Greg Rogers wasn’t interested in speaking to me about click-through rates.We were sitting in a conference room in AOL’s New York City headquarters with Rogers’ computer hooked up to a projector. “We don’t care about the clicks,” he told me. “There have been lots of studies that show very few people click on anything.” He referenced a ComScore study that found that only 6 per cent of internet users drive the majority of clicks on ads. “What does that 6 per cent look like? They’re not necessarily the most attractive consumers. They’re typically bored and have a lot of time on their hands, but they’re not the consumer for that marketer. When you think about the last 10 years, we have optimised our media — have optimised our creative — to clicks. And what we’re now proposing to the marketplace is that you know what, at least for brand marketing, it’s not about clickers but engagers.”
Rogers — who’s 39 but looks like he’s in his early 30s — is the founder and CEO of Pictela, a display advertising company purchased by AOL late last year. This is actually his second stint working for the media behemoth, his first being as head of strategic sales of the behavioural advertising company Tacoda, which sold to AOL in 2007. During his first time there, he told me, he saw the need for a content management system for advertising, and so decided to leave in 2008 to launch Pictela with three other partners. Just two years later, he was back at AOL.
I was invited to meet with Rogers after the publication of a Nieman Lab article of mine a few weeks ago about the challenges facing display advertisers. For the piece, I interviewed several industry professionals about the tendency for click-through rates being used as the standard by which advertising rates are judged. In addition to the above-mentioned ComScore study, click-through rates on most display ads have been abysmal, with most clocking in at well below 1 per cent. “People try to focus more on the tangible rather than the intangible metrics,” a research analyst named Ariel Geifman told me for the Nieman Lab article. “In the future, display advertising is going to be a lot more focused on branding.”
About two months before AOL purchased Pictela it announced the launch of Project Devil, an advertising strategy that would eliminate many of the small display ads in order to devote a sizable portion of a given page to a single advertiser. The goal was for AOL’s content to take up 66 per cent of the page while a single advertiser uses the remaining 33 per cent. The philosophy behind Pictela, Rogers told me, is that brands are publishers in their own right. “When Kraft creates 500 high definition videos of women cooking with its products to put on its website, that’s content,” he said. “When Macy’s does photo shoots for all its catalogues, that’s content. Much as AOL is producing content for an editorial user experience, brands at the same time are spending and investing a tremendous amount of money producing content for their brands, so consumers can experience their brands. You think of the auto companies, how much money do they spend producing content every time they release a car?”
But whereas online publishers have had a host of different tools to manage content and serve it to the web — whether it’s WordPress, Blogger, Movable Type, or a custom-built content management system — brand marketers have been limited in their ability to be their own publishers. Traditionally, ads are served as either GIFs or Flash images (what Rogers referred to as the horse and buggy and the Ford Pinto of advertising), or, if it’s really willing to devote time and money, an advertiser can create a rich media ad (the Ferrari of advertising). Pictella, on the other hand, is essentially playing the role of Blogger when it launched a decade ago: Giving non-coders an easy-to-use content management system to efficiently and quickly deliver content.
“There will always be a place for custom one-off execution,” Rogers said of rich media ads. “But if it’s wacky, it means that it’s not repeatable, and if it’s not repeatable, then how can you create a repeatable metric to replace the click-through rate? That’s why everything has been judged by these things that are repeatable. GIF ads are repeatable. Flash ads are repeatable. So you can use them across multiple campaigns. And click-through rates have always been that repeatable metric. What we’re arguing with Pictela is look, you’re going to have to give up some on the customisation front … because this is a content management system. But what you sacrifice in customisation you gain in other things. You gain because every single time you run a campaign with this — and you’re always using the photo module and it always functions and looks the same — you can create benchmarks around engagement because they’re apples to apples. That has been why this industry has never gotten beyond the click-through rate, because you needed to create an engagement angle that was consistent in the way it delivers your content.”
To help me understand this, Rogers gave me a look at the administrative back end of Pictela. For a large ad, an advertiser will have three modules from which to work — think of the modules as apps. There are a variety of modules from which to choose; for instance, there’s one that serves video content (you can upload several videos at once), one for photo galleries (think of a Macy’s catalogue), there’s one that plugs in your brand’s Facebook news feed, and several others.
The administrative panel looks as you would expect, with easy-to-use buttons to quickly allow an advertiser to upload and move around content. He showed me one module with a PSA video ad inside it and then switched over to the back end to easily replace it with a different ad. A preview button allowed him to compare the new ad to the old one, and, once satisfied with the change, he could publish it immediately.
Many of the modules can exist outside of the AOL page where they rest. A user can embed a video onto his Facebook wall, for instance, or an advertiser can place the modules within its own website. And by creating this app-like experience, Rogers argued, Pictela is delivering the advertiser away from a metric that focuses solely on clicks. “What we’re seeing in terms of metrics is we can capture how much time someone interacts with this ad. We can capture which assets do they look at. For how long do they look at the second video? Do they complete it? Do they not complete it? I use the analogy that the metrics we capture in a unit like this are very similar to the metrics that a website captures for people who visit the website. All that site-side analytics looks very similar to the analytics we capture here. There’s 100 per cent of the page, 66 per cent of which is editorial, 33 per cent is brand advertiser, and so it’s not all that surprising that the metrics would look much like site-side analytics.”
A few times during the interview I returned to the psychology of the click-through. Rogers isn’t the first advertising professional to argue that advertisers should focus more on the brand instead of direct response, but as I detailed in my Nieman Lab piece, this has been an uphill climb. As Federated Media founder John Battelle put it, “No matter what, we have to live in a world where the question, ‘Does the consumer click on my ad?’ is the fundamental and only consistent signal in display advertising that is universally understood.”
As I was writing this article, I visited several AOL-published sites — from Engadget to Huffington Post to PopEater — and found mostly traditional flash ads, indicating that AOL still needs to convince many of its advertisers that these new metrics are better (Pictela is also served on non-AOL sites). “This unit does have higher click-through than the industry average, but again, we always say look, you know, this is an engagement vehicle,” Rogers said. “What I often times say is, because people engage for so long with these units, the argument is that whoever does click is a very qualified click, somebody who really loves your brand, your story. But again we’re really focused on presenting this as an engagement story for the consumer, and making the content for this one-third of the page as useful for the consumer as the editorial content on the other 66 per cent of the page. If you think about why women — and some men — look at fashion magazines, they look at them as much for the ads as they do for the content, because there is a proposition there that the ads are so beautiful and so compelling, that people are drawn to them just as much as the content.”
Whether AOL can flourish will likely depend on whether Rogers and other professionals like him can convince advertisers to follow this philosophy. Though Arianna Huffington has indicated that AOL will not be adhering to its leaked “AOL Way” document, the metrics outlined in it painted a bleak picture of the current state of display advertising. Until the industry moves beyond the click-through, it will never return to the extravagant advertising rates publishers have traditionally been able to charge print subscribers. Without those higher rates, publishers will be pulled toward the content farm mentality. In that sense, many journalists and their editors likely will be cheering Rogers on, for journalism’s sake.