Measurement is essential to growing the online advertising market. But measuring what? It seems that we’ve been focusing on half the problem.
There are four parts to advertising measurement:
- Pre-buy — using MediaMetrix or other sample-based planning tools to decide where to advertise.
- Buy — determining what to pay, based on availability and targeting.
- Delivery — agreeing on the number of impressions delivered.
- Post-buy — evaluating the results of the ad campaign.
For the most part, the online advertising industry is focusing on steps 1 and 3. These are the places where agencies and ad networks have the most control. Steps 2 and 4 are harder, because they require deeper involvement with the web site. In our research at Fastwater, LLP, we’re seeing a chasm between advertising measurement and site-based measurement, and that gap is slowing the growth of the market.
Don’t get me wrong. Pre-buy and delivery standards are very important.
It’s imperative to settle the impression-counting problem. Banner-counting standards are a set of even weights and measures. They let ad buyers and sellers agree to the price of a given transaction: I buy 100,000 impressions at $10 CPM, you deliver 100,000 impressions, and I pay you $1,000.
It’s critical to have a way to compare the size and composition of the audience on sites across the Internet. Despite its flaws, the MediaMetrix approach is a good start — it helps advertisers compare lots of sites and decide where to start spending money.
Proving the Medium
Ad-counting standards don’t improve the underlying effectiveness of ads. And survey tools don’t measure ad results. Only by improving ad targeting and context, and by measuring the results of ads, will online advertising prove itself as a viable medium. These measurement techniques don’t just involve the ad server — they involve the advertiser’s site and the publisher’s site.
Targeting makes ads more valuable. Targeted ads cost more money because they generate better branding, higher click-through, and better customers. Ad networks are targeting based on clues from the surfer’s address — there’s a lot you can infer about the geographical location and workplace.
But in order to pinpoint targeting, the target site needs to be involved. After all, good sites get repeat visitors and can build fantastic, deep profiles of customers’ interests, using explicit information like registration and profile data, and implicit information like the content they read.
It’s not who you are, it’s what you’re doing. Ads are more effective when they reach customers in a timely manner, and when customers are interested in the product. Affiliate marketing is growing like wildfire because of the power of context — the promotion is a signpost in the direction the customer is travelling, not a distraction or a barrier.
Advertisers need techniques to analyze the effectiveness of ads and promotions based on context. And that means working with the publisher or affiliate site. Targeting and context management help improve the value of ads. Site-based measurement helps prove their value.
MediaMetrix reports are important tools to help decide where to advertise the first time. Once an advertiser has experience with the site, hard results count more than survey-based predictions. Advertisers analyze their advertising and marketing programs, tracking which techniques draw visitors, how many are in their target audience, and which visitors become customers. Once you have experience with a site, you toss the MediaMetrix report out the window and build on experience.
Efforts to measure ad effectiveness need to be deeply connected to the web site. Ad networks and services are starting to provide post-click tracking services that let an advertiser see whether a customer has clicked over from an ad to buy a product.
But that’s just the first step. How about when a customer walks into the store, looks around, and buys the next day or the next week? You need to keep track of that visitor and see if they buy later. In order to do this, ad-tracking needs to be connected to site-based marketing analysis, and ad networks and agencies need to work more closely with web sites.
Measurement is important to drive the growth of the ad business. But it’s not something that advertisers can do alone. It requires both ad-based and site-based measurement, and the combined efforts of publishers, advertising professionals, and marketers.