Fools Gold, Real Gold, The Emperor, and Market Leadership

If you ask anyone who was in the advertising or publishing business in the early days of online, you will hear a story of fool’s gold. The story will almost always center on metrics that were hyped, discussed, lauded, and ultimately discarded having shown little value.

In the commerce space, early dotcom companies talked about “transactions”. Many times these transactions were not revenue bearing, but measured and lauded – all the way up to the crash. In the publishing and media space the same was the order of the day. In that market, a much more hollow metric gained a whole lot more notoriety – hits.

Hits were incredibly destructive and, once exposed, the fruits of focusing on Internet audience reach are well documented. Publishers and Ad Networks successfully used this metric to create a bridge to media buyers’ desire to reach an audience and thus created a large advertising market. In the mobile space, an opportunistic focus on the mobile equivalent of hits (ad impressions) has created a fast eroding pile of fools gold.

…until recently.

Like the web, the only true antidote to fools gold… is the real stuff. Over the past 60 days in the mobile display advertising market, more agencies, brands, publishers and industry watchers have begun to notice and shift their activities based on the common and fundamental foundation of mobile audience reach. Why reach?

• Reach because it enables targeting at scale
• Reach because mobile advertising is about advertisers
• Reach because frequency is cheap and rampant
• Reach because it allows persistent audience formation at scale
• Reach because impressions can be manipulated by adding placements
• Reach because added placements hurt share-of-voice per page-view
• Reach because hits (and the mobile version… ad impressions) are fools gold.

The Emperor… Mobile ad networks that have bet their chips on impressions should quickly shift their focus to reach to maintain market credibility (even if reach exposes a substantially weaker market position than others percieve). Unfortunately, we see some of these companies moving to take protectionist action to save the numerator of impressions, even as the fool’s gold loses its lustre. This is still the time to focus on the denominator, as the market will grow tremendously.

Focusing on the market, the ecosystem, and most of all meaningful metrics that create success for advertisers is the market leadership we all need to show.

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