Jivox, an online video ad company, announces a new approach to online ads today, which they claim will help migrate TV ad dollars online.
There's the old, pre-digital saying in advertising, attributed to department store magnate John Wanamaker: "I know I waste half the money I spend on advertising. The problem is, I don't know which half." The Internet was supposed to be the cure to these advertising ills—the billboards by the highway, after all, don't know when you click them.
Yet with video ads in particular, there is still hesitation among advertisers to dive into the online market. It's not that online video ads are small business—it's already a $1 billion dollar industry. But advertisers are still clinging to TV, which they are of course more familiar with. That $1 billion only represents 7% of the entire video ad market.
What might lure video advertisers more completely to the web? Even better metrics—don't just minimize the Wanamaker problem; eliminate it. An October report by eMarketer, "Measuring Video Ads: Metrics for Brand Marketers," put it this way: "Today's video metrics only partially answer the essential question marketers want to know: Did the ad convince the consumer to buy?"
This is where Jivox hopes to change the equation. Jivox was singled out by a Forbes blogger in January as being one of two companies that skirts the "stupidity" of most online ad companies. Today, Jivox goes a step further, announcing a new approach that they claim for the first time enables advertisers to "connect user engagement with purchase intent" in real-time.
Most online ads only report one metric—the click. "The struggle they've had is, 'Great, I can run my TV commercial online,' " Jivox CEO Diaz Nesamoney tells Fast Company, speaking of TV advertisers, "'but what am I getting above and beyond TV?" Click-reports simply aren't enough. Some advertisers follow up with post-campaign surveys for a more nuanced picture of what ultimately did or didn't lead to a purchase—but at that point the lessons can only be applied to the next campaign.
Jivox now tries to do this all in real time. Its video ads come pre-instrumented with analytic tags that feed information about what a user is doing while watching an ad. For instance, this Jivox ad enables the user to roll over the ad to access a number of widgets; clicking "1/2 off New Menu Items" might express a different level of purchase intent than clicking on the store locator. Jivox collects this information, analyzes it, and is able to report to the advertiser in real time what stage of the "purchase funnel"—is the user merely aware of the ad? is he engaging with it? will he buy?—an ad watcher is likely to be in.
"If a million people saw the ad, of which 10,000 actually went and opened up the interactive panel and engaged, that we call 'consideration.' Then let's say of those 10,000, 2,000 further engaged by posting to their social network. Then we call that 'engagement.'" Jivox offers a library hundreds of widgets, each of which corresponds to one or another stage in the purchase funnel. Users can "even click to purchase right from the ad," says Nesamoney.
Jivox's insight is that any single video ad is a psychology experiment. By treating it like one, they aim to come a step closer to ending Wanamaker's anxiety for online video, bringing TV dollars to the web and changing the future of advertising.