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July 14, 2016, 9 a.m.
Business Models

Newsonomics: Are ads on top news sites worth more? A new study says yes

“No matter how you are targeting and how effective you are at reaching audience, you need to pay attention to where your ads are running.”

What’s the difference between The New York Times, and, say, DNAInfo New York? Maybe about $20.

The Times, along with outlets like ESPN, Hearst, Discovery Communications, Gannett, Slate, and ABC, all consider themselves “premium” media. That means they can charge advertisers “premium prices,” as compared to the great mass of news and entertainment sites out there, like a DNAInfo, a site covering local news across New York City’s five boroughs. That $20 or so difference is how much more the Times can charge for access to each thousand of its readers (a cost-per-thousand rate, or CPM) as compared to lesser-branded sites. It’s just an approximation but it holds true across major media: Big branded media companies believe that the “context” they provide and their “quality audiences” justifies higher-than-average rates.

Their pitch to advertisers goes like this: We’ve got tons of readers, and they’re smart and affluent. They really trust us. And when they’re on our site, they’re paying attention. In a word, their argument is a single word: effectiveness.

With the publication of a new comScore study this morning, they just got more justification for their justifying. Entitled “The Halo Effect: How Advertising on Premium Publishers Drives Higher Ad Effectiveness,” comScore puts a few numbers on that effectiveness.

Its key word: lift.

If you are an advertiser, you want lift-off. You want increasing proof that your investment is denting the minds of digital audiences.

So here’s a line from the study: “Display ads on DCN premium publisher sites had an average of 67% higher brand lift than non-DCN publishers.”

comScore found that evidence using an interesting methodology. That “DCN” is Digital Content Next, the successor name to the Online Publishers Association. OPA long represented a broad swath of top media. All totaled, DCN now represents 74 media companies, including the ESPNs and Hearsts, as well as Turner, Time Inc., The Texas Tribune, The Telegraph, and Tronc.

“There’s been a lot of commoditization in digital advertising. It’s being bought like pork bellies,” comScore’s Andrew Lipsman, comScore’s vice president of marketing and insights, explained to me this week. He designed the comScore study and wrote the paper. Given the programmatic-driven commoditization of the booming $68 billion trade, he wanted to know if premium news and entertainment brands could really justify their claims in the hyper-competitive marketplace.

Given that “premium” is an awfully non-quantitative word, Lipsman opted to use the DCN membership as a representative group to be considered “premium” media ad sellers. That makes sense; figuring out a definition for premium could have involved multitudinous committees and many months. Instead, the DCN membership serves as a useful proxy. (While DCN’s members were the subjects of the study, they had no part in its design, says Lipsman.)

That design, though, allowed comScore to use a wide variety of its previously published studies, 15 of them, all to get at this question of how much brand lift advertisers were really seeing. The studies drew on comScore survey results and concentrated only on digital display advertising. Though it makes up by far the largest slice of media ad sales, “digital display” doesn’t include two fast-growing areas, video advertising and native/branded content sales.

comScore’s study found the greatest difference-makers for advertisers in what’s known as “mid-funnel.” In the data-centric game of digital marketing that now consumes the ad business, “mid-funnel” speaks to such characteristics as “favorability, consideration, [and] intent to recommend.” Yes, all those squishy (but highly meaningful) human reactions that brands want to measure. Big brand advertisers from Procter & Gamble to Ford to Microsoft all seek such a consumer reaction from their billions in ad spend.

In the mid-funnel, premium publishers outperformed others by a big number: more than three-to-one.

At the top of the funnel — measuring “awareness, recall, [and] message association” — publishers showed a 32 percent lift, above the average website impression.

At the lower funnel — measuring “purchase intent [and] share of consumer choice” — comScore points to a 9 percent lift.

Put the numbers together, and comScore gets that overall 67 percent lift rate.

“I wasn’t surprised by the results,” Lipsman says. “But the magnitude of the impact jumped out at me,” he says.

The study also buttresses premium publishers’ arguments that their ads offer greater “viewability” than the run-of-the-mill online ad. Viewability has become a big issue in the trade, as poorly presented ads, “invalid traffic,” bots and outright fraud have drained some of the real value out of digital ad buying. comScore gave premium publisher a 50 percent rating in viewability, five points better than non-DCN publishers.

So, will this one study make a difference? For established media companies, it’s more ammo. While they often offer their own “lift” studies, the credibility of an external one carries more weight.

It’s ammunition media sellers badly need. It’s estimated that Google and Facebook are now, between the two of them, taking 85 to 90 percent of every new dollar in digital spending. Their duopoly, which I first noted (“The Newsonomics of Google’s Ad Singularity“) in formation four years ago, is fast becoming a reality.

Consequently, U.S. publishers see their market share actually decreasing, as 75 percent of all digital advertising goes to just 10 players, all of them (largely) non-content-originating platforms.

So established media need those higher ad rates they charge just to try to stay even with the market. On average, the Interactive Advertising Bureau says advertisers paid $12.09 per thousand readers last year. These DCN members charge significantly more than that for access to their audiences — up to five or six times that average.

In practice, media companies now sell both by targeting and by emphasizing the environment surrounding the ad. Say an advertiser wants to target 45- to 54-year-olds in households earning more than $100,000 a year who plan to travel overseas. The advertiser can use a variety of programmatic techniques, buying that slice through a variety of lesser-known media. Or they can seek some of those on newspaper, magazine and TV sites in which the brand connotes that “quality” paying-attention audience. Want them in the northeast, for instance? Use The Boston Globe, Bloomberg, or Condé Nast.

It’s clear how top media companies will use the report, which counts as unexpected good news. Jason Kint, a former CBS Interactive exec who now serves as CEO of Digital Content Next, lays that out:

The industry has, over the better part of five years, spent billions of dollars on ad technology to try to target audience across the web. This report says that no matter how you are targeting and how effective you are at reaching audience, you need to pay attention to where your ads are running. It will have a considerable impact on your brand.

Higher pricing, of course, demands higher proof. A Good Housekeeping seal of approval, as today’s comScore report provides, doesn’t hurt. It provides a halo of sorts on what has become a hellacious digital advertising battlefield.

Photo by Jeremy Brooks used under a Creative Commons license.

POSTED     July 14, 2016, 9 a.m.
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