Jeff Lanctot, Razorfish, Microsoft Corp.
Jeff Lanctot
Chief Strategy Officer
Razorfish, Microsoft Corp.
Jeff Lanctot is responsible for developing Razorfish’s digital services in the US and abroad, as well as creating partnership opportunities and investment strategies. An expert in media research, he most recently served in the role of senior vice president of global media, overseeing the agency’s media buying and planning business and editing its annual “Digital Outlook Report.”
In this interview, Mr. Lanctot discusses impediments to the growth of online advertising and notes a paradox: While marketers’ shift of resources into online marketing and media will eventually improve brand measurement methods, they are unlikely to allocate the kind of dollars spent on offline media until measurement improves.
eMarketer: Would traditional media dollars flow a bit faster online if there were industrywide standards to measure the impact of online ad campaigns on a marketer’s brand?
Jeff Lanctot: As an industry, we do lack standards, but I also think we tend to put too much weight on standards. There’s this view that once we have some better brand measurement standards in place, that the dollars will begin to flow, and I think that’s overly optimistic.
Online measurement is too complex to be standardized, frankly. I think we should put some foundations in place and have some common vocabulary around brand measurement and go from there. But what I think we need to realize, as an industry, is that there’s still so much work to be done on the analytics front. If we think there’s a finish line around measurement, we’ll do brand marketers a real disservice.
Andy Fisher, our analytics lead for the agency, serves on [an] ARF [Advertising Research Federation] committee, and I think we recently rejoined the 4A’s [American Association of Advertising Agencies]. We have a number of folks who are joining different 4A’s groups and Andy will be involved as well.
eMarketer: What kind of common platforms or vocabulary do you suggest and what steps can be taken?
Mr. Lanctot: When you think about the measurement mix, there are different types of data we can utilize for clients and then create custom measurement programs for each individual client. But even the most basic measurements, or what we would think are basic measurements like audience measurement or site traffic—as I’m sure you know—vary wildly depending on the service that you’re using.
So I think for a brand marketer, when there’s such disparity in what would appear to be the most basic of metrics, it plants a seed of doubt about the reliability of data sets or the measurement program as a whole. I appreciate what a complicated issue audience measurement is, but the reality is, standardization around things like site traffic simply doesn’t exist now.
I think some of the more standardized metrics, like recall and purchase intent, are valued by our clients, but I think they and we see the opportunity to tie attitudinal measures to behavioral measures. And that’s where the complexity comes in.
There’s value in measuring those tried and true attitudinal metrics but also in recognizing that there’s another piece to the puzzle, which is the actual behavior. Did consumers purchase? Did they register? Did they take that end action? Digital yields valuable insights and also creates incredible complexity.
eMarketer: Can you offer an example of a client or a consumer category that illustrates the difficulty in tying attitudinal measures to behavioral actions?
Mr. Lanctot: We have a client, a large national retailer of technology, that keeps its direct response and brand budgets separate. The retailer recognized that there was value in tying those two things tightly together. This methodology is what Atlas and Nielsen call engagement mapping—we call it advanced valuation.
Advanced valuation looks at how exposure to messages at the top of the purchase funnel impacts subsequent engagement with the brand or exposure to the message as the customer nears a purchase action.
So if we’re talking about a “last click wins” type of valuation, that’s very easy. I think there’s a recognition that that’s a flawed process. It’s sort of the best we have and it’s got us this far, but it’s really not sufficient—particularly for publishers that feel like search is getting too much credit.
If you’re talking about advanced valuation now, you have to understand if there’s a brand display ad or some type of awareness-building ad, not only how it changed the attitudes of our target audience, but how it influenced things like search behavior. And did it build awareness of a product category? Did it drive people to click on ads in the category? Did it drive them to click on search ads from that specific brand?
eMarketer: And how much time lapsed between consideration and when someone actually made a purchase—or did not?
Mr. Lanctot: If you think about the many different behaviors that might result based on the exposure to one or more ads and then think about the different purchase cycles—whether it’s a retailer or an auto dealer or whoever it might be—all of a sudden, you start to see just how complex and how necessary customization is.
eMarketer: But custom research and studies are expensive. Marketers cannot afford to do them for each campaign.
Mr. Lanctot: That’s very true. It’s sort of a chicken or egg problem in that measurement is expensive so it’s prudent only to measure big campaigns on major initiatives. So until more money’s spent online for branding, the measurement’s going to lag. If the measurement and metrics lag, how can we expect the offline dollars to pour in?
eMarketer: It’s hard to spend $10 million online, right?
Mr. Lanctot: I think the notion that it’s hard to spend $10 million online is a little bit dated when you begin to realize what you can learn from a campaign of that size. When you spend the money on measurement and analytics and start to understand the behaviors of your customer better, a budget of that size allows you to get tremendous insight into your online business and customers.
eMarketer: How can marketers look at the situation more creatively?
Mr. Lanctot: The first thing is to understand is that for certain audience segments, the Internet’s now a larger, mass-reach vehicle than TV or print. We expect that trend to accelerate.
The second thing is that the models used to evaluate traditional media are starting to break. Looking beyond measurement within a specific media channel, the media mix models that have been used for years and have been directionally accurate begin to break when you include digital in the mix. Consumer behavior online and on mobile devices are all over the place.
The fact that television advertising might drive online traffic and online traffic then goes back to TV—it really causes us to rethink everything. Senior-level marketers are becoming increasingly frustrated by some of the existing models. Some are opening their eyes and saying, “OK, it’s time to forget everything that I knew.”
eMarketer: How does Razorfish approach this on behalf of its clients?
Mr. Lanctot: We’ve got six to eight techniques that we use—everything from econometric modeling to tying online and offline panels together to point-of-sale data matches. With data matches, you have to be very cautious with respect to consumer privacy.
If there’s a customer base that’s registered, either through a loyalty program or via credit card and a customer file with an e-mail address, you would use a third party to make sure there’s appropriate anonymity between the credit card purchase, e-mail and online cookie behavior.
When you start to link in-store purchase behavior with online advertising, it’s incredibly valuable. You don’t have to do it for every campaign, but you can do it, say, once a quarter or even twice a year depending on your goals. This type of program can help marketers begin to understand how online marketing drives offline behavior.
If I went into a Target and paid for a purchase in cash, obviously there’s no link to a customer file. But if I paid with a credit card, then Target has my name and maybe my purchase history. The customer file might include an e-mail address, and if I opted in, Target could send me e-mail. If you put a pixel tag in that e-mail, a cookie is linked to the e-mail address, which is linked to the name and credit card.
That said, we have to be very, very careful with the data we have. Usually, there’s a data pass-back [to the client] so they can match customer categories to the purchase behavior. We would have the Web-wide surfing behavior or the cookie data, but we wouldn’t have the actual e-mail address and certainly would not have the name and credit card.
This method works best when the brand controls the point of sale. If you’re Procter & Gamble, you have to rely on scanner data at retail. If you’re Target, you know the name of the customer and the credit card information.
eMarketer: What is the single biggest problem with measurement as it relates to online brand advertising?
Mr. Lanctot: Where to begin? For starters, the disparate numbers for site traffic. A problem with measurement as it relates to online brand advertising is understanding traffic to a Website is not the same as understanding the people who saw the campaign. Sometimes the monthly traffic figures are directionally helpful in understanding the kind of frequency you might see in a campaign, but I think the traffic numbers get misinterpreted a lot.
The second one is that multiple data sources yield contradictory results. If you look at different systems—panels versus ad servers versus site-side tools—they measure things differently. They yield different results. The data providers will either improve their systems or we’ll get hybrid solutions that allow for more consistent measurement. I think clients would find it useful to have hybrid offerings.
eMarketer: What do you mean by hybrid offerings? A combination of systems?
Mr. Lanctot: Yes. For instance, there’s work being done on panel-based, server-centric hybrids where you’re trying to tie some of the site-side and ad server tools to panel data. This might make comScore and Atlas and those types of companies have a little bit more agreement on numbers.
We’ll also see more discussion about social influence and social media not being properly valued. We’ve had advances in measurement that have led to the development of tools to track how social media spreads. There are dozens and dozens of these kinds of tools and services. But there’s been very little progress to evaluate the impact of those conversations on brands.
There’s a lot of work that needs to be done on how people perceive the brand. It’s a combination of attitude and behavior. I expect to see a lot more progress on this in the next year or so.
eMarketer: Where is the consumer purchasing funnel most broken?
Mr. Lanctot: We’re asking ourselves whether the funnel construct is actually the right one. The research we’ve seen shows that the purchase decision process is far more complex and nonlinear than a simple funnel. I’ll go back to social or to peer influence. I don’t think that we have a good idea of how peer influence works in a funnel construct.
You can’t underestimate the impact of social influence. It’s a catalyst that’s causing marketers to rethink the way consumers are making purchasing decisions. Today, the funnel does not appropriately reflect social influence, and it needs to.
eMarketer: Let’s move on to data. Your agency conducts custom research and studies for clients—who owns that data?
Mr. Lanctot: There are definitely conflicts of interest between publishers and ad networks, clients and agencies. The reason is that data is more valuable online than we’ve seen in other channels. If you have better analytics and better measurement programs, it gives you a competitive advantage.
eMarketer: Don’t the marketers, your clients, ultimately own the data? They’re paying for the research.
Mr. Lanctot: They do, but it can prove useful for them to give up ownership of that data. As an agency, whether or not we own the data is less important than having the ability to use the data and have access to it. You could think of it as the marketer renting data to us. The challenge is if the publisher has multiple advertisers within a single category. Marketers have concerns about competitors. I don’t expect resolution on data ownership. I think it’s going to be a big battle over the next several years.
eMarketer: What are your thoughts about measurement and online video?
Mr. Lanctot: Online video is highly measurable now, in terms of number of videos viewed and how long a video clip was viewed. It’s much more measurable than TV. The biggest challenge is having online video as part of the media mix.
Right now ad-supported online video is still quite small, relative to TV, in the media mix. It’s hard to understand the impact of online video using traditional media analytics or television measurement standards. But as online video continues to grow and traditional TV content migrates online, we’ll need a better understanding of how consumers view videos.
There needs to be a lot of work done not only in how we measure online video but, just as importantly, how the networks sell that inventory. For all the talk about the integration of traditional and digital media, they’re still bought in isolation much more so than they’re bought in integrated packages.
You can get some high-level measurement around viewers by channel, but a more holistic picture as to how consumers move between channels and when they’re doing that is much more difficult to come by. It’s also hard to assess the brand impact.
eMarketer: You can count the number of plays, stops and starts and time spent viewing. But you don’t really know how someone who played the video feels about the brand.
Mr. Lanctot: No, you don’t, unless they’re annoyed by the video and tap social tools and networks to express their opinion about your brand. Marketers can listen to customers through social tools and start to draw conclusions.
eMarketer: What are the potential game-changers for online brand measurement?
Mr. Lanctot: I think if we came to an agreement on how a brand campaign influences a direct response campaign and understood how display advertising impacts search, that would be a game-changer.
It’s hard to do, but I can say from experience that it has changed the way our clients buy online media. We have one client that has been very direct-response-oriented and now they are beginning to see that online analytics are a real competitive advantage. This particular client saw how online display advertising and search work in sync.
