butts!
Visiting aggregator sites (71%) Searching online for reviews (66%) Typing or copying a URL into their browser (33%)
All of these activities make paid search and organic traffic look like the driver when in reality it was the email in the inbox that drove the actions. None of the above actions is trackable back to the email.
And when a product is sold to an email recipeint, Epsilon reports it happens by:
48% of respondents did say that opt-in travel emails had a direct impact on offline purchases;
67% reported purchasing a product offline; and
14% reported contacting travel agents as a direct result of such emails.
All these activites are not tracked back to the email because advertisers do not have unique 800#s for every publisher and then for every offer. And walking into a store or travel agent does not track back to an email. But certainly one remembers a brand or offer in an email and types it into google and whoolaaa - paid search is king!
Bottomline is, as the old saying goes, even interactive advertisers cannot figure out where 50% of their budgets go. Therefore advertisers must look to sales lift and other metrics and use them in coordination with interactive statistics to make an informed analysis. That takes critical thinking skills, analytics skills, and making logical inferences. Since most agencies buy only reach and have no idea how to value direct to consumer touch points it is left to people who sell interactive to educate advertisers and agencies and keep the conversation going.
When you talk about print ads, TV, trade show attendance, billboards, or any other non-online avenue, the inability to measure completely seems a non-issue, or at least not as severe.
Hasn't anyone considered the fact that it's not the tactic, but what the tactic is working for? i.e. just because it's the web doesn't mean that it cures all of the metrics issues that are inherent in advertising. I've heard plenty about the Google Last Click Phenomenon, where people were finally becoming "on to something", but with everyone in fear of the economy, we're scrambling to make something be something it's not.
Joe Fredericks (http://www.adexchanger.com)