The Growing Problem with Online Display Advertising

In a recent discussion of online display advertising, Erin Hunter, EVP at comScore, said the following:

“While the click can continue to be a relevant metric for direct response advertising campaigns, certain studies demonstrate that click performance is the wrong measure for the effectiveness of brand-building campaigns.  For many, the branding effect of the ads is what’s really important and generating clicks is more of an ancillary benefit.  Ultimately judging a campaign’s effectiveness by clicks can be detrimental because it overlooks the importance of branding while simultaneously drawing conclusions from a subset of people who may not be representative of the target audience.”  

Since recent digital industry reports have questioned the efficacy and future of online display advertising, Ms. Hunter’s comments are interesting on a number of levels.  If, as she asserts, the subset of people who click on an ad is not representative of the target audience, then I have three questions: Who is clicking? Why are they clicking? And what value, if any, do they hold?

We’d always been told that buying online advertising was the future because the medium offered advertisers better targeting and better results.  Now we are being told this may not be the case.  The comment that clicks are an “ancillary benefit” sounds an awful lot like something out of the print ad seller’s handbook (circa 1999) when clients would chastise the rep’s property for not delivering enough leads.  As Yogi Berra once said “It’s déjà vu all over again.”

The age-old debate pitting direct response marketing against brand marketing is now occurring in the online world. Legacy publishers have been dealing with this issue in a relatively successful manner for generations. Technology aside, the discussion basics are very much the same.  Measuring direct response via clicks, etc., is pretty straightforward.  Brand marketing, however, is murkier, and online display is taking it on the chin as a result.  The IAB and OPA are doing everything within their respective powers to ward-off naysayers.  Randall Rothenberg’s “A Bigger Idea” and OPA’s new ad units proposal may be steps in the right direction, but both groups need to better address two very important questions:

1.  Do Web publishers do as good a job as legacy publishers selling the halo benefits of quality content environments?

2.  Have halo benefits even been considered or have Web publishers thrown the proverbial baby out with the bath water in pursuit of their new media evangelism?

Since technology and analytics have driven Internet ad sales to date, one would have to conclude that new media leaders have fallen short when selling environment and seem to have paid it little mind.  Web publishers may be ahead of the game in terms of breakthrough technologies and evolutionary consumption habits, but it appears they lag far behind when it comes to articulating the non-measurable impact of their offerings to brand advertisers.

Perhaps the reality is that many have nothing to offer.  With the barrier to entry online being so low, just about anyone can play. Publishers that lack capital cannot make the necessary investments that make content a true win for advertisers.  With all due respect to IAB and OPA, all the manifestos and new ad units in the world won’t change this reality.
 
To amplify the quality content issue, various digital media blogs indicate there is a struggle within the community over which is more important—content, eyeballs or interactivity.  If you don’t have content, I guess you have a debate.  It’s ludicrous.  Content wins and it always will.  Great content will find its audience.

I am a huge believer in the concepts James Surowiecki posited in “The Wisdom of Crowds.” The crowd holds many solutions and its voice must and will be heard.  As a result, I cannot predict what the media ecosystem will ultimately look like, but I do know one thing for sure—the beating online display is taking will continue until Web publishers learn to sell the brand-building benefits of great content environments, and find the investment to deliver on what they evangelize.

By Joseph Guerriero -- With close to 20 years experience in both b-to-b and b-to-c media, Guerriero has held top-level executive positions Crain Communications, HealthLeaders, Billboard—where he served as vice president of integrated sales and brand marketing—and most recently at Success magazine. Guerriero presently serves as VP, interactive media sales for DMD Mobile Holdings. He lives in New York City.

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