• by Jack Loechner , Staff Writer @mp_research, January 29, 2003

Everybody agrees on the importance of having a system of measurement for interactive media in order to include it proportionately in campaign planning and buying. How to achieve that is another matter. In the Digital Marketing Insight report from the Atlas Institute, senior research analyst John Chandler-Pepelnjak shows how advertisers can more easily incorporate online advertising into their overall advertising mix by bringing the industry standard metrics of reach, frequency, and GRPs from traditional ad media into the online world.

The Atlas report points out that about two thirds of North Americans are online and reachable through online advertising, and that 12% of media consumption is on the Internet. But online advertising currently accounts for only 3% or less of overall U.S. ad dollars. Chandler-Pepelnjak notes that advertisers are not taking greater advantage of the widespread consumer adoption of the Internet because online media planning has lacked the metrics advertisers are accustomed to offline. Advertisers have had to turn to site traffic and sales data instead. So it has been difficult to make apples-to-apples comparisons across media and plan a media mix accordingly.

Is it possible to develop an “apples” comparison? David L. Smith, president and media director of Mediasmith, says, “The base data for reach and frequency from other media comes from the survey-based suppliers, [but] the Web is different. When a banner or other type of ad is served, it is rarely exposed to the full audience of the site or even the full audience of the page. As a result, there is no relationship between the site’s audience and the audience for the advertising.” He posits that it seems logical to combine User Centric Measurement (collected from survey companies) with Server Centric Data (collected from third-party ad servers) to provide site population estimates with demographic compositions and historical user-level frequency data. This makes it easier to equate traditional and online ad measurements, even if it lacks the authority of statistical proof.

The Digital Marketing Insight report further supports the fact that online reach calculations are much more complicated than the traditional media “total number of viewers of a particular campaign.” A campaign of 1 million impressions on a site with 1 million unique users may reach only a small percentage of the site’s population. Therefore, when predicting online reach, consideration must be given to frequency distributions; run rate; surfing behavior, which plays a large role in reach/impression dynamics (on some sites 5% of users may see 70% of the total impressions shown); and other subtleties such as site overlap.

So is it really the traditional “R/F/GRP” measurements that ad agencies are lacking to incorporate more Internet advertising, or is their reluctance due to the perception that i-ads deliver less bang for the buck? Though the Internet is seen to be three times faster than TV and preferred by three quarters of the U.S.-based advertising executives in a study by I/PRO, the ROI is thought to be half as much as TV…so TV gets the play. Bottom line is the bottom line!