Andrew Walmsley on Digital: Currency conversion

Andrew Walmsley
Andrew Walmsley

Those calling for a currency for online media are overlooking one important point: it's already here.

As the Treasury pumps more money into the economy, we seem to have less and less of it. To make the pill more bitter still, what money we have left diminishes further in value every time we go abroad. Yet people's faith in currencies remains unchecked, and each week we hear more calls for a currency for online media, the latest repeated at the recent ISBA conference.

A currency, it is claimed, will give advertisers greater proof that online delivers the audience they want. It will enable comparisons to be made with other media and make trading easier.

Many are frustrated by what they see as foot-dragging by the online industry in agreeing the format and funding of such a currency. But despite all the hoo-ha, grand claims and posturing, there are real doubts about its value and whether in practice it could damage both accountability and the industry.

First, let's clear something up. A new currency is not needed for trading online media. We already have one that is convenient, widely used and has the benefit of being accepted in pubs.

The three main trading models in online - CPM (cost of a thousand impressions), CPC (cost per click) and CPA (cost per action) - all use the £ as the unit of C. The buyer decides which model to follow, depending on attitude to risk and ability to model and forecast outcomes, then pays for it using money.

This trading currency has got online to a near £3bn market size, but there are still complaints that it is hard to draw comparisons with offline media.

The trouble is, the fundamentals of metrics in those media simply aren't as robust as online. The definition of an advertising impression in print is 'two minutes looking at in the last 12 months', while in TV you simply have to be in the room when the TV is on.

As IAB chairman Richard Eyre put it, these are 'geriatric metrics' - calling for online to be aligned with them is like asking TV to be measured in admissions, to compare it with cinema.

Calls for a planning currency aren't just about comparing digital with traditional media, though. Advertisers are also calling for a planning currency that will assist the process of selecting websites for online advertising, and UKOM, the body charged with developing this currency, favours a panel-based solution that will make measurement a 'user-centric' process.

There are several shortcomings to this approach. First, panels only work statistically against big websites with enough data to draw conclusions - they are useless for smaller sites, which is why Sky has to boost the BARB panel to get meaningful results for its channels.

Second, panels are a rear-view mirror: 80% of the work on digital media happens after the buy, with optimisation constantly shifting the media based on real performance data. Panels work for media where all decisions are made before the media is committed.

Third, behavioural targeting is increasingly decoupling the advertising environment from the target audience. Panel research contributes nothing to this growing area.

The fear is that the digital medium will be subjected to a set of lowest-common-denominator metrics that will damage, rather than enhance, understanding of media effectiveness.

Like those who are unhappy that petrol is no longer sold by the gallon and claim that decimalisation made our money more complicated, there are those who believe the web should be measured in ways with which they feel comfortably familiar.

There is certainly a need to provide a comparison with the old, but it's time for advertisers to adapt to the new environment and stop protesting that it doesn't fit their way of doing things.

Andrew Walmsley is co-founder of i-level

 

30 seconds on the pound sterling

  • The first English pound currency was used in 775 by King Offa of Mercia. Its value was equivalent to that of one pound of silver.
  • A pound from 1264, at the earliest recorded rate, would be worth £11,428.43 today.
  • The etymology of 'sterling' is unclear, but it is believed to refer either to the Old English word 'stiere', which means 'immovable', or 'Easterling', a part of medieval Germany where silver was mined.
  • From 1603, all coins struck in Britain have featured the profile of the reigning monarch. The direction the profiles face alternates with each reign.
  • The Bank of England was founded in 1694 by William Paterson. It issued the first paper money in England and tied the pound to gold and silver reserves.
  • On 15 February 1971, the UK decimalised its currency, moving from 240 pence to the pound to 100, and eliminating shillings and crowns.
  • Every coin but the £2 denomination was redesigned in 2008. The Royal Mint described the look as 'post-modern'.

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