Tuesday, May 19, 2009

Beyond Clicks And CPMs: A Look At 'Engagement'-Based Ad Deals

LM Comment: More and more online advertising is moving towards "engagement." Here's an article that sheds some light on what this means.

May 11, 2009: summarized from paidContent.org -- CPMs are the default standard for buying display, and paid search ads get measured in clicks. But when it comes to valuing a social-media sponsorship, "advertorial" content on a magazine site or even a virtual-world campaign, there's a growing consensus that neither of those metrics is good enough.

Click-throughs aren't great for ads on social networks, for example, because most people are there to interact with the content-not click on a link that will take them to some advertiser's site. And with an oversupply of inventory and easily dismissed ad units dragging down CPMs, publishers are pushing for an alternative currency that attributes more value to their audiences.

That's where "engagement" comes in-and there are a variety of ways to try to achieve it. Facebook has its Engagement Ads that try to entice users to interact; Hearst's digital division is letting advertisers pay to "engage" with Seventeen and CosmoGIRL readers by answering their questions; and video-ad firms like VideoEgg and ScanScout offer "cost per engagement"-based buys. Meanwhile, publishers' sales teams are increasingly serving up stats like time spent, return visits, and event the number of times a brand gets mentioned in the comments, as proof of why advertisers should pay more for their inventory.

The problem is that other than "time spent," there aren't any real standards around engagement. That's partly because all these sites offer different ways for users to interact with their content, but also because each advertiser's goal will be different. "There's a consensus that engagement is going to be how we hold online advertising accountable from now on, but we're still grappling with how to tie it back to real business results," said James Kiernan, VP and group client director for P&G at Mediavest. "Like, how many 'engagements' does it take to drive purchase intent? How do we tie it back to sales?" We spoke with some companies to find out which metrics they're using to broker their engagement-based deals.

Read more at: http://tinyurl.com/qbow3w

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