The answer to inadequate metrics

With today's advanced technology, the best online display ads are rich with website-like capabilities, making ads personalized and allowing customers to have an interactive experience without ever leaving the page they're viewing. A recent Adobe study revealed that consumers who were exposed to interactive ads had stronger engagement, message involvement, and purchase intent than those who saw static ads. What's more, advances in consumer tracking technology have enabled ad creators to feature tailored content that matches each individual's shopping/browsing behavior -- giving consumers a more personalized ad (and brand) experience than any other advertising medium.

Combined, these innovative features not only make ads more noticeable and inviting to consumers, but they also empower them to engage with advertisements without committing to a click. Engagement ranges from scrolling through featured products to searching catalogue inventory to watching a video. Because all this can be done within the ad, it extends the unique experience of visiting a brand site to properties throughout the web.

The dynamic features of this new generation of online display ads have made them increasingly influential in the conversion process, and more capable than ever of attracting shoppers that wouldn't have otherwise returned to make a purchase. However, as is the case with view-through conversions, the value of dynamic display advertising would be completely lost without the ability to track engagement and, more importantly, its influence on user behavior.

The great news is that this capability exists.

Revolutionizing campaign measurement with engagement

The interactive nature of dynamic online display ads creates a unique opportunity when backed with intelligent tracking technology -- it's possible to connect logged conversions to consumers who engage with ads. This post-engagement attribution enables advertisers to fill the gaps left by impressions, post-impression conversions, and clicks, and allows advertisers to see that:

  • The ad was placed in viewable inventory.
  • The user saw the ad.
  • Subsequent behavior is directly attributable to the corresponding campaign.

It's clear that there's value in targeting engagers versus clickers. Empirical data supports the contention that no metric will give you more confidence in the value of your display ad campaign than post-engagement.

In October 2011, mediaFORGE compiled data from 14 participating advertisers, and analyzed more than 180,000 purchases resulting from our display media campaigns. In an effort to evaluate whether engagement was a competitive indicator of purchase intent, mediaFORGE analyzed the average number of delay hours between an in-ad action and a purchase/conversion to assess whether there was a significant difference between clicks and other types of ad engagement. The results revealed that in-ad interaction proved to be an equally direct indication of purchase intent. In fact, in many cases, engagers will convert faster than clickers and will frequently spend more.

On average, those who engage with dynamic interactive display ads return and convert 44 percent faster than those who click-through. This significant improvement suggests that, although a click-through is a demonstration of interest, it's not the most convincing indication of purchase intent. mediaFORGE click-through rate (CTR) ranges from .08 percent to 1 percent, while engagement rates range from 10 percent to 20 percent -- an indication that users are more comfortable interacting with shoppable ads than clicking through to another website. In the case of retargeting, it's unreasonably assumptive to think that users are immediately ready to return to a site from which they recently abandoned.

Interestingly enough, those that do interact with dynamic banner ads also spend more on average than clickers. For instance, 60 percent of campaigns studied had a 5 percent higher post-engagement average order value than post-click.

So, if more people engage with banner ads than click, and engagers purchase more rapidly and spend more on average than clickers, then why would anyone choose to optimize/pay for clicks? Clearly, they shouldn't.

Performance oriented display media often becomes the responsibility of paid search managers. While paid search can and should be rigidly measured by cost-per-click and CTR (mostly because users are more willing to click on text links), display media should be treated differently because it's clear that consumers do not click on banner ads.

Forging the era of value-driven performance metrics

There is no doubt that engagement is the most defensible metric for measuring the influence of an online ad campaign on actual conversions. As advertisers continue to advance the call for higher quality performance analytics, post-engagement should be considered the new standard for metrics that instill a higher level of confidence in return on ad spend. Gone are the days when advertisers were cornered into accepting the gaps created by archaic metrics like CTR and view-through attribution. Engagement is forging a new era of performance metrics that better utilize today's intelligent technology and better engage a generation of increasingly savvy consumers.

Tony Zito is CEO of mediaFORGE Inc.

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