Friday, July 03, 2009
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;
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.
- Countless other measures of obvious stuff.
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.
Labels: comScore, metrics
Tuesday, July 10, 2007
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.
Labels: comScore, metrics, netratings
Sunday, April 15, 2007
Is AOL important? Well, not in search, certainly; especially not outside the United States and Canada. Quite a few numbers have been bouncing around lately in terms of search share and online advertising generally.
For those who take a non-North-American, yet search-centric perspective, the following share numbers reported by Richard Zwicky at Enquisite should interest you:
Search Market Share (Global, Excluding Canada & US):
Google Images 6.9%
That's not to say that the US market isn't the largest and most important, but a wakeup call nonetheless. Enquisite isn't a service whose numbers get reported along with Hitwise and Netratings every month, but the sample size isn't small, either.
That global Microsoft footprint appears to be a myth, also. Surprising that their many partnerships and advantages haven't translated into search engine usage.
Labels: metrics, search engines
Friday, April 13, 2007
The latest Hitwise figures show Google increasing its monthly share of searches again in March, at the expense of Yahoo (down slightly), and Microsoft (down slightly).
Microsoft's numbers can be attributed to a few glitches, depending on who you talk to. A rebrand of the search offering (bad, confusing idea, I think) or difficulties with Hitwise's methodology.
Netratings estimates a slightly lower number for Google, 55.8% for February. Unlike Hitwise, they seem to assign 5% share to AOL Search. Whichever ratings agency you trust, it's clear (again) that Yahoo is in real trouble of losing its status as any kind of default search box for anyone. That would spell big trouble for the organization as a whole.
So I'd like to focus a bit further on the danger Yahoo faces if they let these numbers slip any further.
* First, they've spent too much on search to abandon it.
* Related to that, they've invested too much in Panama, which was built *primarily* to monetize Yahoo Search and only secondarily as a platform to bid on content, to lose any more search share.
* Third, search is good.
The "typing stuff into a box" thing is too important a category to cede, no matter how navigation may shift in the future. It is not good enough to say that Yahoo has a great diversified model that will make them money from all kinds of ad formats and fees. True, but it's not powerful enough to compete "unfairly" as a real heavyweight, if users stop using their properties to search.
So how to acquire enough of those searches? Big ideas grown internally aren't necessarily the way to win people over from their Google habit. So how to acquire enough momentum to re-establish it as people's habit to search on a Yahoo property for at least some of their needs?
* One way to get some of this back would be to acquire local search properties - like the very hot Yelp. You don't have to get into unfathomable social search or expensive Facebook acquisitions, under that scenario. There are some growing, fairly conventional, properties with a slight cachet of cool that are doing quite well. Get them now, before the price doubles.
* Next, keep building out those verticals. If your leading properties are losing to upstarts, acquire the upstarts purely for traffic. Then get the AdSense ads off them.
* As stated above. Acquire specially selected content sites purely because they're AdSense sites. Revamp the monetization plans of those sites.
* Make sure to internationalize your search for these acquirable properties, of course. Yahoo has certain major international holdings, but they need more.
* Biggest of all: Ask is clinging to some market share, and would immediately add several "type it in a box" type properties to Yahoo's stable. Moreover, IAC owns other vertical properties that would work to reinforce other things Yahoo is doing. Although it could be painful, there's nothing that says Yahoo couldn't launch a bid for all of IAC, sell what doesn't fit, and keep what does. Yahoo's valuation is currently about 4X IAC's. People worry about Yahoo's executive bloat, but the best way to reduce the bloat ratio is in fact to grow your overall top line and overall traffic, as long as it's strategic and as long as a lot of it is scalable search type stuff.
* Try to absorb a handful of departing, cashed-out Googlers who are somehow going to be convinced that this is a really cool challenge.
* Least likely, but a good idea for both companies: convince Microsoft to give up on search and paid search platform building. Re-partner on both fronts.
* Piss off Wall Street somewhere around Q1 of 2008, by implementing a short-term de-monetization plan across all properties to increase user satisfaction and traffic growth. Basically, spend the rest of this year studying how you can monetize your traffic *less*. In verticals, in search, in apps, etc. I know that's already happened in a lot of places, but try to hive off a little more - your effective CPM probably bounces back anyway if you're patient. (See Godin, Seth. The Dip.) Don't think Google didn't just spend the last couple of years doing that after beginning life obsessed with it. The paradox of Google's gentle de-monetization initiatives is that it made them money hand over fist in the long run.
* Finally -- though it didn't work so well for Lycos, consider leaving acquired brands intact. (It works for IAC.) If you acquire Yelp, don't fold it into your overall plan but rather let it maintain its identity for the most part. Use your leverage to distribute it more widely and improve the product.
This post brought to you by the philosophy that launched this site in 1999: while the search & traffic ownership game is not quite winner-take-all, it is something close to that. Monopolistic-type advantages will make it more likely for people to default to your offering. When you own the traffic 100%, profit margin on monetization is superb. Profit margin on brokering media is highly squeezable. There are some searches out there that neither Yahoo nor Google own. It would make a lot of sense for Yahoo to swallow the price tag now, and begin owning them.
Go big or go home!
Labels: ask.com, google, hitwise, metrics, netratings, yahoo
Tuesday, February 06, 2007
So, you know the drill. People who don't know too much about web stats love to quote Alexa ranks way too much. And so that's seen as a silly thing to do by those "in the know". But still, darned tempting. You can buy better data, but Alexa is free.
More recently, upstarts that don't seem too dissimilar to Alexa have come along: Compete.com, Quantcast, etc. You can count *dozens* of respected industry folk who have been willing to say stuff like "Compete.com is cooler," "compete.com is better," etc.
So, here's the deal. OK, it's not the deal, it's just my opinion. (Judysbook and Compete.com have "deals," and to be honest I'd rather see them focus on content and metrics, respectively.)
Based on the evidence I've sifted through, there's not a shred to suggest that Compete.com is better at this stage, and some to suggest it's actually worse. That shouldn't be surprising. Going strictly on toolbar installs, the upstart service is bound to have less data, and less representative data. They try to augment that with "ISP relationships," I gather, a practice which is quite old and generally not well explained. (Are Hitwise's ISP relationships better than Compete's? Are Wordtracker's better than KeyWord Discovery's? Does anyone do anything transparently in this industry?)
Evan Williams had a look at Quantcast and found that his site's rank skyrocketed from 15,500 to 2,900 after installing the code. What's wrong with this picture? Doesn't it indicate one or the other number is wildly inaccurate?
A number of analysts, from Greg Sterling to John Battelle, have given Compete.com favorable comments. But the uber-sceptical Matt Cutts just says no. (Check out the epic comments there, with everyone from the Compete.com founder to Lawrence Coburn, to one of the founders of Direct Hit(!) weighing in. The pro-Compete comments sound to me like empty cheerleading, but maybe that's because I'm not.)
And then there's SEOmoz's exhaustive (though restricted unfortunately to the SEM blogger community) attempt to look at the relationship between third-party traffic estimates and the "actual" traffic numbers of the site. This was so thorough that it got into the correlation coefficient between potential indicator of traffic, and actual traffic. Technorati links won as the best predictor. My caveat on this study would be that the "actual traffic" numbers are not reliable enough to give an accurate read - they are not "actual," but rather reported based on whatever log analyzers or other tools the sites use. Most of the site owners are savvy, but that doesn't make them perfect, and their chosen analytics providers are neither perfect nor consistent across the many sites in the survey. Nonetheless, there is something interesting in this study. It would be nice to see it replicated, with slightly more rigor, in different verticals. I found the fact that the third best predictor of actual traffic was the number of inbound links identified by Yahoo Site Explorer to be pretty interesting. Apparently, links matter.
And how! Timely, isn't it, that Google has just weighed in with the availability of a comprehensive linkage report, within Google Webmaster Central (formerly Google Sitemaps). Let's call it the "full linkerooni" - not to be confused with the publicly-available sample available with the "link:" operator. Incredibly extensive account by Danny at SearchEngineLand. Various versions of this might turn out to be topnotch predictors of actual site traffic.
So: some services that aren't really intended to be traffic measurement services predict actual traffic far better than those who make this claim for themselves, it appears. And Compete.com, in SEOmoz's study, comes in below Alexa, which doesn't fare too well in its own right. Shouldn't our cheerleading, then, be directed at Technorati and Yahoo for their fine free tools, and not mysterious startups who have yet to show us anything concrete?
Those in the driver's seat user-tracking-wise are the toolbar (or related user accounts) meisters. No, I don't mean the spyware and low level toolbar hawkers - I mean the respectable guys users hand over their browsing habits to, willingly. The king of toolbars: Google. Others in that vein, like Yahoo. The browser makers, and the like, also. Microsoft, on many levels. Companies that look even a bit like that, have scads more data than any of these "please install our code or download our toolbar so we can get more accurate data" startups.
Depending on who owns what info, some self-proclaimed "better traffic measurement" services will continue to provide wildly inaccurate data. Supporters will defend them by saying "sure, but it's free."
Free, as we know, can be costly. Om Malik still threatens to walk out of a meeting for a smoke break if you tout your startup using Alexa stats. Even if he quits smoking, you get the feeling the threat is still good.
Labels: alexa, compete.com, demographics, metrics, quantcast
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