Online advertising not measurable enough?

Compared to what! Television? Print? Mark Cahill calls my attention to this insanity.
Scott Karp rips apart a recent McKinsey survey/report on online advertising (which I meant to do, but got sidetracked). Here’s the upshot as reported in Adweek:

McKinsey polled 410 marketing executives in five sectors, and among those already advertising online, 52 percent said “insufficient metrics to measure impact” [emphasis mine, ed] was the biggest barrier, followed by insufficient in-house capabilities (41 percent), the difficulty of convincing management (33 percent), limited reach of digital tools (24 percent) and insufficient capabilities at agency (18 percent).”

Scott gets right to it:

“Does that mean advertisers really believe metrics like cost per lead, cost per sale, or even cost per visit are inferior to traditional “bottom line” metrics like reach and frequency, gross rating points, and rate base? Does that mean advertisers believe mass media have better “capabilities” than online advertising platforms like keyword-targeted search advertising, behavioral targeting”

Client-side as I am, let me agree with the survey panel that the primary barrier is indeed in-house capabilities. Budgets, staff and mindset are still geared towards television, print and out of home. Convincing management? Not an issue for me. Limited reach? Sure, online is growing more expensive and yet it is harder to put money in market as strong opportunities begin to vanish under high demand. Agency capabilities? Agencies are scrambling to staff up, I’d put the onus on the client to deal with the in-house capabilities, we’re moving to a multi-agency, specialist network model with the client providing the management and the glue, the metrics and the execution.

But insuffiicient metrics? That is doubtlessly the most ignorant thing I have heard all year. McKinsey needs to either change its survey methodology or find marketers who have a clue, because the one’s they surveyed are probably relying on their agency to give them click-through reports and therefore, deserve what they get.

Metrics in online advertising are the responsibility of the client, not the agency, not the publisher. If the client is incapable of attributing revenue to a dollar placed in the market, then the client is wasting its money. Only the client can detect the action on the client site. Period. If an advertiser is spending online (I suspect McKinsey’s survey panel is obsessed with CPM and CTR on banners) and not measuring the impact end-to-end then they need to fire their agency, hire an interactive marketing manager, and invest in a decent metrics package. If not, well, stick to your TV, radio and print and have fun with such wonderful measurements as “pass-along” and “drive-time impressions”

Note, McKinsey loves its registration wall, in the belief that its content is super precious (it is good, but sorry Stuart and Jeff, it needs to be easy to get to), so I shall not waste your time with a link to the survey which I can’t find anyway.

Author: David Churbuck

Cape Codder with an itch to write

0 thoughts on “Online advertising not measurable enough?”

  1. Maybe it’s not that McKinsey has an affected notion that the content is precious so much as that they want better metrics around who’s viewing the content and whether the effort of posting it does indeed lead to additional consulting engagements? 🙂

  2. Derek,
    McKinsey is filled with smart people but they don’t lead the world in new media consulting. I have in mind one report in particular generated during my tenure that essentially told magazines not to invest online except to build print subscriptions. You want smart interactive marketing consulting? Read the blogs.

  3. Believe me, I read the blogs. (i’m here, right?!)

    The metrics question seems to me (without actually reading the source document, because Lord knows I can’t be troubled to do that) to be yet another case of overstatement. Nobody would argue with “metrics for effectiveness of online marketing need to keep improving”. But in the spirit of online discourse, they’ve gotta go and make a federal case out of it and make some hyperbolic and falacious comparison.

    What puzzles me these days, given the brand I work for (historically aimed at a high-level audience), is that many companies seem to be spending willy-nilly online without any real understanding of the audience that’s attracted by a given site. If I were buying advertising for a tech company, I’d want to keep track of the source from which each of my leads came, and I’d figure out what % of leads from each source convert to a sale, and the average deal size, and the average time to close, and the specific products purchased. That information would guide my future ad spend decisions.

    As you note, these metrics are the responsibility of the client, not the agency (or for that matter the site owners, since they don’t have end-to-end visibility). Am I wrong – is everybody actually tracking these things?

  4. no! very few advertisers have tracked in the past. They’d make some stab at metrics or attribution because someone told them to, but in the end they measured the wrong stuff with the wrong tools and took it as an article of faith that it worked.

    publishers have no incentive to provide accurate end to end metrics. agencies either.
    It comes down to buyer beware.

  5. Dave,

    You posted this a while back, but I’m still seeing the same thing. I’ve just relaunched a Social Media Marketing agency. (Relaunched as it was Aliza Sherman freelance that got to big for her.)

    Anyway, I’m continuing to hear this from clients and it’s hilarious. Here’s an example conversation.

    POTENTIAL CLIENT: “I’m concerned because I can’t measure my ROI with Social Media, but I can with traditional media.”

    ME: “With what metrics are you measuring traditional media?”

    POTENTIAL CLIENT: “Well they give me circulation and viewership reports for print and TV.”

    ME: “So, a few questions…
    1) Does the publisher disclose what percentage of people actually looked/watched your ad instead of flipping past it or going to the kitchen for a drink?”

    2) And how do you bring those circulation numbers back to ROI? Do you have conversion rates of how many people that watch a TV ad, or notice a print ad then buy your product.”

    POTENTIAL CLIENT: “I see your point.”

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