When does advertising pay? Apparently, we're getting closer to knowing courtesy of Microsoft.

The advancement from paying for eyeballs (CPM – cost per thousand times an ad is shown) to paying for click-throughs (CPC – cost per click), appeared at the time to be the ad industry’s nirvana. And then came click-fraud and CPA.

Now if only ‘A’ stood for Acquisition, then we could all go home. Pay £1 ad cost every time you acquire a new customer for your new £50 gizmo (ie, a sale), and advertising becomes a predictable and precisely quantified cost of sale. In this instance, 2% exactly; not 1.9% nor 2.1%.

But that ‘A’ means Action, and that Action may be an acquisition, but more generally it refers to getting a prospect to fill out a form, leave their contact details, sign up for a newsletter, etc. Mmmm, still as much an art as a science then.

But is a sale directly related to the very last advert the customer saw? Of course not. Your decision to buy Vaio not Lenovo, Nokia not Blackberry, Diesel not Levis, is the summation of many independent “touch points” over the minutes / hours / days you’re considering the purchase, and indeed over the many years running up to that point.

How do you measure that?! Well Microsoft has the answer apparently, Engagement Mapping:

a new approach to managing and measuring the effectiveness of online campaigns that goes beyond the current “last ad clicked” standard. For the last decade, virtually all ad campaign reporting methodologies associate sales, leads and Web traffic simply to the last click or ad exposure. Engagement Mapping takes into account for the first time all the various online touchpoints and interactions a consumer experiences before an eventual sale.

And there’s more:

Based on the Engagement Mapping concept, Microsoft announced the beta of Engagement ROI, an online campaign reporting and optimization solution that will undergo testing by national advertising clients and agencies, including Agência Click + UNICA, Best Western International Inc., BKV, Citi Cards, GSD&M Idea City, Ingenuity Media of The Martin Agency, Initiative, McKinney, MEC Interaction, Mindshare Interaction, Monster Worldwide Inc., Neo@Ogilvy, Sprint and World Vision. Engagement ROI evaluates and assigns measurable value to a consumer’s interaction with ads, giving advertisers and publishers a more complete picture of online behavior.

Wow. But call me a doubting geek, I need to see more details on the ‘how’ not the ‘what’. I’ll see what I can find and report back.