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Finally, Advertisers Can Calculate Real ROI From Digital Advertising

August 1, 2008 by Chris Trayhorn, Publisher of mThink Blue Book

Providing advertisers with a wealth of opportunities to reach their ever-splintering audiences, the Internet has earned a reputation as the most accountable marketing medium. But the Web’s accountability as a marketing medium still falls short of fulfilling advertisers’ needs. As a result, the vagaries and shortcomings of digital marketing measurement models have stunted the growth of digital ad budgets, stilted creativity and limited the adoption of new channels for reaching key audiences. Today, however, thanks to new technology and industry demands, these barriers are coming down. A new measurement standard is picking up steam, and the industry stands to undergo even more change as a result. Marketers will be able to take greater advantage of the vast creative possibilities digital media has to offer, and brand marketers will be able to better justify redirecting traditional advertising budgets in increasing numbers to the Web.

BIG CHANGE, BIG OPPORTUNITY

This fast-paced evolution is turning the art of digital advertising into more of a marketing science. Audiences continue to consume content through new channels like video and mobile at a notably increasing rate. And as advertisers attempt to reach audiences through the widening variety of touch points, they’re being forced to rethink the value of their old, one-dimensional return on investment (ROI) measures. Advertisers, as a result, have been demanding a new measurement model that effectively demonstrates the ways consumers engage with their brands across each channel, site and placement, and at each stage in the sales funnel.

These changes have led to the introduction of a new ROI model for advertisers that are looking to digital media to reach their fragmented audiences (whenever/ wherever they are) and that want to measure the value of every touch point with their audiences (whenever/wherever they engage).

THE OLD MODEL TELLS ONLY PART OF THE STORY

A few years ago, measuring click-throughs gave way to linking to the “last ad.” This model – known as the “last ad” standard – assigns 100 percent of the credit for a conversion to the last ad consumers saw or clicked before they converted. At the time, this was the best approach we had – and far superior to offline measurement. Still, it’s a model that’s seriously flawed – and now, thanks to new developments, outdated as well. Today, the industry has taken a large step forward, enabling us to see and evaluate virtually every touch point on the path to conversion. In light of this fuller, broader picture, we see that the “last ad” standard masks the complete consumer experience – from their first impression all the way through the funnel toward conversion. Thus, it’s vital that marketers adopt a model that enables them to explore, measure and leverage the entire interactive experience.

THE NEW MODEL MAKES SENSE OF DIGITAL MARKETING

With the “last ad” model, you know the last stop a user makes before purchasing, but what happened earlier in the process? Different media influence users in different places along the way. Some advertising is targeted at achieving awareness, whereas other advertising seeks to close the deal. The technology behind digital advertising has finally caught up with the big ideas of smart marketers who have for years envisioned an ROI measurement model that could calculate the success of digital marketing campaigns geared toward brand experiences that correlate with the concept of the buying “funnel.”

The new Engagement Mapping model enables advertisers to calculate the ROI on each interaction a consumer has with the marketer’s message, not just the last. By providing a complete conversion analysis, the model calculates which of those interactions are most effective before the conversion.

ENGAGEMENT MAPPING: BETTER ROI MEASUREMENT

Quantifying success today requires much more than an adherence to an outdated model that measures only what happened immediately before the conversion. Engagement mapping enables a better measurement of reach (and the quality of that reach) while qualifying (rather than just quantifying) frequency. It enables today’s savvy marketers to also consider the importance and influence of factors such as ad format, frequency, recency, ad size, interaction and order.

The new model can provide a mosaic of analytics, which taken in full can provide a clear, thorough analysis of engagement ROI. And even though it’s infinitely more flexible, the Engagement Mapping model neither costs more for digital advertisers nor requires additional effort from the marketer. It requires only two simple things: 1) a desire to calculate engagement ROI instead of the return on only the last ad clicked; and 2) for your ad-serving technology provider to have enabled digital advertising and engagement mapping across all the various digital channels.

DIGITAL MARKETING IS NO LONGER JUST FOR DIGITAL MARKETERS

Marketers typically tie their marketing activities to stages within the marketing funnel: awareness, interest, intent to purchase and so on. This has certainly been the case with marketers concerned with traditional media. Because the new model for measuring the engagement ROI from digital media closely adheres to those long-held marketing tenets, digital marketing is no longer just the business of digital marketers. Digital marketing is finally becoming the business of every marketer.

The adoption of new digital-media measurement methodologies that more closely resemble traditional marketing strategy but are superior to traditional marketing measurement is enabling marketers to see how every engagement works together to drive their business. Because it proves the effectiveness of online awareness techniques and channels, engagement mapping makes sense and fits into the strategic thinking of visionary marketers. And it can free up both creativity and ad dollars.

Related posts:

  1. Lessons From Online Practice: New Advertising Models for All Media The Online Advertising Playbook aggregates and synthesizes what has been...
  2. B-to-B Online and Interactive Marketing: Cutting Through The Hype Online advertising, social networking, search engine marketing, Internet broadcasting, wikis,...
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  4. Web Analytics: The Non-Scary, Non-Techie Version You're capturing recency, frequency and monetary data about your customers....

Filed Under: White Papers Tagged With: Brian McAndrews, Perform, White Papers

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