This from the 4/17/07 WSJ: There is “relentless pressure on agencies and chief marketing officers to drive revenue. It’s killing our business. It destabilizes the relationship between agencies and clients,” says Matt Weiss, an executive vice president and chief growth officer at Interpublic’s McCann Worldgroup.
If advertising agencies and their CMO clients want to have a seat/influence in the boardroom they have to demonstrate revenue impact. It’s no more complicated than that. Agencies and their clients aren’t doing a good job of this and that is why the lifespan of a CMO is decreasing and why “Ad Age” recently reported that a significant percentage of the client community doesn’t believe their agencies are demonstrating their value conclusively.
There is raging debate about the relative values of traditional and online media, and little agreement about measurement standards. Measuring the size of the audience has always been the backbone of traditional media measurement. As Internet media properties were struggling to create ad models, they went in a similar direction – offering audience scale measurements of page views and impressions, etc.
Along the way, the traditional intercept/interrupt advertising practice went through a change as audiences learned how to edit out these unwelcome intrusions. “Search” put the consumer firmly in control forever. The push world of advertising was going to have to make an accommodation for the increasing “pull” dynamics.
Relevance and contextual messaging introduced the online measurement concept of “engagement.” Engagement can be measured a number of ways – the time spent with specific content, the length of online video advertising plays, the length of time and number of page views in web site visits, etc.
So what’s the most appropriate system of media measures? Circulation? Impressions? Page views? Engagement?
There isn’t one. We work with clients who have a traditional media bias and are experimenting online. And we have clients who are in the opposite camp. All these clients care deeply about measuring the impact of their programs and we have to respect that and create reports that consider all the measures that are important to them. But it’s not even that simple – we know that a presence in traditional media can affect the effectiveness of online programs. How can we gauge that? We have to try!
The measurement that has a currency across all media is the audience – or consumer – action. Did the advertisement cause an audience action because it was relevant, the offer was attractive, it was entertaining, or because there was an interest in a follow up call?
This goes well beyond the number of #800 calls, or brc replies, the convention of direct response marketing.
This, for example, ties Website visits to traditional advertising. There’s a TV or radio commercial that directs the audience to a Website to see a video. It creates linkage between the audience size in traditional media to the richness of the online interaction/engagement, measured in any of the ways mentioned above.
Implicit is an acknowledgement that media chauvinism has no place. It’s not traditional media measures vs. online measures. It’s all about creating chemistries of measures that are meaningful to each client. Then measuring, benchmarking and optimizing. That demonstrates ROI in a clearly understood fashion.
On a related note, we have clients who do quite a bit of measurement on their own, which has in many cases created data repositories throughout their organizations. We have built a capacity to help these clients by aggregating, organizing, analyzing and reporting on all the data – and most importantly – its relative value. This is not a simple task as each of the repositories has an owner, and therefore, a believer in the absolute value of their information. But the imperative to measure is causing walls to be torn down so all data can be collected and analyzed.
Finally, we believe agencies need to be willing to be measured, too. We have recently engineered a compensation system that has us creating “report cards” for each client relationship. Each client report card features criteria that are particularly important and relevant to that specific client – no two report cards are the same. Some rely on the quantitative measures of engagements or actions. Others favor more qualitative dimensions having to do with our strategic ability, insightfulness and responsiveness. Periodically – annually or semiannually – we conduct report card sessions with evaluations built on a scale of 1-10. And in a number of cases, the scores determine our actual comp. We have skin in the game.
Measurement isn’t just about traditional media metrics – or online media metrics. Measurement is all about demonstrating that the agency’s contribution had impact and was of value – the audience was moved and engaged meaningfully in a way that can be tracked to revenue impact. (Sure, we want a seat in the boardroom.) But agencies also need to be willing to have their services and insights measured. Our resourcefulness and collaboration must be seen as having demonstrated value. Our experience suggests that good clients will be willing to pay for it.
