Leading Voices
Click Fix: How Digital Advertising Can Get Its Game Back
Jim Spanfeller is the outgoing president and CEO of Forbes.com. He is also treasurer of the Online Publishers Association and chairman emeritus of the Interactive Advertising Bureau.
Get clicks or build brand?
That question, long a hot topic within the online-media community, has taken on new urgency recently with the rise of horizontal ad networks. Most of the current online campaigns are completely focused on direct-response metrics with little to no chance of actually boosting the brand. In fact, recent research actually suggests that the current favored planning methodology for online campaigns might actually decrease a brand’s value.
In the past, plenty of people made the argument that even though response metrics were at the core of planning and evaluation for online advertising, the brand naturally benefited too. Certainly, Google (NSDQ: GOOG) was persuasive on this point within the search-ad world. But as time went on, and the tactics used to obtain the best campaign metrics evolved, the ancillary branding effects began to wane. For cost-per-“whatever” metrics to work best, the lowest-possible frequency had to be combined with the highest-possible result. Thus frequency became an enemy of success for demand fulfillment.
This, of course, is at odds with a core driver of demand creation.
Decades of research have shown that to change consumer behavior, those consumers have to see a message repeatedly. In fact, for most television campaigns, reach is only achieved after the campaign has been shown three or more times. Hence, the focus on Reach/ Frequency models and Gross Rating Points.
What’s more, in seeking to create as wide and as thin a sweep as possible, many network-driven campaigns are pushed onto questionable sites. Or, more to the point, into environments that may not be best-suited for the brand or the creative. It is still early days in our understanding of the negative effects of non-optimal environments for advertisers, but without doubt, most clients are horrified to find their ad units in environments that they would avoid like the plague in offline situations.This practice has the potential to do real damage to brands—it has even given rise to a new breed of companies whose function is to monitor where the creative winds up and report back when the campaign has gone awry.
But before I get too far afield here, let me say that this post is not meant to be a complete vilification of horizontal ad networks nor is it intended to suggest that demand-fulfillment actions are wrong. Ad networks serve a purpose and while I believe there will be substantially fewer of them in the future, I do think that the best will have long and successful lives. Further, it would be lunacy to suggest that demand fulfillment is not a core opportunity for online media (or for any other medium for that matter). Every new medium has gotten its start with direct-response advertising, and on some level, that segment of advertising never goes away. It has huge value in the marketing mix and is clearly a very important part of the overall conversion funnel.
No, my point is not to suggest that demand fulfillment is wrong but rather to point out that it has focused too much on just this element and not enough on defining and communicating the success metrics around demand creation. It is now time to rectify this omission. The vast majority of advertising dollars are spent around demand creation. For digital platforms to regain the top-line advertising growth that we saw before the recession, it’s imperative to agree on standards and measurements around demand creation. Whether these begin with gross ratings points or some other more digitally driven data set is almost beside the point. What’s important is that we agree on what to measure and how to measure it—and that we get on with it.
The upside is huge. One need only look at cable and television spending levels to see what success in this effort might look like. But, perhaps, more importantly: The downside is truly ugly. By relying on one-half of the funnel, the digital world will be hard-pressed to keep its current levels of growth, and could conceivably witness overall decreases in spending in non-recessionary environments.
Already we are seeing fewer and fewer people clicking on web ads. Recent findings from a variety of research companies show that a smaller and smaller fraction of web users are generating a higher and higher percentage of overall clicks. This is not a good trend for demand-fulfillment efforts as they are currently constructed. Also troubling is the lack of true creativity that you get when you pursue a purely click-based model, one where tonnage, not quality of message, is the key. This will only hasten the decrease in effectiveness, as the “creative” messages become more and more aggravating for the end user.
As we move from “ideas” to “algorithms,” traditional advertising agencies will be marginalized. This was clearly the experience in the early ‘80s around direct mail, and as sure as the sun will come up tomorrow, it will be the experience again if demand creation does not factor into our thinking in the coming days. As in the ‘80s, marketers will discover that they do not need a creative advertising agency to develop, plan and execute their direct-response efforts when all the metrics around their campaign’s success, and for that matter creation, are mathematically driven. In-house procedures can much more cost-efficiently handle just about everything that the outsource agency was doing—-and do it for a fraction of the cost.
Not to put too fine a point on it, but on one level demand creation is about art, while demand fulfillment is about math. There is so much data online that it is often hard to get beyond the math. The data is incredibly important and always will be. The data will indeed make digital advertising more effective—but only if we can maintain a place in the new world order for the art as well.
Posted In: Advertising, Features, Leading Voices, Media & Publishing, Research & Metrics
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