October 3rd, 2006
Engagement Is a Euphemism For Measuring the ROI of Brand Advertising
Last week I attended the Consumer Engagement Conference, put on by the Advertising Research Foundation (ARF) and the American Association of Advertising Agencies (AAAA), where I discovered that the word “engagement” — which is being proffered as a new “output” metric for advertising to replace outdated “input” metrics like Gross Rating Points and Impressions — is merely a euphemism for figuring out the return on investment for brand advertising.
Several factors have combined to put pressure on the billions of dollars spend on traditional brand advertising — TV above all — to demonstrate “engagement” (i.e. what’s the ROI of all that money we’re spending?):
1. Mass advertising of mass brands is dying
2. Audiences are fragmenting at an exponential rate
3. The share of media time spend online is rapidly growing
4. Online video has arrived
5. Google has made billions on direct response advertising, finally realizing the promise of the Web to revolutionize advertising ROI measurement
The advertising industry has realized it’s only a matter of time before the pressure to demonstrate the return on invest for TV advertising threatens to collapse the whole system. That’s what drove NBC to negotiate what may be the first pay-for-performance deals in the history of TV advertising (Alan Wurtzel, President of NBC’s Research and Media Development, who spoke at the conference, wouldn’t confirm or deny, but it was pretty clear that’s where they are headed.)
So the problem I have with the working definition of “engagement” — “turning on a prospect to a brand idea enhanced by the surrounding context” — is that it obfuscates the real issue:
How much so companies profit in the short term and/or the long term from the billions they spend on brand advertising? In other words, show it to me on the P&L statement!
The coming showdown over brand advertising is only going to intensify as Google comes at it from the other end. At the conference, Patrick Keane, Director of Field Marketing & Sales Strategy at Google, presented the results of — get this — an eye tracking study to show that consumers were more likely to look at an ad in a relevant context. Not click on the ad — just look.
Welcome to the wild, wooly, squishy word of brand advertising, Google!
Google is opening a 300,000 square foot New York office where “newer initiatives into print and audio advertising are being done,” but we all know that TV advertising is the real prize.
Between Google, with its algorithms, oceans of data, and direct response measurements (click!), and TV brand advertising, with its outdated input metrics that are useless for measuring real return on investment in dollars and cents, is the “fuzzy middle” where the battle for the future of advertising will be fought.
Whoever figures out how to bridge the chasm between brands and dollars will win the prize.
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Well said! I agree with everything you say, but, as I’ve commented here before, the world is not singularly direct response. Profit in short or long term is key; but so is competitive differentiation and relative performance within a category. But where does loyalty or preference come into play? Those are factors often determined by brand advertising. I guess it is that squishy middle.
Max, competitive differentiation, relative performance within a category, loyalty and preference are all drivers of financial performance. I’m not suggesting these measures are not a necessary stepping stones. But reach and frequency dominated for so many years because advertising was not held accountable for the final destination. If we lose sight of the destination, we won’t be able to connect the dots, and again will confuse a midpoint along the way with the destination.
Publishing 2.0 » Engagement Is a Euphemism For…
Publishing 2.0
In this article you say:
1. Mass advertising of mass brands is dying
I personally don’t think it is dying it is only being re-directed into more moden advertiisng streams
2. Audiences are fragmenting at an exponential rate
This I agree with completly being in the Podcast Advertising business advertisers are finding the power in reaching a million listeners that are interested in their products versys 25 million that you hope is interested in your product.
4. Online video has arrived
This is true but people are not watching video when they drive to and from work nor should they be watching video at work, but they are tapping into the powerful active listening podcast that are out there.
5. Google has made billions on direct response advertising, finally realizing the promise of the Web to revolutionize advertising ROI measurement
But with Google advertisers have to deal with clickfraud, if advertisers would wake up and understand we can reach there audiences with these narrow markets they would sink larger budgets at targeting them.
Engagement Is a Euphemism For Measuring the ROI of Brand Advertising
Scott Karp has been really on point with several recent posts, covering the evolving “engagement” debate and the issues surrounding the growth of online advertising. This post really strikes a chord: Between Google, with its algorithms, oceans of data, and direct response measurements (click!), and TV brand advertising, with its outdated input metrics that are useless for measuring real return on investment in dollars and
for Time - it wants new friends. Blogs Despite what you think, half of the MySpace users are over 35. WalMart’s MySpace Clone Dead on Arrival. Charlene calculates the ROI of blogging. Marketing Engagement is a Euphemism for Measuring the ROI of Brand Advertising. Wired says Zune won’t kill the iPod - It’s not cool and never will be. Around the Web Skype co-founders are preparing a new launch by the end of the year of a video Web site, The Venice Project
would wake up and understand we can reach there audiences with these narrow markets they would sink larger budgets at targeting them. Personally I understand the power of niche marketing it’s to bad most of the media buyers are ignoring it. [publishing2.com]
How YouTube Kicked Google’s Ass (and everyone else’s too)Why innovation efforts failParticipation Inequality: Lurkers vs. Contributors in Internet CommunitiesKnocking the exuberance out of employeesParadigm shift: What Google didn’t buyEngagement Is a Euphemism For Measuring the ROI of Brand Advertising
Bingo! You are so in the zone. The only thing the traditional agencies can “sell” is the belief that they perform some kind of magic. What they do is spend billions so they can go on cocktail photoshoots with 300 people flying off to Europe to watch a BMW drive down the same road we see in every car commercial. The only engagement real business people want is the kind that happens when the customer writes out a check. And before Madison Avenue complicated that, Sam Walton called it a “sale.”
Mark Stevens
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http://www.MSCO.com
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[...] Isn’t “engagement” supposed to be old media’s euphamism for dancing around the issue of ROI? Isn’t online advertising supposed to be the wave of the future because it’s so measurable? And didn’t Google wash away all of the hyped up over-promising on measurability from the 90s? Well… According to a study conducted by the interactive agency Brulant, even some retailers with millions of dollars of online revenues do not know the ROI of their Web sites. [...]
for Time - it wants new friends. Blogs Despite what you think, half of the MySpace users are over 35. WalMart’s MySpace Clone Dead on Arrival. Charlene calculates the ROI of blogging. Marketing Engagement is a Euphemism for Measuring the ROI of Brand Advertising. Wired says Zune won’t kill the iPod - It’s not cool and never will be. Around the Web Skype co-founders are preparing a new launch by the end of the year of a video Web site, The Venice Project
[...] Engagement Is a Euphemism For Measuring the ROI of Brand Advertising Brandadvertising muss revolutioniert werden! How much so companies profit in the short term and/or the long term from the billions they spend on brand advertising? In other words, show it to me on the P&L statement! (tags: brand branded advertising television tv metrics roi business market ads) [...]