Speaking Sensis

Crunch! is a new column looking at the numbers behind advertising and local search. In today’s Crunch!… Defining what a click is. That’s easy. Defining what a click isn’t. That’s harder… but much more important.

In the 12 years I’ve been working in online media, there’s one thing that’s always befuddled me.

It’s the fact that online marketers cite measurement as the biggest barrier to advertising on what is touted as the world’s most measurable medium.

Go figure!

To highlight this, a 2007 McKinsey Quarterly report* found that over 50% of Internet advertisers saw “insufficient metrics to measure impact” as a barrier to using or considering digital advertising.

And there’ve been similar surveys, with similar results, in Australia.

So, what’s going on here? How the hell can measuring such a measurable medium raise so much angst?

I’ve long thought there’s two reasons.

The first is confusion about how we’re measuring – in other words the different public measurement services and their methodologies. For quite a while now, there’s been concern in Australia about the accuracy of online statistics. Naturally, when there’s a lack of faith in the source, there’s going to be a lack of faith in the data as well.

The second is a lack of clarity around what we’re measuring. Just think about the simple issue of online traffic as an example. Over the years, we’ve been stumped by a blinding array of different metrics – hits, page views, sessions, visits, unique users and unique visitors just to start with.

These metrics all mean slightly different things but, despite that, they’re often quoted interchangeably: a recipe for much pulling-of-hair and gnashing-of-teeth if I ever saw one.

This metric malaise is a really big problem, and I wanted to touch on it today with a focus on one particular metric – the humble click.

WHAT’S A CLICK?

The other day, an interesting question was raised at a customer panel session I attended.

On the surface, the question – “what (in advertising terms) is a click?” – would seem pretty straightforward.

Put simply, it’s when a person clicks from a feeder – like a search engine or banner ad – to a particular advertiser’s web site. It’s the action that gives rise to pricing terms like ‘cost per click’ and ‘pay per click’.

Okay, no biggie there.

CLICKS AIN’T LEADS

But the question becomes a lot murkier when you think about what a click isn’t. In particular, whether a click and a lead are the same thing.

Now, this might seem like nit-picking, but it’s a really important question – especially for the numerically-obsessed, like me. It gets to the heart of how you understand, measure and evaluate the contribution of different media to your business.

To start with, let’s think about this in a traditional media context.

Let’s say you send out a DM piece to 1,000 potential customers. As a result, 100 people take a moment to read it and 10 are so enamoured with what you’ve said that they give you a call.

What have you got there? 1,000 leads? 100 leads? 10 leads?

If you’re a media outlet trying to justify your existence, you might say 100. You might even say 1,000 if you’re feeling particularly hairy-chested (and/or deluded).

But if you’re a manager trying to get a handle on your sales pipeline, the answer is unequivocal… 10.

A lead isn’t a passing ship; it’s a real potential customer who has called, emailed, visited or contacted you in some way expressing a real interest.

A lead is a real sales opportunity that – most critically – you have a real chance to close.

Don’t get me wrong. The fact that 100 people read your DM piece (or clicked through to your web site) is great. They now know you and have you in the back of their minds. They’ve interacted with your brand.

But those people don’t qualify as ‘leads’ until they take that next step and get in touch with you.

BRINGING CONVERSION INTO THE MIX

Clearly, you can’t properly equate clicks to leads (which take the form of calls, visits, emails and other forms of enquiry) in the way some try to do these days.

To properly measure the leads generated by online advertising, you need to bring another ratio into play – conversion.

Conversion measures how many people actually took that next step of contacting you.

Most research suggests that online conversion rates are quite low – in the low single digits. That means the actual leads stemming from your online advertising may only be a relatively small fraction of the number of clicks.

THE BOTTOM LINE

So, what’s the bottom line here?

Firstly, comparing clicks with leads ain’t comparing apples with apples. If you want to compare clicks generated by one form of advertising with calls or visits generated by another, you need to think about the conversion as well. How many people actually visited your site and then contacted you?

Secondly, think about how well your web site converts browsers to buyers. Optimising online lead-generation campaigns means not just getting lots of people to your site, but having a site that efficiently converts them to leads as well.

And finally, if someone comes to you offering a mountain of ‘leads’, ask them precisely what they mean by the word ‘leads’.

How many of them will be real leads – enquiries from potential customers that you have a chance to close?

You might just find they’re leading you up the garden path.

* How companies are marketing online: A McKinsey Global Survey. September 2007

Today, Sensis CEO Bruce Akhurst spoke at an American Chamber of Commerce luncheon on what he describes as The Age of Engagement.

Digital media isn’t merely cannibalising traditional media. It’s giving marketers new tools to work with and the ability to build deep, valuable relationships with customers.

The first presentation in this series looks at how local search is helping marketers support consumer purchase decisions in exciting new ways. And how the next generation of local search is being driven by the mobile phone.

The second presentation looks at social media. Be sure to check back as this presentation will be uploaded shortly.

My last couple of entries have looked back on 2008.’s

Now it’s time to turn from past to future, with eight trends for 2009.

It’s a testing time for the media sector today. But despite the impacts of the economic downturn, there’s a lot to be optimistic about. The key will be focusing on customer needs and listening to what your customers are saying to you.

Which is why we’ve dubbed 2009 ‘the year of the customer’.

Have a read and tell us what you think. Do you agree… or not? What do you think this year’s hot spots will be and why?

Mobiles make mainstream

Mobile advertising has been promising big things for years. Now it’s delivering and, this year, mobile advertising will make the mainstream.

I could spend hours talking about the unique capabilities mobiles offer marketers (and I will do soon), but, for now, let’s talk numbers.

From January 08 to January 09, traffic to Sensis Mobile sites grew on average 12% A MONTH . Mobile now represents 8% of Sensis’ total Australian digital traffic – and it’s growing fast(1) .

And, according to MediaSmart (Sensis’ digital display advertising business), the uptake of mobile display campaigns is currently running at almost three times the rate it did last year.

Think mobile advertising is a way off? Think again.

Integration

The marketing challenges created by fragmentation (people spreading their media consumption) has been a hot topic for years.

In 2009, we’ll turn our attention from the problem to the solution – integration, multi-channel, cross-platform or whatever you choose to call it.

Increasingly, media companies will bundle different media into multi-brand, multi-product networks. This way, advertisers can access a larger base of consumers with a single purchase and manage their media strategy in a co-ordinated way.

Sensis has been executing on this for a while through our Yellow Pages® print, online, voice, mobile and sat nav network. We”re also seeing strong traction for cross platform advertising in the activities of a number of major media players, including the Mitchell Communication Group’’s cross-platform media negotiations, which received considerable media coverage late last year.

Expect integrated campaigns to steadily become the norm.

Syndication

Okay. So, major media providers are increasingly enabling cross-platform advertising. But what about the web itself? After all, it isn’t just one platform, it’s millions. About 108 million at best guess(2). How can you possibly reach out across such a diverse landscape?

In the past, going online meant having a web site and not much more. This year will see more marketers stepping outside their web sites to create syndicated content that windows that reach out right across the web.

Today, advertisers are increasingly using blog, video and even Powerpoint networks like LiveJournal, Wordpress, YouTube and Slideshare to generate and deliver content. They’re using a blinding array of sharing and syndication tools to spread that content everywhere. And the whole lot is search engine optimised, including their Yellow Pages® and White Pages® listings.

The end result is an easy to manage content store streaming content out to a whole mass of proprietary and public sites. You’re heavily increasing potential reach and enabling a whole range of different opportunities, like the ability for people to discuss, share or subscribe to your content.

No doubt about it, there’s more work in this than the old model. But the spin-offs are potentially huge, which is why you‘ll see far more syndication occurring in the future.

Social Media

While we’re on the subject, there’s no doubt that social media is the hot topic right now.

And it’s likely to stay that way. YouTube and Facebook usage continues to grow at almost obscene rates. According to Roy Morgan, over 5.5m Australians used these two sites every month in the September quarter last year – up 1.8m on the previous year(3).

Meanwhile, Coca Cola’s Facebook page now has over 3 million fans !(4)

So social media is a big potential opportunity. But how do you unlock it?

The exciting thing about social media this year won’t just be its growth. It will be the fact that marketers will work out how to use it.

Engagement versus eyeballs

But, to do that, there’ll need to be a major (and very welcome) shift in how we perceive the role of marketing.

Will marketers get value out of social media by using it as another way of shoving brands in people’s faces?

No. They’ll drive value by using social (and other) media to genuinely engage people in conversations and learn from their views. They’ll use media as a channel to provide service – not just taglines – to consumers. They’ll begin sharing, rather than just promoting, their brands and they’ll use media to go right to the source: seeking consumer views on everything from product development to customer service to community relations.

Make no mistake. This is a quantum shift. As a result, brand awareness will start giving way to brand ownership and the role marketing plays in the business will change forever.

Accountability

Here’s a disturbing irony. While digital media is touted as highly accountable, a lack of accountability is still seen as the greatest roadblock by online advertisers. For example, a 2007 McKinsey survey(5) found that over 50% of digital advertisers nominated “insufficient metrics to measure impact” as a barrier to adoption.

The IAB is currently undertaking a much welcomed revision of online measurement guidelines and industry standardisation.

Let’s hope the many issues confronting online measurement can be resolved, including the ability to align online metrics with other media and the ability to measure the rapidly growing mobile landscape in a standardised way.

Of course, accountability doesn’t apply solely to online. Traditional media need to become more transparent about ROI as well. One example of how Sensis is following through with this is our Yellow Pages® metered ads. Unique phone numbers are used on Yellow Pages® ads and then monitored. In this way, the advertiser can see exactly how many calls their ad is generating.

Advertisers have been demanding accountability for some time now. Over the next year, you’ll start to see media providers – both online and offline – start to really deliver it.

Tough times

So there’s a lot of exciting things going on today. But you can’t realistically talk about 2009 without mentioning the global downturn and it’s impact on media.

In Australia, the Sensis Business Index and Sensis Consumer Report are reflecting global trends by finding the lowest levels of consumer and business confidence in their history.

This declining confidence has had a sobering impact on advertising and media.

Almost every major Australian media business is staring at falling revenue, although it’s pleasing for us that Sensis has been a notable exception.

And even the major dot.com high flyers are experiencing either curbed growth or revenue declines.

There is a feeling that things will improve for the industry in 2010, although recent downward revisions in forecasts from various analysts suggest we may not yet be at the bottom of this cycle.

The year of the customer

And this leads me to the final trend. 2009 will be the year of the customer.

Over the last few years, the industry has been beset by discussions about systemic changes. Is traditional giving way to digital? Are advertising business models changing?

These discussions, while vital, have tended to divert the industry’s attention away from the most fundamental and vital question of all – are we delivering what our customers (both consumers and advertisers) want?

Whether they’re traditional, digital or both, the companies that survive and thrive through this downturn will all have one thing in common.

They’ll be focused unerringly on the needs of their customers.

1: Omniture. Visits to Sensis sites. January 2008 to January 2009.
2: www.domaintools.com
3: Roy Morgan Single Source Australia. October 2007 to September 2008. Base Australians 14+.
4: Facebook
5: How Companies are Marketing Online – A McKinsey Global Survey. September 2007.