Ad Industry Metrics Roundup

Online Advertising

How many impressions do you need?

Ad impressions are not an end in themselves. But they used to be the only thing we could measure; the only proxy for the size and presumed return on any campaign or spot.

What advertisers are actually after is individual consumers. In the new measurable world of the Web, we should be able to count those too, right? Well, widespread measurability is still a ways off—but we are a step closer. MediaMind, an online advertising solutions provider, looked at 4,500 rich media campaigns from May 2010 to January 2011. It found that the law of diminishing returns applies, so that beyond a certain size, each extra million impressions delivers fewer unique visitors.

The rule of thumb implied by the research is to take the number of desired unique users and multiply by 10 up to a target of around 18 million unique users. Thereafter the ratio rises to around 15 impressions per desired unique user. There’s your target. Simple, eh?

Ad Spend

Yet more evidence points to online efforts

Advertisers worry not just about total ad spend but also about the distribution of their spend over various media. Acxiom research, focused on the automotive sector but incorporating data from others as well and gathered from actual campaign spending and results, gives some insight into how effective different media are and therefore what choices advertisers should be making.

It’s not good news for TV or out-of-home advertising. In this data, collected during the course of 2010, search and display advertising clearly outperform more traditional media in terms of sales generated. There are other factors to consider, of course, but the current situation where, for example, the automotive industry spends about 55 percent of total ad dollars on TV but only 10 percent on online advertising is unikely to persist. The exodus to online marketing looks set to continue.


Mobile web plays catch-up

The distinction between what happens online and on the mobile Web will eventually go away. But when? Research firm eMarketer has put together projections on smartphone travel purchases that illustrate how technology and consumer behavior are playing catch-up on mobile devices.

First, keep in mind that consumers initially display caution when confronted with a new shopping medium that provides product info. They might research products or services, but then tend to buy the way they always have. We saw this with e-commerce on the Web, and the same thing is happening with mobile Web.

EMarketer, in looking at mobile phone researching and purchase of travel, projects about 20 million mobile phone users will research their trips on their phones this year, but only 9 million, or 44 percent, will actually book via their phone. By 2012 this percentage will be 51.

That year, the equivalent level for all U.S. shopping on the (nonmobile) Web will be 84 percent, according to eMarketer senior analyst Jeff Grau. Mobile Web behavior is catching up—but has quite a way to go.