On Thursday, I attended the internal launch of the Australian Entertainment & Media Outlook for 2007-2011. It was an hour packed with interesting analysis, trends, and statistics across a dozen industry segments. You can leave a comment on my blog if you are interested in purchasing the report and I’ll see if I can arrange it for you.
One valuable thing briefly mentioned, was the irony of online advertising.
On the one hand, internet advertising has advertisers licking their lips at the amount of data that can now be used to better target their advertising. But despite double digit growth for the industry, the biggest setback for more spending in this segment, is that there are not enough skilled people who understand the data to take advantage of it. I took that to mean people that understand the business of media, advertising and content – but also understand technology and the internet. Or in other words, we now have the data – but now what?
Without meaning to sound arrogant, I hopefully am considered someone that fits that job description based on my background on media experience, business and accounting education, and internet technology (an interest that is bordering on passion) – and I’ve explored this issue a few times on my blog.
To me the problem is far greater than just understanding the data: it’s about redefining the concept of how we measure advertising. The problem is the measurement system: it needs to be consistent. The measurement system needs to have a clear purpose, to understand what data is needed. The data has problems, and so we need to keep this measurement system simple
It was interesting to hear that one of the largest Net measurement companies, Nielsen/NetRatings, is about to abandon page views as its primary metric for comparing sites. Instead the company will use total time spent on a site.
Scott Karp also wrote a great piece on how publishers need to stop selling space, or as he ended the posting: “Wherever there?¢‚Ç¨‚Ñ¢s scarcity, there?¢‚Ç¨‚Ñ¢s opportunity.” And what is the scarce in the Information Age? Your attention.
Online advertising is a whole new world, where publishers/advertisers tried to replicate the offline business models online, and failed miserably (most notably with the page view). I may not have the answer for how we do this, but I do know one thing: whether you are watching a video, reading a blog, or playing a game – time spent interacting with that content is the only universally consistent measure for comparison with all content competing for your attention.
Time spent works because:
- It recognises that the same person may view different ads because they spent more time on the website – something that ‘unique visitors’ doesn’t take into account
- It doesn’t matter how the content is displayed – for example, AJAX reloads web pages within web pages and so distorts the number of pages in the pageview model
- It doesn’t matter what the content is – allowing comparisons to anything – because it recognises the only consistent thing among different mediums, is that people are interacting with that content.
As a case in point, here are some stats on my blog. I average 40 people a day reading my blog – sometimes a lot more (when I post a new entry) and sometimes a lot less (weekends).?Ç? I also have an audience that spends an average of seven minutes reading my blog – again this can vary with the people doing Google searches for porn and lasting on my site for 30 seconds (the travel component of my blog makes mention of crude sightings!) but people that come from Google on more thought provoking topics like this, and can spend up to ten minutes. Another interesting thing is that the average visitor only reads 1.4 pages. But that’s because my front page displays plenty of content, so that people don’t have to click away to read postings.
What I tried to illustrate with the above, is the amount of variance between different measurement systems. Despite having the average reader only see 1.4 pages, and only 40 unique people a day visit, people are spending 7 minutes each visit -that’s a long time to be visiting a site. Now if an advertiser was paying me – wouldn’t it be more fair to pay me based on the amount of time I can engage with my audience, rather that on metrics that can be manipulated (such as putting less complete postings, where you have to click to read more, and which would increase page views – as I have done with this posting). I might also ad, that Google analytics says I have 40 unique visitors, but another web statistics program says I have 300 visits a day.
Personally, I applaud the increasing importance of time spent as that is how we really should be measuring: not on the amount of hits/viewers/subscribers – but on the amount of time expended to engage with that content.
However, the industry needs to recognise another issue: it’s not about how many people to hit an ad on, it’s the type of people you target your ad on. An example was a spam e-mail I was received on Tablet PC’s that had just come out a few years ago. However unlike most spam, it was a product I was actually interested in buying at the time. To me – that wasn’t spam – it was relevant advertising. Throwing something at 1,000 people who don’t care, is not the same as throwing something at the five people who would care.
Time spent is a good resolution. But the big issue, of targeting advertising to individuals, has still a long way to go and is not something you can agree on like how people discuss the time spent metric. Instead, it will be a smart bunch of people who build a business model that uses this model in an effective way. Google’s innovated in this direction with it’s adsense click-through’s (and which incidentally, is the leading type of advertising on the net) – but we are not there yet. Whoever innovates to that next level, like how Google did with contextual advertising, is going to transform the industry.
It’s going to be an interesting few years.