The click-through is arguably the most powerful metric on the internet. It is largely the criteria upon which many online ad campaigns are judged and a billion-dollar economy has been built upon it.

But is the click-through really all it's cracked up to be? Sure, it works well when you're doing direct response advertising. But what about brand advertising?

According to a recent blog post by Young-Bean Song of the Microsoft Atlas Institute, brand advertising accounts for two-thirds of the $186bn advertising market. Yet while direct response advertisers have embraced the internet, shifting 30% of their budget online, brand advertising hasn't given the internet a whole lot of love. According to Song, only 5% of massive brand advertising spend is spent online.

Gian M. Fulgoni, the co-founder of comScore, blames the "click":

Used since the early days of online advertising as an indicator of the effectiveness of an ad, the click originated simply because it could be measured. But not everything that can be measured matters. 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.

That display advertising generally produces paltry click-through rates is common knowledge. And this common knowledge is why so many brush off display advertising today. But what if display advertising was even more effective for brand advertising than traditional media? According to Fulgoni, it often is:

By using appropriate metrics, the ability of online display advertising—whether in the form of static display ads, rich media or video—to build brands can be shown to rival or even exceed the effectiveness of traditional media. In a white paper “Whither the Click” (published in the June issue of the Journal of Advertising Research), we summarized the hundreds of studies we’ve conducted using the comScore panel and comparing the behavior of panelists exposed to brand display ads with the behavior of those who did not see the ads. Even in the face of negligible click rates, time and again we 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.

To that end, comScore and Microsoft announced yesterday that they've partnered on a media planning service called Reach and Frequency Planner that is designed to give brand advertisers the ability "to conduct the complete front-to-end media buying and planning process in the digital environment, using metrics similar to those existing for traditional media".

Reach and Frequency Planner combines demographic data from comScore's panel with ad serving data from Microsoft. The data will be used to generate digital media plans with metrics that provide online comparables to the metrics brand advertisers use offline.

Microsoft and comScore are launching Reach and Frequency Planner as a closed beta with a group of brand advertisers. There is no indication yet on when it will be opened up for all.

This is a potentially significant move for Microsoft as it looks to boost its online business in the wake of its deal with Yahoo. There's a good $100bn plus of brand advertising budgets that haven't moved online and there's no doubt that Microsoft would love to cajole a chunk of it online.

Online publishers in general would be a primary beneficiary of such a shift. While there's a significant oversupply of display advertising inventory on the internet, if comScore's Fulgoni is right and online display advertising rivals or exceeds the effectiveness of offline brand advertising, all that inventory would have to be evaluated in a new light. Maybe those banner ads delivering a fraction of a percent worth of click-throughs are worth more than both publishers and advertisers think they are.

How much? Nobody knows -- yet. But there's a pot of brand advertising gold out there. All someone has to do is find the rainbow.

Photo credit: rhettmaxwell via Flickr.

Patricio Robles

Published 31 July, 2009 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

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Comments (2)


Jeff Greenfield, COO and Co-Founder at C3 Metrics

I've read Young-Bean Song's blog post and based on the number of responses and my own experience with 'traditional metrics' -- the application of those metrics in the digital world is going to be horrible flop.  

No offense to Microsoft - but wasn't it 'traditional metrics' that told them to spend tens of millions on the Seinfeld/Gates commercials?  Why would any brand trust those same folks to 'measure' ad effectiveness online?

about 9 years ago


Jeff Greenfield, COO and Co-Founder at C3 Metrics

One of the more thoughtful responses to Young-Bean Song comes from Brian McGinty @ Razorfish:

  • Thu, Jul 09 2009 08:04PM Brian McGinty - Razorfish

    Young, great, well-thought out post.  I agree that we must work to develop a standard currency to measure the value of each channel.  However, I would argue that currency is more likely be a digital metric such as unique impressions rather than a traditional metric such as GRPs.  To begin with, the GRP is a somewhat antiquated metric that is inherently less precise, thus less powerful, than digital metrics.  Moreover, traditional channels are becoming digitized, providing access to these more precise digital metrics for traditional channels.  With access to these stronger metrics for traditional channels it seems irrational to assume marketers would still choose to standardize their measurement on less precise, antiquated measures such as GRPs.  

    As a side note, to your point on the incorporation of digital mediums into media mix models, the debate is still out on how to actually create an accurate model.  In a traditional media model, every consumer has an equal chance to view each piece of media run in their market (theoretically).  However, because of digital mediums' ability to change based on the individual, individual consumers are exposed to more or less ads depending on their exposure and response to an ad in the first place.  For example, say I visit WebMD and view some articles on the Flu and see 2 ads for Tamiflu.  I then leave WebMD but visit other properties in WebMD's network where I am then retargeted with 3 more ads for Tamiflu because I've indicated interest in the subject of the Flu.  Similarly, if I do a search for BWM on Google in the morning and then check my GMail in the afternoon, I will likely be shown more ads for BMW.  This interactive effect causes traditional econometric modeling approaches to break down, often grossly overweighting or underweighting the true impact of digital channels on the outcome.

about 9 years ago

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