Interactive Advertising: User Engagement Drives ROI

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Interactive Advertising is a type of communication that allows the consumer or user to engage with it. It is therefore by definition fundamentally different from traditional advertising which is characterized by a ‘push’ or one way communication construct. Further, the value of an interactive advertisement is directly correlated to the level of user engagement it generates. This is true of all formats, including display, video and specialty ad units.

An example of this type of execution could be a display banner which contains a piece of video in addition to a simple animated game. Both these media types offer engagement opportunities and would be tracked separately inside the single execution from a metrics perspective. The value of the execution would be correlated directly to the number of user interactions with these two media types either individually or taken together. This is distinct from an execution that contains a call to action inviting a user to visit a Website or undertake an action that leads to another destination. The ability to click is thus distinct from actual interactivity in the context of an online advertising unit in that the former implies a gateway to a series of later actions whereas the latter is more often a destination in and of itself.

Role in Digital Marketing Strategy

Interactive advertising can have a significant impact on all aspects of the digital marketing framework, but in examining this it is important to start with campaign or program objectives. As an example, depending on the specific objective one may wish only to create an interesting and engaging ad or potentially an application that exists in isolation and has as it desired outcome, an e-commerce purchase. This would affect the mission, strategy, interaction strategy and place in the customer lifecycle, as well as the measurement and ROI components. Accordingly, objectives would also drive investment decisions pertaining to creative and media.

Decisions around increasing one’s investment in interactive advertising should be made on the basis of facts. Clearly defining objectives followed by a test or controlled buy with a post analysis should provide clear insights as to whether the campaign was a success. On that basis marketers can start to incrementally invest in additional executions and media properties that are driving the specific result being sought.

Integrated Multi-Channel Campaigns

Another way to look at interactive advertising is as part of a larger integrated campaign which could include print, out of home and television. Leveraging certain assets from these other media channels and in particular video assets that have been used in the making of a television spot allows for key brand cues to be used or repurposed while offering marketers the ability to provide user the additional dimension of engagement.

It is important to note though that how the Internet should be used will differ greatly by demographic. Given specific online behaviours and media consumption patterns, marketers targeting youth would be well advised to consider a significant interactive advertising initiative whereas those targeting an older demographic may want to be more judicious and selective. The way these demographic groups use the Internet and respond to interactive advertising varies greatly which is why the mantra of test, track, learn, evolve is so important in making wise investment decisions in this still emergent and ever changing space.

ROI on Interactive Advertising

Companies can best measure true return on their Interactive advertising investment on the basis of their objectives. If as in our earlier example, engagement is the objective, the number of interactions with a piece of creative may be the key measure of success. Dividing this number by the media cost will provide a cost per interaction and this may be compared to other media channels and even other online campaigns for effectiveness and ROI. The key mistake marketers often make is to try and calculate ROI without the metric and campaign objective being clearly aligned.

The key mistake marketers often make is to try and calculate ROI without the metric and campaign objective being clearly aligned.

Leading practitioners of interactive advertising continue to achieve excellent ROI, but it does require a willingness to be agile and move quickly. As an example, a leading North American car manufacturer looks at interactive advertising as a means of distributing the opportunity to configure a car, get a quote right and book a test drive right at the point of the ad being seen and engaged with on a media property. The ROI for them in this case is substantial because test drives frequently convert to sales making the interactive ad an extremely effective tool. It is important to note however that the ROI here is substantial because the metric once again aligns with the objective.

Align Objectives with Metrics

A common theme throughout my article is that aligning objectives with metrics will set the interactive advertising initiative up for success. Above all else this is the key driver of obtaining more ROI and improved returns on interactive advertising initiatives.

Additionally, in a time when click through rates have tumbled to all-time lows and the number of websites continues to skyrocket and fragment, smart marketers will increasingly be trying to distribute key functionality out into ad units themselves on the actual media sites they are running on or into social network environments where they can engage people directly.

For a few examples of this thinking in action, please visit us at www.58Ninety.com

This article is part of a free e-book for Chief Marketing Officers:
Strategic Roadmap for Digital Marketing
Learn how to engage with customers and create value for stakeholders in a complex digital world. Covers digital channels, marketing techniques, accountability and technology. (No registration required to view/download PDF.)

1 COMMENT

  1. I agree that digital advertising is effective and, in particular, very cost-effective. However, research has shown that the level of ad interaction is not correlated with true effectiveness metrics. One should not have a marketing goal of engagement or interaction. There are only two meaningful metrics for advertising — you advertise to sell product or to change people’s opinion about your brand/product. Any other measure is a surrogate (and in some cases very poor surrogate) of the true metric of interest.

    I presented work at ARF last year (http://www.flickr.com/photos/hillholliday/3417574077/) based on hundreds of campaigns that proved the lack of correlation between ad interaction and anything truly meaningful.

    I’m not saying don’t produce ads with interactive elements. I actually think that’s a good idea. However, don’t make interactivity your success metric. You goal should always be sales or perception changes.

    I found after analyzing thousands of ads along with their success metrics side-by-side, that many highly interactive ads use interactivity as a crutch and they forget that the vast majority of people will not interact with the ad. As a result, they put more effort into what the ad will do and not what it looks like when someone doesn’t interact.

    You have to make sure the ad shows the product, is well-branded and has simple messaging — all of which are apparent without having to interact. What makes digital so good is the targeting. The interactivity is great but it’s the targeting that makes digital perform so well. When people think of digital as a very well-targeted magazine, they tend to produce good creative. Magazine quality ads that are very simple and appealing visually, tend to perform very well.

    Thanks,
    Ken

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