Why the Click Is the Right Metric for Online Ads (On Adding Value and Thinking Beyond the Display Advertising Business Model)
“…many advertisers in the past gave most of the credit for a sale or conversion — which in the web world could include anything from visiting a website to printing an online coupon — to the last ad clicked on or seen by a consumer. But that means brand-focused sites such as NYTimes.com and MarthaStewart.com and even social-media sites such as Facebook and MySpace lose credit because they are often not where a consumer will see that last ad. And when they lose credit, they lose advertisers, and when they lose ad revenue, well, you’ve read that story.
“Publishers have a lot to gain,” said Steve Kerho, VP-analytics, media and marketing optimization at Organic. Mr. Kerho has been doing lots of analysis on how online-display ads affect search and conversions and found that in some cases, a display ad can increase a search ad’s click-through rate 25% to 30%. If he had simply measured the clicks from search, he would have missed the display ads’ influence.”
Source: Adage
So… If we’d translate the above model to, say, a real world situation; that’d mean that the sales guy in the local electronics store should get a piece of the provision pie, and maybe you’re neighbourhood whiz kid should be offered a small fee too, since they were the ones that influenced you before you decided to shell out on a new bleeding-edge desktop and order it directly by mail-order, no?
Of course, the conclusion presented above is preposterous to say the least. Not giving full credit to the last click shows a lack of common sense and of everyday reality:
If we’d were to apply this model to the offline advertising industry we’d might as well start charging less for TV ads during the Super Bowl or advertisements in general, since it has never been empirically proven that said ads actually sell significantly more cars, to name but an example.
(Actually I hereby challenge thee naysayers to tell me why the fledgling automotive industry in the US can’t be saved by throwing more money against Interruption Campaigns now that the going is though… Odds are it’s because it just doesn’t work that way nowadays…)
Publishers would of course love to use such a model, since suddenly those abysmally low Click Through Rates on social networks ´d become a license to print money, yet that’s not where the problem lies: it’s about engaging with the visitors of the Facebook’s of this world if and when they feel like it, adding value to the community, giving them something to talk about or a good reason to get rid of their friends. The engagement model is a far more viable one since it makes it very clear for all stakeholders what the true value of those brand interactions are for everyone.
Conjuring op schemes to charge more for a product -display banner- that, on it’s own, has failed to truly deliver on its promise up until this very moment, is not the way forward out of this recession. The research budget would be well better spent on innovation, adding value to the visitors, strategic alliances -you name it, just do not waste it on taking undercover pot-shots at “Go -Emperor CPC- Gle” et all.
There is one thing that does ring true about the statement that a conversion shouldn’t be attributed to just the Last Click alone; and that’s the reoccurring coincidence that carefully crafted, creative Crossmedia campaigns drive word-of-mouth & website traffic, allowing for a tighter control on conversion, ánd they also have the uncanny ability to tip the Attitude scale in your Brands’ favour. A little…
It’s common sense and it’s what marketing should be all about: influencing as many factors as you can to get the prospect to turn into a consumer, making her loyal, spurring her on to buy more and in the end becoming a brand-ambassador.
The communication mix as well as the quality of your product combined with the customer centricity level of your organization all contribute to that end.
As well as a million other tiny factors (does the sun shine, did THAT girl on the train give you a smile, do you have enough money to spare, etc., etc..)
Yet, if we’d follow the philosophy of Mr. Kerho to it’s conclusion, it’d mean we’d have to split the Cost-per-Click revenue and spread the wealth over all communication channels and creatives -and not just the display banner- in order to get a somewhat “fairer” representation of value/conversion for money.
[The Adage article starts with this quote: "The great paradox of the web is that it's an interactive medium and everything can be measured. And that's wonderful -- unless you're measuring the wrong thing."
I'd think what they should be stating is: The single greatest asset of the web is that it's an interactive medium, perpetuously capable of reinventing itself. And that's wonderful -- Unless you don't keep your feet firmly on the ground and try to look at opportunities with a positive mindset!]
Interactive Marketing In Times Of Crisis (Thinking Anti-Cyclic)
Cutting deep in your Marketing budget (and thereby seeing it on default as a cost instead of an investment) is a short term tactic that isn’t going to help your company weather these uncertain times ahead of all of us. Instead it would be more sustainable to take a long term approach; a more critical look at what channels your spending this budget on and whether the story you’re telling is in line with the quality of your services or products.
And though your Marketing Department may stop talking about your company, products or service, the consumers are not: Au contraire; their conversations (in the Social Media space) are increasing exponentially!
Furthermore don’t forget to also take into account that most of your competitors are probably not as comfortable with such a progressive world view and will focus instead on the short term outcome. This means that by keeping your budget stable, but spending it more wisely, you could seriously gain competitive advantage.
“So, then since online has the reputation for being measurable, we’ll just cut back in our offline efforts.”
Contrary to popular belief among some of my peers, right now is NOT the time to cut in offline Ad spending: If there’s one thing we’ve learned so far, it’s that in times of Crisis there is a peak in the amount of readers, visitors, viewers and listeners to (in this particular case financial) news papers & websites, TV and radio. People are looking for guidance and a steady rock to cling on to. This means that if you have a relevant story to tell there’s never been a better time to reach out to your customers and core audiences than right now!
The core thing to keep in mind here is of course that the Old Media are by their very nature geared towards Branding, and thus, -though it’s not really scientifically-rock solid-proven-effective in generating revenue- it is a perfect instrument to instill customer thrust in your brand, if handled the right way and in conjunction with Social Media Marketing and other forms of Online Marketing.
The key challenge would be timing, as you wouldn’t want to have a multi-million dollar tagline -Here Today, Where Tomorrow?- proven meaningless overnight…
One way to manage your Marketing budget would be to higher or lower it every Financial Quarter, in a wave as it were, analyzing the results and reacting accordingly. Moreover reallocate the money spent on different channels based on campaign directive. So, depending on the field or sector your operating in, decrease the amount of money spend on Branding through offline channels and shift the resulting saved money towards Online Results Based Marketing, such as SEA and in optimizing the Task Completion Rate by Primary Purpose on your website…
Yep, I’m not advising you to plainly look at Conversion Rates, I’m suggesting to take a more holistic approach ;) Back in 2006 Google’s visionairy Web Analytics Evangelist Avinash Kaushik already foresaw that the Focus (should be) Shifting from Conversion to Task Completion Rate by Primary Purpose.
Upcoming Interactive Channels that haven´t quite fully lived up to their potential yet like Social Media and Mobile are likely to be confronted with closed wallets and plummeting ad spending, not just because of advertisers cutting back in costs and investments, but also because the consumers themselves are being hesitant to spend money on luxury products and services including Mobile Internet and Mobile Wireless Internet Devices.
Yet again here it would be wise to be wary of and avoid the FUD; for example here in the Netherlands the mobile version of the largest news website Nu.nl (translated: Now.nl) is also the largest mobile news site. It is known that CTR’s in mobile enhanced sites are up to 7% or even higher, putting Display efforts on the desktop internet to shame; so though it’s understandable to make a Pavlov Reaction and eschew Mobile altogether, the contrary might be a better move. Whether your campaign is geared towards gaining a high CTR in the first place is of course a different thing altogether (I’d beg to differ, basing a campaign on CTR alone isn’t the most cost-effective way of spending your Marketing Euro).
As for Social Media, as I’ve pointed out at the beginning of this post: Your target audience, consumers and people in general aren’t going to be less critical, or dependent of peer advice and ratings and they’ll definitely be looking for bargain deals on price comparison communities, so keep joining that conversation!
Wat vertel jij je vrienden?
Opvallend, lekker actueel, grappig, authentiek, direct, ik zou erop klikken.
(PS het gaat om de banner hierboven) Bonus: De kwinkslag naar “Wat vertel jij je vrienden?” als campagne insteek is een schot in de roos, want zeer herkenbaar.
Volgens een onderzoek gedaan door Metrix Lab in opdracht van Microsoft Advertising dien je voor een optimale online brand awareness tussen de 3 en 7 contactmomenten te hebben.
Het staat mij nog helder voor de geest dat ik een aantal weken geleden in een korte periode echt doodgegooid werd met AMC banners van, ik meen, Rabobank Connect.
Dit kwam overigens niet door het ontbreken van een frequency cap, maar gewoon doordat er in het mediaplan goede overlap was met het inzetten van de creative. Zelf ben ik overigens net als het overgrote deel van de internetpopulatie bannerblind, al moet ik toegeven dat ik -door beroepsdeformatie- nog wel eens een banner de volle aandacht geef, zoals dus in dit geval.
I had no choice: Het maakte werkelijk waar totaal niet uit op welke Nederlandse ICT/Online Marketing gerelateerde vaksite of blog ik keek, ik ontkwam gewoon niet aan de banner, vraag me alleen niet wat de precieze strekking was. Uiteraard speelt voor het resultaat van een degelijke display advertising campagne niet alleen het aantal contactmomenten zelf een rol, maar vooral ook de creative zelf en of deze in lijn is met je corporate communicatie en het umfelt.
Destijds was de betreffende rectangle echter niet zo sterk als deze, maar wel onvermijdelijk, dus als men weer een beetje kien heeft ingekocht op alle relevante online kanalen, dan zou dit wel eens een zeer effectieve AMC display-campagne kunnen worden. Of toch niet?
Want wat dan weer wel jammer is, is dat er niet direct een Adwords-campagne bij opgestart is, zodat de displayadvertising- en de CPC-campagnes, tezamen met een goed gesegmenteerde e-mailing en RSS-vertising, elkaar ondersteunen in het genereren van kwalitatief bezoek naar de werkenbij website, temeer daar de praktijk uitwijst dat het gecombineerd inzetten van diverse uitingen in de communicatiemix conversie verhogend werkt en de (Employer)Brand Awareness kan versterken (Tip: in de organische resultaten bij watverteljijjevrienden.nl word geen juiste content omschrijving weergegeven, maar de gebruikte webanalyse tool: “OneStat.com Web Analytics”).
Dit gaat al helemaal op voor de ICT-doelgroep die de Rabobank hiermee wenst te bereiken, want die gebruiken over het algemeen Firefox als internetbrowser, hebben -net als ik- grotendeels Adblock Plus en No Script aanstaan en zien dus los van bannerblindheid zelfs een prachtige banner als deze helaas sowieso niet staan…
[Disclosure:
Begin dit jaar ben ik via ACA/JES Communicatie (zijdelings) betrokken geweest bij online AMC projecten/advies voor de Rabobank Nederland, ik ben enige tijd geleden vertrokken bij ACA/JES en momenteel heb ik geen betrokkenheid bij deze of andere projecten van de Rabobank Groep of haar (in)directe concurrenten. Los daarvan: zoals aangegeven in de disclaimer rechtsonder in de Navigation BayTM: deze Online Column is volledig onafhankelijk; de hier door mij weergegeven persoonlijke visie, opinie of snelle gedachtespinsels zijn derhalve niet die van de genoemde organisaties en/of aan hen gelieerde partijen en dus ook niet noodzakelijkerwijs vooraf door hen ingezien, dan wel beïnvloed. Amen. Verdorie, mooie banner ;)]
Means to an End
“Please understand that I have no problem at all with precision. Precision is great, it’s essential to engineering and to the function of many elements of society. It’s almost impossible to be on time without precision, and quality depends on it. But when we reward people for senseless precision (and punish them randomly for not guessing what we actually meant when we asked a question) then all we’re doing is muddying the waters about what matters and what doesn’t. Is there a difference between the Dow falling 107.4 points and it falling nearly 1%? If not, don’t try to wow me with needless precision please.”
And once again, Seth Godin is hitting the nail on the head again, read the whole post here.
