How Watch Brands Should Measure The Performance Of Internet Advertising

By Ariel Adams, founder of aBlogtoWatch.

Marketing and communication jobs in the luxury watch industry have historically (and very much today) been an area of constant turn-over. Employees in advertising, public relations, and other marketing positions enter and leave jobs with a frequency that should alarm managers and brand owners. Why exactly do luxury watch brands have so many problems keeping marketing people in an industry so heavily dependent on marketing?

Ask most of the people formerly in those jobs and they often tell a similar story. Marketers and communication professionals at luxury watch brands today represent some of the most important roles with the least amount of authority and leeway to do their jobs. Most marketing professionals report to, or have budgets directly controlled by financial people as opposed to brand managers or other creatives. Financial people such as accounts are primarily motivated by the notion of proven performance, which is judged on a month by month basis. Absent what they deem to be performance, they don’t fund marketing budgets. I’ve yet to meet a marketing professional that agrees with a finance person as to what marketing performance actually looks like. This core disagreement is what results in the high turn-over. Is it possible that each of these marketing professionals is wrong about how they do their work and finance people can do their jobs better? Or is marketing as a function at watch brands seriously under threat?

This larger troubling phenomenon often manifests itself into the simple question of “how do you evaluate the performance of an advertising campaign online?” Marketing people have one idea, and finance people have a very different one. This often is translated into marketing people espousing for the wisdom that marketing campaigns are historically challenging to measure and do not yield immediate results most of the time. A salient scientific article on the precise topic of measuring online advertising by the Institute for Operations Research and the Management Sciences came to the same conclusions as I do in this article.

Finance people seem to believe that advertising campaigns should yield immediate results and that each few months a company should be able to numerically measure the performance of advertising. Putting it another way, trained marketing people understand that most advertising performance is measured as a function of long-term outcomes, whereas finance people are confined to measuring activities which offer short-term gains. Watch brands experiencing this problem must ask themselves the fundamental question, “is success in luxury timepiece brand building and maintenance a result of long-term investment and market penetration, or is success as function of short-term get rich quick schemes?”

As a consequence of finance people being in charge, marketing people depart positions with gusto and brands suffer by having negligible or often ineffective internet advertising campaigns. What exactly is going on? A major problem is an inability to articulate how internet advertising is measured and thus performance calculated.

Advertising on the internet versus traditional channels provided marketers with loads of new data – though not all of it useful. Few marketing professionals, and fewer still finance or management professionals are learned when it comes to evaluating internet advertising performance. In other words, at this time there is little “culture” around understanding both how to create effective internet advertising campaigns in the watch industry, let alone how to evaluate it.

One of the biggest red herrings in the world of internet advertising evaluation is a metric known at the click through rate (CTR). This measurement is the percentage of people viewing an ad that also clicked on the ad to be taken to a new page. The idea is that while someone is going about their day consuming content online, they will take a diversion and spend their time elsewhere on an advertiser’s website. The first thing to ask yourself is how often such behavior happens in real life?

People driving on the road viewing a billboard advertisement rarely stop their calls to visit a website or call a phone number that is on the billboard. Fewer still re-route their commute to stop at a retail store that just reached them via an advertisement. That isn’t to say the consumer does not pay attention to the billboard. In fact, quite the opposite is true. Consumer attention to messages around them is very high. They simply don’t act on those messages immediately – rather saving that marketing information to consider or use later.

The very same behavior holds true online when it comes to most experiencing viewing banner advertising. That implies that the consumer views and consumes the message in the banner, to possibly act on it at a later time. Only those few instances when a consumer must immediately take advantage of an offer or learn something impossible to find elsewhere will immediately clicking on a banner be a compelling option for a consumer. Online banner advertising, like traditional advertising is viewed, considered, and absorbed for later action the vast majority of the time. This logic is both sound, and routinely back up by the data.

With that said, marketers at watch brands are routinely pressured to only invest in online marketing that “generate clicks.” CTR is by far the most weighted metric when it comes to internet advertising at watch brands. Why is that even though we’ve established that click through rates are both unreliable and unrealistic as a measurement of consumer engagement with an advertisement? The answer is because click through rates are among the only performance metric available to finance people that they understand. What they don’t understand is that CTR is also a very poor indicator of online banner performance. The result? An industry which is heavily invested in the internet as being a major sales distribution channel does not invest appreciably in internet advertising. This might explain why so many marketers are constantly fleeing restrictive jobs at luxury watch brands where the performance of their work (and thus the performance of them) is judged unfairly.

Internet advertising is better measured using a simple two-step process. CTR is not a consideration. In fact, CTR should more or less be ignored by internet advertisers unless the advertisement itself has a clear, compelling, and timely “call to action.” That means unless a banner conspicuously advertises an offer or information that is immediately relevant to the viewer, and that will expire in a short time, normal consumer behavior is not to click on an advertisement.

The two-step process to measuring the effectiveness of internet advertising first begins with an evaluation of the advertising message itself. This occurs prior to the advertising message ever being publish. An advertiser must create a visual graphic which it feels sends a clear and strong message that faithfully describes the brand or communicates the intended marketing message. In essence, prior to an advertisement ever being deployed, a brand must make sure that advertisement has a clear message, and that viewing the message will cause a viewer to feel or think the right thing.

This first step is almost routinely ignored and mismanaged by luxury watch brand advertisers. They do not engage in the crucial element of coming up with effective messages and then translating those messages into clear and engaging visuals. Most watch brand advertisements online (not all) are produced with as little budget as possible, with as little oversight as possible. Often times junior graphic designers without actual marketing experience are tasked with creating important brand messages. It is incorrect to assume that someone who knows how to make pretty pictures is also in a good position to assert strong brand messages. Successful online advertising campaigns necessarily begin with strong advertisements themselves. Numerically, the effectiveness of advertising banner message quality is challenging to measure, but one time-honored approach is to focus group test advertising messages and conduct surveys.

Provided an advertiser satisfies the first part of the two-step process and has a marketing message they feel comfortably communicates the intended message. The second part of the process is to deliver that message to the right target audience. This step is more straight-forward than the creative-intensive task of creating brand messaging and advertising visuals themselves. The trick is knowing when internet data can assist with audience targeting, and when supposedly useful audience targeting tools are not particularly effective.

Arguments can be made on both sides of the debate, but I for one do not hold much esteem in social media or search engine audience targeting promises. Indeed, these advertising channels can geo-target audiences easily enough (meaning you can target groups in specific regional parts of the world) – but beyond that my experience has led me to believe demographic targeting promises are iffy at best. One issue is that social media and search engine companies are entirely un-audited. They deliver advertising to a target audience you select merely because they say they do. There is absolutely no way for an advertiser to verify their advertising was actually seen by the type of audience or demographic social media or search engine providers are promising. That isn’t to say that social media and search engine marketing is a bad idea, but rather that their promises must be taken with a grain of salt, and their ability to target such niche groups as “watch lovers” is dubiously imprecise.

More traditional ways to locate target audiences actually work better, such as targeting the audience of publications or special internet websites with clear topics and predicable audience types. If a website covers high-end luxury goods, then there is a good chance the people who visit that website are interested in luxury goods. Thus, an advertiser looking to target luxury consumers would have successfully completed the second part of the two-step process by ensuring that their message reaches a relevant audience. Evaluating publication audiences requires both common sense as well as information directly from the publisher (if they wish to share). Much of the time automated techniques by third-party tools used to estimate publication audiences can be misleading at best.

What both message and audience evaluation in the process of measuring internet advertising have in common is that they are non-automated or easily computed with pre-existing data. Meaning that a human being (ideally more than one) must make rational and often subjective decisions about their appropriateness to the brand. In fact, one of the hallmarks of luxury brand advertising is that the people most invested in the culture of the brand tend to know what message direction aligns with the brand and what types of consumers would be receptive to a brand’s values. This isn’t a computerized process and likely will not be for a long time. In fact, the only automated part of the process when it comes to evaluating internet advertising performance are the reports delivered by publisher which prove that a certain number of impressions have been delivered.

Reports from luxury brand marketers to executives should have three pieces of information. First is what the advertising message itself was (examples of the advertising graphics themselves), second is information that proves the message was delivered to the right audience (showing that the message went to a relevant audience), and third, a numerical report that proves what number of impressions (advertising volume) were actually seen by human beings. That’s it.

Any marketer worth hiring at a luxury watch brand should now how futile evaluating advertising with a click-through rate is. That doesn’t seem to stop managers (namely finance people in charge of budgets) from asking. They should stop. And they should also defer to the time-honored wisdom that advertising the virtues of a luxury product to an audience is a long-term game.

Marketing dollars should never be reliant on the perceived performance of past advertising campaigns. This merely robs marketers from the opportunity to experiment and adapt messaging all the time as they should. This might also help explain why marketing and advertising jobs in the luxury watch industry are some of the least satisfying to be in today. Marketing dollars should be a fixed percentage of revenues (10-30%) and not reduced even when times are bad since consistent and strong marketing has been proved to help brands even in poor economic times over the long-run.

More so, if luxury watch brands actually want to both attract and keep top marketing and advertising talent, they must end the relentless culture of justification that marketers need to engage in as a distracting and wasteful part of their jobs. As discussed above, wrist watch online advertising does have a simple and effective means of being measured and justified by brand managers different than how many of them erroneously do today. If brands routinely continue to improperly evaluate the performance of necessary online advertising, they will continue to suffer as a result of their being almost none of it.