YORK, Pa. (AdAge.com) -- A click is just click. And as most sophisticated online marketers have realized, it's a really poor indication of whether online marketing is working.
But if you can start to understand the value behind certain online behaviors, you move much closer to making sense of the efficacy of your spending. That's why Intel has launched an internally developed program it calls the Value Point System to measure marketing effectiveness online.
The system, developed with its media agency, OMD, assigns a pre-determined number of points for every action consumers do online with Intel. Watching a certain online video may garner 40 points, while a site visit is worth only two points. As the online visitor moves about the site, they accumulate points, which Intel uses to evaluate its marketing.
This kind of information is especially important to Intel, because as an ingredient brand that doesn't sell products directly to consumers, it doesn't have databases of loyal customers, sales data or even casual shoppers' e-mail addresses to use for marketing. "It's really critical that we're getting maximum impact out of our investment, and measuring what matters is a really important part of that," said Nancy Bhagat, Intel VP-sales and marketing group, and director-marketing strategies and campaigns.
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Intel has been a marketing pioneer before, launching the first and arguably most successful ingredient-branding program with "Intel Inside" advertising and marketing partnerships, aggressively adopting in-game advertising and, at one point two years ago, dropping TV advertising altogether. While not every marketing gambit has worked -- Intel is back on TV, for instance, having discovered that a mix of online and offline media is necessary to achieve different goals -- that doesn't stop it from pushing the edge.
Ad Age: Why did you decide to institute the Value Point System?
Ms. Bhagat: The opportunity that online represents for us is to be able to really take a look at numbers and data to help evaluate the value we're getting. What we realized early on was that traditional methods really fell short of our expectations and weren't as meaningful a method as we were looking for.
A good example of how I describe it is by using the analogy of sending out invitations to a party. Advertisers evaluate whether their party is successful by how many people accept the invitation and knock on their front door. But that really isn't giving you a meaningful level of information and knowledge around whether that truly was a good party.
What you want to know is, did they knock on the door and did they come inside? What did they do once they came inside? Did they mingle? Did they talk to other people? Did they laugh? Or did they stand in the corner with their arms folded?
Understanding different levels of interaction and engagement helps you evaluate your online activity.
Ad Age: What process did you use before this?
Ms. Bhagat: We looked at the way I think every advertiser out there does: total number of impressions, costs per click, click-through rates. Those are all standard and they're not bad, but they're only the tip of the iceberg in terms of the level of information we need to truly measure effectiveness.
In the past, for example, when we would evaluate online activity in China vs. another country, it was always skewed in China's favor just because of the sheer numbers and the huge population. But when you then start using the same Value Point System and measure the activity, you're creating a nice even scale, so it becomes an apples-to-apples comparison, where before it wasn't possible.
Ad Age: How do your media partners feel about the system?
Ms. Bhagat: Anytime we share data we have with our media partners, it's viewed as a very collaborative relationship. We're very open. We won't necessarily give specific details about a competitor partner, but we will tell them where they fall. We're very honest with them about whether they're effective, whether they're not, whether we see the point system going up -- and sometimes to be perfectly fair, it's not only about the media partners. Sometimes it's about our message. Sometimes it's about tweaking creative. So we view it as a partnership with our media business people, and the more information we can bring to the discussion, the better conversation we can have with them about what's right for our business.
Ad Age: Has it yielded any cost savings?
Ms. Bhagat: When you look at a 35% or higher percentage of our media spend going into online, if we can acquire even 10% additional savings through the use of better metrics and information, that's sizeable for us. It helps us drive down rates, it helps us optimize the value of each dollar spent, and just like any other company we're under a lot of pressure with our marketing investment to get as much as possible out of it.
Ad Age: What do the others in the C-suite at Intel think about the system?
Ms. Bhagat: What's important for 2010 is how we provide the broader organization more visibility to the data, how we're using it, and how we can get them more comfortable with using and analyzing the data. Certainly our executives are aware of this, from the head of sales and marketing, to the new head of product development, to our CEO. Executives look at how we are going to evaluate and how we are going to prove we are driving business. Every time we can come in and talk about it at an investment level and show data that brings results and impact, that's a really powerful thing.