Was It Better Ads? Or Better Analytics?

Greetings from the good-news/bad-news desk. The good news is The Wall Street Journal says online advertising’s back in vogue.

The bad news is the WSJ missed the real reason why.

The WSJ, in a February 25 piece, proclaimed Internet advertising is at last a legitimate marketing channel. Exhibit A was a case study of Mitsubishi Motors and its dealer network, which, the WSJ reported, rushed into online advertising in the late ’90s and spent buckets of money on banner ads pointing people to online versions of print brochures. They deemed the ad spends ineffective. So, they retreated.

Now it’s a different story. Mitsubishi’s online media buys are more complex and better thought out. It includes elements such as prime search engine placements, which didn’t exist last time around. Therefore, says the WSJ, the company’s online ads are quantifiably successful.

End of story? Not as I see it.

Yes, online advertising has changed and evolved over the past few years. The primary reason companies failed then and succeed now isn’t due to changes in advertising. It’s changes successful companies are making when approaching the Web. Defining desired behavior, identifying success metrics, setting goals; in short, a more evolved approach to analytics.

Back in the late ’90s, when Mitsubishi’s online efforts were flaming out, the WSJ said it was tracking impressions and click-throughs but “[wasn’t] quite sure what those measurements meant or what [it] wanted out of online advertising.”

Since then, it figured out what it wants site visitors to do and what success metrics it should look at to evaluate performance. Mitsubishi improved its Web site to better facilitate that specific behavior. That drove success.

A better payoff isn’t all attributable to better advertising. It’s due to better use of the analytics tools and disciplines that were staring Mitsubishi in the face all along. This issue goes far beyond online advertising.

It’s taken years for most companies to see the Web is the sole marketing channel that can measure performance of nearly all of its initiatives. (There’s no such precision with TV, radio, print, or outdoor media; no way to nail down a causal relationship between marketing and sales.) Maybe much of the blame for Web advertising failures lies not with bad creative or buying strategy but with lack of success metrics and traffic data analysis.

It’s also taken time for companies to learn online marketing means not just buying banners but also optimizing Web destinations to receive the traffic those banners generate, so the click-through experience makes seamless sense to the audience (some dot-com ventures died because of dumb business models, but at least as many died due to lack of clear success metrics for their marketers and failure to design and optimize Web sites accordingly).

The WSJ does point out many companies are becoming more aware of performance metrics. They continue to try to improve performance. I see the same, albeit gradual, trend. More of our clients focus on specific success metrics and site goals. They commit to constant, ongoing site improvement. Smart enterprises no longer think in terms of big redesigns once or twice yearly. Instead, they adopt A/B testing and other methods to optimize their sites regularly, always guided by those key success metrics.

It’s exciting, of course, to see The WSJ treat online marketing as a mature strategic channel rather than a fad. Perhaps one day soon, Web analytics will get the same front-page play. Analytics makes the real difference. Until then, here’s to knowing things competitors don’t.

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