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What works and what doesn’t in online advertising + key benchmarks

MarketingSherpa’s 2008 Online Advertising and Benchmark Guide + Benchmarks was born out of a belief that online adverting at present is misunderstood, and as result, underutilized. This isn’t to say that existing advertisers should simply increase spending online. Rather, we think advertisers that can find a balance between economical, efficient targeting and clutter-busting, highly engaging advertising will achieve far better ROI for themselves and a much more positive online experience for consumers. Many moving pieces fit into an online campaign, so this is no easy task.

The first hurdling block, which must be overcome, is that old-school media math is based on the limitations of traditional, linear, analog media, and doesn’t reflect the realities of non-linear, digital media. For this reason, digital media math needs to get more sophisticated, and more accepted among media professionals. One of the more obvious ways of adding sophistication to digital media buys is to take a closer look at frequency. Traditional media doesn’t allow for frequency to be controlled on the individual level, but digital does. To that end, we obtained data from InsightExpress showing how frequency affects ad effectiveness, we looked at aggregate conversion rates by frequency of exposure from Doubleclick, and then explained how to implement a frequency capping policy that makes sense for each advertising strategy.

Another limitation of traditional media planning and math is a lack of consideration for quality on the level of the individual consumer. With traditional buying techniques, a certain amount of “waste” is inherent and difficult to account for. Digital advertisers can and should be factoring in qualitative metrics when planning media. This can take many forms, from advanced behavioral targeting to assigning value by conversion rates. We showcase ways of assigning quality to placements through eyetracking, and effectiveness of media through cross-media effectiveness studies. The point is that calculating effective reach rather than just reach should be the norm on digital platforms.

We don’t think there is a magic bullet for creating the perfect ad, and really encourage people to get creative and try new things. According to our research, it’s the advertisers that try new things and constantly test them that consistently do well. We strongly encourage research and testing and show proof from our survey that qualitative research, which affects the insights going into ad creation, can actually be more effective from an ROI standpoint than improving tracking or A/B testing.

Contextual and behavioral targeting improve Online Advertising

Finally, Analytics needs to get better at incorporating modeled metrics for effectiveness. By designing branding dashboards that incorporate both brand metrics projected from survey sample data with observed, tracked metrics like impressions and clicks, it’s possible for marketers to get a fuller picture of what’s actually happening with an online campaign. There’s too much data and not enough insight out there.

We don’t have all the answers, but we do have a lot of them, and where we don’t, we hope to provide discussion, new ideas, and testing. Pushing online advertising from where it is to where it could be will be a slow process, but it’s one we look forward to participating in.

3 Comments

  1. 1

    it ain’t going to happen. there is no advertising in social media beyond banner ads. Everything else is SPAM. Best bet is product placement in youtubes

  2. 2

    I’m currently at the Ad Tech conference in Paris and the main recurring theme here are three things:

    1. Targeted reach – although content and quality are highly important, knowing the habits of your readers are even more important. Social networking sites are the obvious choice merely because they store the most information about their users. However, as time moves on and good content sites base their readership on subscribers whether the content is free or premium, these sites will be the ideal placement location for online advertising. The creation of the Forbes 400 blogger network is proof of this.
    2. Online Ad Spend – Michael Kleindl of Wunderloop quoted that within a year from the total percentage of all ad spend, whether it be TV, radio, newspapers etc, 10% will be online. He personally thought that even 10% was too low and is of the opinion that the UK will be nearer to 50% within a year.
    3. As digital TV is growing, online TV advertising is also growing. Another huge factor is the increase in Internet speeds. Some companies (I’ll have to check my notes) are promising 100mb download speeds in personal homes within a year. Will anyone watch cable or terrestrial based TV anymore once this happens? It will be a huge competition.

    As Doug pointed out points out, it will be about reporting and analytics. This is probably why advertising networks are investing so much money in client friendly, reporting technology.

    Personally, I believe that there have been a number of false starts for the Internet. I believe we’re currently experiencing it for mobile. However, despite the current lack of vision for good effective mobile advertising, the Internet now consists of a whole generation of people who have had time to learn from past mistakes and finally get it right.

    • 3

      Michael,

      You can thank Tim from Marketing Sherpa for this great post – I invited them to do a guest post and they put up an outstanding topic! Your feedback is outstanding.

      Doug

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