It’s high time our industry provide large branding advertisers with metrics that prove that the web offers just as much—if not more—ROI as traditional media. That’s the best way to convince them that it’s OK to shift large portions of their ad spending to the internet. Consider that while direct-response advertising dollars have flowed strongly onto the internet, capturing 30% of all measured direct-response ad dollars, branding is performing poorly, with only 5% of measured media branding dollars going on online.
Why has the internet failed to attract branding dollars? I lay responsibility squarely at the door of the “click.” In fact, the use of clicks on display ads as a meaningful metric sets the internet up for failure as a branding medium. Doubleclick reports that click rates on display ads today have fallen to approximately 0.1%, an unfortunate reality that has created serious doubts about the value of online advertising in the minds of advertisers that have experimented with the internet as a branding medium. It’s now clear that a publisher would have to be insane to continue using click metrics to try to persuade branding advertisers to turn to the internet. Even in the face of negligible click rates, time and again comScore has observed statistically significant lifts among the ad-exposed consumers in the number of visits to the advertised brand’s web site, the number of trademark search queries, and the sales of the advertised brand, both online and offline.
While these metrics are vital for understanding the true effectiveness of online advertising, reach and frequency (R/F) metrics are also important tools for media planning and analysis. Traditional brand advertisers have been using such metrics for decades, and these metrics should also be central to online media planning and analysis. I’m not arguing that R/F metrics can indicate whether a particular media plan has worked—that can only be determined by measuring the success of the plan in building brand sales, taking into account the particular creative that was used. But R/F considerations – how many people were reached with ads and how many times—are vital when deciding how to structure a plan and critical when one is trying to understand, based on the sales results, why a plan worked or didn’t.
One problem is that measuring an ad campaign’s reach and frequency on the Internet is not as simple as it is for traditional media because there are so many different locations from where an ad can be delivered on an individual web site. For that reason, R/F needs to be measured at the ad-placement level, not at the site level. To that end, comScore recently announced an offering with Microsoft Advertising to provide R/F planning and analysis tools at the ad-placement level based on Atlas ad server data and comScore panel data. We believe this is a much more precise approach because it shows the reach of the ad campaign that can actually be achieved, the true potential frequency, and the specific demos of that audience. Campaigns planned at a total site level can overstate reach, understate frequency and may not deliver the desired demographic.
Perhaps Ted McConnell, Director of Digital Marketing Innovation at Procter & Gamble, put it best at a recent conference when he said: “Call me old-fashioned, but P&G thinks it’s rather important to know what we say, to how many people and how often.”
When traditional media thinks about branding advertising, it focuses on creative, reach and frequency. These are time-tested factors. It’s time for online display advertising to go back to the future.
Gian M. Fulgoni is chairman and co-founder of comScore.