Ad network and technology platform, Collective, released its "2010 Collective Display Advertising Study" here (PDF). Among the findings, "About two-thirds (64 percent) percent continue to use click-thru rates (CTRs) to evaluate ad network performance. The study finds a disparity between senior- and lower-level agency decision makers, with the latter relying heavily on CTRs and the former leaning on other metrics."
Collective VP of Marketing Peter Weingard discussed the study's results.
AdExchanger.com: Why do you think social media and portals are seeing growth and content sites are experiencing declines as it relates to audience buying?
PW: The study points to secular shifts in media buying techniques. Whereas traditionally advertisers have had no choice but to use content as a proxy for audience, they can now buy audiences directly. To be clear, advertisers in our study did expect to increase spending on big branded content sites this year (verses last year). However, the rate of increase seems to favor more audience-centric plays. Social media has some of the desired characteristics of audience-driven buys deep, such as data around users and their behaviors. More importantly, incredible amount of page views and ad impressions ripe for data segmentation and audience monetization via 3rd party data.
Among the findings, which one surprised you the most?
I think we were most surprised by the continued reliance on Click Through Rate as a measure of campaign success. Given all the research disproving CTR as a reliable performance metric, the thought that sophisticated digital agencies are still giving it credence is disappointing. For our part, Collective has been measuring audience interactions and time spent with the ads we manage. We’re also the first company to deploy Nielsen’s new Immediate Consumables research to measure the offline sales impact of online display advertising. When I wondered aloud why advertisers were still using CTR, a well-known advertising journalist, replied, “well, why are TV networks still stuck on using Nielsen 60 years later?”
Possibly, but I suspect the issue has more to do with the general lack of quality inventory historically available and current lack of transparency on exchanges. Publishers are still reticent to merchandise their inventory here for fear this sales channel might compromise their direct sales channel. However, as these brands recognize the display demand comes in two flavors (sites and audiences) and each will likely make up 50% of total display spending in near future, they’ll see ad exchanges as a necessary complement to their direct sales channel to maximize share of audience demand. Ad Exchanges will continue to advance to provide publishers with the control they require to bring inventory through this channel in a way that is differentiated from their direct sales efforts, but still meets the needs of agencies and advertisers.
What do you think the tipping point will be when advertisers stop using CTR as a critical performance metric?
Well, you would think that if 99.95% of ad impressions aren’t clicked, the industry would quickly figure out a way to value the ad impression. This is working for direct marketers, thanks to quantifiable post-impression conversions. However, for brand advertisers, the industry is not providing a universal metric that they care about. They are looking for attitudinal metrics (lift in ad awareness, purchase intent, etc.) and impact on sales (offline/online) so that they can better optimize their marketing mix. The industry has a long way to go to standardize reporting on these other core branding metrics.
By John Ebbert