Imagine for a moment that you’re the VP of Communications at a Washington, DC-based organization tasked with influencing national policy on a particular issue. Then, one day, after months of hard work developing your online audience, you realize you’ve finally done it. All your hard work has finally paid off. Leaping from your desk, you run into your boss’s office to announce the results, an announcement soon followed by cheers rolling across the office as your co-workers read the email lauding your accomplishment. Back at your desk, you take a moment to lean back and smile with satisfaction. You’ve done it. Your Twitter feed finally has a follower.
“One follower,” you might be asking yourself, “why would anyone be so happy about one stinkin’ follower?”
Read on to find out.
Advertising metrics grew out of one stark reality: we didn’t know who was seeing our ads. Sure, using some sophisticated statistical techniques we could make some educated guesses, but knowing exactly who saw an ad was a technological impossibility. And no matter how sophisticated your techniques were, it was still an open secret that audience measurement in the pre-Internet days was really more about shared fiction than about reality.
Because we really couldn’t tell who was seeing our ads, we took a shotgun approach, shooting out enough ads to enough people in hopes that (so the theory went) we were bound to hit at least some of our target market. It was all about “reach” and “frequency”: how many people got hit with that blast and how often we blasted them.
This approach was the norm for decades, so it made perfect sense that when the web came along we just kept doing the same thing: get that ad out there in front of as many people as possible, as many times as possible. But that was just the start of the revolution. The web was going to revolutionize the ad industry because not only could we put ads out there…we could even tell how many times they were clicked!
We shouldn’t make fun. It really was pretty revolutionary that advertisers could now have some real measure of audience engagement that wasn’t based on guesswork or extrapolation. We finally could, to paraphrase Mr. Wanamaker, tell which half of our advertising was being wasted.
But what did clicks really measure? The assumption was, of course, that a click was, at the very least, the equivalent to someone showing interest. And that was important.
Unfortunately, most of us realized pretty early on that getting clicks wasn’t enough, especially if all they did was dump people on the homepage. What we really wanted was for the click to turn into a lead or a sale. We wanted something to happen. Oh, and we wanted the ads to impact the brand, too, by raising awareness or changing brand perception.
But strangely the metrics didn’t change. Sure, some publishers and ad networks started offering CPA (cost per action or cost per acquisition) models, but they were expensive and difficult to measure. Google changed the equation by offering the CPC (cost per click) model (and others soon followed), but while it was a revolution at the time it still kept us counting clicks and kept the focus on the clicking, still emphasizing quantity, not quality and still keeping the focus on an action that doesn’t necessarily mean anything.
All that might be about to change.
The Financial Times recently announced that it would be moving towards a CPH (Cost Per Hour…yay! Another acronym!)…
The Financial Times recently announced that it would be moving towards a CPH (Cost Per Hour…yay! Another acronym!), a metric focused on the amount of time that an ad is in front of readers. The Economist, also owned by Pearson, announced that it would also jump on the CPH bandwagon.
It remains to be seen if other publishers will get on board, but if advertisers like it you can be sure that others will follow. After all, it’s actually a bit of a throwback to the way TV advertising is priced, a point not lost on Shenan Reed, president of media buying firm MEC North America (as quoted in the Ad Age article linked to above). “[CPH pricing will] be more like TV,” she predicts, “with metrics [advertisers] can understand and can relate to.”
Possibly, though I’d argue that if you can’t relate to online metrics today, you’re probably in the wrong business. But the idea of going back to a time-based model surely must give a lot of folks the warm n’ fuzzies. After all, it’s what many of us—especially those of us who remember the days before the web—first experienced way back in the day when dinosaurs roamed the Earth.
But besides being a nostalgic, feel-good method, CPH pricing may also have a number of other positive consequences, including encouraging engagement with long-form content, driving the development of higher-quality content that would hold viewers’ attention longer…a development worth getting behind, for sure. It could also encourage, as Ad Age, points out, the development of better creative, encouraging creatives “to take digital-display ads more seriously” (another positive development). Driving longer engagement via CPH pricing would also possibly increase brand recall: the Financial Times found that readers who experienced an ad for at least 5 seconds showed a 79% increase in recall.
The real key, however, is that it could be a major boon for publishers. The web is awash in pageviews (cough…cough…Huffington Post slideshows….cough) and many publishers find themselves suffering from an excess in un-sold inventory or find themselves selling off their inventory at a huge discount. And why shouldn’t they? After all, “pageviews” are a virtually unlimited resource.
Time isn’t. In fact, “time is the only unit of scarcity on the web,” according to Tom Haile, CEO of Chartbeat, a major digital analytics company. “You’ve only got 24 hours a day per person,” he continues, “That directly correlates with the goals of advertising. Just like any economy of scarcity, anyone who captures the most of it can charge more.”
He’s right, of course. TV and radio ads are priced on a model that recognizes that time is money. And as more and more sites and apps fight for our attention, time’s a resource that’s getting scarcer every day.
We still don’t think that it’s measuring the right thing.
But is going back to the future with time-based advertising the panacea for all online advertising woes? We don’t think so. We still don’t think that it’s measuring the right thing.
Remember our example from the beginning of this article? If you were at an organization that was trying to influence national policy and that one follower was the President of the United States, you’d be pretty happy about landing that one follower, now wouldn’t you? If you want to influence what the country does and the top person in the country gives you their undivided attention—even for a brief period each day—you’d better believe you’d be pretty happy about it. It’s definitely one case where the quality of your audience matters a lot more than its quantity.
It may be that the Holy Grail of online advertising isn’t about measuring what people do, but who they are.
Think about it: current metrics value the President’s clicks or time-on-page the same as anyone else’s. Getting President Obama’s attention isn’t worth any more than anyone else’s. Clearly, if you’re trying to influence the national discussion on a particular topic, Margaret Brunshwallader’s (of the Peoria, IL Brunshwalladers) click or view probably isn’t going to influence the debate all that much. But if the President sees your message, the potential to make an impact is astronomically greater. Our country may have been founded on the premise that “all men are created equal,” but when it comes to marketing some clicks and some views are more equal than others.
Today, whether we’re measuring clicks or time, we’re still using a shotgun approach when it comes to advertising. Sure, targeting and behavioral targeting algorithms are getting more sophisticated, but for the most part publishers and ad networks are still basing their pricing on the assumption that we can’t tell exactly who we’re marketing to, treating each action or view equally. Clearly, as our somewhat exaggerated Presidential example illustrates, that’s not true.
If there’s one adage about the digital world that we believe to be true, it’s something that we’ve said again and again: the stuff that works best online is the stuff that can only work online. Online success doesn’t come from “porting” content or business models from one medium to another but rather from creating new content and new business models that take advantage of the unique properties of digital media. While advertising models that look at actions are a step in the right direction, if they don’t include a dimension that includes the quality of the person taking the action they’re not doing much more than “traditional” direct marketing techniques. Pricing ads based on the time they’re on a visitor’s screen might be innovative and could potentially change things for the better, but it seems like even more of a throwback to another medium. On the other hand, combining these measures with an additional dimension that takes into account the quality of the person interacting with or seeing the ad is something that truly takes advantage of “digital” characteristics in a way that’s not possible in any other medium.
“How is this different than targeting?” you might be asking. Good question.
“How is this different than targeting?” you might be asking. Good question. It’s different because it combines techniques in order to determine differential pricing based on multiple factors. By pulling these factors together—action, time and identity—it would be possible to price ads on how much they’re worth to the client rather than what percentage of screen time, screen space, or mouse clicks they consume.
We may not be there now, but as more sophisticated tracking techniques such as canvas fingerprinting and Big Data-based behavior profiling (not to mention the wealth of personal info available in social media) become more available, the potential exists to finally achieve the dream of advertisers everywhere: reaching the right person with the right message for the right amount of time in order to drive them to take the action you want them to take.