The click of it

It’s official: online has overtaken TV as an advertising medium. According to the Internet Advertising Bureau (IAB), ad spending online grew to £1.75bn in the first half of this year while TV dipped to £1.64bn.

But the TV vs online dichotomy isn’t a particularly helpful one and the headline figures only tell part of the story. Anyone who has ever been on the internet can tell you that online advertising is actually pretty underwhelming – and research and measurement have played their part in making it that way. As a result, many brand advertisers remain wary of the web because it’s so difficult to prove ROI. Most of the £1.75bn online total comes from search and classified ads, and the £316.5m made up by display was down 5% year-on-year. Video, although growing rapidly, still only accounted for about £12m – less than 1% of the online total.

When Hall & Partners released results last year from a study in which they put 600 ads in front of 23,000 consumers, they concluded that online advertising was “shockingly conservative”. Other observers seem to agree that although things are definitely getting a lot better, they’re starting out from a pretty low bar.

The measurability of the internet – one of its great promises as an advertising medium – is actually one of the things that got us into this situation in the first place. A new study from the US IAB and Bain & Company highlights measurement as one of the main factors inhibiting investment in online advertising, alongside shortcomings in the areas of sales and service.

Hernan Lopez, president of Fox’s international online ad network, told Research: “Online advertising in general has been shaped by the direct-response heritage, and that puts immediate, trackable results above everything else. The first reason for that is that you usually see direct response at the early stage of any medium – they’re the first ones to experiment because, by definition, they are constantly tracking the response of the ads and they are willing to pick up advertising inventory that generates return when nobody else is. The second reason is that it’s easier to measure response in online than it is in any other kind of media, and as a result, even the advertisers that traditionally had been brand advertisers in other media started to look at online as a direct-response medium.”

So counting clicks became established as the standard for want of anything else. Lopez says the story reminds him of the joke about a drunk scrabbling around on the floor under a lamppost. A policeman passes by and asks what he’s doing. ‘Looking for my keys,’ says the drunk. ‘I lost them over there.’ ‘If you lost them all the way over there, why are you looking for them here?’ asks the policeman. ‘Because the light’s better over here,’ replies the drunk.

Relying on research that looks where the light is, rather than where things really are, has consequences for the nature and quality of ads produced as well as the overall user experience, says Nielsen Online’s Jon Gibs. “You’re not getting paid by the quality of the advertising experience, or the quality of the environment, or the amount of ad clutter or lack thereof, you’re getting paid by the response,” he told Research. “And in order to generate the most responses possible you see sites putting a lot of inventory up because they’re hoping that somebody clicks somewhere. So it becomes a numbers game: the more I put up, the more likely they are to click. And because of that, people then create really poor ad environments for those advertisers that aren’t going for a click but who are trying to build brands or reinforce their message.”

So it was that in February this year Randall Rothenberg, CEO of the US IAB, found himself saying that we have “toiled under the tyranny of the click for too long”, and calling for a “creative revolution” in online advertising.

To fuel this revolution, new research is needed. The IAB advises media companies to create segmented offerings “to meet the separate needs of advertisers who are focused on building brands and those who are looking for direct response”.

Anna Cliffe, head of research at marketing agency Brahm, says research needs to become “bigger and quicker”, broadening to cover all the things that have an impact on brand perception and quick enough to rival the established metrics. “I think online ad agencies are quite frustrated in general with the options for measurement that are provided by the research industry,” said Cliffe. “Because they’ve always had the clickthrough option they’ve been sort of spoilt, but also led down a different track. There’s nothing the research industry is supplying currently that can come anywhere near to the clickthrough in terms of immediacy. That’s not to say I think it’s the best way to measure an ad – I don’t – but there’s nothing else with that immediacy. That’s the real challenge for the industry.”

Jon Gibs agrees that the situation is frustrating, but he also says it’s understandable from the seller’s point of view. “It’s easy for me to talk about it, but I don’t have to worry about the profit and loss of a website,” he said. “There are significant pressures on those types of publishers right now to meet financial expectations. I think where we are is that we have people saying, ‘There is a better way.’ As an industry we’re starting to get together and think about better ways to do this that are going to financially benefit everybody and make the internet a better place to live.”

When research is used well, Gibs says, “you see a reduction in inventory levels, ads that are better in tune with the content, and better formats for creative execution that allow for brand building.” Publishers whose work he admires include those who have partnered with brands, such as ESPN and Gatorade and the New York Times’ “exceptional” work with Apple.

One initiative expected to accelerate the adoption of online by brand advertisers in the UK is the new audience planning system being launched by the UK Online Measurement Company (UKOM) with Nielsen’s help. Based on a 35,000-strong panel and backed by media owners, it is hoped that the system will become the UK’s ‘currency’ for planning online campaigns. It will focus not just on page views but also on time spent, and will provide data in a form comparable to that used for TV, radio and print, to allow planning of cross-media campaigns.

Advertisers and agencies have waited a long time for something like this – the joint industry committee that preceded UKOM spent years trying to get a system together, but eventually fell apart, with the time and expense involved in setting up a fully owned system from scratch making it a tough sell. By contrast UKOM’s system is due to be up and running in January, just over a year on from the organisation’s founding.

Matt Simpson, head of digital at the OMD Group, told UKOM stakeholders at a launch event in October that the ability to measure on a par with other media should give more clients the confidence to invest. Ian Armstrong of Honda called it a “genuine milestone” in the online industry.

Despite UKOM’s hope to become the ‘currency’ for online media planning, debate continues about the best methodology for such a tool. The system Nielsen is delivering for UKOM is panel-based, providing detailed data on individuals’ web usage, but limited in its ability to measure the ‘long tail’ of sites with smaller audiences. Rival ComScore is currently seeking recognition from industry auditor ABCe for its hybrid system, which incorporates traffic data from websites. Nielsen has argued that implementing a hybrid system is just too complicated, although the option remains to add website data to the mix later.

A large part of the potential of online lies in contributing to cross-media campaigns, and the UKOM system has been specifically designed to fit with the measurement standards used for other media: Barb for TV, Rajar for radio and the NRS for print. Gibs says that in the past, those working in online have made things more difficult for themselves by insisting on doing things differently to other media, “like a teenager who won’t be seen with their parents”.

“It’s certainly held [online] back linguistically,” he said, “because buyers from the TV or print world have had trouble understanding how the internet works. What is an impression versus a GRP? What is a unique visitor versus a TV rating? We’ve done such a good job of making our own language that we’ve made it more difficult for TV buyers.”

The kind of cross-media measurement promised by UKOM should provide a basis for research that looks at the impact of campaigns as a whole. Cliffe says: “It’s not just about advertising anymore when you’re talking about communicating a brand online, and that’s the other challenge – it’s about how we as researchers can measure things holistically. How do we establish whether the totality of the campaign has worked?”

Experiments in this area include ‘test and control’ studies such as ComScore’s Brand Metrix norms database, which studied panel members who were exposed to an ad, and compared them to others fitting similar profiles who weren’t.

But the big potential for online advertising research may lie in the potential for innovative, exploratory approaches harnessing techniques like co-creation. As Rothenberg said: “In our medium, unlike our predecessor media, we can engage people – literally engage people in dialogue. We can ask them not just to co-create ads, but co-create brands with us. Great marketing in our medium can take the form of software. It might even be an actual interactive event. But whatever form it takes, great creative is characterised by one thing: it engages the consumer’s intellect and emotions in ways that create bonds between consumers and the advertisers in the medium that brought them together.”

These ideas hint at a very different role for research and measurement, one that allows a more natural conversation with the consumer. There’s certainly an opportunity for research to be at the heart of that – but not the kind of research that’s concerned with counting clicks.