I have been ranting about this for some time now and it looks as though the media industry is finally taking notice. In the face of plunging CPM rates and even lower click-throughs, digital media types are now scrambling to justify value for online media spends.
Counting eye balls is an inherently old school manner in which to gage value – one that is predicated upon a traditional media structure dating back to the printing press. In this sense, media value was derived from simply seeing an ad that was, by definition, unique and impactful. Those days are no longer. Although I hear the old media guard defend the impression model from time to time by saying that it has become more accountable, more measurable, and more granular. Fine I say, so what? We are now able to prove to clients that people saw their ad – great. How does that translate into a meaningful metric like purchase intent or post-purchase loyalty?
In my opinion the real problem rests with the structure of the entire ad/media industry – we are still chained to an obsolete model of how media is purchased, consumed, measured, justified and paid for. So how do we address this?
For starters we need to stop treating online as just another media channel (platform). Online is different; it is an interactive (I sure hope we have figured this out by now) and not passive consumer experience. Indeed, online media should be viewed as a platform that ties all media together – the essential ingredient that captures and leverages all media communication. IAB CMOS studies have proven beyond a shadow of a doubt that online amplifies a client’s media across all platforms. It is in this respect that media planners should be integrating online as a means to amplify and enhance existing communication channels. Thus, on one side we have clients demanding an integrated media plan and a way measure their spend, while on the other side we see agencies trying desperately to jam the new media paradigm into an antiquated value model. So let’s just say it… traditional media value measurement is failing to provide clients and agencies the proper structure to evaluate and scale their media investment.
Another reality that needs to be addressed is the virtually unlimited inventory of impressions that is available online. The massive shift of eyeballs going online is a double-edged sword for our industry – the more people generating page views the more inventory that can be sold. One of the primary reasons there has been so much downward pressure on CPM rates for online media is that there are no constraints to supply. Unlike traditional media where there is a significant cost to each unit of advertising space or time, online ad inventory is virtually free for each additional unit. Thus, the number of impressions that marketers can buy is almost infinite. In this environment where content is (virtually) free and impressions are mere commodities, we will be forced to find the true value of online advertising and a cost-model that reflects the true ROI of online media.
The growth of social networking sites such as Facebook and the continued importance of search in building successful media strategies only add more complexity to the online value debate. Social media has recently been co-opted by the PR industry as their traditional skills in media outreach and publicity have waned in lock-step with traditional media. In essence, Social Media is becoming a massive opportunity for marketers to influence and participate in brand conversations – a natural fit for PR, presumably. However, Social Media like other online platforms does not conform to a static one-way (push) method of communication. As an example, sending off a press release to a blogger asking them to write about a brand is not a social media strategy. Working from within a cost/value model that is rooted in traditional media is once again the crux of the problem. As much as I can pass judgment and criticize poor online strategic thinking – the fact is that agencies can’t make money if there is not sufficient value placed upon online media by clients. The gap between what clients pay for traditional media and online media will need to change if we ever hope to adapt to the rapidly changing media landscape.
Since the launch of Facebook ads there has been much debate over their apparent lack of effectiveness. This was primarily due to the fact that media planners were looking at the results through the lens of “how many eyeballs have seen and clicked on my ad?” In my opinion this is a huge mistake. When the topic of effectiveness comes up with our clients I usually ask this question: What is more important, having 100,000 consumers view your ad – or having 1000 highly targeted, consumers engage with your brand? Now let’s assume that both of these outcomes cost the same. It would take a very enlightened client to select the second option. Why? Because even if the second option would presumably result in a more meaningful interaction, the manner in which those 1000 consumers are valued is too far too low. When evaluating online with a traditional model, GRPs or reach dictate where dollars are spent. In my opinion, the new fractured media environment makes the GRP focus almost irrelevant. If a brand wants max GRPs today, the only option is an event like the Super Bowl or the Oscars.
Many agencies and clients that we work with understand this new value model and are focused on engagement, context, and relevancy as a key metric. But how do we value and charge for engagement, context, and relevancy? Once again it comes down to structure and pushing hard to understand the true cost of a brand engagement. To a keen observer, traditional ‘metrics’ cross through many separate and distinct marketing disciplines – TV advertising, promo, sampling, awareness campaigns, direct marketing, CRM, etc. For a digital agency however, all of these tactics come into play for an online campaign to be truly integrated – and successful. To a marketer, all of these strategies would seemingly be extremely valuable, and if they could all be done simultaneously? Wow! Sign me up. Back to my original point – this is what a truly integrated strategic digital marketing plan should be doing. It’s not something that happens by accident.
So, how do we look at putting a value on this complex set of consumer interactions and conversations? Here are a few ways to look at a new value model:
Make it simple. In order for a new model to be widely adopted and used, it needs to be based on hard but simple data. You have to have a way to create a streamlined process. Everyone wants and needs a way to compare campaigns and metrics to determine success. Simplicity can lead to scalability, which allows for more efficiency for publishers, agencies, and marketers.
Metrics need to be aligned with campaign goals. Whatever you pay for is what publishers will start mass producing. If you want engagement, pay for engagement. It is unclear whether there is one metric or many. A starting point might be to start with uniques, actions (like sharing, contributing, and engaging), and time.
Here is the truth: executing online campaigns (social or otherwise) is incredibly complex and difficult. It takes a lot of time from many people with diverse backgrounds to successfully develop, design, launch, monitor, track, engage, measure, and leverage a digital campaign. At the end of the day the value for digital media will come down to ROI. Does it work or not?