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Jupiter Media Metrix's Rudy Grahn on Direct Response Versus Branding
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Exclusive Interview with Rudy Grahn, Analyst, Jupiter Media Metrix
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avant|marketer: But, isn't there a pressing need to move away from the CTR as a central Internet Advertising metric? What do you think of CBS MarketWatch.com's recent move to stop reporting CTRs to their Advertisers? And, more broadly, does the content publisher have a role to play in weaning advertisers off of a focus on clickthroughs?
Rudy Grahn: We've gone on the record to say that CBS MarketWatch.com has taken a good idea too far. CTR should be taken down a few notches in valuation, certainly, but it is not, as the CBS folks have said, a "meaningless" metric; if only for the reasons I mentioned just a minute ago.
With regards to publishers' role, the debate here though should be far bigger than this narrow issue. The overarching concern should be that publisher's are in the measurement and reporting business at all. For the Internet to achieve maturity, it will need its' performance measured by neutral, 3rd parties. Otherwise, you have the fox guarding the hen house; not to mention the fact that under the "publisher-as-auditor" model, an advertiser has to collect, integrate, interpret, and manage data from multiple sources, and often, collect data via multiple methodologies, which is not scalable.
avant|marketer: It has been speculated that the rapid, continuing decline in Banner Ad clickthrough rates is a result of the fact that Web users are simply paying less and less attention to Banners. Assuming that this indicates a general problem with existing Internet ad formats, what needs to be done with regards to improving the appeal of Internet ad formats, particularly in order to make Internet Advertising more appealing to advertisers accustomed to the "richer" creative formats of some of the traditional media?
Rudy Grahn: Unfortunately, I think the debate over creative format has become so simplistic that it is losing its meaning.
Where a piece of creative is placed, and how much the advertiser paid to be there are factors that are at least as significant as creative format in terms of whether or not the creative, or the whole campaign succeeds. The consumer is infinitely more agnostic to creative format than advertisers are. The value of Internet Advertising to the consumer is in its' relevancy. Creative format can correlate to relevancy, but it is by no means a stellar predictor of the ads relevance to the consumer. Text links are very un-sexy as creative, but they can have phenomenal click rates if they are relevant. Banners get beat up on, but there are tons of contexts in which they add utility to the user experience, and those banners have click and conversion rates that prove it.
And, I might challenge the premise of this question to some degree, too: Yes, consumer tune-out is certainly one factor in the average click rate dropping; but it by no means the only reason.
I would suggest that the growth in CPC media buying has been a big culprit in dropping CTR averages. The way the delivery of those buys is structured, seldom are these CPC ads appearing in the types of targeted inventory that tend to generate the better click rates, so you have enormous amounts of impressions being used to get clicks, resulting in low averages. Beyond that though, things like the rise in international traffic to US content sites, publishers dramatically over-delivering on buys, and the deliberate efforts of advertisers to bring in more qualified traffic have also dampened CTR significantly.
Yes, these aren't as sexy of answers as consumer tune-out, but I think they are just as important.
avant|marketer: Lastly, you have pointed it out as being a failure that only a tiny percentage of Internet advertisers measure the branding impact of their campaigns. At the same time, it has been said by others that measuring the branding impact of Internet campaigns is very difficult, and that the methods by which this should be done are not at all clear. Does the industry need to evolve more effective ways to measure the branding impact of Internet Advertising?
Rudy Grahn: No. There needs to be no advances in technology or thinking for branding impact to be measured successfully online. The consumer surveying practices that provide this data are decades old and could probably be done with pen and paper. And even for the more interactive, Internet-centric metrics, the tracking technology that exists is sufficient as well.
The real problem here is with the culture of advertising. Advertisers tend to silo their efforts in ways that are entirely self-referential, and which bear little resemblance to how advertising is consumed in the real world. It's the "If it doesn't fall under my budget, then the group down the hall should worry about it" mentality. Advertising culture can be toxic.
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