Primary Impact

When we last reported on impression volume based on Q4 2008 and early Q1 2009 data there were some interesting trends:  Nielsen said spending on display was down 6.4% YOY (3/16/09).  The IAB had noted a decrease in interest in pricier inventory like Rich Media and Sponsorships.

Q2 ’09 data on overall media spend has been the jaw-dropping Armageddon of our worst nightmares at -15%.  But even in this horrific situation, online posed glimmers:  Nielsen reported display down 1% YOY for the first half while TNS reported it actually grew 6.5%. This of course set off another firestorm of navel gazing in the online world (“Online Ad Spending Estimates are Bogus, Some Say,” ClickZ, 9/25/09).  Media researchers know that spending data is a highly variable science (and not a science at all) in ANY medium.  In TV and print, it’s politely considered “directional” and whenever anyone hears the term “rate card value” they take it for what it is. Online is more complex to capture this kind of data for due to the number of formats and technologies involved – and the basic fact that nobody really tells what they pay for anything. It should be said, however, that there is one very simple explanation for why TNS and Nielsen numbers would be headed to the opposite ends of the street: TNS’s methodology does include deals that are performance based, Nielsen’s does not.  In a recession, there’s less demand and thus more content providers willing to sell based on performance. The IAB’s first half 2009 Ad Revenue Report noted that performance deals gained 4 share points YOY to encompass 58% of all online revenue.  TNS is dealing with a broader data set and reflects a piece of the market that has grown over the past year.

A closer look at Q2 reveals some of the very same misconceptions that contributed to the “death of display” notion that was prevalent early in the year. The IAB released Q2 online advertising spend data (which is self-reported based on top properties) on October 6.  The headlines of most pick-up, including those in MediaPost and Paid Content focused on the overall negative number. Various journalists and those in the media industry did not make it past the first paragraph.  “Online display” is typically used interchangeably with “online advertising.”  It was not online display that was down, but classified that shrunk from 14% of the online total to 10%. But once again, display, the bastard stepchild of the industry got slammed. Display actually increased its share of online revenue by 1 point (from 21 to 22% of total in Q2 YOY). Digital video also showed a 1 point share gain and search increased 3 points. If you look at the IAB data broken into component categories it shows that a 32% YOU drop in classified is responsible for the overall online spend drop. Display was stable and growing in some categories.  Craigslist can be blamed not only for destroying print newspaper revenue but for cutting into that revenue online as well.

Nielsen AdRelevance Q2 YOY numbers showed a cataclysmic drop in volume (25%) but a very strong revenue growth story (in categories like B2B, Consumer Goods and Entertainment +25, 20 and 28% respectively). When queried about how volumes in their system could have dropped so strongly when other reports were indicating stability, they noted that it was completely due to the fact that Yahoo had dropped the majority of their “compound image text ads”:  a text link with a 20 x20 pixel image associated with it that often appeared on Yahoo Mail pages.  This page clean-up process began in Q3 of 2008.  This speaks to a couple of interesting industry trends:  Yahoo still generates a ton of inventory, and when one company like this decides to alter their ad inventory strategy (reduction of clutter was a strong trend early in the year) it can impact an entire data set. When these compound text ads are taken out, the impression numbers trend much more positive: +11.7% in spend and +1.5% in impressions.

On other positive notes, by the end of Q2, even some of the greatest skeptics in the online display world issued upbeat quasi-retractions. Nick Denton, the always colorful wizard of Gawker, noted that YOY ad revenues for first half ’09 were +35% (Paid Content, July 9, 2009) and two days prior, Henry Blodget, who had been eager to dis’ display,  noted: “Hey, display ads don’t suck after all”– and he begrudgingly acknowledged that his own display-supported business wasn’t half bad.  Jaguar ads rotated with Land Rover ones on that page of content.  Paid Content reported on July 1 that women’s centric sites had 4.7 billion ad impressions in April vs. 2.2 on auto, 1.7 on travel – clearly Consumer Goods advertisers had jumped on the online bandwagon. For Google, display Q2 revenue grew 3 percent to $5.5 billion. McClatchy’s Q2 earnings report noted that online ad revenues slipped 2.9 percent, mostly due to falling help wanteds.  But, “if job ads were excluded, online ad revs would have been up 24.7 percent.” 

So much for the death of display. Come to DPAC4 on 10/27 to hear the whole story. All registrants get a free whitepaper on the State of Display2. www.dpaconference.com/agenda

I was dismayed to hear that a panel of online experts at last week’s AAAA’s conference basically threw up their hands at the state of online display ad metrics. (http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=101487)

IAB Director of Research Joe Laszlo called them “Confusing.”  To Nielsen President Jim O’Hara they are an ”Enigma.”  Mediasmith CEO Dave Smith called them “Inadequate,” while Marketing Evolution CEO Rex Briggs said they were “Disconnected.” Talk about scaring off your audience.

At the 2001 AAAAs, online was fighting for a seat at the table and was still called “emerging media.”  We merited one lousy panel that generated less excitement than the exhibition hall. Now we’ve got center stage (at both this conference and in consumer usage) and we air our dirty laundry.

My question remains: why are we still discussing this issue? Has everyone in online stopped to consider that metrics is basically a NON-issue in other media.  Sure Nielsen finally acknowledged delayed viewing umpteen years after the introduction of the VCR but marketers clearly don’t care. They continue to buy reach and use GRP models that still relatively accurately predict offline sales. (The promise of set top box data is so exciting, but at what point will agencies be equipped — or even want to — deal with the ramifications of all that data? Plus, can they handle the challenge of producing enough creative to appeal to the segments?) We must see all data — be it on traditional panel based or cookie based data — as merely directional and just get on with it.

We’ve got a data mess on our hands of our own making and the only way out of it is through the creation of a neutral third party — set up as an industry consortium — whose end goal is a planning product through which any data set, be it Google, Microsoft, Comscore or Nielsen can flow.  Demographic data needs to be appended to the ad serving data so we stop talking cookies and bowsers and start talking reach of people.  Just because we can capture all this data to do such finite targeting, does it really serve the purpose of advertising which is to pursuade an ever larger group of consumers to take some action?  Behavioral targeting in my mind is a DR technique for souping up random inventory (like all those email page placements) the networks are awash in.  It’s not the basis for a media plan.

Anyone remember ink-jetting in the early ’90s which was going to be the salvation of magazines? In an example that I worked on involving data matching to a subscriber list of scotch drinkers, guess what, it was damn expensive, consumers thought it was creepy, and why only talk to your proven audience?

As a DoubleClick alumnus — and someone who worked in print and TV — I feel qualified to say that online has the smartest minds in the business.  But as someone from the TV realm once said, “TV is a C+ business” and yet it thrives and is no one is crying out that the :30 is dead.  A recent profile in the NYT (http://www.nytimes.com/2009/03/01/business/01marissa.html?_r=1&scp=1&sq=Google%20female%20executive&st=cse) of a top Google exec revealed that they actually do sit around a table when considering hires, assess SATs and GPAs and and ding unfortunate individuals who got less than stellar grades in macro economics. All that intelligence may be better suited to NASA — or the Obama administration — what we need are media professionals who stop overthinking the problem and start realizing that if we do not create post buy reporting based on demographics and reach and a universal platform to buy and plan online display from, we’re nowhere.

A simple plan: each company with a dog in this fight sends its best and brightest, takes away their iPhones and BlackBerries and locks them in the Newark Airport Marriott with no access to media or transportation. They get 5 days to come up with a simplification plan or are sentenced to another 5 days at the Newark Airport Marriott. They must issue a set of guidelines for buying, planning and measuring online display or they must agree to permanently move into the Newark Airport Marriott.

So Keep it Simple, Stupid or Bang, Bang, display is dead…and along with it a host of content that is extraordinarily valuable to consumers and our business economy.