Online Reach and Frequency: No Panacea

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Meeting the needs of traditional advertisers has been priority number one for the online advertising industry ever since dot-com budgets dried up. Interactive advertising boosters have sounded a rallying cry in an effort to get an increased share of the traditional marketing budget, the majority of which is currently spent on broadcast and print. Important steps have been made, particularly in recognizing the irrelevance of click-through to most advertisers' objectives. But online advertising budgets still fall short of the industry's goals.

Now, the industry is mobilizing around creating standards for online reach and frequency, which would allow advertisers to use the same planning metrics they use offline for the Internet. The logic is that if advertisers can plan offline and online buys on the same spreadsheet, it will be easier to integrate online into the marketing mix, and, hence, Internet ad sellers will get more money.

Developing online reach and frequency is a worthy goal and promises to be useful for integrated campaigns. But developing valid reach and frequency models for the Internet is complex. It behooves the industry to consider some issues as it develops an online model:

• Online is inherently different. In offline advertising, planners calculate the number of people that the media they buy reaches overall (reach) and how many opportunities each person in their target will get to see the ad (frequency). In other words, planners buy media impressions, not ad impressions.

  The Web is different. Since ad servers (imperfectly) count the number of ads that reach a target, buys are based on ad impressions, not based on site traffic. Because of this, online reach and frequency data will always be inherently different and will come from a marriage of data solutions, such as ad server data, log files, and browser-based (cookie) information.

• Don't count on a standard. This industry still argues about how to measure a single impression, so don't be surprised if the competition over the best approach rages on for years. Several companies have already stepped into the fray; Atlas DMT, Jupiter Media Metrix, and DoubleClick all are starting to market their own systems. Offline, planners have it easy because one source of data, such as Nielsen for TV and Arbitron for radio, is the currency. Online planners won't have such convenience for a long while.

• Ignore "the truth." Among the competing solutions in the marketplace, a natural debate will emerge about which is the most valid. Validity is important, and the industry should have high standards. Ultimately, however, the contest should be based on utility -- who can best provide meaningful data in a convenient and timely way. This is not a pursuit for the ultimate truth; it is a search for a useful currency. The online advertising industry should try to avoid its usual infighting over finding common ways to measure things.

It's tempting to hope that finding an accepted online reach/frequency model will cure industry's woes. But it's foolish to think that it will open the floodgates for advertising spending. Online reach and frequency is a worthy goal, but it's not a panacea.

The major reason traditional advertisers don't spend more on the Web is not that their agencies can't plan online and offline on the same spreadsheet, it's that they don't believe that the Internet will meet their marketing objectives. Planning metrics aside, the industry still has plenty of work to do in showing the value of the Internet in building brands, winning customers, and moving product off the shelves.