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HAVAH HOPE WROTE
>I do not understand this statement. If I want to focus on
>ROI as a measure of the success of a campaign, why does that
>mean I am not focusing the ads. I would guess that ROI
>would be higher from a targeted ad campaign. For instance,
>we sell New Balance Shoes. Now everyone wears sneakers so I
>could just advertise anywhere because my potential market is
>huge. But if I run ads on runner's and jogger's sites only,
>won't my ROI be higher? I am more likely to find people
>wanting a new pair of sneakers now or willing to buy
>sneakers before their last pair gives out amoung the jogging
>community than amoung the general population.
What you say is definitely true. However, I think you're
looking at a different form of ROI. Before the internet,
since there was no way to measure clicks/CTR (because they
didn't actually exist), the ROI of which you speak was the
one that was most widely used, and even to this day, it
continues to make sense. Essentially, though, the internet
has opened up a whole new form of ROI.
What is dealt with much of the time in net advertising is
apparent (and/or easily measurable) ROI, as opposed to
actual ROI. If someone can get a 1% CTR for $6CPM or a 2%
CTR for $15CPM, they may opt for the lower CPM rates because
it appears as though the results are better. When someone
runs ads, one of the first things they'll see in that
campaign is the amount of clicks and the overall CTR. While
this is somewhat misleading, it's unfortunately become a way
of life for much of the internet.
Granted, those 2% are probably far more qualified visitors
and should (if targetting is done well enough) be able to
become customers and/or repeat visitors, but from use of the
CTR figures, it's often conceived that clicks are an
accurate measurement of ROI, when in fact, it's far less
measured what happens after the customer clicks through (of
course, it is possible to measure this, but not as
frequently done).
Considering those 1% who clicked through for the lower CPM
campaign, the question then is: how many people were just
attracted by the creative? If that's the case (which it
often is since the ads appear on completely unrelated
sites), that person isn't going to go very far into the
advertiser's site and probably won't a) make a purchase
and/or b) return in the future.
For example, if you're advertising your shoes across a lot
of sites, and it comes up on a tech site, you may get a
click (for whatever reason) from someone with absolutely no
interest in your product when they find out what your site
is actually about, but since the click is easier to measure
than their interest level after going to the site, that's
where internet ROI is primarily derived from. Unfortunately,
as a result of this, the click from the business man who
infrequently wears sneakers is weighed equally to the click
from the person who's a runner with beatup old shoes looking
for another pair (or in need of them, but didn't realize
that until your ad came along).
Another issue is branding. Advertisers may think that
showing 2.5 times as many ads is great because it gets their
message out better. However, if that message isn't something
everyone can relate to, all those extra ads don't mean a
significant amount of additional branding (i.e. if you're
showing burgers to vegetarians, they don't care; whereas the
burger eaters might be swayed).
It seems that the newness of the internet (more
specifically, the newness of online advertising) and the
ease of tracking clicks have advertisers focused on a
differnt type of return. With radio, television, and print,
there is no such thing as a click through, yet those are
successful advertising venues and have been for a lengthy
period of time.
As I said when I began my response, you are correct.
Traditional ROI would go against what I said, but new,
different ROI supports it. Until advertisers begin to
realize there is more to advertising than getting clicks
(unless that's the purpose, but even in that case, with such
broad campaigns, getting qualified clicks is difficult), ROI
will mean untargetted ads for much of the internet (someone
recently mentioned 98% of net ads as being untargetted).
Traditional/actual ROI, and thus the better investment,
would suggest that this philosophy is flawed and that the
move toward targetted advertising is essential (fortunately,
some ad networks are moving towards this trend of more
targetting). Essentially, if your goal is traditional ROI,
targetting is something you need; if your goal is clicks,
targetting isn't as necessary.
However, when advertisers are only concerned about clicks
and are not as concerned about actual ROI (quality of
branding, quality of people who see the ad, etc.), they
believe the low CPM campaigns to be their best bet. When
this is what advertisers are most interested in, and if
pushing for targetting is going to cost a company with such
large demands (1400 sites) potential ads, they are not going
to be pushing targetting as heavily as they perhaps should.
Of course, it's important to note that most of the major ad
networks on the net do this, especially for smaller sites.
That's one reason why I say Flycast is the best bet for the
small to mid-sized publisher (though multiple ad networks
are in reality the best bet, smaller sites who want just one
network are likely to go to Flycast). The larger ones
(Doubleclick and 24/7) are busy fighting for high targetting
for the larger sites and tend to forget about the little
guys, who often wind up with rates that are half as much as
Flycast's.
If you're Doubleclick and need to keep that site with 50
million ads/month, you're going to do more for it than the
site with 2 million. However, for Flycast, they are hoping
to moreso establish relationships with smaller sites, so the
site with 2 million and that with 200,000 are going to be
relatively even (the site with 2 million may wind up with
somewhat better rates, but not to the extent of 5 or 10 to
1). That's why they aim for small to mid-sized (those with
10's of millions aren't small, and thus don't fit into that
target goal), and why smaller sites look to them.
Shane Sacobie
VGF.Net
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Received on Thu Nov 04 1999 - 19:35:12 CST
