Beyond click-through: counting every marketing dollar

Online marketing has been given a bad rap, according to Marc Miller, general manager, South Asia, Engage, Inc.

Engage is an Interactive marketer based in Andover, Massachusetts (USA), and is a Nasdeq-listed subsidiary of the CMGI group.

The company boasts a representation of 5000 websites worldwide, and a reach of 6 in 10 Internet users.

Its Asian branch was launched August this year with the acquisition of Space Asia Media Ltd.

A common complain about online advertising is the low click-through rates. The industry standard hovers below 1% and some see that as indicative of the ineffectiveness of web advertising.

But click-through rate is only one metric for measuring the success of Web advertising. It is limited in measuring marketing objectives such as brand awareness and advertising impact.

Cookie placing and tracking technology, for instance, gives marketers an ability to measure the effects of advertisement beyond the confines of click-through based analysis.

According to Miller, it will be the online marketer's ability to measure and account for the results of advertisement that will set the medium apart from traditional media and begin to draw real marketing investments to online advertising.

"Click-through is very easy to do," said Miller, "but conversion tracking is much harder."

'Conversion tracking' tracks the number of people who converts to your brand because of your advertising.

To track conversion, a marketer must track what Netizens do after they have clicked through to the advertiser's site.

"If you get a creative like "Punch the monkey," which is like a little game on the banner," said Miller, "you may get a lot of click-throughs, but people are clicking on it because it's a game, they are not clicking on it because they are attracted by any offer or what's on the other side of the banner."

In fact, according to Miller, it is all too easy to serve ads that generate very high click-through rate but a very low conversion rate and vice versa.

Click-through is also unable to track the number of people who have seen the ad but resisted clicking on the banner, and come through to the advertiser's site later on.

According to Engage's own study based on its in-house aggregated data, twice as many people are seeing the ad and coming to the site later to conduct some kind of transaction as the number of people who have actually clicked on the banner.

As a result, marketers who rely on click-through rates often miss out on the overall effect of their advertising.

"If you're only measuring click-through," said Miller, "you're missing out on a huge amount of people that are seeing the ad and are responding to it at a later date."

Engage uses a cookie placing and tracking technology to overcome the problem.

When a user visits a site where Engage serves a banner, a cookie is placed in the user's pc and a unique user id is assigned. All without the user knowing anything about it.

At the advertiser's site, Engage serves another banner, one so small that it's only one pixel by one pixel in size.

This tiny banner, so small that it's invisible to the naked eye, sets another cookie into computers that visit the advertiser's site.

Once set, the cookie will begin looking for the unique user id. If it finds one, it will know not only that the visitor has previously seen an advertisement about the site, but also where and when the ad was served.

Furthermore, this technology is able to track what the user does on the advertiser's site, what kind of transaction took place and how long it takes for the transactions to take place.

According to Miller, this technique is even capable of tracking highly involved purchases where a customer goes through extensive deliberation before making the purchase.

"If you just measure click-through," said Miller, "I might click on an ad, go to the advertiser's site, if it's a very involved kind of purchase, I might not necessarily buy then, I might have a look, go away, do some comparison then decide to come back and buy from this site."

The solution is very technology driven and it's not perfect.

There are Netizens who clean out their cookie files. It's also likely that customers who come to the advertiser's site later on are actually lured by advertisments on other media.

"It's not 100% perfect," admitted Miller, " but it's a lot better than what you get with other medium."

The technique is called a closed-loop analysis, and what it gives rise to, according to Miller, is a complete ROI accountability of advertising.

A complete ROI accountability of advertising requires marketers to look at the kinds of transactions that have taken place instead of focusing on click-through rates.

"What this does is to make a lot of advertising a lot more interesting," said Miller. "It gives [marketers] the ability to justify their media spending online. It gives them concrete evidence: we have this many people signed up for more information, we have this many leads, we have actually sold this much as a direct result of advertising online."

"And [with this model] the metric you tend to look at more and more, apart from cost per click, are things like cost per lead, cost per registration, cost per sale and cost per customer acquisition," added Miller.

The technology is still new to Asia. Engage itself has only rolled out the product for the region in the last two months.

Miller insists the technology is necessary for online marketers.

"It is technology driven, but you need to have the technology to be able to optimize and to account for performance," said Miller. "If you can't do that, then you really are missing out on some of the most unique aspects of the Internet."

"Once you have that kind of accountability and optimization, you're looking at results based media," noted Miller. "And once you give people that level of accountability, it's a media into which they'll start to pump a lot more money."