Media spend measurements

Eric Picard of Microsoft have challenged in his last column the methodology used by many to measure the spread of media dollars across channels.  All points made are valid and not that surprising considering the rapid changes in consumption patterns and the fact that investments in tools for measurement is lacking and lagging.

I do feel however that the solution is not as simplistic as attempted to be offered by Eric. For how long will we be able to consider NBC or ABC a broadcast company? Should we assume they will rely on Pure-play companies for distribution online? How will these companies utilize social networks that are becoming the predominant entry point to the Internet? What will their distribution channels be for mobile devices?

As Eric correctly mentions, the more relevant point of discussion relates to the different forms of Display Advertising. TV, Online, In-Game and Mobile channels have many similarities:

• The Currency 
• The Message content, i.e. Creative
• Marketing objectives and the position of the desired response in the buying funnel

Another point of growing similarity is the user mode of consumption. More and more digital content is consumed as a lean back experience that is similar to TV. In such a mode the value of active digital engagement is lower and therefore the marketing content can be similar. It is in these cases that it is difficult to distinguish where the media funds were invested. It is also this kind of inventory that can easily be bought by a traditional buyer using traditional dollars.

The resolution? While I am not sure this will be a growing problem I feel it is within the hands of advertisers themselves to resolve it. I am confident that bundling of media will only continue (Easier for the seller and beneficial to the traditional media buyer to demonstrate its value against the digital one) and Advertiser can insist on measuring and reporting on their Broadcast Vs. Digital spend separately. This will incentivize all of us to distinguish between the spend on NY Times Digital Vs. Print and will hopefully encourage investment in automated digital measurement tools.

 

Blackberry 9000 - The answer to iPhone?

I honestly can't understand the iPhone mania. Maybe my fingers are just exceptionally fat and the rest of the world happens to love the annoyingly narrow touch keyboard. I respect the attempts to create a device that will successfully converge the 3 main applications consumers are after: Voice, Email and Music. 

I remember giving the Sony-Ericsson Walkman phone a shot a couple of years ago. This was an attempt at converging Voice and Music. I was not happy. The software was clunky and the phone reacted slowly. I am convinced the iPhone is doing a better job on this front. 

However, the iPhone doesn't cut it as an email device. It is also too big in my opinion and very male oriented (I don't mean to sound sexist but how feminine is a phone of this size?). Apple might be happy with a phone that converges Music and Voice only and I am sure their stock will be as well.

In order for Apple to create a device that will successfully converge all 3 applications, it needs to do, in my humble opinion, the following:

• Integrate with Microsoft based email application - This will not come naturally to Mr. Jobs
• Enable a proper keyboard
• Reduce the physical size of the phone

I think only 3 companies have a shot at this task over the next few years: Apple, Research In Motion & Microsoft. RIM is rumored to work on a next series of phones that will improve the user experience. No word on Digital Media capabilities though. 

I am still ambivilent about mobile devices as a vehicle for digital content distribution and consumption. I do believe however that volume of Business & Social related activities on these devices will increase and will command adoption of Providers and Phones.

PubliciS(anity)

Unless I missed some big headlines, it took a year too long for it to come. One of Advertising industry's leaders has finally proclaimed: "The second bubble is here". Maurice Levy came forward and announced to the FT what I am suspecting for quite a while. You can read it here.

In my opinion it is not only the imbalance between the varieties of media offerings out there (The tail is getting longer indeed). The nature of digital media consumption is short bursts of content. This means increased ad inventory but how should it match advertising spend? Can and should a single consumer be exposed to more advertising messages online than he was on TV for similar duration of consumption? I don't think so. The reality will be that, at least when it comes to display banners, only the well targeted ones will prevail. 

In any case, Thank You Maurice and exercise restraint please Venture Capitalists. 

MSFT & Facebook

Post Microsoft’s cash infusion to Facebook, placing the valuation of the social network at a staggering $15m+ I am trying very hard, as many others in the Digital Media industry, to rationalize the numbers. Here are my risks and concerns for the group up in Redmond (A group to whom I have utmost respect for):
Social Media as an Online Advertising Vehicle: Online Ad spending growth – Understood. Increase in consumption of Social Media – OK. Exclusive reach of an audience segment – Can live with that. However, where lays the balance between the value of a single user’s exposure to advertising and the return on such investment? Social media sites have yet to prove themselves (I doubt they ever will) as catalysts in online purchase decisions. To me they seem to do a fair job as a viral tool, I am not sure If they can be used as a tool for introduction of brands.
In general, I would hope to see advertising based valuations that have stronger correlation to the track record of the media acquired in fulfilling marketing objectives. While I respect that acquisitions are made based on future projections, I do feel that a mature Online Advertising Industry should use sounds performance figures as soon as possible.
3rd Party Social Applications: Facebook to use the cash to acquire the thousands of applications, and application providers that fuel its website? Possibly, however, wouldn’t it be cheaper for Microsoft to acquire those directly? Are they paying for convenience or for the concern that further ties between Microsoft products and internet application will continue to have a significant price in the European courts.
‘Shrinkage’: The renown male phenomena, introduced in one of ‘Seinfeld’’s chapters, seems to have hit the Online Media space. It is clear that Google, AOL, Yahoo! And Microsoft is creating a consolidated advertising opportunity for their prospective clients. Microsoft is paying for the shrinkage of the long tail, trying – like its peers – to create a one stop shop for advertisers. The model is similar to the one successfully deployed by the Networks for the TV world. Differences:
Content, Audience and Consumption patterns are still fragmented and might prove difficult to package into an upfront model advertising basket.
Microsoft, like others, will need to build an impressive network technology platform that will enable efficient deployment of advertising dollars across this fragmented offering.
Unlike the stable, for many years, TV environment, the online space is constantly changing. In my opinion due to the fact that internet has yet to establish itself as the main platform for premium content. It is still used predominantly as a repository of information and remote human interaction facility. When content arrives, and it will, the rules of the game might change and will diminish valuations of current investments.
The Internet as a Night life scene: Many have mentioned this before. Online properties, especially the ones utilized for remote human interactions, are transient. Like night clubs, they create an exciting atmosphere and establish an attractive fashion for a limited period of time. Facebook, like many other properties online will need to reinvent itself at some point. As it grows, rapidly it seems, this task will become more and more challenging.

A Bee Movie

I like Mr. Jerry Seinfeld! Actually, let me rephrase, I like ‘Seinfeld’. Before ‘Bee Movie’ has even hit the screens, it is easy to guess it will be a commercial success. Being a father of three, recent months drought of animated movies alone, will drive me to the box office on one of the anticipated rainy weekends.
I am surprised though. Mr. Seinfeld has gone out of his way, post the ‘Seinfeld’ era, to demonstrate quintessential approach to ‘celebritism’, shying away from most ‘been there/done that’ projects. A recent New York Times article (http://www.nytimes.com/2007/10/21/movies/21itzk.html?_r=1&oref=slogin), have gauged further interest. I was expecting something new, a different Hollywood, a rejuvenated approach to making movies and promoting them.
Judging from the influx of ads, trailers, co-sponsorships, interviews and coverage, I can confidently determine ‘Bee Movie’ will be yet another A movie. Presumably above than average humor, production quality and story depth and definitely above the average gross revenues. Albeit, not a revolution that is even close to the way ‘Seinfeld’ changed the TV Sitcom scene.

e-consultancy Rich Media interview

What were the main trends in online display advertising in 2005?

A massive trend here and across the globe was much more video content. In fact, last year almost 40% of ads served across the globe through the Eyeblaster ad-serving platforms contained video. This compared to 20% in 2004.

There was also a bigger shift to rich media across Europe and Asia specifically and rich media in particular started to appear on more media plans as an integral part. The rise in rich media meant that animated gifs were employed a lot less.

2005 also saw much better use of interactivity within ads, with big brands looking to engage users with a vast array of rich media creative. Interactivity ranged from putting an entire microsite in a banner – so the user doesn’t have to leave their webpage – to using flash and video assets that users could play with, vote on, influence, move and shape.

The best creatives delivered a combination of unique messaging and engagement that tied in the brand. The rise in interactivity – and the take up from consumers of such ads – meant that advertisers gave more weight to interactivity measurement as a campaign success criterion.

The message finally trickled through to advertisers from media agencies that click through rates can no longer be the sole measure of a campaign’s success, especially when you can have multiple interactions on a page.

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What percentage of online display ads use rich media technology?

It’s difficult to be exact because it is measured mostly in North America and not much in Europe. It also depends on the definition of RM – ours differs from our peers. But in short, I would say 20%-30% of overall display budgets go to rich media.

I would say confidently that it is rising significantly across the globe as the expertise of creative and media agencies continues to blossom, and that usage is intrinsically tied in with a knowledge of the potential.

In the UK, we are someway ahead of China for example in terms of usage, hands-on knowledge, creative empowerment and so overall spend. But we don’t anticipate a long time before the education process kicks in and China in particular will be one of the largest online display markets.

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Last year I read that floating overlays, essentially the same format as a pop-up, account for about a quarter of all ads served by Eyeblaster. Is that accurate?

A pop-up (we call it a window ad since it opens a new window in the browser) is not the same format as an overlay. An overlay, subject to restrictions placed by a specific publisher, gives the advertiser complete freedom to paint a bespoke out of banner experience.

Never have I seen this work more effectively than for an award-winning NSPCC campaign which ran through us last year whereby a small girl walks alone and vulnerable across the web page.

Floating ads can be powerful when used correctly, but the use is beginning to drop after a peak of a couple of years ago. Expandable banners made up most of the ads we served last year.

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Why do you think floating ads are in such high demand among rich media advertisers? Do floating ads generate higher ROI than other forms of rich media ads? Is this why marketers still favour these rich media pop-ups?

Floating ads are not pop-ups. Floating ads – that run over content but not separate to content like pop-ups - are in less demand because the shift is moving to polite or expandable banners, which deliver interactive experiences. This is because lots of content can be pushed into the banner space without causing intrusion.

We only see a demand for floating ads with specific advertisers with a specific target audience. Floating ads can be really effective with the right creative. A couple of years ago, floating ads were used a lot because they were new and ‘in your face’.

It’s true that floating ads have traditionally produced higher click through rates, but now expandable banners are more effective. And in higher demand. Also, click through rates are not a sole determinant of ROI. Especially since floating ads cost more than other formats.

Ultimately, it is a combination of creative, media placement, rich media formats and features and ad-serving technology which will affect ROI. The use of brand and response tools in creative, along with more interactivity, is generating greater ROI for advertisers. It’s not to do with one format or another.

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What percentage of rich media ads would you describe as intrusive? Do you proactively offer guidance to advertisers that choose ad formats that are bad for the end user?

Fewer and fewer. Floating ads are used less but also more creatively. The end game now is increasingly to engage with intrusive ads, not to slap users in the face. Many advertisers have already learnt that intrusive advertising can only work if there is a big pay off for the consumer – whether that’s a well targeted, humorous or thought-provoking creative or whether it offers unique video or audio content etc.

We run education days for our clients at Eyeblaster and by partnering events with leading publishers such as MSN and Yahoo in order to offer best practice guidance. Rich media was a novelty five years ago; now it’s the norm. That has come about because companies such as Eyeblaster are committed not only to the development of the creative and ad-serving technology, but because we’ve helped develop the best practice, education and regulatory sides too.

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Isn’t it a shame that rich media is being used to interrupt the user experience? Isn’t ‘Advertising 2.0’ supposed to be about targeting, context and relevance?

Rich media should deliver a positive user experience. Rich media only interrupts an existing user experience when it is poorly targeted, created and delivered.

The best rich media invites the user to engage and rewards him or her for doing so. The rise of broadband, technology, advertising file sizes, ad features (data capture, polling, behavioural, interactive video, live data feeds) and creative agency experience is all combining to deliver interactive ads that complement user experience.

If you think about it, a click through is the most interruptive experience of all. So a significant number of ads are now being made which don’t use a click through as a primary objective or gauge of success.

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Do you have any examples of great rich media campaigns that worked well from a branding perspective?

Online display advertising, rich media in particular, has provided some excellent results for thousands of advertisers. Many of these use rich media as a brand response tool because of the interactivity, creative and technology that can be employed in delivering campaigns.

From allowing consumers to remix an Adidas TV commercial and build their own edit – which saw almost one in 2 people interact – to an advergame for IBM that saw thousands of strangers play a 2-way game of tennis in a banner – the success stories are legion.

We are seeing a high number of brand response campaigns amongst the tens of thousands launched every year.

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In terms of planning, do you have any insight on when online advertising should be used during a multichannel campaign?

Online advertising should be used when and in a way that best complements the objectives of the campaign.

For integrated marketing campaigns, online advertising has a unique list of features from behavioural, datacapture, polling, interactivity, etc that can be suitably employed to maximise the impact of the medium whilst complementing the other channels. It all comes down to the campaign, the objectives and the creative.

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What other ad formats are currently popular among advertisers?

Expandable banners are once again growing in popularity. They are certainly the most versatile format in that they are perhaps best set up to deliver both branding and response.

Branding can come from the initial expansion or auto-expansion. And with a combination of broadband connectivity, publisher file sizes and growing creative agency confidence, advertisers are able to ‘push’ much more content into the ad space.

In fact, we have seen many examples over the last 12 months of microsites working within the ad. So for a car manufacturer, that means including all the features and video of your car with the ability to order a brochure and book a test drive. The same can be said of all other verticals and that is why the expandable banner is the most used format.

In-stream is also growing. It is a better video advertising experience and more guaranteed value for the advertiser. Gaming is also on the rise.

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Do you have any examples of rich media ads that have been used instead of microsites?

Yes, this approach has been on the increase throughout the last 12 months and with good reason. Advertisers are realising that 99% of users don’t want to click, but it doesn’t mean they can’ be engaged. Instead, pushing assets from a microsite into the banner in a way that suits consumers is proving successful. This also negates the 20% plus drop-off rate that comes with any click through.

We’ve found entertainment, technology and automotive the biggest adopters of in-banner microsites to date. But other verticals are following suit – from travel/route planners in the banners to custom-made food recipes, the possibilities for engagement through in-banner microsites are endless, and made realistic by using many if not all existing assets from a microsite or website.

The Value of Integrating Search and Display

One of the many challenges marketers are facing today is identifying ways to successfully integrate search and display, given the increasing dominance of these two categories in online advertising.

Earlier this year, JupiterResearch forecast that search would lead online ad spend growth over the next five years, increasing from 41% of all online ad spend to 43% by 2011. Meanwhile, the firm predicted rich media would grow at a 21% compound annual growth rate, with video ad spend increasing at a 27% rate through 2011.

In many cases, search and display have each are still siloed practices, often reducing the effectiveness of both. In order to maximize each ad dollar while generating maximum brand impact, response and correct attribution of acquisitions, advertisers must fully integrate their digital marketing campaigns across both disciplines. As the deployment of emerging channels, such as gaming and mobile, proliferate, integration will have ever more increasing importance.

Creative agencies and media planners are increasingly demanding integration of search and display, in order to better serve the brands they represent. To achieve this, many agencies are bringing search expertise in-house, investing in necessary staff and technology. As the scale of online campaigns increase, agencies also need more effective display campaign management.

Another agency demand is for technology that helps optimize online ad spend, especially as budgets increase and the online advertising landscape becomes more complex. More than ever, advertisers need to see maximum impact for each dollar spent online.

Without integration, budgetary decisions and allocations are made up front, even before campaigns are conceived, without any knowledge of performance. By integrating search and display, advertisers can make budgetary decisions during and after planning phases, giving the agency partners more insight into the most effective campaigns, as well as the ability to make changes after initial metrics are reported.

Additionally, display ads are technologically more sophisticated than ever. Wizard-based solutions incorporating advanced capabilities such as full-screen video, and interactive features such as games, texting and music can help advertisers create and manage display ads effectively. The best technology solutions automate ad creation, while requiring minimal post-production work. For example, a flash video used for a rich media banner ad format can be used within a browser game without expensive and timely recoding.

Technology can also help optimize search ad spend. For example, tools can enable agencies to more effectively credit the publishers responsible for a sale. Agencies previously have only been able to give “full credit” to one site for a sale, even if the user had visited multiple sites leading up to a purchase. Now, using the right platform, agencies can assign “partial credit” for the sale, helping the advertiser to plan for a more optimized spend in future campaigns. Thus an agency would be able to assign 30% of the credit for a sale to site A, for example, and 70% to site B.

To summarize, while there is consensus, or maybe not, that a conversion can only be attributed to one ad, be it a Search or Display ad. Multiple ads might have contributed to the ‘birth’ process of a conversion. If we agree with that, fair distribution of the aid provided by different media buys, should be taken into consideration when planning a campaign and even for optimization of a current buy.

The right tools can also help simplify keyword generation with automatic generation of related keywords through data mining.

Other challenges related to search include managing the bidding process and duplicating audiences and conversions. If optimized, all three aspects of search marketing have the potential to return tremendous ROI for the agency.

Providing the benefits of integrated campaigns, especially on a global scale, is a value-added service that can help differentiate truly forward-thinking agencies from those left behind still grappling with traditional ad vehicles.