Ghost clicks at the e-banquet

Written by Rakesh Raman | Updated: Mar 14 2008, 05:10am hrs
EVERY tech player wants to change the rules of the game. But Microsoft needs to be taken seriously when it says that its all set to define new rules for the online advertising system. Sexily dubbed as Engagement Mapping, Microsofts new approach to measure the effectiveness of online ad campaigns came into force on March 1. With this move, the company intends to outmode the prevailing clicks-based standard of last ad clicked (promoted by Google), saying that its a flawed approach as it ignores all prior interactions the consumer has with a marketers message. Engagement Mapping will overcome this flaw, it claims, as itll track all online touchpoints and interactions a consumer undergoes before buying a product. Itll use something called Microsofts Atlas Media Console to measure a consumers online actions on a real-time basis, depending on recency, frequency, size and ad format. Sounds knotty. But thats Microsoft.

This apparently iconoclastic initiative may be market driven, but Microsofts own interests are clear. It has to quickly justify its efforts in online advertising after its expensive buyout of online marketer, aQuantive, by shelling out a whopping $6 billion, or its bid to grab Yahoo for over $40 billion.

Everyone is agreed that the number of clicks by online surfers cant be a true metric for advertisers to assess the impact of their ad campaigns. Online publishers have been using this measurement standard just to hoodwink advertisers. And click fraud is rampant. Click Forensics, a watchdog, says that the 2007 industry average click fraud rate grew by 15% over the previous year. And in Q4 2007, the largest proportion of click fraud originating outside North America came from India (4.3%), Germany (3.9%) and South Korea (3.7%). Click fraud is perpetrated through automated computer programs and other tools that act like virtual consumers to falsely boost the click count on online ads. This is estimated to account for $1 billion in global online ad revenues. Few can tell. So much for the information revolution.

Is anything straight in cyberspace Interactive advertising has been a disappointment, too. Last year, advertisers the world over spent just $30 billion on online properties, 6% of the total ad spend. While advertisers are mostly clueless, analysts have been shaky about the metrics to judge site popularity and online consumer behaviour. With over a billion Internet users exposed to millions of sites, its chaos out there.

Thats why the page views and click-based metrics are now being challenged. And market trackers such as Nielsen/NetRatings and comScore have started emphasising that consumer engagement should be determined by the time spent on a site rather than pageviews or clicks. Plus, for advertisers, only those clicks are meaningful that translate into sales. Trick devices get clicks, but little else.

Yahoo with Yahoo Buzz and Google with Google Zeitgeist are trying similar new techniques to study consumer behaviour that could be useful. However, Microsoft and others who are attempting to create new formulae know that its not quite possible to quantify consumer behaviour. Psychological parameters may be needed rather than only simple numbers. So, itll be interesting to see how Microsofts Engagement Mapping will study and analyse consumer traits without further confusing online advertisers.

True, marketers are still trying to learn the rules of the fledgling online ad business. But this learning shouldnt be at the cost of gullible advertisers. Itll be in the interest of the whole ad ecosystem if a reliable Web measurement practice is in place.

The writer is a technology market analyst. These are his personal views