This is the fourth — and arguably most important — in a series of posts about the measurement of online advertising, and why I think time-spent-on-site, which I wrote about last time, is far from the panacea many believe it will be.
Now I come to impressions, a big ugly elephant in the room that’s been lingering around for years…
When advertisers buy ad space, they actually buy “impressions” more than anything else. You are likely aware that this is called a CPM model — or cost per thousand impressions purchased. A $20 CPM rate simply means it costs you $20 to buy 1,000 impressions on a site.
(Sure, there are other models like CPC — cost per click — which is the standard in paid search. And there’s CPA — cost per acquisition — which resurges every now and again as an alternative but has yet to become mainstream for a variety of issues.)
In any case, if you look at firms that use audience measurement services to determine which sites they want to advertise on, it’s almost always based on CPM. This means that while unique visitors, time-spent-on-site, and page views are all well and good, in and of themselves, they are secondary metrics when it comes to the true nuts and bolts of ad buying.
So ironically, despite all this media fanfare about time-spent-on-site and the death of the page view, there is still a great divide between what advertisers and publishers use to evaluate advertising opportunities and what they use to actually execute on those.
Audience measurement firms are publishing secondary metrics that may help guide advertisers to a particular site, but they are generally disconnected from the advertising inventory itself.
Strangely enough, advertisers tend to purchase inventory based on a metric — impressions — that is rarely made available to anyone outside the company.
To be fair, because advertisers often buy only a portion of available impressions, you could argue that it doesn’t really matter if they know how much total inventory a site can offer. For example, if a site has 10 million available impressions, but you’re only in the market for 1 million, what does it matter if they have 1 million available or 10 million?
I believe it matters for several reasons. First, saturation — if they have 1 million impressions and you want 1 million — that’s 100% of inventory. If they have 10 million, your 1 million only represents 10%. Depending on your ad objectives, 100% saturation or 10% saturation may be more beneficial.
But without the total inventory number, you have no idea.
Second, ad impressions can vary greatly by site. This is because sites offer a variety of ad placements for sale — often more than a dozen. From simple home page banners to run-of-site ads to streaming media pre-rolls, there is a myriad of placements advertisers can offer — and often, more than one advertiser shares a particular placement, rotating depending on how many impressions have been served and how many have been purchased.
Fortunately the IAB has published — and continually updates — ad placement standards, so there is a general consensus as to different placement types. But there are no real guidelines on how many or where these placements appear. For example, one site could have a single banner available on its homepage, while another could offer 10 placements, including one for streaming media.
Because unique visitors, page views, and even time-spent-on-site have a one-to-many relationship with ad impressions, it’s impossible to use those base metrics to even estimate impressions.
So take a step back, and a deep breath. If you’re with me so far, you’re probably asking why audience measurement firms don’t just publish impressions in addition to the other metrics.
Good question. One challenge is that ad impressions are difficult to measure for audience measurement companies. An impression can be generated in multiple ways; there are few “ad serving” standards. And publishers frequently combine several different technologies to serve ads, often on the same page!
Even if ad impression serving technologies were standardized, and the audience measurement companies could track them, there is another challenge (It’s something I talked about before, in the second post of this series): Panel-based methodologies are just not as good for granular reporting as are other methodologies like web analytics. And many ad campaigns are just that — granular, targeted initiatives that are muted across user panels, if not altogether absent.
Furthermore, ads often change by day — whereas most audience measurement companies report weekly or monthly at best.
So don’t hold your breath on this one. I just don’t see it in the cards.
What should advertisers — and publishers — do?
I think there is a significant opportunity for advertisers and publishers to create a more efficient marketplace. In turn, these efficiency gains should drive a better customer experience — as visitors enjoy a more relevant online (and offline) relationship with vendors.
How? Take back control and set a new standard that is publisher-centric. Let me explain.
First, imagine a world where publishers used web analytics to capture ad impressions. Since these impressions are measured at the browser level, and do not even rely on cookies, they are arguably the most accurate measure you can achieve for true impressions.
Second, imagine a world where publishers also captured clicks, and even “downstream” success events (conversions, purchases, form completions, etc.) that occurred as a result of those clickthroughs.
Finally, imagine a world where publishers then provided this information to prospective advertisers, who in turn could evaluate if and to what extent they wanted to purchase that inventory.
A fairy tale, you say? Nope.
The reality is that publishers can do this today, and many are already doing some of it using web analytics.
At Omniture, we have already helped customers capture impressions, in real-time, for their website and report those back to prospective advertisers.
This approach also captures any clicks that result from these impressions, and reports them back in real-time.
For example, you could see the geographic distribution of all people that clicked on one of your home page banners. Alternatively, you could report on advertising and content affinities that would actually help you sell even more inventory on your site.
And taking it even further, you could use third-party data sources like PRIZM to augment the data even more – which I can imagine would provide some compelling multi-channel synergies given PRIZM’s prevalence in the offline world.
From this point, the key is to establish a vehicle or marketplace by which you can share this information with prospective advertisers. This could be done as a collaborative exchange between numerous publishers.
So forget about taking back control from the audience measurement firms– you’re completely changing the game with this kind of data! Existing approaches can’t even scratch the surface when it comes to providing this kind of insight. The depth, the speed, and the accuracy are unparalleled.
Perhaps you think this is impossible; there’s just too much weight around the current approach. Try telling that to Google, Yahoo, Microsoft or any other paid search engine. They run their entire business on a model that’s not too dissimilar from what I’m advocating.
Think about it. Why does this work only for CPC and search keywords? While there are some nuances to publishing that need to be considered (as I’ve highlighted above), it’s not radically different. And paid search is a $7 billion market — so the model has legs.
Is this approach without its challenges? Of course not. Standards will have to emerge, driven by governance bodies like the IAB. And that will happen over time, just as it has for search.
But it won’t happen at all without publishers demanding a better mouse trap… a Brave New World, if you will.
So, long live the impression! And if you have questions about measuring and optimizing impressions, I encourage you to reach out to us. We’d be happy to help.