Brand advertising on the web is suffering from a major problem: too much measurability. To be more specific, too much measurability of the wrong things.
Click-through rates were the first measure of online ad effectiveness, and seemed like the holy grail of ad measurement. Finally, advertisers could figure out which half of their ad dollars were wasted. I think the first well-known demonstration of the shortcomings of CTR as a measurement was the MCI “Shop Naked” ad back in 1996. The ad had tremendous click-through, but nobody actually bought anything.
This spurred innovation in measuring conversions. For direct marketers, measuring conversions really is the holy grail, becuase you can immediately understand if your ad is generating more margin than it is costing. The problem is, both of these metrics, CTR and conversion rate, are direct reponse metrics.
Brand advertisers typically have very different campaign objectives. Does Coca-Cola expect you to click through and buy a Diet Coke? Does P&G expect you to click through and buy some Tide? Of course not, but these campaigns are being force-fit into having direct-reponse objectives, because that’s what we can measure immediately on the web.
Campaign objectives for brand advertisers typically include affecting a customer’s attitude and propensity to buy, their liklihood to recommend to a friend, and simple brand awareness. CTRs and conversion rates are not good proxies for these objectives. Measuring the effectiveness of campaigns on the internet probably requires the same old-fashioned techniques as measuring the effectiveness of TV or radio ads: panels, questionnaires, and close analysis of the effect on local sales.
I say “probably” because there are always new measurements on the internet, and some may turn out to be good proxies for brand objectives. Look at some of the innovations that are coming along now: brand engagement metrics with widgets, for example, or some of the video ads that VideoEgg and others are touting. However, those have yet to really prove their effectiveness relative to the real campaign objectives (witness the number of games where the players can’t name the brand that sponsored them). And, they don’t typically have the reach that brand advertisers need to make meaningful buys.
What is particularly effective for brand advertisers on the web is their ability to target. While Oprah may be a pretty good proxy for Moms on TV, on the web it’s possible for Minute Maid to target exclusively Moms. And instead of limiting their reach to content that is aimed at Moms, they can use behavioral targeting and other techniques to find Moms wherever they are on a network of sites. This can make brand buys on the internet much more efficient, assuming they can measure them appropriately.
Another effective brand advertising technique that only the internet really offers is frequency capping. Most publishers and ad networks can offer frequency caps that allow a brand advertiser’s message to reach their audience an optimal number of times, without burning them out. We all have had the experience of seeing the same TV ad so many times you actually change the channel – with the internet, that doesn’t have to happen.
Brand advertisers need to start to embrace online advertising for what it can offer, targeting and frequency capping, and stop trying to use direct response metrics to measure their campaign effectiveness. When all you have is a hammer, everything starts to look like a nail. Click-through rates are the hammer of online advertising, and brand advertisers are getting nailed by them.