• by December 21, 2007

Global warming and consumers warming up to a brand or product: While it might not be obvious at first glance, there are certainly parallels between the two. First, both climate changes and consumers' responses to advertising are significantly more measurable today than in the past. And, second, in both areas new patterns, emerging from newly acquired data, routinely challenge our convenient ways of thinking and render our customary methods of going about our business inadequate.

Traditionally, the industry viewed advertising effects as a one-way street: advertiser launches a campaign, consumer responds to its ads -- and advertising was attributed as the factor driving consumer attitudes and behaviors. This was a convenience approach, as in many cases we only knew how to quantify the beginning of the process (reach and frequency of exposure) and the end of it (sales). The industry only occasionally considered effectiveness measures, such as branding, that happen in between.

Search and consumer-generated media introduced so much complexity that predicting advertising effects indeed became similar to predicting climate change. In digital ecosystems, just like in the atmosphere, feedback loops amplify the ways a consumer warms up or cools off to a brand. For example, both traditional and digital media campaigns generate online word-of-mouth. That buzz, however, remains after the campaign is over, keeps on reappearing in search results, and acts like a perpetual media placement in itself, continuing to influence consumer behaviors and their responses to consequent campaigns.

Online advertising enjoys steady increases in spending, primarily because it's the most accountable. Unlike print ads, digital banners come with a full repertoire of relevant performance measures: impressions served, clickstream data, direct and indirect (view-through) conversions and rich-media interactions. Digital video is far more measurable than TV commercials, as it yields useful branding metrics such as interaction time, re-plays and pauses -- and, as with any online ad, we can track video influence to subsequent online brand interactions. In addition, we can routinely measure paid search, site visits, blogging, message boards' postings and brand terms' search volume, and correlate them to media exposure.

However, do all these new metrics really translate into more effective campaigns? If, after "having invented the Internet," Al Gore had not moved on, he would have discovered a different inconvenient truth: Online advertisers really only use a fraction of insights contained in their data.

Data analysis is only valuable when it shows what causes what. Global warming opponents often point out that despite the plentiful data, it is still hard to separate the effects of human activity from the planetary cycle or other natural trends. Online advertisers face a similar challenge when trying to establish what proportion of desired consumer behaviors is actually caused by advertising and what would happen anyway, regardless of exposure. It is actually possible to answer that question today, but it requires control ad placements and processing vast amounts of data. So, often online marketers rely on assumptions and shortcuts instead.

Proper attribution becomes particularly relevant when addressing tracking view-throughs (when a user saw an ad, did not click on it, but subsequently performed a purchase). Advertisers typically track such conversions back to the Web sites or networks that delivered the ads and credit the most recent online marketing exposure. However, the fact that a consumer saw an ad prior to making a purchase does not prove that that ad prompted the purchase.

As a result, placements with higher reach often get credit for leading to sales, because future consumers, influenced by an array of media, are more likely to also encounter these high-reach placements prior to purchase.

The methodology exists to isolate valid view-throughs from those that would occur even without media. But we still lack industrywide statistics and studies that determine the instrumental factors for generating the valid view-through response.

A similar challenge exists with sponsored search, to which advertisers typically attribute all online conversions occurring within one month after consumers click on sponsored links. It does not happen in a vacuum, which leads to the billion dollar question: To what extent does search drive conversions independently and to what extent do consumers use it just as a navigation tool to find brands for which they previously saw a digital display ad or TV commercial?

In advertising, as with the atmosphere, we can only establish causality through constant observation and testing. Marketers should abandon outdated linear models along with search and display tracking silos and crediting the most recent online exposure for purchases. We need to take into account more touch points, both online and offline, to identify what's truly working.