Business Growth: Determining The Effectiveness of Digital Media
Dan Arens is an Indiana-based business growth advisor.
Subscriber Benefit
As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowFacebook recently announced it overestimated the average time people watched video advertisements by as much as eighty percent. For social media companies, that admission can certainly impact their revenue. It can also change how your company measures the effectiveness of that medium.
As one recent article in The Wall Street Journal mentioned, a few seconds here and a few seconds there can add up to a significant amount of revenue for social media companies. In the case of the Facebook error, the average length of a viewed video was calculated to be greater because only views of three seconds or more were used. If all video views were used, even those of shorter duration would lower the average length of viewing time. Unfortunately, Facebook does not identify its revenue by medium (i.e. video views). Their self admission that average video viewing time was overstated has sent shockwaves throughout the advertising industry.
According to reporters Suzanne Vranica and Mike Shields, several large companies are questioning the "lack of transparency that plagues the advertising industry." Vranica and Shields suggest that the perception of digital advertising and how it is measured is going to be out front for a while. Without question, more and more advertisers will be questioning the transition from traditional, but reliable forms of advertising to the newer, but not necessarily very accurate, social media metrics. Historically, Nielsen is an example of an independent measuring agency that is used in television.
In advertising language, they are called "viewer metrics." From the viewpoint of a business looking for growth, they are a critical measurement of how effective or ineffective a particular ad is on a social media platform. The recent announcement calls into question what can and should be done to confirm viewing metrics as they relate to advertising itself and the resulting revenue for the provider and added exposure for the company doing the advertising.
When considering digital advertising as a medium for the growth of your business, there are several factors you need to take into consideration. Even though it is a relatively new medium in the advertising industry, many companies both large and small have already spent significant amounts of money on digital advertising. It might just need to be refined a little further. As a user, you should be asking what metrics are used in order to determine the impact of your expenditure.
The digital advertising industry is evolving. Its evolution is no different than television, radio, newspapers, and magazines were in their heyday. If measures and metrics have not been developed yet, then maybe these recent events will prompt the development of more, newer, and better measures or controls for determining ad effectiveness.
Regardless of which side of the digital divide you sit, there are many metrics already available to help you determine the return on your digital advertising investment. Many companies are aware of the relative newness for digital media. They take that into consideration when looking at their advertising dollars. The key opportunity for them and for your company is how you go about measuring and determining whether your ad is effective or not. Rather than looking at a few metrics, find out how granular you can get with the data that is available from your provider. Consider getting as much data as you can in order to maximize how much you spend, where you spend it, and how it will help grow your company.
It also helps to remember where advertising is trending. It is going away from "traditional media" like television, radio, newspapers, and magazines. It is headed toward anything and everything mobile, including tablets and smart phones. Those devices are the devices of the future and the future is now. The Association of National Advertisers puts the digital advertising market at about $194 Billion. Whether that seems like a lot or a little to you and your business, just remember, that figure was $0 not too many years ago. Growth has been dramatic, but not without problems.
Whatever growth plans you have for your business, it is probable that digital advertising is or will be a part of your marketing strategy. How much or how little will depend on how effective you are in managing the money you spend and measuring how much it impacts your business in a positive way. Tread lightly and carefully. Test the market. If it suits your company growth strategy, plan to grow with the industry as it grows.
Dan Arens is an Indiana-based business growth advisor.