Wednesday, May 16, 2012

Answering to our users - delivering on commitments

Wednesday, May 16, 2012 |
Last year at IAB’s Innovation Days, I made a number of predictions, all focused on answering one central question: how can we put the user at the center of all that we do? One year later, I think it’s time for a progress report - to hold ourselves accountable and see how far we’ve come. I presented an update on some of my predictions earlier today at Digital Media Summit, hosted by Luma Partners:

Prediction: People will have a direct say in 25% of the ads they see:
Update: We’ve seen choice friendly formats take off across the industry. In our own network, engaged views of TrueView skippable ads grew 4x last year. Going beyond ads, we rolled out paywall alternative Google Consumer Surveys, which has already shown more than 300 million surveys, with an average publisher RPM of $12. Given all the innovation, I actually think we aimed too low and that consumers will have a say in well over half of the ads they see.

Prediction: Engagement rates across all display ads will increase 50%
Update: This increase in engagement will be driven by two factors: relevance and creativity. While technological innovations continue to improve relevance, we believe rich media will be the key to unlocking the creative potential of digital advertising. According to Nielsen AdRelevance, rich media impressions almost doubled in 2011. We’re committed to helping creative agencies scale and optimize rich media ads with templatized ad units in the latest version of DoubleClick Studio.

Prediction: 35% of campaigns will use metrics beyond clicks and conversions
Update: As we move to a model that seeks to drive engagement versus just clicks, we need new measures of success. We’re working with the industry-wide “Making Measurement Make Sense” (3MS) initiative to establish new standards for brand advertisers to measure reach and engagement. And just last month, we launched the Brand Activate Initiative with several pilots for new metrics — Active View, which shows brands whether their ad has been seen; and Active GRP, the digital counterpart to the gross rating point. We’ve already received interest from dozens of major brands.

As an industry, we’ve made plenty of progress over the last year. With all the innovations to do right by our user, I actually have two new predictions I’d like to add to the list.

New Prediction: 25% of brands will favor digital ads over all other media
This is a pretty bold prediction, considering today this number is probably close to none. So why are we so bullish? First, audiences continue to move online: in 2011, households with broadband internet but with no cable TV, increased 23% (Nielsen Cross-Platform Report Q3’11). Second, so is content: the newly launched YouTube Original Channels alone will introduce 25 new hours of original programming a day. Third, technology is offering new levels of control and measurement: technologies like real-time bidding will allow for improved targeting while initiatives like 3MS and Brand Activate will demonstrate effectiveness. With reach, control, quality content and measurement, I think the real question will become, why wouldn’t a brand name digital their favorite medium?

New Prediction: 100% of campaigns will be integrated everywhere
All signs indicate that campaigns that reach across screens - TV, desktops, smartphones and tablets -- are more effective. For example, in a study conducted by Google and Nielsen Multi-Media Labs in September 2011, users who saw a multi-screen Volvo campaign had a 24% higher brand recall than those that viewed their ads on TV alone. We’re increasingly seeing increased interest in buying across screens on our own platforms, like DoubleClick for Publishers Mobile, where we’ve seen the number of impressions delivered double every quarter.

The online advertising ecosystem is complex, and in order for digital advertising to be a medium that provides a great experience for consumers, marketers and publishers alike, we all need to work together. For our part, we’ve invested in hundreds of partnerships to better support publishers, and advertisers, ultimately serve our users. Happier consumers will drive better performing ads, more money for publishers and increased ad spend (including marketing budget) for agencies. I look forward to seeing the continued innovation that this “user revolution” inspires and working with all of you to move towards the bright future I hope we all envision for this industry.

Posted by Neal Mohan, Vice President of Display Advertising