Thursday, February 10, 2011

Buying Efficiencies In Digital Marketing

First things first.

The Indian digital landscape is so used to buying advertising inventories in the following currencies CPM (cost per thousand impressions), CPC (Cost per click), CPL (Cost per lead) that it does not want to try and use the full potential of the term digital (track-able) aspect of media buying.

I am sure that all digital media planner have to answer the following questions while doing reports to advertisers for digital campaigns being done by them or their agencies.

Q1. If I bought clicks then how come the number people visiting my site are 30% lower than the clicks being reported

Q2. The leads that I have got are junk, my call center tells me that out of all the leads that were generated 50% of them were not contactable.

Q3. Impression being served by "x" publishers are being served at places that the user will not see them.

Q4. Email ID registrations received from the media campaign have a very high bounce %.

On the performance side all the above questions are the ones we face every day. Here is my take on a few of them.

For the past so many years I have seen that all publishers feel very happy selling CPM inventories. The only reasons for doing that in India is because the "freeuser" mentality is very high here and I am sure it is world wide as well.

So it becomes very easy for publishers to sell these free user page views to advertisers at fantastic rates and be over with it. They don't want to bothered by the fact that the advertiser using this digital medium over the years have become intelligent and want that extra mile(s) for the buck they are spending.

Just to give you an example. INR 20 CPM inventory become a INR 20 CPC if the CTR is 0.1%. ie. 1 Click for every thousand impression. And typically an INR 20 buy on any good portal would mean that the advertisers banners are running at the bottom of the page or in some obscure location on the website, resulting in adding no value to the campaign. on the other side a CPM 200 purchase @ 0.4%(an acceptable normal response rate) CTR is actually INR 50 per Click. !!

The only thing this kind of purchase will look good in, will be the reports that the agency would be giving to the advertiser at the end of campaign and claiming that they were able to give a very high "Share of Voice" or reach to the advertiser. !!

But what the advertiser needs to understand is that this kind of share of voice is not relevant as a typical webpage will have 4-5 ad units and if at all they want to look at the share of voice then they should divide the impressions by a figure of four or five. which will make it base less to even talk about.

Coming back to the topic. Buying efficiencies is not some thing that is taught in any institute or part of any communication coursebook. The only thing mentioned in the best of marketing books is the fact that you can negotiate the best rates with publishers if you sit across the table with a lot of monies committed on top of it. I say committed because an advertiser might not spend the same but it a good figure to negotiate rates with. I am over here talking only digital inventory purchases. This statement might not hold true in-case of offline i.e. print/ tv / radio etc.

Efficiencies can be defined in a lot of ways. Cost efficiencies( most common but not the most logical), value add's ( one term used and abused by a lot of publishers), quality of traffic, inventory positions (first scroll vs mast heads) etc .

But what most digital planners forget to look out for are the following efficiencies .
  1. Are the click being bought converting to real traffic on the advertiser site.
  2. What is the user doing after coming to the advertiser's site
  3. Is the data being collected on registration of this user any good, can he be reached out later.
A lot of advertisers have started asking these questions back to the planners and I am sure a lot of them are also working towards providing answers or at least a plausible  solution to the advertiser. 

In the next post(s) I will try and answer one by one a solution to these above questions as each one of them would require me to dig into aspects of technology, ad serving, tracking etc. and would be too long to add to just one post. keep reading...