Peter Fader and Eric Bradlow are answering the biggest questions about doing business on the web.
By Tim Hyland
So what’s a website banner ad really worth? What’s the actual value of a website click-through? And what can an advertiser reasonably expect when it buys space on the Internet?
These are some biggest questions facing businesses, advertisers, media companies, marketers and researchers today. There’s just one little problem: Nobody has the answers. In fact, nobody is even close to having the answers.
The Wharton Interactive Media Initiative is on a mission to change that. WIMI, founded with a $1 million gift from Art Bilger, W’75, and his wife, Dahlia, is one of the most buzzed-about research centers in business academia today, and it’s easy to see why: Behind the leadership of Frances and Pei-Yuan Chia Professor Peter Fader and K.P. Chao Professor Eric Bradlow, the center is collecting an unprecedented volume of data about online consumer behavior. By sharing this data with some of the world’s top business researchers and collaborating with top companies (see Randy Weisenburger profile), WIMI intends to find answers to the most fundamental questions about interactive media—and help companies monetize the Internet explosion.
What was the impetus for launching WIMI?
Fader: Originally, it was just a personal interest. Everyone likes the media business and the entertainment business, and I thought there would be a lot of data in that sector that would be interesting for us. The frustration has always been that [entertainment] is a business that isn’t run like a business, so we thought we could bring a Wharton mindset to it. But it never took root when we were broadly ooking at the entertainment industry. We like to look at individual-level data, and the entertainment industry, broadly defined, doesn’t provide that. So we thought we should choose sectors [such as interactive media] that better play to our strength.
Bradlow: I think WIMI kind of typifies both of our careers. We’ve both been datachasers. For the past 10 to 15 years, wherever the new frontiers are, we’ve been ahead of the curve, really on the frontier. … And for us, this really isn’t about the technology, per se. At the end of the day, a lot of data is going to emerge from all of these new technologies. Mobile technologies, Facebook, cell phones. It’s not that we don’t care about technology. Technology is certainly important and technology can change business. But we’re data guys. And once we get that data, then we can really start getting some answers.
For whom is WIMI’s work most valuable?
Fader: Well, it’s of obvious value for companies. People are out there buying things, visiting websites, and yet businesses can’t get their arms around it—what it all means. The other people for whom we’re of interest are academic researchers like ourselves. We just live and die by finding new data sets, and getting this kind of [interactive] data has been so difficult in the past. We’ve heard researchers tell us, ‘I’ve been asking Facebook for this data, and they can’t get it to me.’
Is that because these companies don’t have the data? Or because they don’t want to share the data?
Fader: It just hasn’t been high enough of a priority. Some companies will say, ‘We really want to do it, but legal won’t let us do it.’ Others say it’s just an incredible burden on their IT departments. But now companies are coming to us. … We’re making it easy for companies to provide the data.
Bradlow: I would add that, while we’re housed at Wharton and we’d like Wharton to be the nexus of all of this, we’re already handing out this data to other researchers. This is not about competition.
So ultimately, what kind of data—and what kind of answers—are you guys looking for?
Bradlow: One of the things I’ve spent much of my career focused on is cross-platform data, and helping business answer the questions they need to answer. You can scrape a bunch of data from Facebook, sure. But how do you monetize that? If I post a link to my favorite movie, but then we don’t have any consumption data beyond that, what does that really tell us? Right now we know who is speaking to who, but that’s it. What we want to be able to do is link Facebook and mobile data and these other things to ‘downstream behavior.’ We want to know: How much is that banner ad really worth?
Fader: Just look at ESPN, which is a company we’ve just started an initiative with. Think about all of the touch points with their audience. They have the website, the television shows, ESPN mobile, ESPN the magazine, ESPN fantasy sports. And they have different data sets for all of that. We’re trying to bring that all together, so if Pepsi wants to spend a million dollars with ESPN, they can spend it in the best way possible.
There’s no way to answer that question now?
Bradlow: You would think companies would have this dataset. Unfortunately, many companies are siloed. Part of our mission is getting past that. There’s a lot of gold out there in cross-platform data, but even for a very, very sophisticated company like ESPN, it can be very hard for them to get that cross-platform data set. … Again, what we want to get to is that question: If Pepsi had $1 million to spend with ESPN, how could they best spend it? I’m borrowing a line from Peter, but mass marketing is not dead. It’s just that it’s hard to do across multiple channels. That’s why if you asked a company how they should best spend their money, they don’t know how to do it. They’re relying on third-party advice, and not any hard data.
Do you get any sense that these media companies don’t really want to know what a banner ad is worth? What if they find out it’s not worth much?
Fader: Well, I think it goes both ways. Sure these companies want to maintain their leverage. But they also want to demonstrate value to their customers.
Bradlow: I have to say, it’s just my gut feeling that I think ESPN, for example, wants to know the truth. They want to know what a web ad is worth, compared to a television or magazine ad. They want to know the truth and they want to be able to devise a rational pricing model.
So if you guys succeed—if you can really figure out how to link something like Facebook sage to buying behavior—it would be game-changer, right?
Fader: Yes, it will certainly change the way companies work. It will change the way researchers work. But it will also change the way we teach the whole practice of marketing. I think it’s such a natural fit, so perfectly in line with the spirit of the Wharton School. Our students aren’t just interested in finance. They like being analytical. They like trusting data more than their gut instinct. It’s a natural here. I really think this is a goldmine of opportunity.