 
Is the Internet a direct response medium or a branding/awareness medium?
This question, which not too far back into the past was used as a means of somewhat eruditely suggesting that, perhaps, there is more to Internet Advertising than clicks and immediate conversions, has now become part of a wider phenomenon of over-generalizing that has hindered progress in the Internet Advertising space over the last two to three years.
Few are quicker to point out this fact than Rudy Grahn, a key Analyst covering Internet Advertising, and specifically, online branding at Jupiter Media Metrix - one of the world’s foremost independent Internet Research and Audience Measurement firms.
Over the last months, Jupiter Media Metrix has released important research findings authored by Grahn, concluding that Internet Advertising has significant branding effects, the majority of which go unmeasured by Internet advertisers.
According to Grahn’s latest Jupiter Media Metrix research, the actual return on investment from Internet Advertising is at least 25 to 35 percent higher than most marketers believe. Grahn’s research also indicates that, at the present, a mere 15 percent of marketers are conducting formal online branding measurement.
In what follows, avant|marketer speaks to Rudy Grahn to get his thoughts on the direct response versus branding debate, the future of brand/awareness advertising in the online medium, whether this form of Internet Advertising will soon overtake the various forms of direct response marketing that have come to define Internet Advertising since its inception, and what advertisers need to do to better harness and understand the branding capabilities that the online medium offers.
Grahn’s incisive, to-the-point remarks on these matters are instructive, indeed.
avant|marketer: The prevailing view is that the Internet ought to be leveraged as a direct response medium akin to direct mail, as opposed to a branding/awareness medium on a par with Television. What is your take on this?
Rudy Grahn: This isn't an either/or proposition. It is both.
It's absolutely essential that advertisers stop defining campaign success solely by their intent. Direct marketing ads online may not be intended to do branding, but they brand. Similarly, brand-positioning ads can prompt immediate action, and overwhelmingly - these things are measurable.
The division between direct response and branding is something advertisers sit around and talk about. But, the distinction is basically meaningless to the consumer. Advertisers have to start to think more like the consumer. They must get interested in measuring everything that impacts the consumer's purchase consideration, regardless of the intent, or their degree of control over those inputs.
To sound bite my thoughts on this whole "direct response versus branding" issue: "If it isn't relevant to the consumer, why is it relevant to you?
avant|marketer: Talk about the findings from your recent Jupiter Media Metrix research into Internet Branding. What are the main lessons from this, for advertisers?
Rudy Grahn: This is really quite simple: You're not measuring ROI if you are not doing formal branding measurement in addition to your response tracking.
avant|marketer: Now that money is no longer pouring into the Internet Advertising space from venture capital-backed Internet ventures, it has been said that the focus of the Internet Advertising industry as a whole must be on getting the large-scale traditional advertisers to put increasingly large percentages of their advertising budgets into Internet Advertising. Some have suggested that this can be accomplished by switching to the use of traditional campaign success metrics such as those used offline. Do you believe that making this shift toward traditional campaign success metrics would revitalize the Internet Advertising industry? If so, how?
Rudy Grahn: Again, as I said on the direct response versus branding issue, the choice of metrics isn't an either/or proposition. Smart marketers will try to understand both.
That said, too many traditional advertisers want to treat the Internet like it is Television or Radio or Billboards or Print. It isn't. I am yet to see anyone approach Internet Advertising that way and see them come out with a successful campaign. Yes, the Internet is a synthesis of those other media. But, the whole is bigger than the sum of its' parts. There are unique dynamics at play that marketers will have to respect whether they want to or not. Anyone that wants to come out and say, "Internet Advertising Doesn't Work," should be also willing to throw open the books on their campaign. I am willing to bet 99% of the time, it was their specific approach that didn't work.
The Internet is a mass medium in which the consumer has near complete control of their consumption of content and advertising. That means advertisers have to market to the consumer purely on the consumer's terms. That is no easy feat, but it can be done.
Naturally, the drum beat is already getting louder from some corners to wrestle that control away from the consumer the way it has been done elsewhere. Basically the idea that these people have is to find ways to make ads more intrusive and interruptive and loud and flashy. This is a cop out and laziness - and, I would suggest, not going to be nearly as easy or successful as many people think.
avant|marketer: So, what is the lesson here, so far as metrics are concerned? What are the main Internet Advertising campaign success metrics Internet advertisers and content publishers ought to focus on, going forward? Is CTR (clickthrough rate) one of them?
Rudy Grahn: The most important metric, hands down, is cost. It's that simple.
I am amazed at how often I see studies that are released about the effectiveness of certain types of placements or creative formats, yet, they fail to mention how much of a premium you need to pay to get the premium performance from the placement or format.
It's like the NFL releasing a study saying Super Bowl Ads are better at raising mass awareness than Kung Fu Movies on UHF stations. Of course they are! But is that performance cost effective? Everything measured must be measured against cost. Performance is meaningless without it.
As for CTR, it should be tracked, but as a secondary metric. I have found that CTR's greatest use is in indexing it with conversion rate to tell me whether or not the traffic that a specific creative/placement is driving is qualified or not. At the end of the day, I am far more concerned with the quality of my clicks than the quantity of them. Of course, advertisers need both quality and quantity, so the advertiser should use CTR as a way to figure out which combination of creative sets and placements provide them with the volume of clicks they need, at the highest possible ROI.
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