December 2008 Archives

Anyone who still thinks that contextually targeted online video doesn't have impact ought to have been in my shoes last week. My appearance on "3 Minute Ad Age" beneath the headline "IAB CEO Rants Against Audience-Measurement Complexity," tore up my email box as well as the advertising-obsessed quadrants of the blogosphere.

While enormous credit goes to Ad Age editor Hoag Levin -- who knew the hot word "rant" would be a magnet to blogging, traffic-driving controversialists -- I believe my generally mild charge struck a chord because it reflected the daily reality of marketers, agencies, and publishers who are weighed under by the numbing complexity of selling, planning, buying, placing, and measuring advertising.

You can watch the video, but here, in essence, is what I said:

Measurement is not just a science; it is also an essential business process. Yes, measurement aims to uncover truths about the brands, products, services, and consumers with stakes in an advertising campaign, but those truths are worthless unless they improve -- unless they add value to -- the companies and customers on either end of the chain.

Our problem is that, right now, the marketing-media ecosystem has been so consumed by the equivalent of an angels-dancing-on-the-head-of-a-pin debate, that we make the transacting of advertising business more difficult than it needs to be. Measurement, as I told the crowd at the IAB's Audience Measurement Leadership Forum last week, isn't the cause of this complexity crisis, but it's certainly a major ingredient.

Physician, Heal Thyself

An apt analogy is modern medical science. Advances in molecular biology, diagnostics, neuroscience, and technology and instrumentation have revolutionized our understanding of how the body works and malfunctions. But were it not linked to the practice of medicine in ways that allowed physicians to cure peoples' ills, we'd consider it a failure.

That's unfortunately where we are with so much of modern media measurement: The science is diverging from -- even divorcing itself from -- the practice. We can measure so many things, in so many ways, that the actual customer -- the marketer -- is tuning out. The McKinsey & Co. study I referenced last week, "How Poor Metrics Undermine Digital Marketing," is sad proof of this undeniable reality. "Companies have failed to crack the code for measurement," the consulting firm concluded from its survey of 340 marketers around the world. Comparing its findings to a similar study done in 2007, McKinsey found that "most companies have made little progress in this area."

Who's at fault? Let's ask, rather, what's at fault. Interactive media is an industry with historically low barriers to entry. Moreover, its delivery is based upon the almost continual exchange of bits and bytes of information. Pretty much by definition, that means the more media we create, the more data out there that can be measured -- and the more opportunities to measure them. Pageviews, hits, clicks, time spent, pre-roll completion -- the media glut almost pre-determines a measurement glut.

The IAB was created to bring form to this chaos, and has done a fine job of coalescing all parts of our industry around standards and guidelines that create the definitional consistency that make business simpler to conduct. Last week, we issued for public comment our Audience Reach Measurement Guidelines. Forty-four companies -- publishers such as the Wall Street Journal and the Weather Channel, researchers such as Scarborough and Millward Brown, auditing experts such as Price Waterhouse Coopers and the Audit Bureau of Circulations, giants like Google and Microsoft, and newer innovators like YuMe Networks -- came together to find the simplicity on the other side of complexity.

What do you call a publisher that provides its advertisers original and data-rich consumer segmentation and preference research, a cross-platform communications strategy, customized executions, trade promotion support, qualified sales leads for considered-purchase goods, customer relationship management of those leads, and end-to-end analysis of a campaign's returns?

Very successful.

As the recession tightens its grip on the American economy, the media industry is discovering that the one segment not only holding its own among marketers but thriving is interactive. There are certainly numerous reasons for our relative strength. The gap between consumer time-spent and advertiser-spend is wider in interactive media than any other platform, an invitation for advertising share to shift this way, if only to reach equilibrium. Then, too, the availability of high-quality video on demand, an outgrowth of the broadband revolution, is proving increasingly attractive to the consumer-brand advertisers that had been relatively absent in the earlier days of interactive commerce.

But the larger reason for our vigor, as I argued in my last clog, is that interactive is a medium that can do it all -- simultaneously. "Online marketing increasingly aims for awareness, consideration, preference and loyalty all at once," The Economist wrote this week, in support of the IAB argument that interactive is the über-medium. "Internet advertising," the publication proclaimed, "will be relatively unscathed in the downturn."

This represents an historic shift in the nature and purpose of media companies. Where once a medium could thrive by serving as a simple channel for single-purpose advertising -- as network television did for national brand advertising -- today and in the future a multi-purpose services strategy likely will be the new normal for media companies.

And interactive publishers, the evidence below will show, have a considerable head start.

The Clicks Curse

Online publishers' blessing begins with a bit of a curse: Advertisers historically have under-leveraged us for brand advertising.

For better and for worse, interactive began largely as a direct-marketing vehicle. Advertising is a science, but the limitations of the media turned it into an art, Doubleclick co-founder, Chairman and Chief Executive Kevin Ryan insisted to me in 1999. Mr. Ryan was wrong: Advertising is neither science nor art, but a craft -- a skill-based trade, infused by artistry and based on principles established through time, that aims to achieve practical objectives. Although he meant only to invoke the claim to accountability that was and is a strong suit of the medium, he and other early Internet pioneers so closely associated accountability with specific, immediate, measurable actions that marketers reflexively identified us as a direct-response channel.

Even then, interactive industry leaders lamented the unthinking connection between interactive media and direct response. "There's no correlation between click-through and brand building," Rich Lefurgy, the founder of the Interactive Advertising Bureau, told me more than 10 years ago. "That sent us in the wrong direction."

Indeed it did. A study recently released by our cousins at the European Interactive Advertising Association showed significant growth in selling-related "below-the-line" expenditures by marketers between 2006 and 2008 -- a pattern consistent with what we've seen in the U.S. For example, the number of marketers saying they use the Internet to "generate sales" leaped 50 percent in that two-year period. The number saying they deployed interactive media to "influence purchase decisions" rose by one-third.

There's nothing wrong with direct marketing. To the contrary, it's a foundation of the marketer's craft, and its $173.5 billion in annual expenditures dwarf those for any media-advertising segment. And because recessionary economies prompt marketers to shift budgets from brand-related media advertising toward direct-marketing and promotional activities, interactive's strength in below-the-line functions has certainly helped to sustain our industry during this tough time.

But by concentrating our efforts on selling to the exclusion of branding, we have only limited ourselves. When the Booz & Co. consulting firm presented Phase II of their groundbreaking Marketing-Media Ecosystem 2010 study, sponsored by the IAB together with the American Association of Advertising Agencies and the Association of National Advertisers, at our Annual Leadership Meeting last year, Booz media practice leader Chris Vollmer was unsparing in his criticism. Displaying a chart indicating that only 39 percent of U.S. interactive advertising revenues came from the nation's top 50 advertisers -- the advertisers with the largest stake in building and maintaining great sustainable brands -- Mr. Vollmer told our members: "You have grown by picking the low-hanging fruit."

The Roosevelt Hotel Ballroom is packed this morning with industry leaders hungry for information and education about audience measurement in the interactive advertising world. They are here seeking guidance as they face the challenges of digital measurement in a time when every penny a marketer spends in scrutinized like never before. The day’s agenda will satisfy this need for knowledge.

 

Randall Rothenberg, President and CEO of the IAB, focused on simplification in his open remarks and making our industry friendlier for digital immigrants. To do this everyone in the room must think about how they can work together and with other ecosystem players to reduce the complications involved in interactive metrics. “Don’t let the perfect drive out the good,” he expressed. The call to action is clear.

 

Sherrill Mane, Senior Vice President, Industry Services at the IAB, and the chair of the event, reemphasized the need to focus on quality, transparency and simplicity in order to “make money move.”

 

The IAB Audience Reach Measurement Guidelines, which were released for public-comment this morning, have been distributed for review, in preparation for the afternoon's live public-comment sessions.

 

Check www.iab.net later this week for a complete event recap--or participate in the complimentary IAB Audience Measurement Webinar this Wednesday, December 10 to learn more about the topic. The details and registration information can be found at www.iab.net/member_webinars.