Is display advertising broken?


Ben Shepherd writes: “It continues to be an ongoing problem  from the beginning that the Web has overpromised its trackability, and the wrong metrics are often used,” says emarketers David Hallerman in a recent AdWeek article titled ‘Is the End Near for Display Advertising?’

Have a read – http://www.adweek.com/aw/content_display/news/digital/e3ic19bb33a86fd66429b985553373d44b0

It touches on a few topics

– the economic climate may force the industry to rethink the way it approaches advertising
– online has been focusing on the wrong metrics
– traditional display units are considered bland by many marketers
– the research/tools available to really evaluate the success of digital campaigns are limited
– the industry standard ‘impression’ model is wrong. “People are not impressions”

So is the display advertising arena broken? Well – it was mainly a sensationalist headline to get a few eyeballs through the site. Do I think it’s broken? Not really … but it’s not exactly fully realised. The points touched on above are things I’ve been banging on for the past year about in my other blog … so why not continue banging on about them … or, continue the ‘dialogue’ 😉

Lets go through each point

– the economic climate may force the industry to rethink the way it approaches digital advertising
This is possible. It will definitely change the definition of the word ‘accountable’ and probably the term ‘measureable’ … is online accountable? Not really – in 95% of instances all that is tracked is impressions and that doesn’t mean anything aside what was bought was delivered (which all media can do practically). Maybe advertisers will feel less pressure to advertising using digital mediums because ‘that’s where the eyes and $$$’s are going’ and will take more time formulating the right approach and defining the right metrics pre campaign.

– online has been focusing on the wrong metrics
Ok – this one is a no brainer … most of the metrics used by the digital world are confusing to those outside the digital world. Hell – they’re confusing to some people INSIDE the digital world! CTR is a valid metric but often it’s used as the only metric … plenty of campaigns don’t require further investigation by the user hence don’t require a click … but many struggle with this ideal. Online is getting better at measuring brand shifts as a result of online activity … but therein lies the problem … online hasn’t been very good at tracking how it interacts and compliments other media. Marketing people want to know the answer to this and they want to know soon. Publishers need to get a lot better with their metrics – all they can track are impressions and that is it. That isn’t really reporting – it’s purely tracking that what they agreed contractually to deliver is delivering. This is a bit of a problem – publishers pitch for spend by saying they can answer commercial problems, yet their reporting is so far removed from analysing the problems they said they would address. Same for agencies – if they outline a challenge to be overcome in a strategy, the report and data within needs to be relevant. Lastly – performance is doing so well because as an industry we have laid the foundation for these networks by validating reach/clicks/acqusition as the stats that matter. So yeah, the wrong metrics are probably being used.

– traditional display units are considered bland by many marketers
Not sure about this – it’s like anything, it’s all about how you use it. You can do a lot within the standard IAB ad units and the only thing that gets in the way are the publishers generally – who tell you what you can’t do. Creatively, online has very minimal limitations. Marketers do seem much more enthused by non traditional ad units, like takeovers, skins etc … but generally these are more expensive to buy and produce, which tends to dampen some enthusiasm

– the research/tools available to really evaluate the success of digital campaigns are limited
Very possible. The Nielsen/DL studies are great but they don’t factor in other media and how digital works with them. If digital is the ‘glue’ that brings campaigns together (cliche alert) then we have to report on how the glue has worked in a broader sense. Right now the question seems to be ‘but what did we achieve’ and giving really big impression figures, really small CTR figures and moderate landing page figures doesn’t answer the question. Personally, I feel the IAB needs to do a LOT MORE here – right now they are trumpeting their Nielsen FMCG study and how it shows branding can work online. The thing is, this was never questioned … but all this report shows is digital in isolation when the IAB should be looking at things a little broader.

– the industry standard ‘impression’ model is wrong. “People are not impressions”
Carrie Frolich from MEC Interaction says this in the Ad Week article and it’s an interesting point. Other media is sold on people reached, not impressions … could now be the time for digital to be sold on reach instead of imps. Ie – you buy ESPN across one month and sign off on reaching 400,000 people at a frequency of 3. Sounds very simple. In fact, it is pretty simple. Effectively you could do it right now by applying frequency capping – the trouble is publishers hate frequency capping is it limits the inventory they can sell … they are in the business of selling impressions and often revert to trying to sell a horrible bastardised version of SOV if they want a higher spend level. If they have a property that has an average frequency per user of 100 page views a month, selling in this manner (ie freq. cap) could be a problem. But for the advertiser this could be a big selling point and simplifier for the medium.

 

Liam Walsh writes: There is a lot here to cover. It seems to me that people become polarised about digital advertising. It’s fantastic or it is all a hoax. It is fun to watch the rollercoaster of opinion.

The only steadfast voice on digital seems to be Neil Shoebridge at the AFR who consistently finds a negative story to tell. No small achievement as he stares down countless audited statistics about double digit growth in usage and revenue year after year.

Anyway, the piece talks about online focusing on the wrong metrics. 

 What a nonsense this assertion is. What on earth are the wrong metrics? They are just metrics. I have bought, sold and more recently traded this stuff and it’s not buyers and sellers determining the metrics, it is the marketers.

The marketers  spend millions of dollars on advertising without knowing what sales it gets them, so when they finally see a chance to measure the direct measure of the advertising, well they jump on it. Telling them they are wrong won’t really help either because if they could measure the other media channels the same way they most certainly would.

Oh and please nobody tell me about econometric modelling as yes I do understand it’s role and it is not a direct relationship thanks. It is a model based on economics, just a simpler version of real models for treasuries use to model economies. I can think of one large-ish economic event the models didn’t pick up.

Traditional display units are no good.   The last resort of a beaten man is to blame their equipment. It is extremely easy to run very compelling creative online. If there was any merit whatsoever to this lame assertion then there would be a slew of fantastic suggestions about alternatives.

There needs to be some standardised formats are the core businesses cannot trade. There would be no basis for buyers to evaluate relative value of assets.

Research tools are inadequate. They sure are inadequate. It is impossible to get a campaign reach and frequency in advance of a campaign running. This is just bad and it is the execution basics that are precluding significant movement of brand dollars online. With the exception of our world famously innovative retailers, I can’t think of too many sectors that think online advertising can’t achieve brand impact, it is just too damn hard to execute.

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5 responses to “Is display advertising broken?

  1. Nice post. I think the key problems with online media buying that I’ve seen are:
    – media companies negotiating bulk deals than shoe-horning clients in so they get their discounts/bonuses at the end of the year
    – junior digital media planners brought in after the fact (ie after all the other media has been presented and signed off)
    – SOME heads of digital (media) only being in the field for a year or 2 but look the part… and age
    – publishers not innovating sufficiently with advertisers in mind and having to balance editorial teams’ ideas – it’s been a one-way cash cow for too long
    – dead inventory being ‘thrown in’ so instead of 1m impressions a few years ago for a certain $ amount, you may now get 15m but most of it is a waste
    – Have only once had a digital media planner proactively take an interest in optimising a campaign; never proactively heard the phrase ‘let’s test’

    Result – performance and SEM buys massively on the rise and hard to defend against when publishers and media agencies have almost ‘gotten away’ with a bunch of stuff for so long (sorry this is NOT supposed to be a big diss to all media agencies – just frustrated by this very issue for years and years).

    Metrics will always be a problem when the role of online (by unit, by publisher, by creative) isn’t discussed up front.

    Just some observations from my limited experience

    Mark
    My Twitter

  2. Oh and I’m tired of hearing that the industry average CTR (not that that has to be the main metric) is 0.1%. It’s only that low because of junk inventory, weak strategy and non-proactive optimisation plans. And that little metric has been bandied about for 3+ years as the average as if it will never change. LOW STANDARDS! 🙂

    Thanks, Ben. Seen the new Q-Tip clip?

  3. “Is display advertising broken?”

    when exactly was it ever fixed?

    http://www.useit.com/alertbox/9709a.html

    From what I can gather it appears that the only people that think online advertising is acceptable are the people working in this industry.

    And when you analyse the Web, how it started and what makes it tick you begin to realise that online advertising as it currently exists is ineffective for the online medium.

    Its time we came up with a different model besides the mass marketing model that was designed for the offline world.

    Are there any thinktanks in Australia?

  4. I agree with almost nothing of this piece. Which is fine, but what has inspired me to completely waste my time typing this comment is the countless inaccuracies upon which it’s based.

    Online focusing on the wrong metrics?
    The piece states “In 95% of instances all that is tracked is impressions.” Really? What clueless, hack agency is doing nothing but tracking impressions. It’s simply not true. Maybe 12 years ago. In a very similar vein the piece also suggests that when online measurement DOES go beyond impressions, it’s mostly just CTR. Bull&$!@. The truth is there is absolutely no other medium that is anywhere near digital in terms of it’s tracking and measurement, whether it be DR or Branding measurement.

    Online research/tools limited?
    The piece states “The Nielsen/DL studies are great, but they don’t factor in the other media and how digital works with them.”. Really? So the dozen or so CROSS MEDIA branding studies I’ve done with Comscore and Dynamic Logic which specifically does that very thing was all just a figment of my imagination?

    The industry standard impression model is wrong?
    The piece states “Other media is sold on people reached, not impressions.”. Not even close to being true. Most offline media is sold on GRPs (or TRPs), which is nothing more than impressions expressed as a gross percentage based on that demo’s U.S. universe estimate. And what’s more, with an online impression, it’s essentially a guarantee that when my ad loaded the person was staring at his/her 15″ computer screen. Maybe didn’t see my ad, but they were proactively loading the page upon which my ad resides. With the ridiculous, archaic means of measurement with say TV, I can be in the kitchen, in the bathroom or left the country and I’m still counted as a TV impression because my television device was in the “ON” position and just happens to be tuned to that pure genious called “The Real Housewives of Orange County”.

  5. talkingdigital

    hi michael,

    thought i’d respond to some of your points.

    re measurement: cross media studies here are in their infancy … in fact, DL is coming to Oz in January to roll these out so in our market digital only research is the sole option. I realise in other markets cross media measurement is reasonably advanced.

    re the metrics: i stand by this … again I’m speaking from a local perspective. Yes … digital has more advanced tracking/measurement … but again I question how this data is used and what takeouts the majority gets. Again, this is just my opinion based on my observations. It sounds like you’re pretty evolved in the way you approach digital – please keep commenting as I am sure people will want to read your comments (i do)

    re impression model: i think your argument is wrong here … i was never saying TV Tarps was a flawless model – completely aware of its issues … but digital is equally flawed.

    Cheers, Ben

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