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Oh dear. One of the biggest advertisers in the world is making bad noises about the internet, disguised as good noise. Who could it be?
In this case, it is Proctor & Gamble. The firm's corporate marketing director, Roisin Donnelly, has been talking to NMA. It made the front cover, under the banner: “Poor metrics curb ad spend.”
It pains me to inform a company with such deep pockets that they're wrong about all this, but as the following statements show, they seem badly off track.
“P&G is moving ever more of its marketing budget into digital,” explains NMA, before quoting Donnelly:
“[online spend is] four times higher than it’s ever been measured at and it’ll be even higher this year, especially as the hundreds of small sites we use aren’t being measured.”
Well that’s a bit confusing. And why aren’t they measuring small sites? Weird.
But what comes next is even more disturbing. After complaining about the relative cost of online advertising vs TV, Donnelly really sticks the boot into the internet’s lack of measurability.
“Another barrier is measurement. We know how to measure TV, we know what the ratings are. Online has been slower to set up measurement systems, even though ISBA is working on it now. It’s desperately needed.”
Has the world gone mad? Or just P&G’s marketing department?
Firstly, the TV thing. Unless some amazing new development has occurred, I was under the impression that most TV ratings are defined by the 6,000 or so BARB set top boxes that are located in various households around the country.
So nobody really knows what the ratings are, but it’s agreed that this is a rocking way to measure TV. Doesn't matter that It Isn’t Very Accurate.
How come BARB is regarded as a suitable device for measuring TV? You have to extrapolate the data massively. As far as accurate measurements go, this system sucks, surely? To use BARB as some kind of benchmark for what constitutes a decent measurement system seems plain wrong.
TV panel data is also available from other companies, at a cost, but panels are panels, and the data they provide is to be taken with an industrial dose of salt – give me accurate web analytics numbers over that stuff any day of the week. It’s amazing, given the amount of budget brands like P&G spend on TV ads, that the demographic profiling of any given TV show is based on such limited, inaccurate data. If accuracy doesn't matter offline, then it doesn't matter online. Right? Hmmm...
I don’t at all understand how “online has been slower at setting up measurement systems”. I interpret this as: “P&G has been slower at setting up measurement systems”. Presumably P&G has heard of web analytics? Or ad networks? Or ad serving solutions?
Maybe we are once again talking about the dreaded demands – typically from offline marketers, including P&G - for ‘a single common currency’. What the hell does that term / demand actually mean? I hate that phrase almost as much as 'paradigm shift'. Does 'single common currency' simply mean that TV-focused marketers simply don't want to deal with terms like ‘page impressions’ or ‘clickthroughs’ or ‘unique users’?
You can measure the effectiveness of ads in any number of ways, so long as you have good measurement tools in place, and have predefined goals and metrics. You can measure CPA ads by CPM or CPC. And CPM ads can be measured by CPC or CPA. It doesn't matter how you buy advertising, in terms of whether it is effective or not (and it might not be, in P&G's case). Ultimately though, you measure ads by the business goals you've set - number of new customers acquired, for example. It's much easier to see this sort of visibility online, though for multichannel brands it can be difficult.
Measuring the effectiveness of ads across channels is harder, but let's stick to the basics: is my TV / internet / print / billboard ad effective? And if you can measure the effects of, for example, TV and print campaigns in conjunction with one another, then you can certainly do the same for the internet.
Maybe Donnelly is in denial: “We haven’t stopped watching TV ads,” she claims. Actually, many of us have – Sky+ boxes are now in 16% of Sky’s installed user base - and that’s one trend that will continue apace, like it or not. More than one million Sky subscribers regularly avoid ads. Does P&G pay 16% less for its TV ads these days? IPTV is on the horizon too, which should seriously shake-up the TV advertising landscape.
Reading the interview, it feels to me like P&G are significantly behind in terms of its approach to matters internet. Are these stalling tactics? I realise that this is one company that is hugely into brand marketing, and pushing out messages on a mass scale, so maybe the web isn’t cost-effective for P&G. But, you can’t know what you can’t measure, and P&G’s approach to online measurement seems shady at best. Or not there at all, if your site is considered ‘small’. That’s a classic TV advertiser’s approach to return on investment...
But whatever we think, let’s not compare the measurement systems for the TV and the internet, because for my money there’s only one winner in terms of accuracy, and it ain’t the telly.
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We’re pleased that, amongst her legion other responsibilities, Roisin is well up to speed with ISBA’s strenuous and sustained efforts to get a user-centric currency for the online media. But that said, some of your subsequent interpretation is debatable. I would focus on two points :
1. The measurability of online vs offline
You rightly assert that online can throw up as much data as can be imagined, making it much more accurate at what it does than any panel-based research such as BARB.
But where it falls short – to the medium’s current cost in lost revenues – is that brand advertisers seek to reach people, not computers or IP addresses.
Site-centric data, both from sites themselves and from ABCelectronic - which ISBA co-founded and funded a decade ago - reveals a wealth of information about the way users – whoever they are – come to, travel around and between sites.
But it doesn’t tell us who they are, so it doesn’t satisfy brand advertisers’ established practice of seeking to reach and positively influence the kind of people they believe to be their target customers.
Hence the strenuous industry efforts to establish a user-centric – audience – because only such measurement can yield the equivalent of the ratings, reach and frequency upon which brand advertisers plan and against which they spend.
We regret that these efforts sadly remain inconclusive, but are absolutely committed to continuing to persuade all parties – and principally the major site owners – of the commercial value to them of such information.
2. The demise of other media, notably TV
Much has already been written about this, but I would encourage you and your readers to check out the very good piece by CBS Broadcasting VP Gil Schwarz in this month’s Television magazine.
He gives the lie to some of the doom-mongers’ prophecies, citing the major US networks’ experiences. In short, the new technologies are certainly enhancing viewers’ ability to consume TV in ways which suit them better and better, but this is not to the detriment of viewing or ad revenues. Rather, it is a force for good as viewers are using the technologies to ensure that they are getting to see more quality content.
As they say, the rumours of the death of the medium may be exaggerated.
Having successfully and rapidly grabbed a goodly share of the low-hanging ad budgets, the challenge for the online medium is now to attract more than a small share of the succulent ones higher up the tree – the branded goods companies’ traditionally large budgets. This will at best be a slow struggle if it doesn’t begin to talk their language, slower still if it just bites the hand that could feed.