How to maximize the return on investment from digital

marketing
Gian Fulgoni
Source: WARC Best Practice, March 2016
Downloaded from WARC

This article explains how marketers can maximize the return on investment in digital marketing, a
platform predicted to overtake TV in adspend in 2016.

Where to start: measurement and operational promises require tight management to find
meaningful insights and attitudinal or behavioural changes that may result from the ad.
The essentials of digital marketing centre on its measurement: crucially, it must be professionally
undertaken, and audience guarantees should be negotiated with publishers, in the same way as
TV.
Digital platforms need to show that ads served on their services have a chance of being seen on
a screen by actual people, not bots, and that this measure of viewability is measured by a third
party.
The article includes a case study from ConAgra, whose digital advertising was only hitting 25% of
the intended target, and only half their ads were in view; Ad-agency brokered measurement of key
metrics delivered both valuable data for the future, as well as notable KPI increases.
A study from Kellogg's details how it conducted granular reporting of key validation metrics for
every impression, meaning that no ads would be delivered to invalid users.
Finally, a checklist of questions that advertisers should ask of their agencies and questions that
should be asked of an advertiser's internal IT staff.

Gian Fulgoni
comScore

Jump to:
Introduction | Where to start | Essentials | Checklist | Case studies | Further reading

Introduction
The lure of the internet has attracted marketers for some time now. In 2016 spending on digital advertising
(encompassing search, display, rich media, video, sponsorship, classifieds, lead generation and mobile) is
expected to grow by 15% in the U.S., reaching $68 billion and surpassing spending on TV advertising for the
first time. Targetability and measurability are often cited as digital's key advantages over traditional media. While
these benefits are real, nothing is perfect, and smart marketers are now realizing they need to be careful in their
measurement and executional approaches if they want to maximize the return on investment (ROI) from their
digital ad investments.

Definitions
For the purposes of this paper, digital marketing is defined as display or video advertisements delivered to
desktop or mobile devices. Search marketing is not included.

Where to start
There are four areas in particular where digital's measurement and operational promises need to be tightly
managed and, by doing so, where benefits can be obtained:

1. Click rates on display ads have fallen to levels of only 1 in 1,000. Clicks today are at best an incomplete --
and at worst a misleading -- effectiveness metric. Instead of using click-through rates, which have been
shown to have no statistical relationship with campaign effectiveness, it's far better to directly measure the
attitudinal and / or behavioral changes that occurred among consumers exposed to a digital display ad
campaign. There are many third party services that provide this capability.
2. Because of high cookie deletion rates, cookie-based measurement of the number of unique visitors to a
web site or the unduplicated reach of an ad campaign overstate the true numbers by a factor or 2X to 3X.
Third party measurement companies that use panels of people and don't simply rely on cookie counting
can provide accurate metrics.
3. Cookies can also present a challenge when they are used to target ad campaigns, especially if the
descriptors attached to the cookies are inaccurate or out-of-date. Unfortunately, this is often the case and
third party measurement using person-level panels is needed to gauge the accuracy of delivery of a
targeted ad campaign. Buyers of advertising should negotiate with sellers regarding the level of accuracy
being promised and obtain audience guarantees whenever possible.
4. About 50% of the ads delivered in a typical digital campaign are never in-view to the consumer. This is
either caused by ads being loaded on the page but below the screen such that the consumer never scrolls
down far enough to see the ads or the ads are delivered to fraudulent bots / computers. Obviously, ads that
are not in view have no hope of impacting consumers. Consequently, the buying of digital ads needs to
occur with a full understanding of in-view rates. Buyers can use a variety of third party campaign
measurement tools to accurately identify the degree to which ads are in-view. As in the case of digital ad
targeting, smart advertisers are increasingly demanding viewability guarantees, with "make goods" (i.e.
additional free ad impressions) being provided by the seller if the prescribed level of targeting and
viewability is not obtained.
Essentials

Unraveling the Realities of Digital Marketing

The Internet has been described "as the most measurable medium ever created." While it's true that digital is
superior in many ways to traditional media such as TV and Print, it's far from perfect in terms of measurement
and execution. There are pitfalls in the digital world that marketers and their agencies need to recognize and
understand. Let's take a look at some of the more important ones.

1. The Click

In the early days of the digital ad industry, click rates on display ads were in the 5% range and it was easy to
believe that clicks reflected effectiveness. But there was a novelty factor to much of that clicking. Fast forward to
today and click rates have dropped to levels of about 0.1% -- which is to say that only 1 in 1,000 ad impressions
in a campaign are clicked. This begs two questions: If click rates are so low, can clicks still be used as a reliable
metric or are we basically saying that digital advertising doesn't work? The answer is 'no' to both questions. In
fact, research1 has shown that there is no statistical relationship between clicks and campaign effectiveness and
also that digital advertising works even in the face of minimal click rates. The concept of view-through value of
advertising has long been understood in traditional media. Focusing on clicks in digital will lead marketers
astray. Unfortunately, however, in a 2014 survey comScore conducted of publishers, agencies and advertisers,
it was found that approximately four-in-ten professionals said they used the click "always or most of the time" to
measure the effectiveness of display ads. It's likely that simplicity, low cost and speed are the drivers of the
continued use of clicks -- which is unfortunate in light of their lack of relevance to advertising effectiveness.
Instead of using click-through rates, marketers should measure the attitudinal or behavioral changes among
those consumers exposed to the campaign compared to those who weren't exposed. There are a variety of
reputable research companies that provide these types of services. While this requires spending some research
dollars, that cost is far less than the cost of being wrong when making expensive decisions about campaign
spending.

2. The Cookie

This is an identifier placed on a computer browser either by a web site when the computer visits the site or by an
ad server when an ad is delivered. It was originally believed that cookies could be used to measure the number
of unique visitors to a web site or the reach of a digital ad campaign. Unfortunately, it's been found that cookies
are deleted by about 30% of internet users in a month at an average rate of 4 to 6 times per month2. This totally
disrupts cookie-based measurement because the same computer can be counted multiple times, leading to
artificially high numbers of unique site visitors and the number of people reached by a campaign. Unique cookie
counts will overstate the true number of site visitors or the true reach of an ad campaign by as much as 2X to
3X. The solution is to use third party measurement services, which don't rely solely on cookies but also use
panels of individuals to adjust the cookie counts for the duplication caused by cookie deletion.

3. The Cookie and Ad Targeting

Cookies also present a challenge when used to target ads to specific segments of consumers – either
demographic or behavioral segments. If the descriptors attached to the cookies are inaccurate or out-of-date
then the correct target segment won't be reached with advertising impressions. Unfortunately, it's become clear
that this is often the case3, with targeting accuracy averaging about 44%, which is to say that only 44% of the
impressions in a typical digital ad campaign reach their intended target. Targeting accuracy varies according to
the number of variables used and can be as low as 11% when three variables are used.

In the case of demographic targeting using cookies, one particular challenge is that multiple people can use the
same desktop computer. The cookie is a browser-based identification and can't identify who is using the
computer at any point in time. As a result, gender and age-based targeting errors can easily occur when
campaigns are targeted using cookies.

The Kellogg Company has been at the forefront of digital marketing for many years and has been quite vocal
about the steps it's taking to improve its effectiveness. Chief among these is the use of third party campaign
measurement systems to keep track of the delivery of targeted impressions4 and negotiations with publishers
regarding Kellogg's expectations of accurate delivery. Just as in the practice of buying ads during the annual TV
Upfronts, digital marketers need to negotiate audience guarantees in the digital world, ideally with the provision
of make-goods if the promised target audience isn't obtained.

4. Ad Viewability

This was never thought to be a problem until research showed that slightly more than 50% of digital ads were
never in view to the consumer– even though they were paid for by advertisers5. There are two ways in which
purchased digital advertisements may not be in-view:

First, even though a human is using the computer, the advertisements might not load on the viewable
portion of the user's web page. An example of this is if the advertisement is loaded onto the page but below
the computer screen, and the consumer doesn't scroll far enough down the page to see the advertisement.
These also are referred to as out-of-view human impressions.
The second way is if the advertisements are delivered to invalid traffic (IVT), generally a fraudulent
computer not being operated by a human. The increased recognition of the deleterious impact of online
fraud has accelerated attention to the matter of digital ad viewability

Pricing negotiations between advertising sellers and buyers are important and need to occur with a clear
understanding of the degree to which ads are in-view. Advertisers need to be extra vigilant when buying
advertisements on open programmatic (i.e. computerized) exchanges where fraud exists at high levels. The low
price and targeting promise of the exchanges attract advertisers, while fraudsters are lured by the volume of
transactions. Insisting on viewable audience guarantees is one way for advertisers to minimize fraud and
maximize advertising impact.

Meanwhile, advertising on premium publisher sites offers marketers the benefits of lower fraud, higher
viewability and greater sales impact.

Video advertising attracts advertisers because of its ability to lift sales. The high CPMs of video advertising also
attract fraudsters, however, so advertisers need to be careful when buying on this platform and it would again be
prudent to require some form of audience guarantee.

Advertisers also need to ensure that inputs to their market-mix models only use validated viewable ad data and
not the gross tonnage delivered. Failure to do so will lead to erroneous conclusions that understate the impact of
digital advertising.

It's clear that the viewability of digital ads is a challenge on a global scale5. Leading global marketers such as
Unilever are addressing the problem head on, demanding that digital marketing platforms address what Unilever
calls the "3Vs" – value, viewability and verification6. Unilever's CMO, Keith Weed, says digital platforms need to
show that ads served on their services have the chance of being seen on a screen by actual people (not bots),
and that this measure of viewability is verified by a third-party.

Checklist
Key questions advertisers should ask their agencies:

1. Are you using click-through rates to measure the effectiveness of my digital display campaigns?
2. What click rates are you seeing for my campaigns?
3. Why do you think click-through rates are predictive of campaign effectiveness?
4. Have you looked into using third party companies to measure the actual attitudinal and behavioral changes
among people exposed to my ad campaigns?
5. Are you using third party campaign measurement services to measure how many of my ad impressions are
not in view?
6. Have you negotiated guaranteed audiences with digital publishers that specify the percent of ad
impressions that will reach:
a. Target demographics?
b. Target behavioral segments?
7. Have you negotiated guaranteed audiences with digital publishers that specify the percent of ad
impressions that will be in view?
8. Have you demanded guaranteed in-view and target audiences on the programmatic ad exchanges?
9. For Q5, 6 and 7, what guaranteed audience levels (in terms of percent of ad impressions) did you request?
10. In negotiating guaranteed audiences what premium price (if any) did you pay?

Key questions advertisers should ask their internal IT staff:

1. Are you basing your estimates of our site traffic on web server analytics that simply count cookies?
2. Does this mean you're counting a single machine with deleted cookies as multiple visitors?
3. Did you realize that, because of cookie deletion, counts of cookie visitors are far higher than the true
counts of unique people?
4. Have you looked into getting a count of the number of unique people that visit our web site (along with
their demographics) from reputable third party companies that provide such metrics?

Case studies

How ConAgra Has Met the Challenge of Digital Targeting and

Viewability
ConAgra Foods has demonstrated how to best handle the challenge of digital targeting accuracy and viewability
so that its digital campaigns are more effective7.
 1. The Challenge. The situation was that only 25% of ConAgra's digital ad impressions hit their intended
target and only 50% were in view. So, ConAgra changed its media buying strategy, negotiating for
guaranteed viewability and audience delivery rates in order to improve its campaign performance.

2. The Approach. Through its agency, Spark Communications, ConAgra negotiated with digital publishers
based on validated delivery guarantees for display – meaning the ads were delivered in-view, in the right
geography and free of invalid traffic – and in-target audience guarantees for video.
Typically, guarantees for display ads ranged from 80-100% validated impressions, while guarantees for
video ads usually fell within the 90-100% in-target range. ConAgra is willing to pay a higher CPM to hit
these validation and audience delivery rates as it believes in aligning price with value.

While the campaign was in flight, Spark Communications worked with the publishers directly to maintain
delivery metrics within the rates guaranteed by the terms of the media buy. To facilitate delivery
optimizations, publishers were also given access to data for their own sites. This empowered publishers to
make changes to ensure the quality of their delivery and to meet the audience and viewability guarantees
throughout the campaign.

3. Results. After the campaign, ConAgra used its third party campaign data to reconcile and bill accordingly.
In addition, the data - along with online survey data – was used as an input into its market mix modeling
systems. With these tools, ConAgra was able to measure the changes in key branding and equity metrics,
as well as the incremental sales volume driven per impression, and to understand the ROI generated by its
campaigns. Insights gleaned from this analysis will also help improve future campaign planning and
execution.
Through increasing the validated and in-target rates for advertising campaigns, ConAgra was able to
achieve notable increases in key performance indicators. For the campaigns evaluated, ConAgra saw
increases in attribute awareness lift of up to 70% and increases of purchase intent lift of up to 30%.

ConAgra also achieved greater sales volume ROI and efficiency through these validated and in-target rate
guarantees. In an analysis of a key display campaign, ConAgra Foods found that viewability led to
significant increases in two key ROI metrics: incremental sales volume per impression and incremental
sales volume per dollar spent. ConAgra Foods compared these metrics calculated for both gross
impressions and viewable impressions, and found that incremental volume increased by 74% for in-view
impressions, while incremental volume per dollar increased by 39%.

Given the marketing effectiveness and efficiency that this advanced delivery has provided, ConAgra Foods
is committed to continue working with its agency and publisher partners to evaluate the validation and
audience delivery of its online ad campaigns.

How Kellogg Minimized Wasted Ad Spend on IVT

The cost in wasted dollars if an advertiser’s ads are delivered to non-human traffic is high. Kellogg was
determined to minimize such waste and increase the return from its investment in digital advertising.
 1. The Challenge. Kellogg has long been at the forefront of digital marketing and has never taken the threat
of IVT lightly. As a progressive marketer that has always sought and embraced innovative methods to
improve ad delivery, Kellogg has achieved IVT levels far below what is considered acceptable by industry
standards. However, Kellogg was convinced that greater improvement was possible and turned to Krux and
comScore to devise a solution.

2. The Approach. One way to reduce the impact of IVT is to whitelist and blacklist sites so that the ad server
knows which sites to avoid. However, even premium sites can suffer from occasional sporadic IVT
problems so Kellogg needed a solution that went beyond a simple identification of problem sites and was
able to identify IVT even if that occurred on the premium sites the Kellogg frequently used. Krux and
comScore worked together to feed Kellogg’s impression level campaign data from comScore vCE® directly
into its system. This provides granular reporting of key validation metrics – including invalid traffic,
viewability, geography and engagement – for every impression delivered. With this data Krux was able to
pinpoint users associated with invalid activity and add them to a suppression list applied to Kellogg’s ad
serving on a daily basis. This ensured no ads would be delivered to these invalid users from any Kellogg
campaign.

3. The Results. The new approach devised by comScore and Krux is expected to save Kellogg’s $2 million in
wasted U.S. campaign spending per year. This program provided Kellogg with a number of other
advantages:
Full automation of campaign optimization, where previously it would have been a highly-manual
process
Applicability across ad formats and channels including display, video and mobile
Reduced threat of invalid traffic on cost-effective programmatic inventory
While the industry has come to accept low numbers of invalid traffic on premium content, this program
demonstrates that granular IVT suppression can further reduce these numbers – leading to significant cost
savings and improved ROI

Further reading
Warc Topic Page: Digital Media

Warc Topic Page: Online Display

Warc Topic Page: Online Video

Warc Topic Page: Audience Measurement

Warc Case Studies: Online Display (lead media)

Warc Case Studies: Online Video (lead media)

1 Fulgoni, G. M., and M. P. Morn. "Whither the Click? How Online Advertising Works" Journal of
AdvertisingResearch49, 2 (2009): 134–142.
2 https://www.comscore.com/Insights/Presentations-and-Whitepapers/2007/Cookie-Deletion-

Whitepaper
3 https://www.comscore.com/Insights/Blog/vCE-Audience-Viewability-Benchmarks-Reinforce-
Message-Normal-is-a-Relative-Term
4 https://www.comscore.com/lat/Insights/Blog/When-the-Cookie-Crumbles

5 https://www.comscore.com/Insights/Blog/Digital-Campaign-Benchmarks-How-Are-Your-Campaigns-
Performing-Versus-the-Canadian-Norms
6 "Almost a quarter of Unilever's $8 billion ad budget is now spent on digital." Business Insider, January 28 2016.
Retrieved at http://www.businessinsider.com/unilever-digital-advertising-budget-up-to-24-2016-1
7 https://www.comscore.com/Insights/Case-Studies/validated-Campaign-Essentials-A-ConAgra-Foods-
Case-Study

About the author

Gian Fulgoni is Co-Founder and Executive Chairman Emeritus of comScore Inc.

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