Whenever agencies or publishers talk to advertisers about marketing programs in the digital realm, they can be sure to be asked about what the advertiser's competitors are doing in the space. Over a decade and a half of web advertising history, that's been a very difficult question to answer.
To understand why it's so difficult, we first need to look at how traditional advertising has addressed this question over time. The linear nature of offline media makes it easy for a monitoring service to keep track of advertising. That is, if you buy a copy of Good Housekeeping and see an ad for Pillsbury crescent rolls in it, you can reasonably bet that everyone else who has a copy of that issue has the opportunity to see that same Pillsbury ad. Yes, there are such things as geographic editions, but if you get copies of the various regional editions of a publication, you can quickly figure out which are regional runs and which are national.
Track all the ads for Pillsbury in that print title for the year and multiply the number of insertions by the magazine's published rate card for the unit that you saw, and you can get an idea of what the advertiser spent in that publication for the year. Do this with enough titles, and you can build a comprehensive print competitive service that can deliver spending and creative to anyone willing to pay a fee to track their competitors.
It's a similar methodology for broadcast media. Monitor the various broadcast, cable, and terrestrial radio stations, pick up on the ads, and cost them out at rate card. Because the media experience is linear in nature and uniform for anyone watching or listening in the given market, it's not a huge technology challenge to build a tool that delivers competitive spending and creative with a consistent methodology. Yes, it's true that attributing rate card costs to ads will inflate the value of a competitor's media commitments, but the reported results will be inflated consistently, so users of the service can adjust the reported expenditures accordingly.
Now, how does one bring this approach over to the digital medium, where the media experience is non-linear and differs greatly from person to person? After all, you and I might visit the exact same page of content at nearly the same time and receive completely different ads. The ramifications of this fact are significant -- even if I observe an advertiser running on a particular website, there is no guarantee the advertiser will continue to run there after I leave. The ad impression I observe could be part of a campaign of 10,000 or 100 million, and I'd never know the difference.
The first digital competitive tools worked in a similar fashion. Essentially, they used web spiders and crawlers to observe ads, put the ad creative into a database, and make note of how often a particular ad was encountered. In this way, they did a passable job of delivering a snapshot of competitive creative, so the service was particularly valuable if you wanted to see what a competitor was running. But they did a positively abysmal job of detailing online spending for the reason I just described -- they weren't able to adequately gauge the size of an ad buy.
Spending figures were further skewed by wildly ranging price parameters for different types of ad inventory. Discounts from rate cards are less uniform in the digital realm. Furthermore, when a crawler from a competitive tracking service encountered an ad, it had no idea whether that ad was sold as a run-of-site ad at $2 CPM, as a geo-targeted ad at $8 CPM, or as a behaviorally targeted ad at $5 CPM.
Is it any wonder that competitive spending figures were way off?
If we ever want to see realistic spending figures, we have to move outside the spider and crawler technology model. The Interactive Advertising Bureau had the idea to pull spending data from ad servers but was met with significant pushback from agencies. Later, SQAD (a company best known for its offline competitive tracking services) took a similar approach and was more successful in seeking permission from advertisers.
Companies with significantly sized web panels or insight into wide swaths of online consumer surfing behavior are also in a position to introduce competitive tracking tools. But they will still have to deal with problems stemming from the fact that the web is non-linear and customized from user to user. Nielsen and comScore may be in a position to get a better handle on the potential size of digital ad campaigns, but they're not yet in a place where digital spending can be discerned in a reliable way. comScore's AdMetrix product, judging by the descriptions of it on the comScore website, seems to be geared more toward broad competitive insight than toward targeted understanding of who is spending what and when.
Today, we have solid tools for competitive creative, and experienced agencies and digital practitioners can take a look at the sites on which those ads show up and deliver top-level insight about a competitor's buying strategy and target audience. But we still don't have reliable tools for delivering competitive spending. Moreover, those tools aren't even on the development horizon until we either get over a few very significant technical hurdles or achieve universal acceptance of the SQAD model.
Just remember this the next time your agency delivers competitive digital spending figures. They need to be taken with a huge grain of salt.
Tom Hespos is the president of Underscore Marketing and blogs at Hespos.com.
On Twitter? Follow Tom at @THespos1 or @_MarketingLLC. Follow iMedia Connection at @iMediaTweet.
