While the general quality of online advertising is on the up, if the take up rate for adblockers is anything to go by (there were 198m adblocker users at last count), we’re still not getting it quite right.
We know that ads are here for the foreseeable future – they support the free web, and can be useful, inspiring, or both.
To stop site visitors from downloading adblockers, we need to serve them ads that are useful to them (or at least not too intrusive).
But how do we know whether the ads we’re serving are working for site visitors and brands?
Ever since the banner ad made its debut in 1994, we’ve relied on the click-through rate (CTR) to determine how an advertisement is performing, which makes sense on the face of it: reader sees ad, reader is intrigued by the messaging in the ad, reader clicks ad. Simple.
However, a recent study by Scandinavian publisher Schibsted found that CTR is negatively correlated with ad effectiveness, and other studies have questioned the metric’s utility.
Furthermore, research has suggested that up to half the clicks to banner ads by mobile users (whose numbers now exceed online desktop users in many larger markets) are accidental.
Apart from CTR, what other options do we have?
A measure past its prime
In 2012 a study by digital intelligence researcher Dstillery (then Media6Degrees) in partnership with New York University’s Stern School for Business found that clicks were a poor proxy for conversions, and don’t correlate with purchasing. “Buyers do not resemble clickers,” they wrote in the paper.
However, they observed that because CTR is the most cited and used proxy for ad success, campaigns are optimised for clicks, which would only muddy the waters further for marketers trying to determine which of their efforts are ultimately returning more ROI.
The study also found some proxies are measurably better than others for determining ad effectiveness.
Today, publishers are experimenting with other measures to ensure their ads are engaging site visitors, and paying off for their brands.
Last May, the FT bought out of beta testing its new time-based metric for selling advertising space, developed with online attention analyst Chartbeat.
Now, instead of selling simple space on its site to brands, it sells nuggets of time, and can guarantee all ads are viewed for at least five seconds.
The FT said that its tests, with companies including BP and IBM, had proven a “significant uplift” in brand recognition and association among readers. It added that it could report on how long each impression had been viewed, and the total duration of exposure across the campaign.
Dominic Good, the FT’s advertising sales director, said that where CPM (cost per thousand impressions) values every impression the same, CPH (cost per hour) uses time to measure value.
Furthermore, when the team observed that adverts seen for five seconds or more on FT.com show up for 50% higher brand recall and familiarity than those that aren’t seen for as long.
The FT now aims to make CPH a standard digital trading currency for the industry. “In addition to better serving advertisers, time-based metrics will benefit publishers,” it said in a statement. “CPH values quality content over quantity, or real reader engagement over clicks.”
Toward the end of last year, The Economist launched Attention Buy, a model that it says “guarantees and trades on user attention”.
Another initiative developed with Chartbeat, as well as MOAT Analytics, Attention Buy offers marketers the ability to buy user attention on a CPH basis, both for its online and in-app offerings.
Attention Buy will track active view time, and only account for times an ad is in view and the reader is “actively engaged with the page”, and like the FT’s time-based metric, will only count impressions of more than five seconds.
However, to protect marketer from over-exposure, it will cap attention on a per impression basis at 30 seconds.
What about conversions?
For the time being at least, the time-based metric appears to be the best solution we have for tracking reader attention, which will work especially well on sites with particularly engaged subscribers.
Another measure digital marketers are concerned with, which underpins any time-based metric, is viewability.
The IAB defines a banner ad as viewable if more than half of it can be seen for at least one second, or two seconds for video ads.
According to the IAB, keeping tabs on viewed impressions rather than served impressions makes it easier for the industry to compare how online ads are performing against traditional media advertisements, and is “another step to greater accountability in digital media”.
However, it does note that current technology does not yet allow for fully measuring all served impressions, meaning we’re not entirely sure what percentage of ads are “viewable”.
“Vendors simply cannot measure viewability in 100% of cases at present,” the IAB says, laying out some principles for getting on the road to achieving full viewability.
“Attention metrics and viewability are certainly a step in the right direction,” says Ashwin Sridhar, global head of revenue from Economist digital products. “They are merely a first step in the journey towards trading on user attention. Viewability is just a proxy for what marketers desire the most – their target audience’s attention.”
Nicolas Sennegson, global MD and chief revenue officer of The Economist Group’s media businesses, adds: “Knowing that an ad is viewable is good, but knowing that users are paying attention to your ad is even better.”
Although these methods go some way to creating a clear picture of what works for advertisers, they’re still removed from the desired result of advertising – customer conversion.
Edward Kim, CEO of SimpleReach, a company that measures the impact of digital content, called conversion the “only measure that really matters” in an editorial for Digiday, adding that “one metric can never fully encompass the vast diversity of a marketer’s goals”.
Kim also pointed out the problem with relying on just one measure to gauge ad effectiveness, echoing the Dstillery study’s observation of the worrying trend of optimising ads for CTR.
“Once video marketers placed a placed a higher premium on completed views, we saw the rise of gated content, views for in-game benefits and even views for free WiFi, essentially incentivising users to finish watching ads. Show me a metric, and I’ll show you someone gaming it.”
So perhaps it would be foolish to rely on one metric alone. Perhaps this could even work in the industry’s favour, leading to more interesting, innovative ads if there is no need to tick the recognised boxes for effectiveness.
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