Six Pixels of Separation - The Blog
June 17, 201411:29 PM

We Have No Idea If Online Ads Work

Are you doing pure branding or are you trying to make something else happen?

The real issue that threatens online advertising is not the data, the creative, the spend, the marketing mix, the Cannes Lion awards or anything else. The biggest threat to online advertising is treating it (or hoping it acts) like traditional advertising. This isn't a new message. It's a drum I have been banging since the late nineties, and it's an important message to think about if you're managing a brand and trying to figure out what works (and what doesn't). There is way too much misinformation out there. Sadly, some of the coolest and most interesting digital media properties are the perpetrators of such heinous advertising crimes. They're trapped. They're stuck in a position where they are being forced to show brands - by comparison to traditional advertising - metrics like reach and audience instead of looking at the true opportunity: building a relationship.

Relationships don't have to be serious (at first).

I haven't dated in many years (my wife doesn't let me). I'm not sure what the dating scene is like these days (but, if Tinder is any indication, things have changed drastically in the past few decades). Dating is a lot like advertising. You have individuals seeking attention, so they put their messages out there and market themselves in a way to attract the right match (ok, this is being overly simplistic, but bear with me). The point is that while the world is full of one night stands, dating is the first step in the long road towards marriage. Along the way, there are milestones that need to occur (and they're don't always align between the couple, in terms of when they happen). For me, saying that we have no idea if online ads work, is the same as saying that we have no idea if dating leads to marriage.

We know that online ads work.

Slate published a long piece today titled, We Have No Idea If Online Ads Work. From the article: "In 2013, Randall Lewis of Google and Justin Rao of Microsoft released the paper On the Near Impossibility of Measuring the Returns on Advertising. In it, they analyzed the results of 25 different field experiments involving digital ad campaigns, most of which reached more than 1 million unique viewers. The gist: Consumer behavior is so erratic that even in a giant, careful trial, it's devilishly difficult to arrive at a useful conclusion about whether advertisements work." And then there's this: "The problem... is that much of the data websites generate is more or less useless. Some of the problems are practically as old as marketing itself. For instance, companies like to run large ad campaigns during major shopping seasons, like Christmas. But if sales double come December, it's hard to say whether the ad or the holiday was responsible. Companies also understandably like to target audiences they think will like what they're selling. But that always leads to the nagging question of whether the customer would have gone and purchased the product regardless. Economists call this issue 'endogeneity.' Derek Thompson at The Atlantic dubs it the 'I-was-gonna-buy-it-anyway problem.'"

Am I missing something?

Can't every piece of creative (be it a search ad or a display banner) have it's own unique link to better understand what was seen and what was acted upon? Can't every piece of creative that isn't getting a response be dumped, optimized and tested for efficacy? Can't all pieces of creative lead to a unique (and trackable) landing page with a clear call to action? Can't those landing pages offer up multiple opportunities for a brand to date the potential customer instead of marrying them on the first date (get them to watch a video, offer up something compelling for an email address, etc...)? Can't every piece of creative - and the landing pages that it leads to - be looked at and optimized? Can't they take ads and use multivariate testing to see which landing pages respond better? Can't ads be a great engine to lead to content that will keep a consumer's attention? 

Of course we can... but most don't.

The Slate article is actually one hundred percent accurate. Brands will never know if online ads work, if all they're doing is treating them like traditional advertising. It sounds like most brands are still satisfied checking the "online advertising" box in their media buys, by simply pushing for whatever creative looks nice during the agency presentation and ensuring that everything is reported back in a way that may be palpable to a Chief Marketing Officer (one that is most comfortable looking at GRPs). It's sad. The opportunity to build a sales funnel and an engine of conversion in online advertising offers brands an unparalled dating experience. The ability to build little moments of micro-conversions (hat-tip to Avinash Kaushik) and manipulate your online advertising to be more reflective of a consumer's true path to purchase has never been easier.

The problem? The real challenge?

It's not in the brand and agency DNA to do the strategic media planning on the frontend and then have the resources, aptitude and diligence to see it through. If you're looking for simple mass reach, it's going to be hard to tell if online advertising works (and, the Slate article is then validated). What marketers in today's age tend to forget is that advertising is no longer based on a scarcity model. It's now a model of abundance. You can place an ad anywhere (and it's fairly cheap to do so). What the smarter marketers in this day and age do is focus not just on what kind of space they are buying, but how they are going to squeeze every last drop of juice out of the advertising opportunity to not just capture a consumer's attention, but to capture some information in an effort to get a chance at that elusive second date.

And, who knows where things might go from there?

By Mitch Joel

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