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Friday, January 8, 2010

3 Ways Reach Rankings Can Mislead You

Brought to you by Julia Casale-Amorim

There are myriad advertisers out there, just as there are millions of products to be advertised. To get the most from this discussion of reach and value, ask yourself a few questions... and for the moment, let's pretend that the internet does not exist.

What kind of an advertiser am I? For instance, is my product one that would appear in tabloids or on late night programming? Is it a product that would be allowed to run during family hour television or on a major radio station?

Where do I want my ads to be seen and why? If in print, what distribution methods would I want to use? Free distribution newspapers, magazine covers, newspaper classifieds, wild-postings? If I used flyers, who would I trust to deliver my message? Commercial flyer delivery companies, high school students? Do I actually care who would be responsible for the delivery? Do I care about the quality of the placement, so long as the ad gets distributed?

There is no shortage of media and methods for ad delivery, each one satisfying a different set of requirements and/or limitations (from budget constraints to the genuine need to sell "snake oil"). Thus, you need to firmly establish your advertising philosophy before you can effectively evaluate your media options. In this business, ignorance is not bliss -- where (and how) your ads appear can communicate a lot about your brand.

Qualification beyond raw reach rankings
Media planners place a lot of weight on monthly ad network reach rankings. While questions surrounding audience reach, page views, and duplication with other networks are typically the first asked on any campaign RFP or vendor RFI, absent are questions pertaining to where that reach actually comes from.

Of course, it's natural to be concerned about audience reach -- does the supplier have the breadth required to connect with your clients' target markets? But, evaluating networks using reach as a primary basis for comparison can be dangerous. The problem is that (at least online) all reach is not created equal. The wrong kind of reach can be acquired at bargain basement pricing when it's purchased in bulk. Quality impressions and quality reach, on the other hand, cannot. Third-party data reports don't differentiate reach on the basis of quality, so a network's reach rank alone is not guaranteed to deliver what you might instinctively think.

Take a look at three lessons that explain why not all reach is created equal. These lessons will help planners better understand where reach can come from, and they challenge the popular view that if a network's reach is inferior to another's, it can't possibly do a better job.

Lesson 1: High reach does not guarantee high quality
The wrong kind of reach can be acquired by virtually anyone, en masse. Interpreted in a silo or as a primary point of qualification, reach is not an effective measure of quality or performance.

Networks can acquire inventory in one of two ways. They can go directly to the source and establish direct working relationships with each of their publishers (more difficult), or they can procure their inventory through third-party sources, allowing them to quickly grow their reach and inventory (easier).

Internally, we use what we refer to as the "apple tree" analogy to discuss the differences in reach among vendors. Network inventory picked directly from the source (the publisher) represents a much different product than network reach procured through the multitude of other means available (e.g., network-to-network trading, blind buys on exchanges, brokered impressions, etc.)

If you go directly to the source (the apple tree), you have the luxury of hand picking the very best apples available using whatever criteria you deem to be most important. You also have the opportunity to leave behind the bruised and otherwise blemished apples, taking home with you only the most ripe and vibrant of the harvest. In this scenario, you have complete control over quality and can guarantee that you have procured the best apples available.

If, on the other hand, your apples are picked and delivered to you by a third-party, you have no control. If your supplier is reputable, you will probably receive quality apples for the most part, but without control there is no guarantee that a bad apple or two won't make it into your bunch. You also have no way of knowing who will end up with the bad apples. And if a bad apple lands the wrong brand on the wrong page, site, or section, you could jeopardize your client's entire media plan.

The only way a vendor can guarantee that the impressions (and reach) it is supplying are the best, and are sure to meet whatever criteria are deemed important, is to select them directly from the publisher. Otherwise, those impressions are being inherited from a supplier, who is two steps away from the tree, at best.

Additional reach can be easily acquired using these "daisy-chaining" tactics, but it's just not the same quality-wise, a fact that is ultimately reflected in the way a campaign performs. Of course, a low reach network does not imply a high-quality reach network. The apple tree analogy merely illustrates why you need to look beyond raw reach numbers, and understand how that reach is derived and whether or not it satisfies your quality standards, to be truly effective in the evaluation of your options.

Why this matters

Without complete control over placement, networks cannot guarantee that they are not exposing their clients to undesirable/low performing "reach" (think below-the-fold or deeply chained "gallery" exposures) -- where is the value in that?

How can a vendor guarantee priority of delivery when it is acquiring inventory through a third-party rather than directly from the source? How can that vendor guarantee that it is getting "the best" inventory from the underlying publisher?

Would any advertiser actually want to reach 100 percent of everyone online and pay for it? What matters most is how consumers are targeted and how and where your ads connect with them.

Ask, "How do my vendors acquire their audience reach?"

Do they procure the leftovers being handed out by other networks/brokers?

Do they have the relationship and degree of control required to identify and secure the most desirable inventory on a site?

Do they procure inventory on a lowest-price basis from exchanges?

From what sites is the vendor's reach derived? Rich, immersive consumer and brand friendly environments? Social media? Can the source be guaranteed? Can it be vetted?

Are the impressions that make up their reach sourced at the beginning of users' browsing sessions or near the end (long tail impressions)?
If you aren't comfortable with the answers you receive, move on. There are 400+ other options available to you.

Lesson 2: Potential vs. actual reach
To date, the reach figures quoted by third-party data providers represent a network's "potential" audience. And potential audience reach is different than actual audience reach. Consider this analogy: A bookstore orders 10 times the quantity of books it actually intends to buy (or is capable of selling) in order to get a bulk discount. At the end of each month, it sends back 90 percent of the books it ordered. The store does this repeatedly, every month, until eventually the book supplier cuts it off.

In this example, the books represent reach, the book supplier represents the publisher, and the bookstore represents the network. The number of books ordered represents the network's "potential reach." The books not returned represent the bookstore's "actual reach."

At some point in the not too distant past there was talk about introducing the concept of "potential reach" into third-party ad network rankings. Rather than assigning a single lump sum reach figure (employed to date) to each network, the figure would instead be segmented as actual reach (or reach that a network actually serviced) and potential reach (the reach that a network had the opportunity to service).

Currently, reach is assigned to an ad network if it has received exposure to an ad impression at some point along the sequence of display. The problem with using this as the criteria for reach assignment is that the mere exposure to an ad impression does not provide any guarantee that the network exposed actually placed a paid advertisement. It only proves that the network had the "potential" to place a paid advertisement.

Why this matters

Looks can be deceiving: You may conclude that a network (as above) is much larger than it actually is if you interpret its audience reach at face value.

Instability: Networks (which amass reach as above) can be subject to substantial fluctuations in supply since they are not contributing significantly to publishers' bottom lines and are therefore vulnerable to displacement. Networks in this category may let you down on that media plan signed six months ago when they realize that they no longer have the inventory to fulfill it because their publishers have moved on.

Ask, "How much of a network's reach is fulfilled and how much is passed on?"

If your network does more passing than filling, its supply (and therefore your media bookings) will be subject to potential instability.

Lesson 3: Why reach diversity matters
Sometimes an old adage says it best: "Don't put all of your eggs in one basket." If you drop it, then you lose them all.

There is no shortage of networks that tout widespread horizontal diversification: 1,000 sites, 5,000 sites, 10,000 sites... but in many cases, the majority of sites that make up these networks are inactive or offer negligible contributions to overall inventory and reach.

If the majority of a network's reach is derived from a handful of large portals and/or large social networking sites (which is true in more cases than you might think!), and something disrupts that network's supply dynamic (e.g., you decide to block a major portal from the network's site list or eliminate all sites containing UGC), clients with bookings on that network may experience massive variations in campaign delivery.

Why this matters

High vulnerability: Faced with the potential of under-delivery, networks in this situation may feel compelled to quietly "fill" your buy with un-optimized third-party inventory -- just to uphold their booking commitments.

Higher probability of reach duplication: You may be buying inventory from the same large portals that your key networks are primarily composed of.
If your plan includes networks that lack reach diversity, you're at greater risk of encountering a disruption to your campaign's delivery at some point in time.

Ask, "How diversified is the network's supply of impressions and reach?

What percent of the network's impressions come from the web's three largest portals?

What percent of the network's impressions come from social media properties?

How many of the network's "sites" actively contribute impressions (and reach) to the network?

In summary and to answer the ever-popular question, "Why would I buy from a lower reach network?" I leave you with the following:

Reach is a useful tool when you look beyond the figure itself and analyze each network's individual sourcing techniques and composition. What you find may surprise you. In some cases, high reach may also indicate high risk. In other cases, low reach may indicate high quality. You need to know how to spot the fundamental differences in reach composition that make each network unique, and to do so, you need to know what questions to ask. Ultimately it's your clients' budgets on the line, and your reputation.

Julia Casale-Amorim is CMO at Casale Media.

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