The immature digital ad market has to determine what it values and why

I want to sell you a poster (unusual, for someone who works for a newsbrand).

Here's one: It's nice. It's part of a bus stop. People will hang around it, may well consume your message. It's quite small though and there are loads of them, all the way down the road.

Here's another: It's a giant. It's beautifully lit, looks elegant and impactful. It's on the North Circular so there are always queues. It will get noticed so there's a good chance it will be effective. It’s great for brands.

If they were valued the same, you'd buy the latter over the former, wouldn't you? Of course you would. Although no one would value them the same, would they?

Welcome to programmatic, where the value of an ad has yet to be properly determined. Not in terms of ad sizes as they are priced differently, but in terms of effectiveness. Clients and agencies have whitelists of sites – they number in the thousands. All have been vetted for quantitative metrics like audience size, viewability, cost per impression and click through rates.

It’s all very sensible but one of the unforeseen consequences of digital advertising that we now live with is an obsessional focus on short-term thinking and the use of direct response measures for all digital campaigns, regardless of the job they are doing. As any good marketer knows, you don't expect DR campaigns to perform until you have built a brand. They also know that using direct response metrics to measure branding campaigns is bonkers, and wouldn’t happen in the offline world. It does online though: we had someone call us up recently to say that their £30,000 car branding campaign wasn't working; it had been running for two days.

What's infuriating is that we seem OK with this – that those metrics are all we need. At the Guardian we pour huge resources into creating journalism that our audience is highly engaged with. We care passionately about design and how the reader is presented with that content. We carry a light ad load; we started on a journey of "fewer, better" ads last year. We think fewer ads is a win-win: a better experience for our audience and an ad more likely to be noticed – just like a nice, big poster. We feel like we're trying to do the right things for the long term.

The market is slow to reward this approach. We’re competing for business against Gumtree and Zoopla and eBay, often valued below them when it comes to delivering on these basic metrics. Our business, our approach and our utility are completely different, yet the market has decided that for the purposes of audience targeting, we are the same – it's all a bit apples and pears.

However, there is reason to be optimistic. We recently met with Aimia:Lumen, the eye tracking company. It has a panel of 300 people. It's a great bit of tech – it literally follows your eyes as you travel round a site. It was founded by an ad guy – so he knows what works in our world.

And here's what works. Newsbrand sites. Aimia:Lumen wasn't commissioned by newsbrands to do this work, but that's what it found. Premium content works for advertisers because it offers total attention, because it is built with readers in mind, because quality journalism is more than about killing an idle moment or finding out a train time. Lumen's panel is attached to Nectar card data, so it can trace activity in store. So we should be able to show business outcomes that really mean something, not empty statistics that are easy to count, but count for nothing.

That's what we need to add to the algorithm. In addition to the necessary hygiene factors of brand safety and ad fraud and viewability, how about measuring ads that are viewed (not just viewable), how about metrics around attention, about how many ads are on a page? How about adding qualitative metrics to value environment and context, like we do in other media? Mostly, how about trying to properly evaluate their effectiveness?

Today, it seems like we're taking part in a giant experiment, where the immature digital ad market has yet to truly determine what it values and why. Programmatic could be so good – a wider advertiser base, the removal of unwelcome human bias, a genuine auction for your inventory – but it is yet to deliver on its promise.

That poster next to the bus stop does its job, but the market clearly decides it is less valuable than the big one. It's high time we introduce that thinking to programmatic.

Nick Hewat is commercial director at Guardian News & Media

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