Online Media Daily has published a commentary piece on the difficulties of measuring value online and the implications for online branding. It is a bit dense, but well worth reading carefully. In summary, Andy Atherton argues that 1) Something that is valuable is not necessarily directly measurable, because value can be difficult to measure; and 2) No model can substitute for relevant experience and common sense. Models aren’t always right.

To support his argument, Atherton quotes a recent study from the Atlas Institute which concludes that about 60% of all paid search clicks are on branded terms. Calling that number “simply astounding,” Atherton writes that ”Obviously Atlas’ parent company, Microsoft, has a vested interest in moving the market away from an excessive focus on Search, so skepticism is warranted. However, even if we cut that percentage in half, the inescapable conclusion is that a lot of the money brand marketers are spending on other media (online and offline) is having an impact - even if we can’t measure it precisely. 

“The other just as important and also equally inescapable conclusion is that marketers who only spend on search are losing potential sales to those marketers who use the full funnel. A consumer who begins by searching for ‘Campbell’s Soup’ must be more likely to end up buying Campbell’s Soup - versus buying Progresso soup or any other brand - than if they began by just searching for ’soup.’ ”

He concludes that, “Accountability is always good. However, accountability should never be a mandate (or an excuse) for doing only things that can be precisely measured. Just because we can’t measure something as precisely as we would like, doesn’t mean that thing is not valuable. That’s point #1.   

“Point #2 is that a measurement itself is only as good as the model on which it’s based. Models are a complement, not a substitute, for experience and intuition. 

“There’s an interesting parallel to be drawn with the current financial crisis. An army of ‘quants’ had built complex and impressive models explaining how return could finally be separated from risk. Some experienced investors, following their own common sense, avoided this trap - Warren Buffet comes to mind.  Often common sense is the best sense of all.”

Tags: advertising, digital advertising, digital marketing, e-marketing, online advertising, online marketing

Posted on Wednesday, January 7th, 2009 at 6:12 pm under Marketing, e-marketing, social media.

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