eMarketer Online Brand Measurement Report

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<p>June 2009</p> <p>Online Brand Measurement:Geoffrey Ramsey, CEO &amp; Co-Founder geoff@emarketer.com</p> <p>Connecting the Dots</p> <p>Special Report</p> <p>IntroductionIn 2009, US advertisers will spend $4.7 billion on display ads, and another $3.1 billion on other branding-oriented ads, including rich media and video. But are they getting their moneys worth? Does online brand measurement even work? Do marketers have the metrics they need to connect the dotsboth within online platforms and between online and offline media?Authored by eMarketer CEO and co-founder Geoff Ramsey, this special report addresses these questions and many more. A Look Inside Total Access: This report gives you a sample of the premium content that is exclusive to eMarketer Total Access subscribers. For more information on what Total Access can do for your business, day after day, visit www.emarketer.com, or contact us at 212-763-6010 or 800-405-0844 (toll-free).</p> <p>More Available OnlineWe encourage you to view this special report online at www.emarketer.com/brandmeasurement for access to videos, in-depth interviews and full survey results (courtesy of InsightExpress). On the report Website, you can also join the conversation on this important topic by contributing comments.</p> <p>Digital Intelligence</p> <p>Copyright 2009 eMarketer, Inc. All rights reserved.</p> <p>Geoff Ramsey: Why This Report?Measurement means different things to different peoplebut most can agree that in business, measurement is vital to long-term success.Ill never forget my first experience with measurement. When I was 12 years old, my family moved to the UK, exposing me to a new school system and a decidedly different way of measuring student performance. Instead of the generalized feedback I was used to in Michigan, such as needs to try harder, the UK students were ranked from 1 through n (where n = however-manystudents-were-in-the-class). Granted, it was a blunt measure. And at the end of the first marking period, I was ranked last in every single subject, from Latin to mathematics. Ouch. Remarkably, though, this measurement system had a profound effect on me. I started paying attention in class and generally worked like a dog. By the end of the last marking period, my rank had elevated to No. 1 or No. 2 in each class. Could the online advertising industry benefit from a similar transformation if better brand measurement systems were put in place? Does the industry have the right metrics to be able to connect the dotsboth within online platforms and between online and offline media? Thats what this report was designed to uncover. Online brand measurement has been on my mind for some time now. After moderating industry panels with session titles such as Fixing the Measurement Mess or Is Data Friend or Enemy? it became clear that we had some major challenges to overcome. That feeling was confirmed when eMarketer commissioned InsightExpress to conduct a poll of industry stakeholders. On a scale of 1 (were still in the Dark Ages) to 10 (weve got this all figured out), a majority (51%) rated the current state of online brand measurement at 5 or below. Ouch again. This report was made possible by contributions from many individuals, who offered their time, expertise and razor-sharp thinking on an incredibly complicated topic, including many of my hard-working colleagues at eMarketer. In particular, I want to thank senior analyst David Hallerman, who shored up my original draft with much-needed improvements; writer/editor Tobi Elkin, who conducted more than two dozen high-level interviews; and Evelyn Majewski, who analyzed and provided a contextual summary of the InsightExpress poll of industry professionals. I am also grateful for the commitment and friendship of the industry leaders who agreed to be interviewed or come into our offices for video sessions. I offer special thanks to David Smith of Mediasmith, a legend in online measurement, who acted as a sounding board and sanity check for many of my points and conclusions. The process of writing this report was like absorbing the collective consciousness of the online ad industry, and it convinced me to change my views on a number of key issues. I hope it opens your mind to some new ideas and provides a forum for the industry to move forward on this important subject of online brand measurement. Please take the time to share your comments and thoughts. Collectively, we can begin to connect the dotsand maybe we can move to an 8 or 9 out of 10 sooner rather than later.</p> <p>Geoffrey Ramsey CEO, Co-Founder, eMarketer</p> <p>Online Brand Measurement: Special Report</p> <p>2</p> <p>Letter from Our Sponsor, Datran MediaWhen I first heard that eMarketer was publishing a study dedicated to online measurement, I got excited, because I felt that the timing couldnt be any better.We are witnessing a very interesting period in the industry where advertisers are no longer simply buying media on Web sites to reach a particular audience, but instead are actually targeting users. The explosion of exchanges and behavioral data targeting has suddenly made the term remnant important and sexy. Lets face it, this is not a just a trend, but rather a clear movement towards leveraging the plethora of data that differentiates the Internet from any other form of media. Even when advertisers buy from an individual site, they are now expecting to target specific users with relevant demographics or behavior. Although this appears to be a subtle switch, it actually has a profound effect on the industry, especially when it comes to measurement. Think about it. The measurement tools that exist on the Web today were created to address the desire to determine the most popular sites by attempting to count the number of unique visits to individual sites on a monthly basis. These tools were not really developed to provide valid insights into the user behind the browser. Perhaps in the early days of the Internet when people were focused on buying homepages or sponsorships, knowing the most popular sports-related Web site was actually relevant. But let me ask you a question, if you are only buying four million unique impressions, does it really matter whether the site reaches 20 or 30 million visitors a month? Although instinctively most of us want to say yes, chances are the answer is no. Advertisers should be shifting from asking what site is the most popular to wondering who specifically am I reaching?, is this who I am intending to reach? and what is the impact on my brand? Unfortunately the industry is still stuck in a rut over counting methodologies. Yet at the end of the day, the only figures that typically matter come from an advertisers third party ad server, as this is what determines the money actually spent on advertising. Until the debate switches from unique user counting to the accuracy and quality of data about the individuals exposed to and interacting with the ad campaign, we will be holding back the potential of the industry. Not to say that the number of monthly visitors isnt at all relevant to publishers or advertisers, but lets put that challenge into perspective and focus resources on moving the market forward with the type of audience measurement that todays marketer truly needs. I trust that this timely report will give us all a lot of food for thought and we are delighted to be sponsoring it. No one knows exactly what measurement will consist of in five years, but I guarantee it will evolve greatly from what exists today. This study should provide us with not only the current challenges, but also a hint of things to come. Enjoy the report and let the debates begin! Sincerely,</p> <p>Scott C. Knoll SVP Display and GM Aperture Product Group, Datran Media</p> <p>Online Brand Measurement: Special Report</p> <p>3</p> <p>ADVERTISEMENT</p> <p>What are Analytics ReallyTelling You about Your Audience</p> <p>Verified consumer data is the key to accurate reporting Current methodologies are outdated Most research sample sizes are statistically insignificant Audiences need to be measured at the campaign and creative level, not just site level</p> <p>Advertisers and marketers have long searched, with mixed results, for proof that their campaigns are e ective. For the interactive industry, integrity in audience measurement is a fundamental necessity. After all, accurate reporting and transparency is critical when planning future media buys, segmenting audiences, and optimizing marketing mixes.How crucial do you feel analytics can be in dictating future ad campaigns? (% of respondents)</p> <p>19,312,785impressions</p> <p>41,228clicks</p> <p>2,conv</p> <p>INFLUENCE (share of impressions)DEMOGRAPHICS FINANCE HOUS</p> <p>College Grad36-45 yrs (Adult Age)</p> <p>$250k (Net Worth) Bank Card$100k (Income)</p> <p>1-2 1</p> <p>Very</p> <p>69.2%</p> <p>Females 35-44 yrsMales 35-44 yrs</p> <p>Somewhat30%</p> <p>pressions indexed to internet</p> <p>Not at All .8%Source: Datran Media, Third Annual Marketing &amp; Media Survey, January 2009Adult Age (all) Sampling Percent 62%</p> <p>The methodologies that most media is measured by today are over 70 years old! Panel-based research was initially developed to help radio advertisers understand how many listeners were exposed to their campaign. Ironically, not much has changed in the world of media measurement. Although in recent years, ISP-based measurement has made some attempts to improve the way audiences are quanti ed. Clearly, online advertisers need deeper insights into who they're reaching. In todays competitive atmosphere, where targeting very speci c audiences is increasingly important, the old-world methodologies are becoming less relevant.Do you currently leverage audience analytics? (% of respondents)Aperture measures household- level demographics across the entire media chain from impressions to clicks to conversions.</p> <p>86-99 yrs 76-85 yrs 66-75 yrs 56-65 yrs 46-55 yrs 36-45 yrs 26-35 yrs 18-25 yrs 0 2 4 6 8 10 12 14 16 18 20</p> <p>Aperture answers the questions every digital marketer is asking:Am I reaching the right audience? Who is responding to my campaign? Should I be targeting new audiences?</p> <p>Yes No26%</p> <p>76%</p> <p>Source: Datran Media, Third Annual Marketing &amp; Media Survey, January 2009</p> <p>With more and more marketers relying on analytics to shape their campaigns, new tools are being developed for todays online advertiser, as evidenced by the recent launch of Datran Medias Aperture. Aperture is the rst and only audience reporting tool that delivers consumer pro les across all digital media, based on third-party veri ed household-level data. Anonymously combining veri ed o ine data with the online activity of over 100 million consumers, this rich data provides unprecedented insights into the audience that is exposed to, has responded to, and is converting on an advertisers campaign.</p> <p>To understand who your audience truly is, you need a reporting tool that is designed for the 21st century digital marketer. To learn more about Aperture, please visit datranmedia.com/insight</p> <p>A Datran Media Solution</p> <p>Table of ContentsIntroduction More Available Online Geoff Ramsey: Why This Report? Letter from Our Sponsor, Datran Media Table of Contents Background: Factors that Contribute to the Measurement IssueWhat Does Measurement Mean? Putting Measurement into Perspective The Accountability Factor</p> <p>1 1 2 3 5 55 6 7</p> <p>Building New Measurement Models for Social and Video Environments Unraveling Consumer Engagement Metrics</p> <p>44 46</p> <p>Next Steps: A Seven-Point Plan Endnotes Related Information and LinksContact Report Contributors</p> <p>47 49 5255 55</p> <p>eMarketer Total Access: How to Make Better Digital Business Decisions 55</p> <p>What Spending Trends Say About Online Brand Measurement 10Total Online SpendingSlow but Positive Growth Ahead Search versus Display Trends Dollar Trends Dont Tell the Whole Story 10 11 14</p> <p>Beyond Banners: Other Online Formats Will Boost Overall Branding Dollars 15</p> <p>Drill Down: What Are the Problems?A General Apathy Toward Branding</p> <p>1616</p> <p>A Preoccupation with Search, at the Expense of Branding 18 An Addiction to Clicks Do Traditional Measurement Techniques Work for New Media? Integration Is Hard When Data Is Locked in Silos Too Much Information, Too Much Complexity Current Measurement Models Have Limitations 21 22 23 24 25</p> <p>Measurement of Social and Video Are Even Further Behind 26</p> <p>Data Spotlight: How Online Brand Advertising Can Influence Every Step Along the Consumer Purchase Funnel 27How Display Ads Impact Brand Metrics Integrating Search and Display Ad Measurements How Display Ads Drive Site Traffic How Display Ads Impact Online Sales How Display Ads Influence Offline Purchases Three Factors for Online Branding Success 28 29 30 30 31 33</p> <p>Working Toward the Solutions for Online Brand Measurement 35Big Picture: Five Broad Approaches It All Starts with Marketing Objectives The Need for Uniform Standards Integrate Online and Offline Measurement and Metrics Embrace Traditional Media Metrics Get Smart About Attribution Modeling 35 36 36 39 39 42</p> <p>Online Brand Measurement: Special Report</p> <p>5</p> <p>Background: Factors that Contribute to the Measurement IssueUS advertisers will spend $4.7 billion on display ads in 2009, and another $3.1 billion on other branding-oriented ads, including rich media and video. But are they getting their moneys worth? Do they have the right metrics, and are they able to connect the dots, both within online platforms and between online and offline media? Is online brand measurement even a problem that needs to be fixed?This special report will seek answers to these questions, and many more.</p> <p>Putting Measurement into PerspectiveIn April 2009, eMarketer used online survey company InsightExpress to poll 37 high-level, highly knowledgeable marketing professionals with expertise in the field of media measurement. The purpose was to gauge their opinions on the state of online brand measurement. To get a level set on the degree to which measurement is seen as a significant barrier to the growth of online advertising, the respondents were asked whether they agreed with the following statement: Other than the economy, brand measurement is the single biggest obstacle holding back the growth of online advertising. A little under one-half of respondents, or 43.2%, agreed that measurement is the major obstacle aside from the overall economy.US Marketing Executives Who Agree that Brand Measurement Is Holding Back the Growth of Online Advertising, April 2009 (% of respondents)</p> <p>Its time for digital media to grow up and for clients who are running full-on marketing campaigns to really understand how their campaigns are performing if they spend $5 million or $1 million or $800,000 online, across various sites and fragmented audiences. Curt Hecht, president, Publicis GroupesVivaKi Nerve Center, in an interview with eMarketer, April 22, 2009What Does Measurement Mean?In exploring online brand measurement today, marketers need to be careful to separate out its two basic components: How successfully...</p>