The AOP is committed to an industry-wide initiative to prove the value of digital ad investment. Here’s why....
Digital channels now account for more than half of UK advertising expenditure, according to the most recent WARC/AA Advertising Expenditure Report.
Digital media is in good health. But questions still exist about whether advertisers have enough clarity on which parts of the digital ecosystem are delivering real value – in effect, what return they are getting for each pound invested.
There have been a number of recent interesting pieces of work investigating this area. While these help our understanding of how digital communications deliver for brands, it’s important to step back and look at what the key themes mean for advertisers.
Three main areas need to be considered: physical placement, realistic exposure, and outcomes.
1. Phsyical placement of ads
In most media, a high proportion of advertiser investment is accounted for by the actual media space. This is not the case in digital. Advertisers need to factor in the impact of two areas:
• Tech Tax
Analysis from The World Federation of Advertisers found that 55% of investment goes on ‘tech tax’ – money spent on areas such as trading desks, ad exchanges and DSPs, rather than the media space. In the UK, The Guardian found that this could be as high as 70%.
• Ad Fraud
A study in the US by Google, MightyHive and Guardian US found 72% of video inventory bought on the open market didn’t go to the expected publisher, but ended up with counterfeit sources. The use of ads.txt goes some way towards removing this potential ‘loss’ of investment but, as JICWEBS makes clear, advertisers need to ensure they know placements appear as intended.
2. A realistic view of actual exposure
Clearly an ad that can’t be seen can have no effect – so AOP supports ongoing work to identify the variables that affect whether an ad has the opportunity to be seen (OTS).
Recent work from GroupM and Newsworks set out to identify what proportion of ad placements achieved a base level of OTS – that they could be both measured and, at some level, seen by consumers. This work identifi ed massive differences in performance, with premium publisher environments being twice as likely to deliver than open exchange.
While an enhanced exposure metric is a good baseline, we need to go further and quantify the factors that have an impact on noticeability. Eye-tracking work from Lumen has shown big variances by publisher and format. Across a basket of metrics, GroupM found that an ad placed in a premium environment over-indexes by 42% verses open exchange in terms of quality of exposure.
But a lot more work still needs to be done. AOP and ISBA are working together to help drive action in this area.
3. Quantifying outcomes
A stronger quantifi cation of actual exposure will enable marketers to improve their understanding of the impact different digital environments are having on key business and brand metrics.
Studies from comScore, Magnetic, TEADS and the ARF have proved premium environments outperform other placements on these outcomes – often by more than 50%. AOP’s recent neuroscience study with Newsworks and Neuro-Insight provides clear evidence that environment affects memory encoding. Work from academia (Harvard, University of Adelaide) has given weight to the relationship between visibility, attention and sales. As an industry we need to unpick all this further to provide better guidance – where, when, how long – on ad placements. The GroupM work hinted at the importance of this and we await further results with interest.
As these three areas demonstrate, it is important the industry works to evaluate the whole ecosystem; taking account of actual placement, realistic exposure and outcome. Through greater collaboration, the industry needs to come together to provide advertisers with a framework to show how, and why, digital investments are delivering. Through discussions with key players, the AOP is committed to making this happen – but it must be an industry-wide initiative.
If you’re keen to support actions, please get in touch: Anthony.Jones@ukaop.org