Advertising Accountability: Every CMO Wants It, But Few Know How to Get It

Posted by Bruce Rogers on March 12th, 2010 at 7:00 pm


A Chief Brand Officer’s Perspective

Advertising accountability: Everyone wants it, needs it, demands it, yet few of us have complete command over the process. And with good reason, I would say.

Advertising is the business of persuasion, and as long as the individual needs, wants and desires, advertising will remain both an art and a science. Algorithms alone will not lead us to the promised land of complete and transparent advertising accountability.

However, we as marketers and senior business leaders with bottom-line responsibilities must identify ways to gauge advertising effectiveness by measuring, testing and repeating our way to better marketing efficiency. More on balancing art and science in a moment.

As the Chief Brand Officer of a media company devoted to meeting the information needs of affluent business decision makers around the world, I see strong corollaries between what we do in terms of content creation—across multiple media platforms—and what you do as marketers to create effective advertising messages. We both seek to inform, entertain and delight. The goal is to persuade your target audiences to learn more about your company and products, create an affinity toward your brands through dialogue, and ultimately, to buy something.

Yes, we market through traditional advertising venues, but mostly our minute-by-minute content creation is our form of "advertising," if you will, and we are maniacally careful to measure all aspects of this process to know what works so that we can do more of it.

Fortunately, we've been pretty successful at it—creating a media brand that touches in aggregate some 50 million people around the world every month, with our digital properties accounting for close to 33 million of that total.

Our web analytics have been a huge help in that regard as we developed a culture of accountability across all of our disciplines—editorial, audience development, web engineering and, of course, marketing.

So science is a big part of our success. But I can tell you that no analytics tool  can replace the considered judgment of a good editor—one who anticipates and leads our audiences to explore information or services they never knew existed—nor could our audience articulate their interests if you asked them. There's an old story about Henry Ford. He said that marketing research would have led to the development of a faster horse, not a better automobile. This statement was never more true than in the content business.

Like the content business, the impact of advertising messaging needs to be measured—but we cannot lose sight of the non-linear and often irrational process of creating brilliant advertising that works.

The State of Advertising

The advertising business is in crisis.

The digitization of all forms of media and the power of networks has fragmented audiences, increased media outlets, shifted control of messaging to consumers and driven up impressions while driving down price. Add in the continuing recession and you have the makings for a perfect marketing/media storm.

"So other than that, Mrs. Lincoln, how did you like the play?"

I predict the next phase in marketing will center on creating trust between marketers and all of their constituents: customers, employees and the investment community.

Without a trusted brand, measuring advertising effectiveness is meaningless.

The recession and financial meltdown have left a huge deficit in the trust account for many companies.

Here is where the media can be of huge help. Advertisers need to temper the need for cheap impressions by aligning themselves with trusted media brands that help confer the "trust" halo by means of contextual editorial environments.

This notion of brand alignment and marketing science is very different from the discussion of "Brand" advertising (or really just advertising) vs Direct Response marketing.

The two not only do not necessarily work together they often work at odds with each other.  DR suggests lower frequency and behavior change suggests higher frequency.   Getting someone to identify a need and then add a brand to a consideration set is a radically different process than point of purchase displays to make the lower funnel transitions easier.

In the digital media space the two tactics are often confused –because you have a "transactional" measurement process in the form of a "click" and hence a performance rating based on CTRs.

So we get the unfortunate circumstance of marketers measuring brand advertising with CTRs and in some cases DR programs measured with brand metrics.

However, the idea that you can create "demand" (DR) without "inspiration" (Brand Advertising) defies logic. Recent research from iProspect confirms the value of online display to drive lower funnel response advertising tactics like search.

The study suggests that while 31% of people click on display ads, nearly as many -- 27% -- go to search engines to provide a search. More than 20% type the company Web address into their browser and directly navigate to the Web site, and 9% respond by investigating the product, brand, or company through social media.

So you need to develop programs that combine display and search in a very strategic way.

What Marketers Think

Forbes recently conducted research among its CMO community to better understand senior marketers’ behaviors and beliefs with regard to digital marketing and to forecast where the major areas of growth—and weakness—will be over the next six months. Here is what we found for those with digital ad budgets above $1 million:

  • Higher budgets equate to greater use of all digital marketing tactics. Advertisers like HP are now spending upwards of 40% of their total ad expenditures on digital platforms, according to HP CMO Mike Mendenhal.
  • While "CPW" (cost per whatever) lower funnel activities are ascendant right now, 23% of the larger budget marketers state that CPM-based programs on digital publications exceeded their expectations or marketing goals, just below PPC search at 25%.
  • Only 17% of these top marketers found behavioral targeting to exceed their success goals .
  • Surprisingly, ad networks were found to be at the bottom of the list at 15%—well, not surprising to us, but surprising because of the growth in ad network advertising over the past 18 months.

How are marketers measuring success?

  • 82% say they are using conversions or sales data
  • 55% use registrations
  • 51% use click-throughs
  • 51% use impressions
  • 39% use search rank
  • 31% use brand perception
  • 16% use customer feedback
  • 14% use reach to target

Amazingly enough, less than one third are using brand perception metrics—despite that fact that the digital world makes brand perception research readily available and measurable. In fact, five years ago, instituted a brand increase guarantee for advertisers who met certain spend and impression minimums. We thought the industry would adopt this across the board as a way to drive more brand dollars to the Web. So far, Forbes remains the only media company to do so.

Obviously, we still have our work cut out for us.

With all the talk of creating highly personalized and trackable digital campaigns based on behavioral parameters, we asked these marketers if they had concerns around the practice. We found that:

  • 77% had some concerns with consumer privacy
  • 81% were concerned about customer backlash and losing the positive opinion of customers concerned about privacy issues
  • The largest segment (82%) said they had concerns over the effectiveness of BT

How about the most effective tactics for generating conversions?

  • 53% pointed to SEO
  • 43% to paid search
  • 39% to email
  • 27% to BT
  • And only 10% to ad networks

What about brand building tactics?

  • The leading tactics by far were site sponsorships and CPM programs on digital publications, at 66%
  • 29% chose SEO
  • 27% viral marketing
  • 24% video
  • BT came in at 22%
  • Ad networks were again down the list at 14%

Where do these marketers plan to increase their digital media allocation over the next six months?

  • Viral marketing came in first at 54%
  • SEO at 50%
  • Digital publications at 36%
  • 32% for video
  • 28% for paid search
  • Only 19% for ad networks

So, what should we make of all this?

It would appear that ad networks and behavioral targeting tactics will slow or decline as advertisers fail to get the expected results promised. The need to build a trusted relationship with customers as part of an overall reputation management strategy will increase the need for contextual ad environments that align the advertiser’s message with trusted, branded media.

To borrow a term used by Reagan during the cold war—Trust, but verify.

Marketers must create advertising messaging that engenders trust and inspires customers to act and transact in an environment of openness and transparency. And we must all continue to find better ways to measure the impact of our marketing and media channels in a way that does not focus on the lowest-value transaction activity—just because it’s the easiest place to measure.

I'll explore these issues in more depth during my Masters in Marketing session at ad:tech San Francisco with other great speakers including Brian Quinn from The Wall Street Journal; Chris Tolles, CEO of Topix; Drew Lipner, EVP and Group Director at InsightExpress and Patrick Crane, V.P. of Marketing at LinkedIn .  I hope you'll join us.

11 Responses to “Advertising Accountability: Every CMO Wants It, But Few Know How to Get It”

  1. Brian Quinn says:

    Bruce, you certainly covered most of the relevant ground here. One of the biggest challenges we premium publishers have is getting brand marketers to fully understand the basics of a what a consistent and robust digital media investment can do for them. This is further complicated with the never ending "new stuff"... ad exchanges, real time media buying, audience data, agency/demand side networks, etc... I think many advertisers just sit on the sidelines or never really invest in online because "who has time to figure this all out?". When our clients ask us about all of the new stuff, I always remind them about the tried and true banner campaign. The type that we deliver to a much sought after audience, in the most well lit and trusted of environments. Yes, the beauty of a well executed 300x250!

    As a basically optimistic person, I always look for anecdotal evidence that we are moving ahead on these fronts. And we saw some of that this past Q4. During the end of the year, the full day, home page road block on was virtually sold out. This broad array of brand marketers was doing just what I describe above: placing their beautiful 300x250s on our fertile home page... all day. Sweet dreams...

  2. Bruce Rogers says:

    I think we need to rebrand or ban the word "banner" advertising.

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  6. Bruce-

    Thanks for a well thought-out piece on why digital advertising is so important to large (and small) brands, and how too often, the very 'metrics of accountability' can confuse CMO's who are battling internal and external forces to continue spending out-sized dollars on TV, radio, and print. I live this story each and every do ALL my digital colleagues.

    You chose Mike Mendenhall of HP as someone who is committed to the tune of 40% of their ad spend. I can add to this list; Debbie Conrad, GM, Advertising, Intel, also dedicated 40% of their ad budget to digital. BRAVO to each!

    The two key points I'd like to make are:

    #1. CMO's need to start making the connection in FAR DEEPER, STRATEGIC ways to their consumers, who have already gone digital; zap 55% and more of all TV commercials; don't buy newspapers; listen to mass radio, et al. I think 40% is, in fact, the right total percentage of the budget allocation that major brands SHOULD be using, against all forms of digital media.

    Honestly, the way I see it, ALL methods of digital planning/buying/strategies/tactics make sense for major brands like those mentioned above. Whether it's ad networks; effective campaigns like today's Intel History of Innovation clock on (did it run on too?), SEO, SEM, affiliate - they are ALL valid channels and should be deployed.

    #2. Since we in the digital ad business are masters of metrics, how is it that we have done such a horrible job at identifying HOW ONLINE ADVERTISING IMPACTS OFFLINE SALES, and then go about demonstrating this fact through the use of those very metrics we have available?

    Some of us, myself included, have been devoted to this very proposition for a long time and proving-out this model. I would say that, just like the beleaguered CMO who is stymied by the many forces out there who are invested in the continuation of the last millennium's idea of media/advertising, the time will come when people will laugh at this article and subsequent comments, because in 5 years time (or less) DIGITAL ADVERTISING AND CONTENT WILL BE THE PREVAILING DISTRIBUTION METHOD.

    Matt Greene
    Blue Ribbon Digital

  7. Bruce Rogers says:

    Matt-- Thanks for the thoughtful comments. I agree that marketers should deploy every and all advertising channels that will help them achieve their goals. The key is identifying the correct objectives with the correct media tactic. You can't expect to move upper funnel metrics with lower funnel demand fulfillment tactics and vice versa.

  8. Steve Pelletier says:


    Interesting article. Enjoyed the stats as well.

    How do you think the notion of buying audience fits into this equation? There are a lot of companies / technologies focused here and it seems to me that it is another way to circumvent brand publishers and allow for the purchase of 'cheap' impressions.



    CEO, FatTail

  9. Steve,

    I think publishers need to reclaim ownership of audience data. We as publishers need to stop selling "impressions" and start selling "people." People buy things, care about causes, invest in their futures. Impressions are easily aggregated and cheap. People care about their media choices and are dear to marketers.

  10. sheri says:

    realy good article..

  11. Social media brings a whole new level of advertising challenges.