Is “engagement” the newest new thing? That’s what I found myself wondering as I tried to navigate the teeming Ad:Tech conference in San Francisco in late April.
The crowds were so thick and the atmosphere so exuberant that it was hard to formulate a clear thought, let alone find a clear path from one part of the site to another. Amidst the hullabaloo, though, I did have the sense that industry minds are clustering around the concept of “engagement.” At the show, Mary Meeker spoke about engagement and suggested a new, simplified hierarchy of human needs, riffing on psychologist Abraham Maslow’s proposition that, aside from physiological requirements, humans need safety, belonging, esteem and self-actualization.
In Meeker’s new model, modern man requires food, water, shelter… and internet/mobile access.
Tongue in cheek, yes, but the idea was not meant entirely in fun. Our engagement with the online world is still only just beginning, she argued, citing everything from the rapid improvements in efficiency of online markets to an email sent to her from an internet-connected passenger on a commercial flight, 36,000 feet over the Atlantic Ocean.
Just days before the Ad:Tech conference, at the VNU Digital Marketing Conference & Expo in New York, Charlie Buchwalter of Nielsen//NetRatings also addressed the idea of engagement. His comments were tied to a new paper from Nielsen aimed at quantifying online engagement.
A particularly interesting point of the Nielsen paper is that measuring usage alone is too simplistic. It pointed to a study by Yahoo! and an ad agency, OMD, in which users were asked to abstain from using the internet for two weeks. Many participants reported feeling frustrated, bored and disconnected. “Engagement is fundamental to understanding the relationship between consumers” and the internet, the paper says.
The skeptic in me can’t help but note that some other benchmark internet measurements have hit a plateau recently -- namely growth in internet users and growth in time spent online.
According to Nielsen//NetRatings, the aggregate number of Internet visitors actually declined by four percent between February 2004 and February 2005. Over roughly the same timeframe, several researchers point to flat or declining time spent online, based on an average time spent per user basis.
One measure that has not hit a plateau, of course, is online ad spending. In fact, many people have become almost immune to the staggering gains we are seeing. We are now so used to seeing double-digit increases that we don’t even raise an eyebrow when new records are set.
At the Ad:Tech show, I announced during my presentation that eMarketer had (hold on to your hats!) revised its projections upwards for growth in online ad spending. For 2005, instead of a growth rate of 21 percent, as we had previously estimated, our analysts are now predicting growth of 33.7 percent.
I expected at least some reaction -- maybe not hooting and hollering and jumping out of seats, but at least a quiet gasp of amazement. In fact, the staggering growth barely seemed to register on the audience. (Maybe I wasn’t engaging enough?)
The point is, though, that ad spending, usage statistics and time online numbers don’t tell the whole story.
The Nielsen paper notes (and I agree wholeheartedly) that broadband use may be reducing the total time people spend online -- even as they visit more pages. With broadband, internet usage is more efficient. And the user is more engaged.
Fundamentally, Nielsen is arguing that engagement should serve as the new measurement metric for media, especially interactive advertising. “Many metrics have been offered as proof that the medium has finally arrived,” Nielsen says. “Yet the one that is probably both the best proof and the most often ignored is consumer engagement.”
One way to measure online engagement is to look at the number of pages viewed. Pages viewed per person is on the increase, at least for categories such as news and information, financial services, family and lifestyles, education and careers, and entertainment. You can of course apply the engagement factor to other media, such as television. Some, in fact, would say that television, with its high quality sight, sound and emotional qualities, is the most engaging medium. What’s more, with the advent of TiVo (personal video recorders, or PVRs) and video on demand (VOD), it may become even more engaging for its users. Several studies indicate that people who have PVRs watch more television than those who don’t have the capability. The addition of the user-in-control factor leads people to spend more total time in front of the tube.
Of course, these users may also be engaged enough to skip through the ads.
Geoff Ramsey is the CEO and co-founder of eMarketer. This article is drawn from the latest issue of The Ramsey Review, a monthly report on e-business and interactive marketing trends.
Ad networks are dying.
Remember a few years ago when everyone, myself included, predicted the great ad network shakeout? You know, that was back when people said things like, "Only a small handful of ad networks will survive because..."
Well, that didn't happen. And since then, those who are continuing with that narrative have adjusted the message. While no specific date has been set, the rap on ad networks these days is that they're dying, not a certain, immediate death, but a death nonetheless. Which means that if you rely on ad networks for your media buying, you better find a new strategy -- ASAP.
Well, not exactly, according to Seevast CEO Jaan Janes.
"Sure, the ad networks that have no standards and 'cookie-cutter' networks will be the dying breed," Janes says. "Those networks that are built on solid partnerships and offer results-driven technology for its advertisers and premium publishers will prevail. The ad network must offer unique selling points and a differentiation in the marketplace. The network must leverage consumer data and insights to satisfy advertisers' goals and objectives. The network must use targeting to drive a proven higher revenue return than the competition. They must do all of these things and more to be an essential part of the media buying/planning process to survive."
Only a few ad networks matter.
There are probably several hundred ad networks out there. Nobody really knows how many for sure. But one thing you often hear people say is that only the top few really matter. But that's simply not true, says Kaley Dobson, marketing manager for LookSmart.
"It's true, there are a lot of ad networks out there, and not all of them are going to flourish this year, or even five years from now, but even inevitable ad network consolidation will still leave us with more than a handful of ad networks," Dobson says. "Want proof? Look at the search advertising industry. Search networks thrive because many savvy search marketers choose to complement their existing campaigns on larger engines like Google, Yahoo, and Microsoft with supplemental campaigns on ad networks in order to expand their reach and increase their ROI. Many marketers don't want to be limited to a one-stop-shop advertising channel, and multiple ad networks provide them with the power of choice."
Ad networks only sell junk.
Want to buy inventory on a top-tier premium site? You won't be able to do it through an ad network.
That's the conventional wisdom out there -- that ad networks can only deliver inventory that lesser sites were unable to sell themselves. But nothing could be further from the truth, according to Jim Waltz, president of Traffic Marketplace.
"Almost every publisher in the comScore 500 works with top ad networks," Waltz says. And, he points out, ad networks often have access to the first impression on a premium site during non-peak hours.
Ad network traffic is unreliable.
Ad networks are no strangers to stories about dubious traffic. It simply comes with the territory. And in the early days, traffic horror stories seemed almost commonplace. But those stories usually aren't accurate -- at least not as applied to the industry as a whole, says Steve O'Brien, VP of marketing at Click Forensics.
According to O'Brien, many of those stories stem from a perception that ad networks buy and sell traffic amongst themselves, which often results in a very murky picture for their clients. But that shell game -- which might benefit a handful of shady ad networks in the short-run -- isn't standard across the industry, says O'Brien, who adds that, "Most credible ad networks have internal quality standards and controls to filter/block poor traffic from advertisers. Ad networks hate underperforming traffic almost as much as advertisers do!"
Transparency is unavailable.
One of the earliest knocks on ad networks was that they didn't offer transparency to their clients. Naturally, this criticism was compounded by the fact that there were -- and still are -- a number of so-called "blind" ad networks. While the terms vary a little, the general idea is that buyers won't know exactly where their ads will end up. But when speaking about ad networks in general, Andy Smith, VP of Marchex, says the industry, driven by media buyer demand, has gone a long way toward improving transparency.
"When working with ad networks, advertisers and agencies have become increasingly more focused on transparency and ROI," Smith says. "[Many ad networks] offer site-specific targeting for advertisers and agencies, giving them full transparency into the placement of their ads. With full transparency down to the page level, brand advertisers can protect their brand image by controlling the placement of their ads while only paying when a consumer clicks on their advertisement."
Ad networks create channel conflict.
File this one under the heading of "sometimes." In a nutshell, there's a school of thought that says ad networks create a conflict in a given channel because they undercut the price of the inventory. That is, advertisers often decline to buy directly from the publisher when they know they can hold off and pick up the same inventory for less by working with an ad network. While that might be true in some instances, it isn't true for at least one type of ad network, says Ben Cohen, director of sales for the ZEDO Ad Network.
Here's why: "Some ad networks sell only behavioral and DMA targeting," Cohen says. "They don't sell sites, so advertisers can't buy impressions from a site -- at any price"
In other words, ad networks that sell based on technology innovations like behavioral or geo-targeting aren't really selling an impression that can be bought elsewhere because the advertiser didn't buy an impression from a specific site -- they bought a user at a specific site (or sites) based on a predetermined set of criteria.
Ad networks -- like the weather -- are an inescapable reality, and just as there are all kinds of weather, there are all kinds of ad networks. Heaping complaints on ad networks for existing might be fun cocktail conversation, but in practice, those statements don't get you very far.
Even more worrisome is the possibility that many of those complaints might only be valid as to a specific ad network, but inaccurate as to the rest of the industry. That might be bad news for the ad networks, but it might also be bad news for those in digital who shy away from them because of bad information. After all, if you're steering clear of a particular type of resource because you've bought into some bad information, there's a distinct possibility that you're missing an opportunity.
Michael Estrin is a freelance writer.
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