Fix the Metrics, Fix the Incentives, Fix the Problems

The following is republished with the permission of the Association of National Advertisers. Find this and similar articles on ANA Newsstand.

By Marc Guldimann

Technology has come a long way since the first banner ad launched on hotwired.com in 1994. That famous AT&T unit promised great things for the future — “You will.” And we have. Within digital marketing alone, the industry has seen huge innovation — new formats, devices, and channels, and advancements in targeting and optimization. And yet marketers rely on metrics that are almost a decade old and have long been gamed.

Take video completion rate (VCR), for example. VCR doesn’t measure whether audio was enabled, the size of the video, or the position of the player. And viewability, the whipping boy of digital metrics, is satisfied once 50 percent of the ad is in the viewport for one second.

Thanks to easily gamed metrics, the digital media market is littered with refreshing slots, shrinking video players, and dozens of “high-viewability” formats. Each adds incremental revenue to a page but inches the industry ever closer to a future where the only browsers without ad-blockers are used by bots.

Necessity Is the Mother of All Metrics

Digital media is hardly the first casualty of perverse incentives caused by bad metrics. Many markets have broken down thanks to poor proxies for quality, but history indicates there’s still hope to set things straight. Here are a few examples:

When life gives you lemons, make better metrics.

Buying a used car in the 1960s and 70s was a risky proposition. Prices were based on physical appearance and easily coaxed odometers. To hedge against a market of “lemons,” buyers became unwilling to pay top dollar, forcing sellers of high-quality cars out of the market. This reduced average quality even further, which perpetuated a negative feedback loop.

Then, in the 80s, services like Carfax restored the health of the market with metrics based on detailed maintenance and repair histories. Buyers could recognize a fair deal, and high-quality sellers re-entered the market.

A degree of dishonesty.

University rankings by U.S. News & World Report are used as a form of currency to attract students, faculty, and alumni support. With so much on the line, schools started gaming — or in some cases, openly cheating — the system. Some encouraged unqualified applicants, whose later rejection made the schools appear more selective. One university offered admitted students money to retake the SAT to raise its test averages, as reported by The New York Times.

U.S. News & World Report fought back by introducing more evidence-based measures like graduation and retention rates, graduate indebtedness, and social mobility indicators. These outcomes-focused metrics better reflect institution quality — and are more difficult to game.

FICOh no.

Before credit scoring, there was no unbiased structure in place to evaluate creditworthiness objectively — the system was not fair, fact-based, or consistent. Introduced in the 1980s, the FICO Score standardized this process, making the lending ecosystem more equitable and efficient. But not for long. As more lenders began to rely on FICO Scores for decisions, companies specializing in “credit fixing” sprouted up, creating a $3.4 billion industry to game credit scores.

A new breed of lenders, including MyBucks, Moven, LendUp, Petal, and Accion, use social data, cash-flow data, and other signals in addition to FICO Scores to counteract this gaming and generate more accurate measures of creditworthiness. It’s no surprise that the credit-score repair industry is shrinking at 5.2 percent each year.

Embracing Attention Metrics in Media

There is a movement in digital advertising to develop better proxies for quality than viewability and video completion rate. Some of the most promising approaches use attention metrics.

In June, the Attention Council released “The Link Between Attention Metrics and Outcomes,” a meta-analysis of more than 50 case studies from more than 20 brand categories, proving the connection between attention and brand outcomes throughout the marketing funnel. (Adelaide was a contributor to this report.)

The idea that the more people pay attention to something, the more they’ll remember it, like it, or buy it isn’t earth-shattering. The tricky part is figuring out how to measure media’s contribution to attention — or at least the potential for it.

It is commonly understood that media’s job is to create the opportunity for “attention to creative.” So Adelaide researched the factors of media that drive attention — such as duration of viewability, placement size, page geometry, and clutter — and their subsequent incremental impact on business outcomes. Adelaide then applied the collected data to a machine learning model that estimates the impact of these factors and scores the quality of placements with a single metric.

Through controlled experiments with advertisers, the model verified the link between attention metrics and outcomes. For example, Adelaide’s research found that attention optimizations for a leading U.S. healthcare company yielded 85 percent greater impact on brand familiarity and 77 percent greater impact on brand perception than viewability optimizations.

For a financial services firm, high-attention media drove 2.5 times the number of bank transactions than low-attention media. This finding indicates a very strong positive correlation between attention and lower-funnel action per impression.

For one of the most recognized global technology brands, Adelaide conducted an A/B test in which one group of consumers was exposed to attention-optimized media while another was exposed to viewability-optimized media. The attention-optimized group tracked 6 percent higher familiarity and 20 percent higher unique reach. Attention optimizations also proved 31 percent more cost effective.

Attention Metrics Deserve Attention

A growing body of work proves attention metrics provide a simple and evidence-based improvement over the easily gamed metrics used today. There’s a substantial arbitrage opportunity for early adopters on both sides of the market in the short term. Longer-term, as media buyers and sellers embrace evidence-based metrics, good incentives will compound. Advertisers can quantify the value of their media and shift investment to higher-quality placements, incentivizing publishers to produce better formats. So long, auto-refresh placements and outstream video. Hello, bold new opportunities to capture real consumer attention and drive real brand outcomes.

About Author: Marc Guldimann is the co-founder and CEO of Adelaide, a partner in the ANA Brand Activation Partner Program.