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If online advertising is going to work, tech companies are going to have to take some lessons from traditional media, whether they like it or not.

Most especially for display advertisers, most online measurements have a fatal flaw — brand building campaigns don't always translate into click-throughs.

A recent study released by the Online Publishers Association and comScore has shown that display ads produce a 50% lift in Internet searches for brand terms within a week of viewing. But without an immediate click-through, that's not easily measured.

And according to one Microsoft exec, the answer to this problem is a return to old media metrics.

On Microsoft's Advertising Blog this week, Young Bean Song, senior director of analytics at Microsoft's Atlas Institute, wrote that online advertisers ignore traditional media metrics for three reasons: arrogance, ignorance and fear.

According to Song, "digital folks snicker when they hear advertisers make statements like 'TV works.' Turns out, TV does work and there is plenty of quantitative proof that TV advertising drives sales."

As much as online advertisers likes to champion the medium's intense measurability, click-throughs are a metric that works with search — where users are likely to click-through on links and purchase products they've searched for — and are much less useful with display.

Display ads function much more similarly to offline brand advertising, and Song argues it's time they start being measured similiarly as well:

"As much as digital marketers love to carry the ROI torch, what they don’t realize is that traditional marketers live and die by the same sword. They just do it in a different and arguably better way. The science of Media Mix Modeling (a.k.a. Econometric Modeling) has been around for decades and is the gold standard for analysis of how marketing investments impact SALES. The inputs into these models are reach, frequency and GRPs across different marketing channels."

As Song points out, brand advertising budgets take up about two-thirds of the $186 Billion advertising market. But only 5% of overall marketing budgets are spent on the Web. And display advertising is just a small fraction of that slice.

In order to grow the money spent on brand building online, marketers have to find better measurements. eMarketer released a survey of marketing execs yesterday that essentially said the same thing:

“Other than the economy, brand measurement is the single biggest obstacle holding back the growth of online advertising.”

The movement to better measure display ads is picking up steam. The June OPA and comScore study, called "The Silent Click: Building Brands Online," attempted to loosen the grip of click-throughs as a measurement of ad success online. And today, Silicon Alley Insider reported that "Hey, Online Display Ads Don't Suck After All!"

By getting online publishers to start treating display more like traditional brand building ads, Microsoft could see a big jump in their display efforts - a point not lost on Song:

"The good news is that we can join the party, and even better, we can be the life of the party. We know the web can deliver scalable and impactful reach – we just haven’t proven it yet in a standardized and easily repeatable way. That’s coming, and the first of a lot more research from the Institute – The Planner’s Digital Dilemma - speaks to how."

Meghan Keane

Published 7 July, 2009 by Meghan Keane

Based in New York, Meghan Keane is US Editor of Econsultancy. You can follow her on Twitter: @keanesian.

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