Facebook, Google Ad Execs Spar Over The Value Of A Click

At TechCrunch Disrupt NY today, VP of Display Advertising Products at Google, Neal Mohan, Facebook Ad Products Director Gokul Rajaram and Twitter Senior Director of Product Revenue Kevin Weil took the stage to talk about the state of digital advertising.

What began as a consensus between the three companies over how crucial it is for each company to provide advertisers with multi-screen, cross-platform advertising and the importance of “not thinking in silos anymore,” soon revealed their differences, especially when it comes to measuring a campaign’s success. Mohan started by saying that measuring value remains the biggest obstacle facing digital brand advertising, but it’s one that is crucial for Google and other companies to solve.

Why? According to the Google exec, a “full one-third of digital campaigns will soon be measured by a metric other than clicks.” However, it’s worth noting that, while this may be true, at this point those clicks are the core of Google’s ad business.

All three companies seemed to agree on the fact that brands advertising on their platform are most concerned with the reach, frequency and results of their ad campaigns, but not so much on how to measure it.

Rajaram said that Facebook is working with Nielsen and DataLogix to discover who ads are reaching, and based on who is seeing an ad, to correlate impressions to purchases in a scalable, real-time way. The promise of digital, he said, is making advertising even more “real time” and “fine-grained.”

Weil then said that Twitter is more focused on engagement, because no one ever takes a screenshot of a banner ad and sends it to their friends. In other words, traditional forms of display advertising are insufficient and don’t provide a good way to measure the viewer’s actual engagement with the brand.

Rajaram countered, saying that the industry is doing brands a disservice by focusing on engagement and clicks, because “there’s really no correlation between clicks and whether people actually convert.” In fact, the industry needs to focus instead on how people are being exposed to ads, the efficacy of that exposure and how it correlates to what happens offline — i.e. verifiable offline purchases.

Mohan disagreed with Rajaram on this point, saying that engagement can in fact be a good proxy for future conversion and that Google is focused on helping brands find the right audience, the best way to engage that audience and the right interaction, formats, sight, sound and motion.

In response, Rajaram continued by saying that the leaders in the space shouldn’t be focused on tying an ultimate sale or conversion to the last click. Instead there’s more value to being exposed to other influences and additional channels. The Facebook ad exec said that the company acquired Atlas last month to help it move toward a “fairer view” of conversions.

Facebook has been doing quite a bit of research in an attempt to tie online ads to offline purchases, thanks to its partnership with Datalogix. Not so long ago, Facebook’s head of measurement and insights Brad Smallwood said that it was ad impressions, rather than clicks, that actually drive sales. In the DataLogix campaigns, Brad mentions, 99 percent of sales were from people who saw ads but didn’t interact with them, Anthony reported.

“For the last decade, the model has been broken,” Rajaram concluded. “We need to move towards a more sophisticated, multi-touch model and figure out how to accrue value at each touch point.”