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Responsive Design and the Advertising Industry – On A Collision Course?

The interactive industry today reminds me of the old Marshall McLuhan maxim - "The Medium Is The Message." Essentially: the way that content is delivered has a huge impact on how the audience receives it. Context is everything.

If that's true (and I believe it is), then, as marketers, we're living in particularly interesting times.  

After all, today's world is a multi-screen world: 125 million people in the US carry a smartphone, and 50 million own tablets. What's more, nearly 4 out of every 10 minutes spent online in the US today is done so on a mobile device. And the universe of mobile devices continues to expand and fragment. 

So what do all those devices and all that usage really mean for the way we market to consumers moving forward? When we can't plan for context, how do we make sure we're delivering a message in the most compelling way?

Web publishers seem to have found their solution – Responsive Design. For those not in the know, Responsive Design is an approach to Web development that assumes content will need to be delivered to multiple screens. Responsive websites are built with flexibility in design and interaction that allows them to be dynamically reconfigured for different screen sizes. Content stays consistent, but layout and interface change to match the user's screen.

By our analysis here at Undertone, more than 10% of the Web's top 200 sites (according to comScore) are already built with Responsive Design, including big brands such as Time, Disney, and the BBC. And beyond the top 200 there are thousands of additional sites transitioning to this responsive, multi-screen approach. 

This begs the question – As all those websites go responsive, what will the impact be on the advertising that supports them?  After all, the ads are an integral part of all those layouts that publishers are reconfiguring, aren't they? Jack Marshall from Digiday covered this topic in a recent article, going so far as to claim that the lack of innovation in advertising was actually stifling the adoption of Responsive Design. I tend to agree.

Today, responsive sites are essentially taking one of two approaches to their advertisements: Swap or Drop. The Swap method basically replaces ads with smaller versions as screen sizes decrease. Drop is exactly what it sounds like: as a user's screen gets too small to deliver desktop ad sizes, ads simply drop off the site altogether.

For obvious reasons, neither option puts brand marketers in the best position. When there are only one or two premium slots available on a typical page, and those slots either get replaced or removed for 40% of the audience, predictability and impact go out the window.

To try to find a middle ground, some responsive publishers have standardized around the IAB rectangle, a 300x250 unit that can display properly on just about any screen. But that's directly opposed to a push from brand marketers in the last few years to transition towards bigger, more engaging ad units like the IAB Rising Stars Units because of a whole host of issues including banner blindness. The rectangle is a perfectly serviceable ad unit, but high impact/high engagement it isn't. 

Compounding these issues is the ad industry's reliance on Flash – a technology that even Adobe has publicly stopped supporting for mobile.  Desktop is where campaign development usually begins for many of our customers, and from simple in-page expandable banners to custom high impact units like the Rising Stars, marketers are starting with Flash – which doesn't work anywhere other than the PC. At some point, something has to give.

The IAB recently took the first step towards loosening the industry's reliance on Flash with the release of the first draft of their guidelines for delivering ads in HTML5 (which works across devices). It's a great starting point, laying out the necessary technical requirements for reproducing the types of interactivity marketers require. But it stops short of reinventing advertising – it's essentially defining a new approach to the same standard ad units that the industry is trying to get away from. 

Looking at how quickly consumers are shifting their time spent online to mobile, and how rapidly Web publishers are migrating to responsive design to keep those environments manageable, I don't know that the industry has the ability to take small measures in adjusting.

The answer, then, lies in bringing Responsive Design to the advertisers themselves. Building ads in a universal language (HTML5) that responds to the sites and screens they're delivered to from a single piece of creative. It's a topic we predict will continue to gain steam in the coming weeks.

Bridging the Gap Between TV and Digital Video: Possible, But Not Perfect

Nielsen Online Campaign Ratings (OCR) and comScore’s validated Campaign Essentials™ (vCE) are two campaign measurement tools that have generated a lot of buzz in the marketplace, and rightfully so: many advertisers want and need to quantify online video campaigns using traditional media metrics. We offer OCR and vCE, and many of our clients find them helpful, but they’re not (yet) perfect solutions—and it’s important to understand why. Let’s take a look at how they’re being used.

Advertisers using these measurement tools typically just want to know the percent of a target audience that their campaign reached. With Nielsen OCR and comScore vCE, there are now measurement tools that validate these audiences; we no longer have to figure it all out using media math. TV advertisers have told me that without understanding how many GRPs they are getting in video, they feel like they are throwing their money away. With OCR and vCE, these advertisers can now understand the value of a video ad across TV and online. This will enable advertisers to have an overall video strategy, regardless of the screen.

Unfortunately, online audience measurement is not that simple. It’s a confusing topic that is relatively new to the industry. Let’s start with how different TV and digital are in terms of delivering ads in the first place. When advertisers run a TV spot in The Voice to reach W18-49, they know there are millions of impressions that will be delivered to viewers outside of that demo, but this isn’t considered a cause for concern. Those other impressions don’t even factor into the numbers they pull. The advertiser knows that their consumer is watching The Voice so they want a spot in that show, regardless of the “wasted” impressions. In the digital world, however, we control for every impression that is served. We look at the percent of impressions delivered in-target out of all impressions delivered for the campaign. That simply isn’t a concept that exists in TV; it’s happening but isn’t being monitored. In digital, the “wasted” impressions are more obvious and painful for advertisers to accept—even though this same wastage exists in TV.

Now let’s look at measurement. Here’s the obvious hurdle: although there is a common metric, there is no standard way of measuring this metric in digital, as there is in TV. We are all talking about GRPs, but measurement companies use different methodologies to validate audiences. In addition, digital measurement companies do not sell data for purely demo targeting purposes. So they can tell us how well we delivered an audience, but they can’t help us find that audience in the first place. Sure, we can buy data from a different 3^rd party to try to find an audience, but as of now, that data is not aligned to either Nielsen or comScore measurement. Just because a data vendor identifies a cookie as a W18-49 does not mean Nielsen or comScore will agree. And if the data companies were to validate their audience data against the measurement, who should they align to—Nielsen or comScore? There’s no clear standard to work towards.

In addition, don’t forget that having any other goals on audience campaigns likely means you are optimizing away from your audience. Not all users that are completing videos are going to be in a brand’s target demo.  So what is the primary campaign goal - completions or audience delivery? If it’s audience delivery, pricing on in-target CPMs will get very expensive to account for all the over-delivery needed in order to reach the guaranteed audience, especially on small demos.

Now for the issue that’s often left out of the conversation. In the month of February 2013, there were one trillion (yes, trillion) ad impressions available on TV. In that same month, there were only ten billion ad impressions available in online video. Just let that sink in. The online video marketplace is 99% smaller than the TV marketplace. So yes, we can measure audience delivery online, but is it possible to fully replicate TV goals online? Perhaps not to the extent that advertisers are expecting… yet.

So what should advertisers do? I don’t think anyone disagrees that online video is a great complement to TV; the issue is that there just isn’t a ton of it yet. There are a lot of factors to consider when audience measurement is involved. On the plus side, OCR and vCE give us a measurement solution that bridges the gap between TV and video. Yes, there are challenges (and of course, we don’t have decades of data from which to learn yet, as TV does). But OCR and vCE are great solutions, and we’re happy to be able to offer them to our advertisers; it’s just important to remember that advertisers and vendors still need to test and learn together to find the right balance between in-target delivery needs and other KPIs native to online video.

Race to the Top: A Panel Discussion

On April 24, Undertone hosted an educational panel discussion with top industry leaders to explore the impact of emerging ad units on the digital industry. Is the Internet entering a "dark age" of cluttered Web environments and display ad oversupply—or are we entering a bright new future where immersive, large-canvas units drive deeper consumer engagement? Watch the recording to learn what we uncovered!

                       

A big thanks to all who attended, especially our panelists: Mark Howard of Forbes Media, Kate Jalkut of PHD, Wade Rifkin of Digitas, Geoff Schiller of Hearst Digital, and moderator Eric Franchi of Undertone.

Ad:tech Week Observations: Mobile and More

Ad:tech and several other events in San Francisco earlier this week yielded some interesting observations.  My take:

• Some people still need to be convinced that mobile matters.  I had several conversations where people spent time convincing me that mobile is important. Even as companies like AppNexus and Rubicon made announcements about mobile, it seemed that each still felt that they had to explain to the audience why they should look to mobile as an important part of their business. If a company still doesn't get the fact that they need to make mobile a part of their strategy, then they likely won’t survive.

• Speaking of mobile, apps are where it’s at – but it remains mostly games.  In-app advertising is the important and growing segment.  News apps get some ad time, as do some social apps, but the real action is on the game side. Game developers get advertising, get monetization, and have users coming back for more.  If you want to work with apps, be ready to work with games.  

• The disappearing cookie. There’s a lot of concern around what might happen to cookies in the future.  Browser policy changes have just shined the light on what smartphones and tablets had already started – the cookie is not the user identity solution of the future.  Several companies are looking to solve this problem in a variety of ways and are still looking for some agreement from the industry on what’s acceptable.

• AdTech is now merging, blurring, blending with MarTech.  Marketing Technology is getting as sophisticated as Ad Technology. The two together produce powerful tools for marketers.

• Programmatic is here to stay and growing.  It used to be a differentiator if you were a programmatic based company and sourced inventory via RTB; now it’s just expected.  The bad news is that anyone with six months to burn can build the basics and call themselves a “platform” (and we saw a few of those).  The good news is that with the maturity of the capability we now see it moving up the quality and brand ladder. Programmatic is no longer just for remnant, low-end inventory.

• Data, data and more data. We all know it, but it is stark when you see everyone together: data is the currency and differentiator in the industry.  How you get your data, what you do with it, how you analyze it, how you link it across your ecosystem, how data influences your systems operation, and on and on.  It’s a Data Scientist world.