But losses mount for the home furnishings e-retailer that went public in October.
Putting together an online marketing strategy is one thing. Building a strategy for measuring the impact of marketing is quite another.
At firstStreetOnline.com, where a retailing strategy based on innovative consumer products goes hand in hand with innovative marketing, director of Internet marketing Daniel Yonts takes nothing for granted when exploring new ways to promote his company’s offerings.
Targeting baby boomers with things like easy-grip garden tools and turntables that transform vinyl records into CDs, Yonts uses strategies including developing buzz-creating special-content sites like StuffTalk.com that link to firstStreetOnline.com and running ads on political and other types of blogs. And to expand firstStreet’s marketing reach even further, this year he’s planning to launch homegrown software designed to quickly produce blogs and social networking sites to create new marketing venues for unusual products.
Putting together a comprehensive online marketing strategy is one thing. Building a strategy for measuring the impact of all that marketing is quite another. Although there is a growing number of online marketing measurement products and services, finding the right mix and putting them to effective use is a challenge, Yonts and other retailers say. “It takes time to go through marketing measurement data and make decisions,” Yonts adds.
Indeed, the very nature of online marketing-and the way it continues to quickly evolve with new forms of interactive media-call for new measurement tools and tactics that are challenging to use, experts say.
“These are complicated tools trying to solve complicated problems,” says Andy Fisher, director of analytics for marketing services firm Avenue A | Razorfish, which specializes in managing Internet marketing strategies.
Moreover, effective measurement of the impact of multiple forms of online marketing requires a complex mix of applications, he adds. Getting a handle on the impact on customer traffic and sales from a mixture of search marketing, blog ads and video ads placed in social networks, for example, can require a mix of measurement tools that look at traffic and customer activity throughout the web as well as on a marketer’s own site.
Most of Avenue A’s marketing clients measure the impact of marketing efforts using a variety of tools-server-based monitoring of web traffic, consumer panel surveys, web site analytics, content management tools, landing page optimization and multi-variable testing. “Every tool is managing something different, so the information is never consistent,” Fisher says. “So it’s important to look at it altogether as much as possible.”
Deciding which mix of tools to use or which to make a lead source of information is still another challenge, experts say. At industry marketing conferences, attendees have been packing sessions covering ways to measure the impact of online advertising on Internet traffic and sales, says Brad Bortner, an analyst who specializes in online advertising at research and advisory firm Forrester Research Inc.
“The cool thing about the Internet is that it’s inherently measurable,” he says. “But it’s still not quite clear what’s the best approach to measure stuff.”
Measuring the measurers
The measuring services themselves, meanwhile, are going through steps with marketing industry groups to see how they measure up as reliable sources of information. Both comScore Inc. and The Nielsen Co.’s Nielsen Online, two leading providers of data on the effect of online marketing on Internet traffic and consumer activity, are undergoing reviews by advertising industry groups the Media Rating Council and the Advertising Research Foundation.
The goal of the reviews is to show more transparency in how comScore and Nielsen gather and present data on consumer response to online marketing, and, in turn, provide a better understanding of why their data on Internet traffic may differ. Even if their data sets remain inconsistent, marketers need to know why they’re different in order to make the data sets more useful, experts say.
Nielsen reported, for example, that the number of Internet searches grew 39% between 2006 and 2007, while comScore reported growth of 11%. And while Nielsen has estimated the number of Facebook unique visitors at 20 million, comScore has put the number at 30 million. Part of the difference may lie in the way each company recruits panel members as well as in the way they weight their panels to reflect demographic makeup of targeted populations of surveys, Bortner says.
Nielsen randomly selects a large part of its 500,000-person global consumer panel, which includes 250,000 in the U.S., according to Manish Bhatia, president of global services and U.S. sales at Nielsen Online.
ComScore, though it doesn’t comment on its use of random selection, uses a complex system of incentives to attract a broad mix of panelists, including people in work, home and university environments, says senior analyst Andrew Lipsman. ComScore works with a global panel of 2 million, including 1 million in the U.S., though any one of its survey services may use a subset of the full panel, such as the 125,000 used by comScore Media Metrics, he adds.
The reviews for each company are expected to take another year or so to complete, though each company has openly discussed data consistency issues while making improvements and additions to their marketing measurement services. The overall effort, Bortner says, is part of an ongoing evolution of media measurement. Thirty years ago, the state-of-the-art in media audience measurement was face-to-face interviews conducted by researchers in consumers’ homes. While such interviews still are widely conducted in Europe, they eventually were replaced in the U.S. by telephone surveys that proved to be faster and cheaper.
Now, with the Internet making it easier to gather data from groups of consumers, online consumer panels are emerging as the new research standard, but with a new set of challenges. While there are more types of media to measure, including ads placed in interactive rich media, online games and social networks, marketers are demanding more complete and accurate data.
Meanwhile, with the quick pace of evolution in online marketing, it’s helpful to have different approaches to measuring the effect on Internet traffic and consumer activity, Avenue A’s Fisher says. “I see the difference in Nielsen and comScore as a good thing,” he explains. “We want innovation. We want all the measurement companies out there to come up with better ways of measuring things.”