Yesterday, "The Drift" kicked off a special four-part edition aimed at answering columnist Jack Myers' "20 Questions for the Online Advertising Industry," which was published back on March 21st. Today we handle questions 6 through 10.
6. How do we conform our unit size? Radio and television have :60s and :30s. Magazines have three, maybe four standard sizes for most advertisers. Online has text links, banners, buttons, rectangles, pop-ups, rich, and a never-ending cacophony of unwanted alternatives.
This is another one of those "through the looking glass issues." Enjoy the simple palate of :30s and :60s while it lasts. Running a pod of 30-second spots in the era of the remote control and TiVo is more than a little retro, don't you think? Advertisers recognize the fading attention that's being paid to standard broadcast units. That's why they're constantly crowding commercials onto the "content screen" in the form of paid-programming, "advertainment," product placement and more. The TV screen of 2010 will probably look a lot like the web screen of today. Our prediction is that broadcasters are going to aggressively devise and sell new non-traditional units over the next several years.
7. How do we simplify our terminology? Online media includes a disparate variety of unconventional formats, including search, e-mail, IM, viral, interstitial, Pop-Up, Daughter, Pop-Under, commerce, rich media, to name just a few.
This is not really a question of terminology, although the terminology can be daunting. It's more the fact that online is not a single medium, but a host of digital platforms that just happen to be delivered via the Internet. The Web, e-mail, and Instant Messaging are three very distinct entities. And within any given platform, there can be many different types of marketing opportunities and units. The best advice is to start organizing the options into an understandable hierarchy. Search can be compared - imperfectly - to the Yellow Pages (on steroids) while e-mail is akin to direct mail (without the postage).
Best to remember that we're talking about online media - plural.
8. How do we validate our research? Most media have a tradition of supporting a research monopoly or duopoly and simplified measures of audience age, gender, and narrowly selected psychographics. Online has click-through rates, impressions, uniques, e-mail responses, conversion rates, demographic profiles, awareness and recall, page views, e-commerce revenues, user sessions, times per page, and hits, again to name a few.
You could spend days on this one. First, it's important to recognize that the online industry is trying to answer the exact same questions as offline media: Who? How many? Did it Work? and What's the right mix? In determining user demographics and audience size - the Who and How Many questions - we're relying on two different kinds of data: Server Centric Measurement (what our ad servers and web servers can tell us) and User Centric Measurement (what we learn from panel measurement, not unlike the Nielsen and Arbitron figures). So there's always going to be multiple data sources and forms of measurement.
A real strength of the online advertising practice is our ability to do research "in flight" to tell the advertiser how his message is being received. I'm talking about the work of Dynamic Logic and others who have adapted the age old standards of pre- and post-testing to the world of the ad server and are accurately measuring awareness, ad recall, purchase intent and more. As far as "validation," you don't achieve that simply by having a single source of measurement. The online research providers are earning validation by groups like the Advertising Research Foundation and ESOMAR by adopting rigorous standards for their methodology and research practices.
One thing that has changed pretty dramatically is the adoption of offline media terminology within the online world. Watch over the next few months as the traditional planning standards of reach and frequency take root within the online world. I think you're going to see us sound more like offline advertising in the short term, while co-opting and improving on all advertising measurement in the long term.
9. Research suppliers include Nielsen/Net Ratings, @Plan, MediaMetrix, MRI, AdRelevance, CMRI, Simmons, Scarborough, Banner Track, comScore, Media Audit, Evaliant, and numerous third-party measurement companies. Although there has been some consolidation, how does the online industry foster standardized research tools, techniques and service companies?
The companies you mention span many different types of data. I could just as easily throw up a list that includes Nielsen, Arbitron, MRI, Simmons, Ipsos ASI, BRG, Telmar, IMS and Millward Brown, the companies that provide the full range of answers to print and broadcast. I can tell you that within each major offline sector there are about two leading providers of research today. Market economics have reduced the number of providers, and we're getting close to standardization in some spaces, but it's still too early in the development of the medium to choke off innovation.
10. How do we accurately report ad spending? The spectrum of current spending estimates for 2002 online advertising ranges from $3.5 billion to $11 billion.
In my opinion, the first thing we should do is understand the difference between reporting and predicting. I'll raise some hackles by saying so, but I still think the best source of ad spending reporting is the IAB/PriceWaterhouseCoopers reports that are based on blind publisher reporting of placement. They're historical - the numbers come out a couple of months after the fact - and they're not perfect, but they provide a solid baseline and a picture of growth or decline year over year. Those in the business of offering predictions for upcoming quarters or years are on slippery ground. This industry is still extremely volatile and moves at astounding speed. If there's anybody out there with a great crystal ball, I've yet to meet them.
Send your comments and questions directly to Doug Weaver