Analytics, Advertising and everything in between
Nice article from Ad Week about advertising in social networks, and how the model there is going toward building experiences instead of just display ads.
This fits well with what I wrote last week on the same subject.
The big question of course is how you measure the success of such campaigns, and how you compare one to another. This opens up again the discussion about engagement metric which I won’t dive in right here, but feel free to read other posts in this blog which discussed this issue 
Read/Write web came out with a story today that try to show that Yahoo Buzz got bigger than Digg.
The data that the article is based on is new Comscore data that shows that Yahoo Buzz did passed Digg in the number of uniques.
If you consider just the traffic numbers, indeed it seems that Digg are in big troubles. But a quick look at Yahoo Buzz and Digg home pages will show you a very different picture.
On the Yahoo Buzz home page, the most voted story has 118 votes. Most other stories has less than 30. At the same time, Just by taking a quick look you can see that most stories on Digg home page have more than 300 diggs (votes).
It even get worse for Yahoo Buzz if you go to the tech section where most stories have just about 2 - 30 votes. Even if you look at all stories from the last 24 hours and not just recent hours, the picture stays the same.
So yes, Yahoo Buzz is leveraging the Yahoo home page to build a big reach. But sometimes it’s not about quantity - it’s about quality. Digg users are much more loyal to the Digg brand. Their engagement in the site is much higher. Yahoo Buzz users are more likly to skip to the next hot site, as they are less emotionally invested than the Digg users. There is much more chance that they will stay loyal to the site on the long run. I will even argue that their value to advertisers can be higher (put demographics aside as I don’t know Digg data) as their digital participation is higher.
This is a great example why by looking just on page views and uniques we can get a very disturbed picture of reality. This is exactly why attention and engagement metrics are so important to the future of the web.
On Thursday I had the pleasure of presenting NuConomy in the Under The Radar Conference (and may I add - we won both the Judges and audience awards).
After my pitch, Rafe Needlman (CNET) who moderated the event asked me a very interesting and important question: "Do I think that advertisers will start to use engagement as their buying currency?"
My answer was that I think it will happen eventually, but it will be a long process.
Coming back home, I thought that I gave just half the answer. The second half is all about why it is so important for the future of the web, that engagement will become the next currency for advertising.
Today most advertisers look on three metrics: Unique users, page impressions and time spent on site.
The number of unique users is no doubt very important and will stay like this. Let us focus on the two other metrics.
By measuring page impressions as a currency we basically encourage sites to create bad user experiences. You can argue that some sites use too much ajax today, but I believe we can all agree that page refreshes are simply bad thing. The best user experience comes from sites that use a smart combination of Flash and ajax. Instead of encouraging this, we actually punish those sites by paying them less money.
Same thing also for time spent on site. Again, we actually encourage sites to be slow. If the pages will take more time to load, if you will need to go through more steps to get what you want, if you won’t be able to get the data through RSS and other channels, you will spend more time on the site. Again, advertisers today encourage sites to develop bad user experience.
Measurement of engagement takes a different approach. In essence, it say that what’s important is not the quantity but the quality. By using engagement as currency, advertisers will say "We don’t want just a million people to watch our ads, we want the right people to watch and interact with our brand". Instead of paying for every joe that see or click on the ad, an advertiser will pay just for the audience he actually want to engage with.
If you advertise a sport product, you want to pay just for sports fans that interact with your brand and not for people who never watched a football game in their life. The more they are engaged in sport, you will probably be willing to pay more.
Using engagement as a currency, will not just encourage better user experience and adoption of new technologies, but will actually yield better ROI for the advertisers.
So if this such a great solution for everyone, why do I think it will be a long process until we will get there?
There are many reasons, but probably the number one reason is the fact that engagement is not a comparable metric. It’s easy to say that one site has more page views than the other. It’s much harder to say that one has a more engaged audience than the other.
We still don’t have any standards to how engagement should be measured. If you read this blog, you know that I believe that there is no just one engagement metric that fits all. Still, I do believe that we all can come up with different engagement standards for each vertical.
So we will have an engagement metric for blogging sites and another for video. Who should define them? It will probably be a joined effort of the community and the IAB. Yes, the world of engagement will be more difficult to navigate in but it is also the right way in order to take us to the next step in the evolution of the web.
Computerworld published yesterday a comprehensive article about the discussion in the analytics community around the measurement of engagement.
If you read this blog on regular basis you already know what I think and if this is your first time here, you can read my quotes in the article itself.
I won’t get here to the full discussion, but I did wanted to talk about another metric that is mentioned in the article - attention.
During 2007 Nielsen and Comscore came up with their own engagement metric. For them engagement is the measurement of the time users spends on a web site or a page.
This is not engagement. This is attention. What’s the difference? There is a thin line there but I believe that attention is passive evolvement while engagement is active interactions (such as comment, posts, purchases, sharing, etc).
But put definitions aside, I also think that measuring time spent on a page, although important, can also be on of the more misleading metrics out there.
I’ll give you an example:
A few weeks ago I had to change the date of one of my flights with Delta. I went to Delta.com and it took me more than three minutes of staring on the page before I figured out how to change my flight.
If all we measured was the amount of time I spent on the page, we will probably conclude that this is a very engaging page/site with a great user experience.
In reality it was exactly the opposite. It was one of the worse user interface possible, a confusing one that just made me don’t really like the Delta brand.
Don’t get me wrong, it is still important to measure the attention metric (and we also do that at NuConomy), but you just need to be careful when you get to conclusions based on that metric alone.
Microsoft announced today an important new tool that will help advertisers to measure an engagement metric for their online ads.
This is a great step forward for the industry when a giant like Microsoft (that owns aQuantive and Atlas) admits that the old way of measuring impressions and clicks is just not good enough.
The new "Engagement Mapping" tool will allow you to measure the different interactions consumers had with an ad as a way to understand its effect on the buying decision.
Basically it will take into account how may times an ad was shown across sites, and hopefully also the different interaction the users had with it, when deciding on whether it contributed to the final sale.
This is a great step forward, but you probably would not be surprised if I say MS didn’t went all the way with that.
What they are missing is also the ability to tie the different interactions, across sessions, the users had inside the advertiser site to the final decision process about the ad ROI.
Even going further, the goal of an advertisers is not always a one time sale. You actually want to measure the user interaction with your brand across time.
For example: for Amazon "Acquiring" a user that will buy one item is not as valuable as a user that will register to Amazon prime and buy at least two items every week on the course of a few months.
Also, some advertisers goal is not a sale on their online shop. A social network want to get users that will not just register to the site, but will also use it as much as possible, will have many friends in their list and upload as many photos as possible.
Still, this is a welcome step forward for the Analytics and advertising industries, and it will probably start to move other companies in the same way.
People tend to say that in the web business traffic is the king. I always add, that if traffic is the king, so ROI is god.
People sometime looks at advertising as a way to drive millions of users to your web site. True, brand awareness is very important, but I will argue that in today competitive market, what you actually want is not just a lot of traffic but the right traffic.
I’ll give you an example from our life as a company. In the recent week we got great press coverage. From famous tech blogs such as Techcrunch and Read/Write web to the mainstream news sites like cnn, forbes and others. We got huge amount of traffic and more than 4000 beta requests in less than two days.
We use our own platform, NuConomy Studio, to track the different activities on our site. One of my favorites reports in the system is the one that shows you not just how much traffic you got from any referrer to your site, but which referrer contributes the most value to you.
In our case, we actually saw that the users that comes from Techcrunch were almost 5 times more value to us than the users that got to our site from the traditional media sites (which is fascinating fact when you consider that most people who register to our beta are in CXX or VP position in their companies).
Of course the big question is how do you define value?
In our case it was the combination of number of registration, request for information and actual acceptance into our beta program.
But every business has a very different kind of definition for value. If you are a blogging platform the most valuable users are probably the ones that wrote the posts that generated the highest number of views, comments, rating, shared and clicks on ads.
If you are an e-commerce site, value is probably the users that bought the most items, spend the most money, reviewed the most products, etc…
If you an advertiser, would you rather get (and pay) a million users click on your ad, or just two hundred thousands - but the right two hundred thousands?
If you are bidding for keywords on Google ads do you want to buy the ones that generated the most clicks or the ones that brought you the most valuable users?
I personally believe that the measurement of mare traffic is something that will slowly die. Advertisers will not be satisfied with the numbers of how much hits and uniques you have. They will want to know exactly what kind of audience are engaged in your site. They will want to know exactly what kind of ROI to expect when advertising in your site.
A recent post in Occem’s Razor claims that we can’t measure users’ engagement using web analytics tools.
Although I’m a big fan of this blog, I got to say that this time I disagree with the conclusions in this post.
Avinash and Theo claims that the reason we can’t measure engagement is that we can’t differentiate between positive and negative engagement.
I think they are right to some degree. It’s true that if you only look at criteria such as number of visits, recency and depth of visit you won’t really understand engagement.
But that’s exactly why we in NuConomy decided to offer a different way to measure engagement.
Engagement is not just how many pages I’ve seen in a site. It is about how engaged I am in the brand and activities of the site.
Engagement is the combination of all of the user interactions in the site. It could go from purchases, media uploads, ratings to comments, share with friends and many other things.
Let’s take an example:
User A, goes into YouTube. He goes through a few channels and user pages. He browse about 30 pages which brings him deep into the site, but he doesn’t watch even a single video.
User B goes into YouTube. He watch the top 5 videos in the home page. He rate 3 of them and make comments on the other two. He than continue to upload two videos of its own. During all this time, he doesn’t browse more than 5 pages in the site.
Now - Which of the users do you think is more engaged with the YouTube brand?
This kind of measurement is exactly what’s in the heart of our product NuConomy Studio. We let you measure all kind of user interactions, and even combine them to get a definite "engagement" rank to each of your users or content pieces.
It’s true that even than we can’t be certain about the how much a user love the brand, but we believe it brings you very close to that.