Microsoft Calls For Online Advertising To Adopt Traditional Offline Metrics
- by Laurie Sullivan @lauriesullivan, January 25, 2010
SAN FRANCISCO -- Brands demand the promises and the guarantees of performance -- the same performance and fundamental metrics they have come to know in traditional media, such as television and radio.
During his keynote at OMMA Performance Monday, Young-Bean Song, senior director at Microsoft Advertising Institute, told attendees the online industry needs to adopt traditional performance metrics into online to make brands that traditionally advertise on television and radio feel more comfortable about moving advertising on the Web.
Data needs to prove the outcome of a campaign. But that outcome has become complex. So, marketers continue to look for ways to take the data and prove the outcome. During the next few years, companies will bring traditional media metrics to online media plans. The industry will also design new standards for return on investments (ROI).
Today, the industry talks about cost per activation and cost per sale, but that will change. Within the next year or two, Microsoft will have the ability to fill in some of the missing data. Not only will a company know it spent $100,000 and provide a forecast that the media plan will reach about 7.8% of the target audience -- it will provide a GRP that gives them the offline equivalent for an online campaign.
Investments in online advertising from brands will follow the metrics -- not just the click-through rates, but traditional metrics, such as reach frequency and GRPs, a metric fundamental to offline brand advertisers.
"We're not translating our media plans," Song says. "It's one reason we're not seeing traditional media dollars move online, because they don't know what they're buying."
Not just impressions and click-through rates. It must be traditional brand metrics, such as reach, frequency and GRPs. And making the tradeoffs in terms of cost per point and where they get the most result for the investment.
Advertisers also need to measure more than the last ad. If a marketer's view remains on the last ad, they will start at the purchase funnel. "You may end up with a great ROI, but just a handful of conversations. And we all know that's not sustainable."
It's actually easy to calculate Target Rate Points for digital media. Smart Digital Spending provides a free tutorial on how to do this http://smartdigitalspending.com/solutions.html
Eric
Interesting article. It’s true, the time for ambiguity in online advertising has passed. Whether it's a lead, a sale or even a view, there has to be some quantifiable result to the ad in order to attract bigger advertisers. But we’d argue for not just performance metrics, but the performance-based model itself. Many leading advertisers have already realized that the performance-based model works best, as they pay only for real results. The performance model filters out low quality results, giving advertisers exactly what they're looking for at a better cost. If online advertising is to take its place alongside traditional offline advertising, a performance-based path will lead the way there.