Clicks and conversions don't suffice as metrics data in an increasingly wired world.
As has been widely observed and reported by Jupiter Research over the last few years, consumers of all types are spending more time online, both in the U.S. and Europe. Growing PC ownership and usage (at home and work), growing broadband adoption, increasingly untethered access, and the platform's multifunctional nature have positioned the Internet playing in an ever-greater, more central role in consumers' lives. Consumers increasingly go online for information, communication, and entertainment at the expense of other, more traditional media (e.g., TV and print).
Most important for business-to-consumer (B2C) marketers, consumers also increasingly turn to the medium to satisfy their buying needs. As they become more comfortable and reliant on Web-based media, consumers spend more time researching, investigating, and interacting with product and service content, whether to purchase online or off-.
Not surprisingly, the Internet's growing use, coupled with its reach, flexibility, accountability, and creative potential, persuades more marketers to spend more budget dollars online. European marketers will increase their investment in online advertising over the coming years from €2.1 billion in 2004 to €4.6 billion by 2009. And the medium will take a greater share of total advertising investment during that period, rising from 2.6 percent to 5.1 percent.
The Internet has a growing influence over consumers' thoughts, opinions, decisions, and, especially, shopping habits. Marketers no longer invest online just to influence short-term consumer actions. Now, they help shape consumers' longer-term perceptions and attitudes toward products and brands. Increasing brand favorability and customer loyalty were two of the most common objectives online marketers cited as goals in a recent survey (whether they sold online or not). The Internet is not purely a direct response medium.
Yet despite online advertising's potential long-term potential effect on consumer mindsets and increasing focus on influencing, marketers still measure campaign success largely through the telescopic view of immediate online behavioral response.
Due to digital media's interactive nature, all ads, regardless of format or objective, have embedded destination URLs, enabling click-through to a landing page. As a result, direct response has become an entrenched industry focus, and CTR (define) the most keenly observed outcome.
Eighty-four percent of online marketers use CTR to track campaign performance. It indicates online viewers' immediate reaction to a commercial message, whether as a sponsored search link or graphical banner. It provides little insight to consumers' thoughts, interest, or intentions.
Measuring direct converters often comes at the expenses of measuring the equally important target consumers who don't immediately convert, convert offline, or never convert at all. Despite marketers' claims of online branding objectives, few measure what viewers think as opposed to what they do. Only 22 percent said they measure shift in brand metrics to determine campaign success. This suggests two-thirds of online marketers neglect to determine campaign outcomes against preset goals.
With greater online activity, marketers should no longer rely on click data and conversion metrics alone to provide an understanding of return on investment (ROI). Increasingly, they must take a holistic view of performance and measure the greater, aggregated effect their online messages have on consumers' minds, offline behavior, and overall attitudes if they are to fully optimize campaign performance.
As the medium matures, a wider range of traditional measures and metrics will become important. Reach and frequency are offered by the key audience measurement companies, such as Neilsen//NetRatings with WebRF and comScore Media Metrix with Campaign R/F. Those measures will enable marketers to build campaigns against branding metrics, such as gross rating points (GRPs). They'll make pre- and post-campaign management more analogous to and comparable with offline advertising. Brand engagement measures, gained through an understanding of advertising or Web site content interaction, will enable comparisons with exposure to 30-second TV spots. Marketers should look to adopt analytics tools and interpret and act on behavioral data.
Audience attitude metrics will become increasingly important. Marketers should use attitudinal research as a systematic part of the online planning process to measure non-click response and optimize the wider influence of their campaigns. Providers such as Dynamic Logic, with its AdIndex, CrossMedia, and MarketNorms products, offer online survey tools to measure consumers' attitudinal response to online advertising.
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Julian Smith conducts research and analysis on the European interactive marketing and advertising arena as an analyst with Jupiter Research, which shares a parent company with ClickZ.
His areas of expertise cover all aspects of the online advertising industry, e-mail marketing, mobile (SMS/MMS) marketing, search engine marketing, eCRM, online branding and Web site design. His particular area of interest is in the use of digital media for the acquisition, retention and development of customers.
Prior to joining Jupiter Research, Julian spent over six years working in a variety of interactive marketing agencies in London. These included Razorfish, Euro RSCG Interaction and TBWA/GGT where he worked in strategy and client service roles helping develop online solutions for leading blue chip clients. Most recently he assisted in the integrated marketing launch of 3, the new 3G video mobile phone, one of the largest new product launches in the UK in 2003.
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