Thursday, July 09, 2009

Why The Lack Of Branding Online And What Can Be Done About It

(This post is bit longer than our other posts. That said, we think it's worth it.)

Brand advertising budgets represent about two-thirds of a $186 billion advertising market. Yet, only 5% of overall marketing budgets are spent on the Web.

In 2009, U.S. advertisers will spend only $3.1 billion online on rich media and video ads in a branding-oriented capacity.

That’s in spite of the fact that users spend up to a third of their media consumption online, not to mention, the Web’s reputation for being an accountability-oriented, data-rich medium.

Why is this?

With all of the data available on the Web and ample opportunity to engage consumers, why aren’t advertisers spending more than a tiny fraction of their advertising budgets online?

For Branding To Grow Online, A Separation of Responsibilities Is Needed

When it comes to branding, whether offline or online, there are two very distinct and different steps that have to be followed.

Step one is to reach the intended target consumer. This is done through the efforts of the media agency and is measured through impressions.

Impressions are good for determining how well the advertising worked at creating awareness. But as the consumer moves down the purchase funnel and it becomes time to create interest, desire and action, in other words, build the brand; impressions become an inadequate measurement of effectiveness.

Impressions measure the number of opportunities a marketer has to involve a viewer in a message. But impressions fail to measure whether a viewer was actually involved in the message or not.

Engaging or involving a viewer in the message is the second, and equally important prerequisite if branding is going to be successful.

Involvement in the message is the responsibility of the creative agency. If the commercial doesn’t involve the viewer, it becomes more difficult to be able to influence that viewer’s attitudes, perceptions or behaviors associated with the brand.

While both reach and involvement are necessary components to having a successful branding campaign online, advertisers are currently being asked to judge the effectiveness of their branding campaigns on reach, i.e. impressions alone.

Are The Media Agencies To Blame?

Although it’s unfair to lay the lack of an adequate measure of branding effectiveness at the feet of the media agencies, in this case it wouldn’t be completely off-base.

The reason is that the majority of a media agency’s income is structured around media mix models where reach, frequency and GRPs are the inputs and outputs.

Introducing new metrics that don’t fit into the traditional marketing mix model, and even more importantly, which don’t fit into the way media agencies make money, will not be well received by media agencies.

Or, their CFOs.

Is There A Solution? And If So, What Is It?

It’s a given that branding would increase online if better measures of effectiveness were put in place. The questions that need answering are:

  1. What would the appropriate metric or metrics be?
  2. And, who would implement them?

Currently the front-end and back-end of an online buy are monitored so that click-streams going in and results—in terms of sales—coming out, are measured and monetized.

What is overlooked is the qualitative part in between–the level of viewer involvement, measured as time spent.

If branding is about building relationships, and relationships are built through time spent together, then we would argue that the solution is to continue to use impressions. But, in addition to impressions, as Geoff Ramsey, co-founder and CEO at eMarketer put it,

“To overlay the time spent data that is unique to the online space and provide a digital footprint measuring how the consumer is engaged with the brand over a period of time.”

We currently know how many impressions a $5 million buy delivers to the advertiser. What advertisers also need to know is how much time spent that same $5 million delivered?

A Rapidly Growing School Of Thought

There is a new school of thought that is quickly attracting followers that says that the measurement of advertising online should involved time-based measures rather than impression-based measures.

One such advocate is Jon Gibs, vice president, media analytics, at Nielsen Online. According to Jon,

“Instead of buying 100 million impressions on a web site, we should be buying X% of a person’s time.”

While we agree that time spent is a critical measurement, we don’t feel that time spent should replace impressions. Rather, our belief is that time spent should be an effectiveness measure that is used in addition to impressions.

Fortunately, time spent is now being measured by third-party analytic companies for use with most, if not all, digital platforms. Currently, this information is being provided to online publishers, who in turn provide it to media agencies in an attempt to better convince those media agencies to run advertising on their site.

As media agencies have yet to realize how to optimize and/or monetize time-spent data, it is seldom shared with clients. Where is the upside for the media agency? They currently make money by selling impressions whether the commercials are actually viewed or not.

What is needed is for an outside group to start to broker time spent for advertisers just as media agencies are currently brokering impressions.

(In order to be completely transparent, our company offers a product called CreativeAudits that allows advertisers to both optimize and monetize time spent with their advertising.)

By separating impressions from time spent, advertisers can start to hold their media agencies accountable for what they do well, building reach. Yet, at the same time, they can hold their creative agencies responsible for what they are paid to do well, creating time sent with the brand.

There is, after all, only so much time in a day. The more time a marketer can convince consumers to spend with their brand, the less time those consumers have to spend with the competitor’s brand.

That’s why we believe that there’s a direct correlation between share of time and share of mind. And, as we all know, share of mind ultimately leads to share of market.

So are we saying that time spent can serve as a proxy for sales? The definitive answer is still out on that. But common sense seems to indicate that if consumers aren’t paying attention to what the messaging is saying, it will prove difficult to build a brand. No matter how many impressions you have.

Time spent starts to measure if anyone is paying attention.

And, if you did up to here…thanks.

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