Does Online Metrics Need A Stimulus Package?

Most of us remember the state of the Internet economy after the dot-com bubble burst in September of 2000. I, for one, have vivid memories of walking into a Soho Starbucks in the middle of the business day and seeing the place full of lean 20somethings dressed all in black, sobbing into their lattes, "My options!  My options!"

But pretty soon (at least in hindsight it seems soon) the industry was back as a vital part of the media, marketing, and retail economies, this time with profitability having replaced multiples of revenues as a means for evaluating company performance.  In short, we bounced back better than before.

So how will digital media fare in this recession-slash-depression?

In economic times like these, consumers, who are ultimately remarkably resilient, make choices -- some difficult, some not so difficult -- about what is important, and what is expendable.  Instead of going to a movie, maybe you rent a movie.  Maybe you stop taking the newspaper, because you know you can read it online.  In November, in a column in this space titled "Depression-Era Digital," I quoted one agency media researcher who told me that in this economy, consumers will have to make "hard choices about what paid media they needed, truly needed."  

I'm hearing stories about people dropping satellite radio, cutting back on cable TV, even cancelling landline telephone service (I know my wife wants us to do just that.)  Indeed there is a growing trend among some 18- to 24- year-olds to eschew TV ownership entirely, choosing instead to stream their favorite shows online.  

But I'm not hearing that anyone is opting to cancel their broadband connections, their Internet accounts.  MediaPost recently reported the results of a study that found 70% of males 18-34 would sooner give up TV than the Internet. And that is not surprising.  The Internet has become a digital lifeline: a place where, if push comes to shove, you can get your newspaper, your radio, your TV. It is a must-have.

But what about the field of online metrics?

Like consumers, businesses also need to make choices.

If the Internet remains the most robust ad medium in these tight times, then metrics become more important than ever, because advertisers will be more concerned about effectiveness, efficiency, and ROI than ever before.  In short, the market robustness will be driven by quantification and accountability.

In tough economic times, companies look to trim non-essential costs.  In many organizations research is viewed as a cost center, not a revenue driver, and thus becomes a ripe target for cost cutting.  So let me make a plea here that research -- the function itself, the people staffing that function, and the syndicated and custom work the organization utilizes -- is not expendable.  Research expenses should be held to the same standards as other expenses -- that their contribution to the organization's bottom line be tangible and quantifiable.  But this is a standard that has always been appropriate.

Well-designed, well-interpreted research informs business decisions, including very specific and immediate ones relevant to buyers and sellers of online advertising. Is this campaign working?  Am I delivering the desired target with a sufficient reach and number of average impressions?  How much time are people spending on my site?  Am I able to differentially monetize the more-loyal visitors?  What impact does video have on my site's engagement? What share of advertising am I getting from the automotive category?  Is there any way to increase that?

Some of my colleagues in this space (Judah, Jodi) might refer to the tools that help answer many of these questions as Web analytics. But to me, all of it -- even Web analytics -- is research, and all of it is vital to the enterprise's ability to make the right business decisions.  Over on the Web Analytics listserv, there's been a thread recently about, "is the web analyst obsolete?"  Good lord, no.  The practitioner who understands how to turn insights from data into guidance for business decisions is more valuable now than ever before.  And if you come across a really good one, hire him or her.  And if you have a hiring freeze, send me the resume.

It is possible that we will see a "thinning of the herd" in the online metrics space; some companies might not survive these times.  This is probably not the best time to be working out the kinks in a new business model.  But this process is probably healthy, and best for the long-term viability of the herd itself.

So my message this week is to hang on tight. As Bette Davis said in "All About Eve": "Fasten your seatbelts, it's going to be a bumpy ride." But the Internet is as robust and resilient as the American consumer, and research (including audience measurement, Web analytics, ad effectiveness and other work) is essential to our collective continued success.  So let's all champion research in our organizations -- and bond together over the importance of doing so.



Tags: metrics
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6 comments about "Does Online Metrics Need A Stimulus Package?".
  1. Denis Dunann from Caliber Data , March 3, 2009 at 2:34 p.m.

    .......because advertisers will be more concerned about effectiveness, efficiency, and ROI than ever before.

    We agree. I would like to introduce true Pay Per Transaction advertising that links a consumer's online ad click to a resulting in-store purchase and charges the advertiser a commission rather than paying upfront fees for clicks, impressions or other actions not directly linked to a sales conversion. This model offers advertisers an effective, efficient and measurable ROI.

  2. Paul Van winkle from FUNCTION , March 3, 2009 at 2:47 p.m.

    "Night".

    "It's going to be a bumpy night", is the Davis line from that film.

    Her character Margo also said: "You're maudlin and full of self-pity. Magnificent!" That bit above about the herd being the best thing for long-term viability is maudlin alright. Self-pitying, too. You didn't mean it, I know.

    As evidenced by the showmakers at OMMA's BT last week, it is only in better differentiating, communicating and defining why you're better, smarter, more valuable and unique that survival lies. Anything less is a dirt nap.

    Another Davis line and I'll quit: "You're not much of a bargain, you know. You're conceited and thoughtless and messy." Better to batten down the position and finally do the hard work on value propositions and communications, because nobody buys messy, self-centered offerings in a down market.

    Now -- back to it. "Peace and quiet is for libraries!"

  3. Rob Perrier from Adometry , March 3, 2009 at 3:09 p.m.

    On the topic of Web Analytics versus Research, I agree that any metrics package worth its salt should be informing the team(s) that are responsible for research. However, I always wonder if the goal shouldn't be to lower the bar for comprehensible data, so that you don't have to find the super-analyst in order to even understand the basics of campaign measurement.

    Wouldn't it be fantastic if the whole team working on the media plan could get the data they need, and let the analysts work on the truly in-depth, advertiser-specific information?

  4. Jody Wright from The Flint Journal , March 3, 2009 at 3:57 p.m.

    Right on, Rob!

    I'm the research analyst here, and I can assure you that the process of gleaning insights from data are exactly the same, whether CPG-Nielsen-IRI data or comScore data. However, it is extremely frustrating that our online partner is too overwhelmed to provide metrics for us, and even more frustrating that I can't manipulate them in ways I would like (demographics, attitudes, purchase behavior). It may be that I lack the access, but it seems the data is not as rich as that traditionally collected. In the world of packaged goods, I could examine many different aspects of a product (how much purchased, how often, what else purchased, what the occasion was, how it is used after purchase, etc etc etc.) Here, I feel that the web is a huge missing piece of the puzzle, and I'm not sure I feel comfortable about the way we're thinking about it (since we're a newspaper and trying to juxtapose ourselves against other media -- but the Internet can provide any and all of the other media we're worried about... in some ways, it IS the newspaper).

    The other tough thing about web analytics is that advertisers are suspicious of our sources that provide this data (since it is "internal", so to speak, and not audit data).

    From my point of view, there's not much about the web I can say with data-based authority.

  5. Paula Lynn from Who Else Unlimited , March 3, 2009 at 4:34 p.m.

    Bingo. No matter what the media is, research is part of the foundation. At the Philadelphia Inquirer/Daily News, the research department was the first to go and that was before the free fall. If we needed something, the one person left took days to get back to us if at all. There was a real bad attitude there, too. By 2003, we had very little available and management if even they knew never schooled the sales department, let alone any other department on what to do with what they did have so I did as much as I could on my own. So when I say newspapers disintegrating is also do to suicide, here is a perfect example. Either digital media can learn from those mistakes or take the magic pill.

  6. Paul Fisher from IAB Australia , March 3, 2009 at 6:50 p.m.

    Good article - IAB Australia is launching it's Research Council, modelled on the US and UK IAB Research Councils/Working groups to aggregate and make available current research and commission market specific research that will further support the case for online advertising.