Measuring Engagement ROI

aQuantiveToday I saw in a news story that Microsoft is testing a new tool that is called ‘Engagement ROI’. This tool, developed by aQuantive’s Atlas unit, is supposed to measure the all the ways in which buyers interact with a company’s online adverts until the point when they eventually buy something. Basically, Microsoft says that focusing on clicks is not the whole story and the fact that website visitors are actually not clicking on ads doesn’t mean that adverts don’t work.

Ok. This is fascinating. Let’s take a step back and think this through. What do adverts actually do?

Let’s say, I am reading a magazine or watching TV. I will see 100s of ads in both instances. However, I only know a few types of ads that will spur me into action directly. Examples might be:

  • Special offers/discounts
  • Limit period products/promotions
  • Job adverts

Essentially, these are all the adverts that indicate that something is only available for a short period of time. The message is: this is a great deal, if you don’t act now, you will miss the window of opportunity. Dell’s computer adverts are a good example for this style of advertising. They constantly give you the feeling that if you don’t buy the computer now, you will loose out.

All other adverts, I ignore. Or do I? Certainly, they don’t spur me into action. But there is one thing that they do: they position a product in my mental map. This means a couple of things. It means that when I am actually looking for something, I might remember this product and consider it in my purchase decision or give it a higher consideration. If this product is positioned well, I might be prepared to pay more for the product than it is worth objectively. Also, once I have bought a more expensive product, I will also enjoy it more than if the product had been cheaper. Here is a good story about how the perception of price changes experience.

So, what does that mean? In the vast number of circumstances, advertising has the potential to:

  • Increase probability that user will buy a product
  • Increase price users are prepared to pay
  • Increases satisfaction with product, leading to more recommendations, and repeat sales of these products.

I guess what Microsoft is saying is that they want to measure these effects. This is, in theory, a very interesting idea.

So, here is the trick. I was in science a little while back. One thing that I remember very clearly is that when you are measuring an experiment, you need two sets of data. The data set of your experiment and a control data set. You draw conclusions based on the comparison of these two data sets. Ideally, you also have a positive control, so you know what the results look like, when the experiment works.

What I don’t understand is how Microsoft wants to establish the control data sets in these circumstances. I guess it is possible to figure out who has actually looked at which ads online. But how do you know who hasn’t? How do you measure overlap with offline advertising?

I am looking forward to seeing the answer later this year.

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The Role of Internet Marketing

Internet marketing has obviously been talked and written about a lot over the last ten years and more.

One of the aspects of most of these discussions that fascinates me is that Internet Marketing is usually talked about as if it is just a further marketing and sales channel, in line with TV, Radio, Print media etc. This is very intriguing, because I think this is both right and wrong at the same time. Here is why.

The Internet obviously enables a company to advertise and sell its products and services. For advertising, think banner ads (very reminiscent of print ads, by the way). Obviously, you can also buy things online, Amazon and others come to mind. But that is not all.

Let me put it like this. These days, before I make any meaningful purchase decision, I go on the Internet to check out my options and to become informed. This is true for both personal and professional puchases. So, for example, before I buy a computer, I will spend a certain period of time on the Internet to check out all the options, read the reviews, got the the manufacturers’ websites, etc. After I have done this, I will go to the place where I will purchase, this place can either be offline or online. To me, this means the following:

All roads lead to the Internet

What does that mean? Let me explain it by example. I hear a radio ad on a product, I go on the Internet to check it out. I see a TV spot, I go on the Internet. I see a print ad, I go on the Internet. A friend tells me about something, I go on the Internet. I see a banner ad online, I go further on the Internet.

This fundamentally changes the role of marketing and of advertising

In the old days, you would advertise, so that either people went out of their way (they called, they went to the shop) to go and get the product or that when they chance encountered it (had to select one soap in the supermarket, chose one soap over the other) they selected the product they felt better about. Yes, you could read magazines and reviews and try to form an opinion, but this was a difficult and laborious process.

Today, people go and check things out online (I admit, buying a burger, ie impulse purchases are somewhat different than considered purchases, like buying a PC). This means that the conection between advertising and product purchase is broken in many industries. This means that regardless of where you advertise, the next step for the buyer is very likely to go online, become informed and THEN to go and purchase the product: All roads lead to the Internet.
Internet Marketing

I think this has some pretty substantial implications for marketers: Whatever the messages are that you send via traditional and more modern channel, they will get modified and changed by whatever your buyers find online. This means that the messages that can be found on your company and on your products online are at least as important, if not more important than the messages that you send out via channels. This becomes even more important, when the majority of content on your company that can be found on the Internet origniates not from you, but from 3rd parties.

An additional consideration is that the role of advertising has partially changed. Ads lead to online visits. This means that you cannot design any advertising campaigns anymore, without knowing exactly how they integrate with the Internet, because they will invariably lead to it.

A practical example: I watch a TV spot on a new car. It talks about some new cool features that it has. I think: this is pretty cool, I should check this out on the carmaker’s homepage. I go to the homepage, but all I find is a ton of videos (some of which I had already seen on TV), but it is impossible to find the information on the new features that they talked about. I give up, being frustrated.

I think one could think this through even further and start with the needs of the buyer, develop an online programme that meets those needs and then to develop TV ads, for example, that drive people online. This is the new role of Internet marketing as I see it: providing the linkage between advertising and the company itself.

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