Nobody — nobody — clicks on digital ads. Which is why brand advertisers have only the dimmest idea of whether the $30 billion or so a year they collectively spend on display ads online has any impact on us at all. Clearly some of that investment works, since digital shopping totaled roughly $160 billion last year. Still, as John Wanamaker, the 19th century department store magnate, famously muttered, “Half the money I spend on advertising is wasted; I just don’t know which half.”
Now comes a promising attempt to find out what’s wasted and what works. The effort is spearheaded by a group of young veterans of the click-through wars — for years, the standard way advertisers determined the success of an ad campaign: Jonah and Noah Goodhart and Michael Walrath, the team that brought you Right Media. (click More to keep reading)
Right Media created an online exchange that allowed advertisers to bid on unsold (and, therefore, cheap) inventory of publishers, and was sold five years ago to Yahoo for a boatload of money. This trio’s 2010 startup, Moat, announced this morning a $12 million Series B round, led by Mayfield Fund.
Clicks are dead, Moat now declares. Long live the new metrics: gauging whether anyone’s paying attention to an advertisement. Why the shift? Ad impressions can only measure the number of times we’re theoretically exposed to an ad and whether we take some kind of immediate action (signing up for something, buying an item and so on) , not whether it made any impression on us. Engagement, says Jonah Goodhart, is the new currency. “This is about connection, emotion, affinity,” says Goodhart, 33. “You walk into a Best Buy to shop for a TV, and every brand has a personal meaning for you. That intangible is critical for brand advertisers.”
Like the sort of response elicited by Clint Eastwood in Chrysler’s Super Bowl commercial, “Halftime in America.”
Everyone remembers the ad because of the welter of feelings it stirred. Did it result in higher sales for Chrysler? Maybe. It certainly created a nexus of associations between an iconic maverick, a national comeback and a storied brand. You rarely get that kind of experience on the Web. The Internet, Goodhart argues, has been great for targeting specific demographic groups — and lousy at creating thoughtful, fun, memorable experiences through ads.
Moat has recently launched a series of 27 different ways to suss out engagement with a brand ad — Metrics That Matter — and is licensing this platform to publishers like Forbes. These metrics focus on who’s viewing the ad impressions and for how long, as well as whether you’ve engaged in any sort of interaction (did you click on something? roll over a photo gallery? play a video? listen to music or a podcast?) and how much time you spent doing so. They create heat maps, to see which parts of an ad draw the greatest number of people, and determine pause rates, to see how long it takes you to scroll down a page.
Measuring attention in this way, Goodhart insists, works across any site, any platform, any device. “Do the fundamentals of advertising change? No,” he says. “Social media amplifies the intangible connection to a brand.” A brand like Apple, for that matter. “If you handed someone a tablet and said, ‘I can prove the utility, speed, quality and definition is better,’ most people would say, ‘Keep it; it’s not an iPad.’ That’s the connection you’re after — that’s a brand’s moat.”
What’s Goodhart’s plan to do with the new infusion? “We have 23 people working at Moat: 18 engineers and zero salespeople. We’ll use the money to double the size of the engineering team.” Doesn’t that work against a small firm’s trying to get a purchase on how people relate to ads? “While we’re furiously studying psychology and human behavior,” says Goodhart, “we still have to execute well.”
-forbes.com
