Beyond Clicks And CPMs: A Look At ‘Engagement’-Based Ad Deals

16 Comments

imageCPMs are the default standard for buying display, and paid search ads get measured in clicks. But when it comes to valuing a social-media sponsorship, “advertorial” content on a magazine site or even a virtual-world campaign, there’s a growing consensus that neither of those metrics is good enough.

Click-throughs aren’t great for ads on social networks, for example, because most people are there to interact with the content — not click on a link that will take them to some advertiser’s site. And with an oversupply of inventory and easily dismissed ad units dragging down CPMs, publishers are pushing for an alternative currency that attributes more value to their audiences.

That’s where “engagement” comes in — and there are a variety of ways to try to achieve it. Facebook has its Engagement Ads that try to entice users to interact; Hearst’s digital division is letting advertisers pay to “engage” with Seventeen and CosmoGIRL readers by answering their questions; and video-ad firms like VideoEgg and ScanScout offer “cost per engagement”-based buys. Meanwhile, publishers’ sales teams are increasingly serving up stats like time spent, return visits, and event the number of times a brand gets mentioned in the comments, as proof of why advertisers should pay more for their inventory.

The problem is that other than “time spent,” there aren’t any real standards around engagement. That’s partly because all these sites offer different ways for users to interact with their content, but also because each advertiser’s goal will be different. “There’s a consensus that engagement is going to be how we hold online advertising accountable from now on, but we’re still grappling with how to tie it back to real business results,” said James Kiernan, VP and group client director for P&G at Mediavest. “Like, how many ‘engagements’ does it take to drive purchase intent? How do we tie it back to sales?” We spoke with some companies to find out which metrics they’re using to broker their engagement-based deals.

Time spent, the “go-to” metric: “That’s the primary statistic that advertisers look for with our games,” said Neal Sinno, VP of business development at advergaming firm Arkadium. “We can also tell them who’s playing, how many times they’ve played and things like whether they emailed a game to their friends — but they really want to know how long their target is seeing the brand images for.” Arkadium powers the casual games section for sites like myLifetime.com and AARP.com.

Offer a new way to interact with users: Hearst launched Q&A sections on Seventeen and CosmoGIRL in April; advertisers can buy standard banner ads or come in as an “expert” and answer readers’ questions. A brand like Clearasil can buy an expert spot in the beauty section, for example, and pay for overall engagement (in this case, the percentage of users that ask or answer a question), but also on an impression basis. “They can say, ‘we want 100,000 people to see the entire Q&A thread,’ or even get the Q&A as part of a buy across the whole network; the bottom line is that they’re adding value to the audience’s conversation,” said Matt Milner, Hearst Magazines Digital Media’s VP of social media.

Tie engagement to a purchase: IM-based virtual world IMVU is reportedly bringing in about $1.7 million in revenue per month, 90 percent of which comes from the sale of virtual goods (via Virtual Worlds News). And it’s just starting to do branded merchandise deals with advertisers. “There’s no reason that a legit brand couldn’t sell at least 100,000 items over several months,” said IMVU’s VP of business and finance Kevin Dasch. “But we can also give them real-time stats about the number of times a user wears their item, the amount of time they spend looking at their page, as well as the number of groups that have popped up around them on our network. We try and bundle those stats with some standard banner impressions, so advertisers can measure their spend in the ‘traditional’ way, but also get comfortable with this kind of engagement.”

Kiernan called other options, like in-game ad units, “very engagement oriented,” since advertisers only pay once a player views the ad at a predetermined angle, for a minimum amount of time. “We’re still buying on a CPM, but it’s a more accountable CPM,” he said. Kiernan added that the majority of buys were still made on a CPM or CPC basis — with engagement metrics bundled in as an add-on. Meanwhile, Publishers Clearing House is tracking the number of people that enter their contests via networks like Facebook, MySpace and Twitter. “We’ve generated about 9,000 contest entries from a pool of about 1,500 fans across various networks,” said Alex Betancur, GM and VP of PCH Online. “That’s 9,000 opportunities to present them with magazine offers — which is how we define engagement.”

Photo Credit: Marinela

16 Comments

newbie

I sure this site will be famous in the future maybe tomorrow or two year
Good article – almost all of the articles I have read on engagement deal with engagement applied to the ads themselves. What about the content in the page? One of the models we have been working on is a way to assign an engagement rating to subjects/keywords by measuring a sampling of that subject’s traffic across different sites

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mabby

I enjoy playing the games, but am very annoyed that I cannot redeem my tokens. I get a pop up that says "sorry," Anyone know why this happens? I would appreciate any help.

Steven Chiu

@ David Steinberger – I work for a company called Speak2Me. We offer Chinese students high quality spoken English practice lessons for free via our internet site. In return, students agree to view lessons that contain "embedded" advertising. I realize that what I am about to say probably makes readers in "the West" cringe but in China, students actually prefer lessons that put them in real-life, branded situations. For example, instead of the lesson being "a road trip to the countryside", the lesson becomes "a road trip to the countryside in my smartfortwo". Our lessons typically last five to fifteen minutes and can be repeated over and over without following the same conversation path. While we have recently launched the site, we've had early success with this advertising format.

@ Tameka – I'd be happy to go on the record if you were to write any similar stories in the future. Do feel free to ping me.

Best, Steven

Michael D

If anyone can name me two print brands that transmitted their equal value digitally, I will name you 200 that did not. And another 2000 that will not.

Tameka, I sent you an email using the sites contact tool. When you suggested that you love to know what the content/advertising landscape looks like from my vantage point, I'm willing to oblige. But not publicly because what I know has real value and I'm not inclined to give it away on public message board.

My personality is a bit biting on a keyboard, but in real life I'm just another East Coast opinionated type A. I have a kinder gentler side, my comments don't always reflect that.

Dave K

I disagree with Michael D. Bottom of the funnel marketing completely discounts brand, Regardless of people may think brand still matters and it always will especially when you get into the premium product world.

David Steinberger

Sure engagement is hard to define and measure. Time, on the other hand, is really simple to define and measure.

Create an accurate way to measure time spent with the marketer's message on screen and you'll deliver a result so far superior to the status quo that no one will care that it falls short of the almighty engagement.

-Dave

John Grono

The problem with measuring that nebulous thing we call "engagement" is twofold. First, no-one has successfully defined it, and you can't accurately and consistently measure something you can't define. Second, "engagement" means something different to everyone – what is engaging for you may not be engaging for me – it is a psychographic construct.

I think I will leave it to Erwin Ephron (well I think it was Erwin who said it) … I can measure engagement … if you've paid for te rock on her ring finger then you're engaged!

David Steinberger

"Impressions" are completely bogus and it's amazing the industry has accepted it as a standard for delivery. For every 1000 impressions your online ad gets, how many of them are above/below the fold? On the browser being covered by another? On the page for too short of a time to be cognitively recognized? And then we wonder why CTRs are under 0.2%.

The standard has to move to Cost Per Time if it's to be taken seriously. Imagine buying on TV or radio and randomly your .30 sec ad plays sometimes for 2 seconds, sometimes 10 seconds, and sometimes 3 hours with the last screen of your ad plastered on the screen. That's what online advertisers are accepting.

But here's the thing, buying on a Cost Per Time only works if you are buying from the people who actually control the time you are buying. And that is the consumer, not the media company. For more on how that works…www.OurSeatAtTheTable.com

-Dave

Josh Hofmann

Good article – almost all of the articles I have read on engagement deal with engagement applied to the ads themselves. What about the content in the page? One of the models we have been working on is a way to assign an engagement rating to subjects/keywords by measuring a sampling of that subject's traffic across different sites. So if you are a brand advertiser looking at music, you might want to place your campaigns against artists that command the highest user engagement amoung readers to maximize exposure – similar to the gaming example above. It's a dimension that is not really used when determining the value of keywords because it's not measured, which could generate significant revenue for publishers if monetized properly. Another author who deals with engagement frequently is Kevin Mannion in MediaPost.

Josh
– Vertical Acuity

DJBHorner

What would be most helpful to know in the interim would be to determine how many impressions it takes to produce 1 engagement. Brands have a much more in-depth knowledge of how much to invest in an impression-based buy to achieve their objectives. From there they can evaluate how many engagements it would take to produce the same effect and invest accordingly.

Srini Kumar

Tameka, what a courteous reply to @Michael D' s comment. You are going to be a superstar, I look forward to reading your future articles !!!!

-srini
stickernation.com

Ex-employee

There are companies like Touch Commerce that power the online chatting behind the ads, and they directly increase sales. They also provide the metrics related to engagement, and have powered ad campaigns for companies like AT&T.

jenkins

Um, er, practically every ad serving company offers some sort of "engagement" style ads. They are usually called "cost-per-lead" or "cost-per-action".

You are definitely getting played with this nonsense. Sorry, sad but true.

Tameka Kee

@MIchael D – Appreciate your feedback. If there are companies you know of that are offering advertisers engagement-based buys, I'd love to hear about them, and possibly cover them.

I picked the companies in the post — Hearst, IMVU, Arkadium and PCH — partly because they were some of the only sources willing to go on the record about engagement-based buys. I also thought they offered a good mix of old and new media. I'm always open for suggestions about new startups that are willing to talk about their biz models.

-TK

MIchael D

Sorry but I am afraid this is same-old, same-old, just using different words.

And its not going to work for the simple reason that advertisers have an abundance of choices that are entirely performance based. No guessing, no intrinsic value, no "branding" value.

Straight up —Dollars spent to Dollars returned. And the reporting is real time, so campaigns can adjust to trends, adjust to time zones, adjust to weather, adjust to news cycles…..

There are so many cutting edge advertising products coming to market that make this story look like it was written by Wilma Flintstone. When does the Dinosaur show start?

I like Paid Content, I have your widget on my IGoogle. But after reading the piece from the Forbes CEO last week, and then this, I really have to wonder if you folks get it.

No one needs any help following You Tube, or Forbes, Conde Nast, Meredith or any of the other Brands. Those brands are saturated and playing checkers with one another.

The real content/advertising game is going on with companies you don't even know exist. That is where the high stakes chess games are.

Guest

advertising needs to evolve to incorporate tv, film and music material into a new art form..

Comments are closed.