Digital Media Measurement:Friend or Foe for Marketers?

Joe Laszlo, Director of Research (outgoing); Deputy Director of IAB Mobile Marketing Center of Excellence (incoming)

OMMA Metrics and Measurement Conference

March 2011

Digital Media Measurement Today• Robustly competitive with many diverse vendors

• Leading vendors bring a high degree of integrity to the marketplace

• Innovation comparable with that of online media itself

• Nearly ANYTHING is measurable in a way that other media can only dream of

• And all media are becoming digital, so some of these “digital” media measurement characteristics spread to other media

p 2

FRIEND!

Digital Media Measurement Today• A cacophony of contradictory metrics from dozens of

competing vendors

• Almost impossible to determine reach and frequency of an ad schedule on multiple sites and/or ad networks

• No consistency across research vendors on basics like the Top 20 sites within a content genre

• Census-based web analytics and vendor data yield different exposure numbers

• Vendor methodology changes render dramatic fluctuations in measurement

p 3

FOE!

Contrast With Traditional Media Measurement• Media buyers and sellers accept a shared margin of error• Value chain players work within scientific norms• Agreement on exposure measurement and “currency” allows

billions of dollars to flow through the television advertising supply chain– Planning and buying, – Guaranteeing and stewarding guarantees– Settling up the differences between guarantees and deliveries, make

goods or overdelivery

• Reach and frequency of a TV schedule against target demos are readily available

• Reach and frequency across traditional media (e.g.,TV + print) can be calculated

p 4

At Best Maybe Marketers and Digital Media Measurement are “Frenemies?”

DIGITAL MEDIA MEAS.

MARKETERS

p 5Source: Gossip Girl

Even if Measurement isn’t a Friend, the Market’s Growing Fine…?

Quarterly Online Ad Revenue Comparisons — 1Q2001-3Q2010

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$1,872

$1,848$1,773

$1,641

$1,520

$1,458

$1,452

$1,580

$1,632

$1,660

$1,793

$2,182

$2,230

$2,369

$2,333

$2,694

$2,802

$2,985

$3,147

$3,608

$3,848

$4,061

$4,186

$4,784

$4,899

$5,094

$5,267

$5,946

$5,765

$5,745

$5,838 $6,100

$5,468

$5,432$5,500

$6,261

$5,875

$6,185

$6,400

$9,626 $12,542$7,267$6,010$7,134 $16,879

2001 2002 2003 2004 2005 2006 2007

$21,206

2008

$23,448

2009

$22,661

2010

Source: IAB Internet Advertising Revenue Report, 2010 First Half and Second Quarter Report; IAB Press Release: “$6.4 Billion in Q3 2010 Sets New Record for Internet Advertising Revenues.”p 6

But Especially in Terms of Brand Advertising, Measurement is a Barrier

Di-rec

t re-sponse38%

Branding

62%

Direct response

75%

Branding25%

2009 US Measured Media Spend:$147 Billion Total

2009 US Online Media Spend:$24 Billion Total

Source: Brand.net analysis based on Barclay’s Capital, Think Equity Partners LLC and DMA. From Ad Age, Building Brands Online, 2010p 7

The Data Issue Deters Marketers

“There isn’t one ‘standard’ for online measurement. Comscore, NetRatings, servers all have different numbers.”

- CPG Marketer Client Lead, Agency

“If reliable metrics were available, we would put a much larger chunk of money into online. It is too high-risk to sell this approach upwards without hard data. Right now, we can’t scale our content marketing efforts confidently.”

- Prospect Acquisition, Financial Services

“Reliable metrics on brand-building are the Holy Grail. Right now, we use a collage of metrics to prove things out.”

- Account Manager, Digital Agency

•The lack of online measurement standards makes accurate comparisons impossible

•Marketers have difficulty justifying large campaigns without trustworthy data

•Without proper metrics, marketers have to try to piece together the story themselves

p 8 Source: IAB and Bain & Co., Building Brands Online: An Interactive Advertising Action Plan, Nov., 2009

“Measurement should still be an important part of the story

… but I submit that it should be the sizzle not the

steak.” -- Andy Atherton, Brand.net (Ad Age, Feb 2009.)

The Digital Metrics Universe:PublishersBusiness Question/Problem Vendor Sample Metrics•Is my site working?•How do consumers use it?

Web analytics vendors

•Uniques•Pageviews•Abandonment•Performance

•How many people visit my site?•Who are they?•How does my site’s audience compare with the competition?

Audience measurement firms

•Unique visitors•Audience demographics•Pageviews•Time spent•Visits

By the way, this line is getting pretty blurry…

p 9

The Digital Metrics Universe:Agencies and MarketersBusiness Question/Problem Metric Vendor Key MetricsWhere should I run my ad campaign?

Audience measurement firms

•Unique visitors•Audience demographics•Pageviews•Time spent•Visits

How much should I write the check for?

Ad server-publisher or 3d party

•Impressions•Clicks•Other actions

Did my ad campaign work? LOTS •Click-through rates•Conversions•View-throughs•“Engagement”•Redemptions, •Pass-along & “Buzz”•Interactions•Brand metrics: Purchase intent, brand favorability, awareness, recall

p 10

The Digital Metrics Universe: IAB Has Helped Create Rigor and StandardsMetric Category IAB WorkPlanning •Audience Reach Measurement Guidelines

•Call for audits for measurement vendors•Participation in ongoing MRC audits

Buying •Web impression measurement guidelines, and follow-ons•In-game ad measurement guidelines•Mobile web ad measurement guidelines•Click measurement guidelines

Effectiveness •XMOS Research•An Evaluation of Methods Used to Assess the Effectiveness of Advertising on the Internet

p 11

The IAB’s work so far has been vital, but it’s treating symptoms not the underlying issue.

What is Making Measurement Make Sense?

•An initiative to fix digital measurement with an eye to building cross platform measurement metrics and systems and making our medium more brand hospitable

•A process that will create an efficient supply chain so that the planning, buying and evaluating of all media are transparent and consistent

•A new perspective: digital media measurement is a business issue, not a research problem

•An independently led, short-term way to create digital media currency  

•A mechanism for developing recommendations for the establishment of a measurement governance body that will oversee standards, quality and change management for all media measurement 

p 12

Who is Behind Making Measurement Make Sense?

• IAB,4A’s and the ANA are the founding partners and form the leadership team

• IAB, 4A’s and ANA jointly issued an RFP to consulting firms to lead the process

• The founders evaluated consultant proposals together

• Bain and Medialink selected by the partners to lead the effort

p 13

Making Measurement Make Sense: Project Objectives

Determine the right metrics and solutions

Drive industry consensus around the solution

Establish measurement governance model

p 14

Making Measurement Make Sense Can Significantly Improve Digital Measurement

• Increased effectiveness and accelerated growth of brand marketing in digital media

• Reduced “supply chain” costs in planning, buying and managing digital media

• Rapid expansion of cross-platform marketing campaigns that better leverage digital

• Strong foundation for ongoing cross-ecosystem collaboration and metrics/standards change management

p 15

Conclusion: Digital Measurement is a Friend. But it Could be a Better Friend

• Digital measurement is a powerful tool, delivering insights on consumer behavior and ad impact that no other media can match.

• But maybe digital measurement is a little nerdy, lacking in listening

skills (among other social graces).

• Past IAB measurement efforts have been helpful, but also scattershot and somewhat reactive.

• The industry has a real opportunity to improve digital measurement, holistically, preserving the dynamism we love while encouraging greater clarity and accountability.

• Since all media are ultimately going to be digital, it’s even more important to seize this opportunity now.

p 16

Thanks!

joe@iab.net