In 2005 I had a digital marketing agency and we were buying display ads, email sends and paid search for FedEx Kinko’s.  I still remember the anxiety I felt when we presented results from our media buys.  Paid search of course looked great, with a very low Cost Per Action.  Email produced decent results but clearly took a back seat to search.  

The media stepchild we call display accounted for a majority of the spend, and appeared to be a complete waste of money with a CPA that was 10x that of search.  Naturally my client asked the question: “why on earth are we spending money on display when search is so much more efficient?”

My answer was that: 

  1. we were buying all the search inventory that was available, and 
  2. we believed the investment in display was creating awareness that was driving the growth in leads from search.  

We cited the increase in clicks and leads from search that correlated with the growth in display advertising, but lacked hard data to support our thesis.  Fortunately the client agreed, but he also challenged me to do a better job of justifying the media plan.  We did what we could at that time and found that 20% of converters from paid search had previously clicked on a display ad.  But that was the extent to which we could attribute credit for awareness created by display ads.

In the past 7 years we’ve evolved significantly as an industry. We can now view comprehensive conversion paths and use machine learning and statistical analysis to allocate credit to each impression, click and interaction that influences an online conversion.  

We can show a much more accurate ROI from online advertising, measure the ROI for each channel, publisher and placement, calculate optimal frequency and quantify wasted spend efficiently and cost-effectively. Capability-wise, we’ve come a long way since the days of last-click reporting and with the recession of 2008 in our rear view mirror, the industry is ripe for massive adoption.

But despite these circumstances, most advertisers still measure and optimize the same way we did in 2005.  They realize there’s a better way to do it, but for a variety of reasons they stay rooted in outdated metrics that preclude them from optimizing spend and maximizing ROI.

In Geoffrey Moore’s classic high-tech marketing book “Crossing the Chasm” he defined five groups of adopters: innovators, early adopters, early majority, late majority and laggards.  According to Moore, an industry “crosses the chasm” when the early majority adopts new technology, which sparks rapid growth and value creation in that sector.  Adoption by the early majority constitutes the evolution from “fad” to “norm”.  When it comes to measurement of online advertising, these days are still ahead of us.

While a handful of advertisers (innovators and early adopters) have raised the bar in media measurement and optimization, the early majority is still in the consideration stage.  For years they’ve been hearing about Attribution from innovators, and are now seeing case studies and thought leading research from early adopters.  

Resembling the tortoise more than the hare, the early majority are reading POVs, evaluating solutions and building the business case to invest in attribution and advanced analytics.  Last year I wondered if 2011 would be the year we crossed the chasm.  Despite high hopes, the big event did not happen.  Some brands and agencies dipped their toe in the water, but adoption was still limited to select few – the innovators.

As we entered 2012, I again wondered if this was going to be the year.  We are seeing a noticeable rise in research, media coverage and testing, but it is the early adopters who are driving change.  Given that the year is now 2/3 over, I am not holding my breath for rapid transformation in 2012.  But there are many positive signs, fueled in part by Big Data fever that has everyone atwitter.  

Mass adoption will happen when advertisers start demanding better metrics, deeper insights and demonstrable improvement in ROI from their agencies.  It’s happening today in small numbers, but at an increasing rate.  Consequently, it feels like we are close to the tipping point and, assuming the Mayans are not right, it may be that 13 (as in 2013) will be our lucky number. 

When the early majority adopts attribution and advanced analytics, the whole industry wins.  Marketers will do a better job of optimizing spend and measuring ROI, which will justify growth in digital media budgets, which will expand our market considerably.  To combat the forecasted deceleration in ad spend growth, we need the early majority to make measurement a priority.  Let’s hope it happens sooner than later.