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Friday, July 03, 2009

Gian Fulgoni, Where Have You Been?

Really, it's not becoming my favorite thing to name names in headlines. But in light of Mr. Fulgoni's deliberate (if lighthearted) provocations of online "direct response" lovers, we must fight fire with fire. Or at least, on this statutory holiday, fireworks with fireworks.

When I read that comScore founder Gian Fulgoni yesterday told eMarketer that the "preoccupation with direct response" is "partly a response to so many young people being involved in Internet advertising," I nearly fell off my Big Wheel.

I suggest a different reason for clicks and sales conversions as key metrics in the marketing and advertising industry: they're objective. Much like:

  • The radar gun that tells the police officer you've been driving 20mph over the limit, in response to your opening salvo: "...but I was just having a nice, zippy day."
  • The 7.5 second time in the 40-metre dash that tells the college coaches that your son has zero chance to become a wide receiver at that level, let alone the pros, as opposed to "my boy has a big heart -- as big as they come!";
  • The growth in net profit that helps investors decide whether or not to buy Comscore (SCOR) stock;
  • The thermometer and hygrometer that tell your furnace, air conditioner, and dehumidifier/humidifier when to turn on and off;
  • Countless other measures of obvious stuff.
If measures of "brand lift" also prove useful, then so be it. But the interest in measuring the more obvious stuff didn't get dreamt up by some imaginary cabal of literal-minded rave-going Youth. Rather, it appears to be an unholy alliance among people called Clients (the ones with the dollars to spend on more measurable digital media channels, who by the way got burned by brand-speak in Bubble I in 1998-2000); Web Analysts and the inventors of tracking methods, software, etc.; and Customers (who often use online tools like search and classifieds to avoid being bombarded with off-topic commercial messages). The Designers of the Medium Itself (eg. Tim Berners-Lee) and the surfing tools people use to access the medium (eg. Lynx, Netscape) created something called Standards and Conventions that created Expectations in Users, later codified and explicated by the Usability Gods.

Performance-based media? Clients ask for it by name. Customers don't shrink from it. Perhaps that's why upwards of 60% of online ad spend goes to the combination of search and classifieds/local.

If we're going to tout the benefits of "all of the other media that impact a person's psyche," then shouldn't we hold them to account as well as singing their praises -- specifically pointing to their enormous cost, and at least attempting to measure the benefit?

On a serious note: online, there is still a shortage of the types of quality places to engage customers, to start conversations, and to (without making them rebel) place decent "demand creation" messages. Then again, are we conceiving of "online" too narrowly? A celebrity touting a hot new camera will find herself on TV ads and billboards at the ball park. But in my mind, those are all potentially "digital, measurable, targeted, and auction-efficient" media channels.

Creating new kinds of (digital and measurable) demand-creation media spaces isn't as easy as it looks, perhaps because of the conventions and expectations cited above. Nor is it impossible. The Internet isn't TV. It really isn't. That does not, of course, mean that we should close off innovative conversations about what digital might become.

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Posted by Andrew Goodman




Sunday, April 27, 2008

Killer Verticals

Going back over some posts on Marc Andreessen's fantastic blog, pmarca, I came across this post that places market (and granular product-to-market fit and timing) ahead of "team" and "product per se" as a determinant of eventual success. In other words, a good product with an average team can still win if the market "pulls them along." I always thought of AOL as a company like that. You can probably think of many others. (Some in my field will say GoTo.com/Overture and Google AdWords were like that for awhile - they got better later.)

Cross-referencing these thoughts with some of the notables that show up on comScore's recent leaderboard of top web properties, I get some ideas.

Some markets are just so big, you can't dismiss them. Startups with a shot at doing something different in a vertical are not in a space that's "too crowded," arguably -- they are in the right place, with at least a solid chance of success.

Seeing Careerbuilder in 38th place, I think that startups like SimplyHired have a good shot at carving out a more than respectable sliver of a huge market, no matter how huge it seems.

In such verticals, international expansion also makes a ton of sense. Italy, Greece, Turkey, Singapore, French Canada, Mexico, "small" markets compared to the U.S.? Not if the category is big enough.

Seeing American Greetings in a ridiculously high position, I think that a greetings *feature* should probably be rolled out by Flickr, YouTube, gapingvoid, and others. If companies already have such things it may be worth pushing them a little harder. Greetings sound boring. But how many other categories have a whole store in the mall? Hallmark has a whole store in my mall.

Target (#20) and Wal-Mart (#22) are of a different ilk entirely. They actually sell "stuff." Those are some gaudy user numbers, though. Just imagine how many retailers in how many categories never thought e-commerce was worth the level of investment that could take it to that level. There are category winners in online retail still waiting to be decided. $1 million in up-front investment (or so) is all it would take some current laggards to dominate their niches. What are they waiting for?

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Posted by Andrew Goodman




Monday, April 14, 2008

Burst Media, That Old Thing?

comScore's release for March contains some fairly riveting stats. Numbers this aggregated don't really speak for themselves, to be sure, but the picture painted is one that is far less monolithic than current media accounts (mea culpa I suppose) might suggest.

The ad network stats pictured here, for example, show many of the supposedly "tired old" companies doing some pretty brisk business. And some of the startups in the group show real promise.

Some niche ad networks are doing pretty well, too. As are individual sites, selling their own inventory.

If niche ad networks have a role to play, and if the best economics for large individual publishers (as Jason Calacanis recently argued) are to sell their own ads and barely use networks at all, then look forward to continued variety in the ad sales economy. No monolithic "takeover" by any big network is in the works. If anything, it proves the value of the publishers themselves. It is mighty difficult to control someone else's inventory, as disintermediation is only a click and a better deal away.

Conveniently left out of the tables: revenues.

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Posted by Andrew Goodman




Tuesday, July 10, 2007

After the Page View: Can We Focus on the Question, Please?

Of course I agree with the great insights by Future Now guys Robert Gorell and Bryan Eisenberg on many questions of user engagement (though by necessity in my practice I use dumbed-down versions of what they do)... but there's something left out in the most recent round of responses to Nielsen finally putting the page view to bed as a meaningful audience engagement metric for the purposes of selling advertising space online.

Specifically, we still need (see above), a meaningful audience metric for the purposes of selling advertising online. (Probably several.) Let's assume for a moment I'm a large content publisher. Heck, assume I'm MSN. Maybe I'll sell ads in a variety of formats, based on advertiser demand. I'll need to price the ads in some way, be it on a formal rate card, through negotiation, or through an auction.

Or if you prefer, assume I'm a publisher of deep content and the operator of a pivotal resource online with a related light social networking component -- let's say it's called ILoveMyBackYard.com. I'm not a powerhouse, but all the outdoor patio vendors and such happen to be clamoring for ad space on the site. It's a quality site, so I can attract higher rates than "just AdSense." A good position to be in. How to fairly price the "inventory"?

I've got to make money. I don't want to sell subscriptions, because that limits openness and growth. So, in the mix of a variety of sponsorship and listing options, *based on heavy advertiser demand from those who simply want to include online display advertising as part of a broader online-offline mix*, I'll sell some display advertising.

First of all, (a) what's wrong with that? (b) if there's something problematic with the pageview due to AJAX, then we need to replace it with something. (c) if tabbed browsing and other perverse incentives mean it's not useful to measure time spent, then we need to replace it with something. (d) If certain events achieved by users are hard to prioritize fairly, then we need to replace it with something. And with all due respect, Robert, that something is not a sales pitch for persuasion scenarios! Remember, we were talking about my revenue needs as a publisher and community resource site, and the needs of media buyers 90% of whom may never want to figure out how so-called persuasion scenarios fit in with their preconceived notion of allocating a large media budget.

So meanwhile, in the offline world, the 30-second spot is not quite dead yet. Full-page newspaper advertisements and magazine ads are not dead yet. Far from it. Their online counterparts are doing pretty well, too.

As the interruption marketing world (not my favorite personally) moves towards an increasingly diverse ad mix, let's face it, ad folks are still filling spaces with ads and coming up with a fair formula to charge for that space. Insofar as it's a marketplace, it's their right to do this if there's a demand. The main scandal would be if the main metrics are so laughably primitive as to be "gameable" by the least scrupulous players. And often such players are the biggest-name publishers. So I'm in agreement with that part of Gorell's argument. Give me something I can reasonably fall back on like visitor counts and audience size. Beyond that it gets harder to measure user engagement, to be sure, so I proposed something like a "multi-point scorecard" as a potential helper metric, but at the end of the day, this is impractical.

I think the problem is, we're talking about too many things at once. There are quite a lot of rational scenarios for advertisers big and small to shell out for different kinds of listings and units online in places generic and specific. Advertisers will need to get more sophisticated about how well the ads "perform," but some really deep-pocketed ones are willing to just go for saturation tactics in key verticals, without over-measuring. So be it!

And meanwhile, for the average observer not in the process of transacting an ad buy, it just muddies the waters as the agencies like Netratings and comScore publish these broad-based "rankings" of web properties that we're supposed to look at. These have always been vanity metrics, easy to manipulate and ostensibly useful for impressing people at cocktail parties. I recently overheard someone from a long-defunct search engine company (still, sadly, in operation in shell form) mention that his company was a Top Ten Web Property in Canada! Did this mean he attracted a large crowd of groupies hanging on his every word? Absolutely not! People aren't stupid. They know a bunch of legacy page views from old personal homepages, and a gaggle of motley content acquisitions, can easily add up to a Top Ten Web Property (or more like "OK, OK, sixteen now, but we were ten for a month in 2006"), but that's irrelevant to most of us. Soon, I'm sure word will get out that some of the Netratings numbers factor in AIM usage where they shouldn't, (not that the word needs to get out, but I'm sure it will if it needs to).

I mean, when you think about it, the new "time spent" metric adoption by Netratings doesn't literally "hurt" Google, now does it? Nor will AOL get a "boost" in any tangible sense.

If we can agree on anything, the online ad world should be critical of easily gameable metrics, and should be wary of laughably unsophisticated measures relied on by ratings agencies that have this unwarranted godlike status. But my sense is that most sensible players already are.

But in a time of unprecedented supply and demand for online advertising, it might not be the best idea to split too many hairs as individual players try to practically execute on these vital transactions. Gullible advertisers who get completely ripped off have themselves to blame - but this has been happening on a grand scale for a half century, and online is more measurable than ever before. If Party A, Publisher wants to sell inflated page views to willing Party B, Advertiser, -- even after page views have been declared dead -- I won't lose a whole lot of sleep over it. I can't afford to let some online publishers' cynicism get to me -- although I came very close to going insane watching what unfolded in 1998-2000. :)

And if a few journalists wish to wildly misinterpret the time-spent metric, most will understand its limitations, so again, I'll sleep as soundly as ever.

I'd love to think that we have a mechanism in this place for taking Occam's Razor to the whole process (no, we won't be able to apply the razor to this rambling post, there's no antidote for that), and we do: it's called an auction. As distorted as some marketplaces might be in practice, in theory a good auction platform builder can facilitate an environment whereby advertisers are in total control of what they're bidding on. When advertisers control and monitor their own measures of success (be these time spent, events, conversions, etc.), they decide what happens to be significant to their business. Publishers that satisfy criteria sought after by more advertisers will thrive, and get paid more for their inventory. Today's auctions aren't perfect; Google, Yahoo, ContextWeb, Quigo, and others, are working to perfect the craft.

Not much has changed, then: the higher-level data proffered by NetRatings and comScore are all too easy to misinterpret.

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Posted by Andrew Goodman




Friday, March 16, 2007

New "Visits" Metric: Pro and Con

(via Searchviews) comScore begins touting a new metric, "visits," that allows a second visit and a third to be counted from a single user if that visit is more than 30 minutes after the previous one.

OK, well first of all, the concept of a visit is far from new. But let's run with it any way.

On the "pro" side, it's going to be vitally important to look at new measures of attention online. Time spent, and yes, visits, are key metrics because of the so-called death of the page view. New presentation methods such as AJAX will mean it's harder to measure pageviews (or impressions), and that makes it hard to fairly price advertising. I'd add that this is a good development in that content sites sometimes or often chopped up their articles unduly, or otherwise engineered a navigation model that actually produced more pageviews per visit. Should that be considered "more ad inventory" or not? Clearly we have always been dealing in nebulous concepts of user attention and some online advertising is well overpriced and some underpriced.

On the "con" side, I'll refer you to the perennial problem of sites gaming their traffic; or again, simply engineering more of what they have for sale. Valleywag's been relentless in poking holes in those who use small tricks to pump up the volume of what they're selling. The concept of visits is going to be unduly exploited by some sites, inevitably.

In the end, happy advertisers will be happy advertisers, and overpriced advertising will disappoint. But we do a disservice to clients if we don't continue to probe these various metrics for, shall we say, the "gaming opportunities" they might provide for some publishers.

Is "visits" better than uninformative stats like "reach"? Absolutely. Publishers and agencies have no business selling "reach." I'd rather see us be looking at a multifaceted stats package for pricing ads, like a quarterback rating (comprised of pageviews, time spent, heat mapping, and a list of various other stats). Or that could be considered at least a method of providing a third-party "scorecard" for how users work with a given website; of what type of audience and attention you're dealing with. You hear a lot of tough talk about third party advertising "audits," but that misses the point. You're not selling something that is ever 100% quantifiable, as the death of the page view shows. So as an industry I'd love to see us innovate, use scorecards, and explain the value of targeting.

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Posted by Andrew Goodman




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