New-Age Online Ads Need New Measurement Metric – Propensity to Respond


Online advertisement has been traditionally been measured on how contextual and relevant they are for the users. In the early days of web 1.0, it was eyeballs - a metric which was largely derived from traditional media parameter of reach or circulation figures. Google turned it around with search ads - enabling tracking for every single click and every user. Online advertisement in web 2.0 was divided in intent based search and visibility based display advertisements. Cookie based user-profile targeting emerged, social media platforms offered a whole new meaning to internet and changed the online advertisement world as well.

We are now in web 3.0 - which is defined by newer interfaces of mobile, tablets; newer ad formats like video ads, in-app ads and so on. Attention spans are becoming shorter - which means besides being relevant, ads now also need to be attractive and have sufficient exposure or chance to get clicked by users. User behavior has evolved significantly - leading to players winning market solely on the basis of having an intuitive user experience and attractive design. Ads now are becoming more and more interactive. With this, AdTech Industry now needs an evolved tracking parameter to measure the "propensity to respond".

Evolution of AdTech in Web 3.0 World

Evolving User Behavior in Web 3.0 World

Web 3.0 world is about the newer interfaces driven by the smart devices. From smartphones to tablets to Internet-of-Things (IoT) applications and wearable devices - user behavior is evolving fast. Apps on these smart devices are rapidly changing the way content is being delivered and consumed. It is also impacting the tracking methods. Internet is getting increasingly customized and personalized for individual user resulting in an explosion of user data to track and target. Along with it, customer privacy issues are getting complicated. On these devices, the web 2.0 methods of cookie-based targeting fails to deliver. Google recently announced that they are developing methods to crawl previously hidden in-app content and there is a lot to be achieved in this domain.

With new interfaces, we now have new ad types like video ads, in-app ads, app-install ads and so on. Newer interfaces are interactive, and so are these new ad types. We have 360-degree view in video ads. Touch interfaces, better computing powers in handheld devices and convergence of different media formats are totally altering the landscape of online advertisement today.

Propensity to Respond

With this evolving user-behavior, ads now not only need to be relevant, but also should be attractive and interactive as well. The chances of response for these ads are being governed by below few key aspects:

Reducing Shelf Space for Ads:

Content consumption on mobile means user is on-the-go and expects an "always connected, instantly delivered" experience. As internet moves from web 2.0 world of browsers to web 3.0 world of apps, shelf space for ads becomes smaller in size. Pop-up ads were a nuisance in the multi-tab browsing sessions, but users could live with it. In apps, too many irritating pop-ups or interstitial ads can actually just kill the app itself. Users reviews on app-stores like Google Play tells you that people do not hesitate to uninstall the app because of such ads.

Focused Activity:

We today have an app for every possible online activity. Users when interact with an app, are very focused on the outcome expectation. In such scenario, getting them to respond to an advertisement becomes an increasingly difficult challenge. Imagine yourself booking a table for a dinner with friends and you get very relevant app-install ad from a new hangout place in town. Would you halt your table-booking process to install the new app of this hangout place and interact with it? On browser, you would have opened the website of this hangout place in new tab and probably had gone to the tab after completing table booking.

This becomes crucial in case of video advertisements. Just ask yourself how many times have you waited for the "Skip Ad" button on those pre-roll video ads on YouTube - and skipped ad without even giving a thought on whether the ad was relevant or not. No wonder 94% of pre-roll ads are skipped!

94 percent of pre-roll ads are skipped

These, and many more such web 3.0 specific user behavior patterns suggest that besides the relevance, ads and ad-inventory should now also be evaluated on the basis of "propensity to respond".

There has been a lot of research on measuring this propensity. This research done 10 years back lists multiple factors to measure propensity to click on ads. Over the years, there has been more research on this, but yet this metric hasn't become mainstream in online advertisement campaigns. Industry now needs to recognize the importance of this and act on it.

Innovations Based on Propensity to Respond

Once this metric is established, there can be several innovations in AdTech based on it. I could think of below two examples, but I am sure there will be lot many to be explored -

Innovations in ad-delivery:

Users "skip" or "close" most of the ads not because they are irrelevant, but because they are focused on the app-activity and do not want to divert their attention from it. So then why not give these ads a second-chance with users? How about creating a bucket wherein these ads can be moved to when users "skip" or "close" them? I came up with one such innovation idea of minimizing the interstitial ads in in-app advertisement. Pre-roll ads can also be similarly marked for "show me later" or made to become semi-transparent in an in-set frame. Instead of skipping the pre-roll ad, it can be minimized into an in-set frame where it can play with muted audio (see a detailed post on this concept here). This way, users has an option to go back to these ads after she has completed the desired app-activity. This can possibly improve the ad-visibility and response rate a lot.

Innovations from advertisers:

Instead of making ads more interactive, advertisers should try to make them more attractive and engaging. Make them irresistible for users. Make them so engaging and beautiful that users would want to come back to them. As a first-principle of advertisement, all advertisers should understand that users' first priority will always be the desired intent or app-activity, and your ad should not be an hindrance in it. Instead, if users have a choice to return to your ad, make sure that they will take that effort to come back and respond.

A system which measures propensity of response by users based on the advertisements creativity will automatically push advertisers to make more engaging and attractive advertisements. This should be a move towards making advertisement the content itself - which users would want to engage with and consume wholeheartedly.

Summarizing this chain of thoughts, I believe that the new-age internet of apps and smart devices call for new innovations in ad-technology. Web 3.0 is about intimate and quick user-interactions. A robust metric of propensity to respond can be a significant step towards aligning the ad-technology with the emerging online scenario.


3 thoughts on “New-Age Online Ads Need New Measurement Metric – Propensity to Respond

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