Does the digital ad business need a visit with Dr. Drew? Based on the discussions at Monday’s Digiday Agency conference, it might be time for an intervention for an industry addicted to direct-response metrics and, more important, DR dollars. As Aaron Broder, CEO of Evolve Media, put it during a session on publishers’ advice for agencies, “Agencies are addicted to retargeting.”
But it’s no surprise agencies are so into clicks, which are easy to measure. The only problem is the ad clickers aren’t the ideal consumers. “People that click on ads are losers,” as Broder puts it.
Yet the click persists. Brands don’t seem to be able to resist viewing their click-through rates. Young, overtaxed media planners don’t have much else to go on — even if all parties agree the stated goal of a campaign is to increase awareness or purchase intent. And publishers can’t afford to turn down direct-response dollars, even if they object principally.
IAB president and CEO Randall Rothenberg agreed during a keynote presentation at Monday’s event that the click, and the direct-response obsession is holding the business back. But he’s also hopeful, pointing to how long it took cable TV to win serious brand dollars.
After all, up until about five years ago, Rothenberg noted, the Web was a dial-up medium. “It was technically quite limited in the kinds of ads it could deliver,” he said. “So we ended up with small, crappy spaces with not a lot of movement attached to them.”
Rothenberg was adamant that the creative side of the business is seriously looking to improve the media’s output and reputation today and, hopefully, to help break the DR addiction. But there is an inherent conflict built into that endeavor. “There is a challenge built right into the heart of how advertising works,” Rothenberg said. “You have this tension. It’s an art vs. scale business.” Creatives want pallatees with no borders, while formats help businesses grow. Increasingly, however, that is tension is between art and math.
Nancy Hill, president & CEO of American Association of Advertising Agencies, spun another interesting theory as to why brand dollars lag online. Compensation models for clients encourage them to invest more in TV than in digital.
“It’s difficult for a client to say, ‘I’m going to take money out of my pocket for an unproven model,’” said Hill.
Better measurement of course would help the Web prove itself in the eyes of many brand managers. That’s proven to be elusive, because the industry is waiting for something perfect that doesn’t exist, argues Rothenberg.
“Historically we’ve viewed measurement as a derivation of science. We’re kind of looking for the perfect metric,” he said. “Well, there isn’t a perfect metric. … By continuing with the fiction that measurement is purely science, we’ve lost sight of the fact that we just need agreement on something that is reasonable accurate.”
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“There are so many important steps along the way [of a purchase cycle], and we haven’t been able to say, ‘This is an important measurement, this is an important measurement,’” said Hill. “Bringing this ecosystem together is not always easy.
Thus, the industry ends up sticking with measuring clicks and sales and the like, which will likely keep non-performance brands offline for a while.
“Brand advertisers, they are very committed [to the Web],” explained Rob Norman, CEO of GroupM North America. “The ones that are less committed have terribly low interest goods and services that have no potential in e-commerce land.” Those brands, by the way, are the ones relying on TV.
Norman continued: “There is a signification correlation between advertisers who either have a goods that can be bought or sold online and or one where they can provide an enriched experience or information that substantially increases chance of purchase.”