IAB SRI Online Advertising Effectiveness v3

5/28/2018 IAB SRI Online Advertising Effectiveness v3

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www.pwc.fr

Measuring theeffectivenessof online

advertisingStudy conducted by PwCfor IAB France and the SRI


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Measuring theeffectiveness ofonline advertisingStudy conducted byPwC for IAB Franceand the SRI

PwC| 63 rue de Villiers 92200 | Neuilly-sur-Seine


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Summary


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Introduction ........................................................................................4

Key points of the study ........................................................................ 6

Background ....................................................................................... 12New ways of using the internet help boost the developmentof online advertising ........................................................................................13Formats and targeting techniques are evolving .................................................13Monitoring the performance of online advertisingis becoming a key challenge .............................................................................14

Seven key approaches to effectively measuringonline advertising .............................................................................. 16Dening the objectives of online communications strategies............................17Measuring the Webs contribution to branding objectives.................................22Measuring the impact of online campaigns on ofine sales...............................34Measuring media mix effectiveness ..................................................................41Analysing the impact of online advertising on browsing behaviour ...................45Assessing the impact of targeting on all aspects of the campaign ......................50Measuring the impact of advertising formats on conversion and branding ........56Conclusion: towards an effective measurement approach ................ 68

Bibliography ...................................................................................... 70


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Introduction


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Over the past ve years, advertisingbudgets allocated to internet mediahave grown spectacularly. In 2010,the internet will represent 16%of total advertising expenditure

worldwide and this gure couldreach 21% in the next four years1.This growth is signicantly fuelledby search and performancetools (afliate marketing, email,comparison websites, etc.),

although display advertisingcontinues to represent a largeportion of online budgets (49%in 2010 and 45% in 2014)2.

Two trends are driving this boom:

an increase in Web usage whichstrengthens the internets role inproviding recommendations andpreparing consumers to makepurchases and recommendations

developments in targetedadvertising formats andtechniques which help shapemore communicative andrelevant online campaigns

Although the internet is by naturea quantiable medium, onlinestrategies are not yet adequatelybased on a suitable performancemeasure. Advertisers realise thatmeasuring performance is animportant issue, but for the most partthey face difculties in implementingappropriate methods and indicators.This is rst of all put down to a lackof resources, but other reasons oftenalluded to are organisation, tools andthe need to strengthen expertise3.

This new environment hasprompted advertisers to considerseveral fundamental questions:

Which media mix should beused to achieve an optimumcommunications strategy?

How can digital media bemost effectively combined

with other media?How do online communications

inuence a brands imageand reputation?

How can the impact thatonline advertising has onbricks-and-mortar distributionnetworks be measured?

Which targeted advertising formatsand techniques are best suitedto the marketing objectives?

Aside from traditional clickthroughrates, the limitations of which

are outlined in this study, thereare several indicators available toadvertisers, including the web-basedgross rating point (GRP), return oninvestment (ROI), media post-tests,exposure time and the engagementrate. However, it is importantto dene in which frameworkand with which objectives theseresources should be used.

The purpose of this study is toidentify the different ways ofmeasuring the effectiveness ofonline advertising. It is aimedat online marketing and mediabuying professionals and, moregenerally, at all departmentsinvolved in digital media.

Our study focuses on measuring theperformance of display advertisingand covers seven key approaches:

Dening an onlinecommunications strategy

Measuring the Webs contributionto branding objectives

Measuring the impact of onlinecampaigns on ofine sales

Measuring media mix effectiveness

Analysing the impact of onlineadvertising on browsing behaviour

Assessing the impact of targetingon all aspects of the campaign

Measuring the impact ofadvertising formats oncampaign performance

For each of these topics, our aimis to analyse market trends basedon benchmark studies conductedby market research institutes,

advertising agencies and salesagencies, companies specialised inmeasuring advertising performanceand consultancy rms.

We interviewed several advertisersfrom a variety of industries as wellas three media agencies in order tounderstand their view of the keyissues at stake and identify togetherthe best resources for measuring theeffectiveness of online advertising.

We hope that this study willprovide you with useful insightsto help you plan for the future.

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Key points of the study


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New opportunities, newmeasurement challenges

Today the internet is at the core ofcommunication and consumptionbehaviour. For example, internetusers in the U.S. spend 58 minutes

watching video or surng onthe web4. 78% of internet usersstate that they consult a website

before buying a product5.

As social networks develop, theWeb has also become a place

where a brands reputationand image is shaped.

Advertising formats are moredeveloped, videos more sophisticatedand targeting tools more focused.Now that advertisers are betterequipped for communicating

on the Web, they are graduallydirecting their budgets towardsonline advertising. Measuringonline advertising performance istherefore becoming critical for them.

For display advertising campaigns,the clickthrough rate remains themost widely used indicator, butis not without its limitations.In2009, only 16% of internet usersclicked on advertisements6. Inaddition, this rate gives no indicationof the impact of a campaign on abrands image or on the consumerssubsequent browsing or purchasingbehaviour. So there is now a realneed to nd other solutions...

Starting point:a clear online strategy

Developing the brandexperience, growing onlineor ofine sales, generatingleads, reducing acquisitioncosts... an online campaigncan have many objectives.

It can have many resources too,including brand websites, searchtools, rich media campaigns,presence on community networksand website sponsoring.

Which online resources achievethe best performance in termsof a campaigns objectives? Howmuch of the budget should beallocated to each resource? Foradvertisers investing 10%-30% of

their budget in online advertising,and up to 50% in some campaigns,these questions are crucial7.

Faced with this realm ofpossibilities, the advertisers

who were interviewed identiedtwo key imperatives:

Dening a clear and measurableonline strategy with indicatorstailored to each objective

Measuring the Webs performancetogether with that of other media,in terms of coverage, impact onthe brand and additional sales

Measuring the impact ofcampaigns on the brand

61% of American advertisers ndthat the internet meets brandingimperativessuch as awareness,recognition, brand loyalty andpurchase intent. Several studiesdemonstrate the impact the Web hason a brand. For example, an analysis

conducted on a campaign run bya catering rm reveals that brandidentication improved by 10%8.Similarly, a luxury goods campaignachieved a rise of 9%. By studyingdisplay advertising campaigns runby four advertisers from differentindustries, Mdiamtrie NetRatingsrevealed that the purchase intentof internet users who were exposedto these campaigns increasedby 11%. In a study of 73 display

advertising campaigns reaching100,000 internet users, UnitedInternet Media found that theinternet enabled the rate of aidedbrand awareness to jump by 26%9.Post-test studies continue to be thebenchmark method for evaluatingthe impact of campaigns on a brand.In this respect, it is increasinglycommon for advertisers to carryout specic analyses on the Web.

Indicators other than theclickthrough rate can howeverhelp determine the impact onlineadvertising has on branding. Bymeasuring exposure, advertisersare aware of the actual visibilityof a display advertisement andthe average time during whichinternet users are exposed to theadvertisement. This indicator

will continue to develop in thefuture with the standardisation

of measurement methods.

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8 |Study conducted by PwC for IAB France and the SRI | Measuring the effectiveness of online advertising

Measuring interactionalso providesan initial analysis of the impacta video or rich media campaignhas on a brand. Several studieshave revealed a close correlationbetween interaction and impact ona brands reputation and image.

Advertisers can also assess theimpact of their branding campaignsby internet users engagement

on a website. This is achieved byanalysing every aspect of theirbrowsing behaviour, includingdepth, duration and actions.

From our meetings with advertisers,we discerned a strong tendency todevelop these online indicators,

which provide a responsiveinterpretation of the impacton their brands and can bemonitored over the long term.

Do online campaignsgenerate ofine sales?

In 2009, 24% of French internetusers interviewed by IFOPresponded that they couldbe enticed to buy a productadvertised online. The samepercentage of respondentssaid that TV advertising couldinuence them in the same way10.In 2010, eight out of ten internetusers interviewed by Mdiamtriereported consulting a websitebefore purchasing a product11.

This trend is conrmed byassessing the impact that onlineadvertising campaigns have onofine sales. After analysing thepurchasing behaviour of a panel of185 million consumers, comScoreshowed that exposure to displayadvertising campaigns resulted in

a 10% increase in shop sales12.

The objective of online advertisingis therefore not just to boost webtrafc and online sales. It alsohas real leverage to boost sales inbricks-and-mortar distributionchannels. But how can this bedemonstrated and evaluated?Post-testsassess the impact ofadvertising campaigns on consumerbehaviour and purchase volume.Econometric modelscan be used

to measure the impact of advertisingon the Web and other media onsales over time, but they require arelatively long observation period.

In general, advertisers oftenuse an empirical measurementmethod by cross-checking salesdata against media campaignstrategies. Many advertisers feelthis method could be improvedas a number of organisational

and technical issues make theindicators difcult to implement.

Finding the mosteffective mix of theWeb and other media

Media use is becoming increasinglyinterlinked. In 2009, 40% ofEuropean consumers watched TVat the same time as browsing onthe internet at least once a day13.The Web is viewed as a means ofboth extending coverage andoptimising performance with axed budget.A study carried outby Nielsen for an alcoholic beveragemanufacturer revealed that by re-allocating 10% of the TV advertisingbudget to the Web, the advertisersucceeded in increasing its audienceby 3.4% and boosting the campaignstotal GRP (gross rating point - seedenition on page 30) by 20.7points. Mixing media is an effective

means of branding, which in somecases can enhance brand awarenessand loyalty by up to 20%14.


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Media agencies propose differenttechniques for measuring theimpact of media mixes that showthe impact of a shift to morefrequent and repeated Web use.These decision-making tools canbe complemented by conductingpost-tests on the contribution madeby different media to brandingobjectives. In spite of this, comparingthe effectiveness of TV and online

data presents a real challenge toadvertisers, 70% of whom say they

would like to be able to comparemore easily the effectiveness ofonline and TV advertising15.

What impact doesdisplay advertisinghave on the behaviourof internet users?

Exposure to advertising has an

impact on the behaviour of internetusers on the brand website. A studyconducted in 2009 by the OnlinePublishers Association reports thatthe time spent by internet users on

websites is on average 50% higherfollowing exposure to a displayadvertising campaign16. Advertisinggenerates activity on the website

which has to be measured on alllevels: depth, duration of visits,purchases and registrationsgenerated. Tracking, whether itbe focused on websites or users, iscommonly viewed by advertisersas a key means of measuringand monitoring performance.

Online advertising exposure alsostimulates online searches. Displayadvertising triggers a signicantrise in the number of campaign-related searches, demonstratingthe intrinsically complementarynature of display advertising andsearch.According to comScore,the probability that consumers inEurope perform a search on thebrand, or key words relating to the

brand, is multiplied by 2.3 afterexposure to an online advertisingcampaign17. Advertisers shouldidentify and assess this impact,so as not to undervalue displayadvertising in relation to search.Multi-exposure analysis can enableadvertisers to dene the rightlevel of message repetition andthe most effective combinationof online advertising resources.

What is the impact oftargeted advertising?

Behavioural targeting is expandingrapidly. According to eMarketer,it will grow annually by 23% overthe next ve years in the UnitedStates18. Retargeting, in particular,is advancing exponentially and isgenerating up to 16 times higher19post-click conversion rates. Onlineretailers closely monitor its impacton conversion, but its impact onbrands is seldom measured bybrand-focused advertisers. Inthe future, measuring the impactof behavioural targeting will beessential because real time onlineauctions will promote its wider use.

Which are the mosteffective advertisingformats?

It is estimated that video andrich media will represent 63%of the European marketin 2014,compared with 40% today20.Even so, in certain cases a staticbanner remains the most effective

way of conveying a message.

Advertisers should thereforemeasure the impact of differentformats in order to choose theones best suited to their needs.

New methods are emerging formeasuring the impact of rich media.

As the clickthrough rate proves to bean inadequate form of measurement,the interaction rateand time arebecoming key. Measuring interactionenables the impact a video or rich

media campaign has on a brand tobe analysed. It is especially relevantfor advertisers who do not aimto increase web trafc or websiteengagement. With the emergenceof these new formats, creativityonce again offers the means to standout from the crowd. Approachesdesigned topre-test the impactof online creations may developfurther in the years ahead.


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Five levels for effectively measuring online advertising

Browsing

Interaction

Actual exposure

Display Number of impressions Mature, minimum indicator

Number of advertisements

viewed, exposure time,display surface

Interaction rate/lengthof interaction

Number of visits, time,depth, recurrence

Committing interactions

(newsletter subscription,catalogue requests, credit

simulations, quotes, etc.)

Indicators Level of maturity and trend in use

Mature and fundamental foronline retailers

Developing for brand-focusedadvertisers

Developing, depending on advertisers

Often associated with purchasesthrough recommendations

Still not widely used for measuringbranding

Developing rapidly, in line withgrowth in rich media and video

Often only partially exploited

On the rise, being

trialled by manyadvertisers

Not yet fully available


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Background


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New ways of using theinternet help boostthe development ofonline advertising

Simultaneous use of theinternet and TV is becomingmore widespread

The emergence of the internethas not replaced the use of other

media, particularly TV. Ratherthan competing, these two mediacomplement each other. Theinternet acts as an extension to theTV experience. As demonstratedby a Microsoft Advertising study,78% of internet users believe that

watching videos online complementstheir TV use. Internet users lookout for specic, unusual andpreviously unavailable content21.

This simultaneity in mediaconsumption enables the brandexperience to be prolongedthrough online media andencourages advertisers to mixthe Web with other media.

The internet assertsitself as an essentialtool for inuencing andpreparing purchases

Today, the internet is at the heartof purchase processes. The 2010FEVAD-Mdiamtrie barometershows that 78% of internet usersconsulted a website before buyinga product22. The Web is becominga highly inuential medium, inthe same way as TV. Internet usersknow how to make the most of thenumerous resources available tothem, including retail websites,consumer reviews, comparison

websites and forums. This trend has

been strengthened by the crisis, theslowdown in household spending23and the development of hunteror opportunistic behaviour.

This development underpins theimportance for advertisers toconduct as detailed an analysisas possible of the multi-channelpurchasing path used by buyers. Itis vital to understand the impactadvertising has on ofine salesand in particular its ability tofoster consumer engagement andinuence consumers decisions.

Social networkingoffers advertisers a newplatform for expression

Internet users spend a tremendousamount of time using exchangeand communication services on theWeb. According to Mdiamtrie/NetRatings, internet users spendon average 3 hours 40 minutes permonth on instant messaging, 4 hours8 minutes on community networks,

2 hours 40 minutes on emailingand 1 hour 15 minutes on onlineauctions or classied ad websites24.

This new use of media, includingcommunity and social networkingsites, generates additionaladvertising space which providesadvertisers with remarkabletargeting opportunities (througha greater targeting capacityand increased exposure times).Nevertheless, advertisers must assessthe relevance and effectiveness ofthese new spaces in relation to theirown communication objectives.

Advertisers are awareof the large number ofresources available tothem for measuring theeffectiveness of onlineadvertising. It is up to eachone of them to select themost useful indicators fortheir interactive strategy anddevelop an online culture

within their environment.Thierry LimousinDigital Director, Samsung

Formats and targetingtechniques are evolving

The increased number ofadvertising formats andspaces requires the actual

visibility of advertisementsto be measured

Continuous innovation andgreater choice in formats meanthat analysing the actual impactof different advertisements is acomplicated procedure. This impactdepends on at least two factors: thescreen space, or proportion of thescreen used by the banner; and theduration of the advertisement.

With webpages becoming moreelaborate, it is necessary tomeasure the difference betweenthe impressions delivered andthe impressions seen by the user.In fact, only the latter are likelyto have an impact on the user.

Based on these ideas, resources areemerging for measuring advertisingexposure which help improvemeasurements of the impact of

advertising in terms of branding.

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Rich media and videoadvertising offer newbrand experiences

Rich media formats have advancedconsiderably over the past ve years.This progression heightens thecommunicative potential of onlineadvertising. Links to a brand websiteare no longer the be-all and end-allof developing a brand experience.

The clickthrough rate nolonger provides an adequatemeasure of the impact of theseadvertisements. Indicators thereforeneed to be put in place in orderto gauge the interaction withadvertisements. It is also necessaryto analyse the impact these newformats have on reputation,recognition and brand loyalty.

These enriched formats bringthe creative dimension of onlineadvertising to the fore. Measuringthe effectiveness of creativeapproaches and the ability to adaptis now a critical performance driver.

Developments in behaviouraltargeting increase theeffectiveness of campaigns

Behavioural targeting has becomefar more widespread these pastfew years and is used in advertisingcampaigns to reach out to theright audience. By examining thebrowsing behaviour of internetusers, proles can be established

for which display advertisementscan then be designed in accordance

with the internet users interestsor purchasing habits. For years,media planners have beensearching for useful targetingmethods and have often had tomake do with information ongender, age and socio-professionalgroups. Behavioural targeting nowprovides an answer to their needsand often generates signicantly

higher conversion rates. It can alsobe used in branding to draw theconsumers attention to a product

while they are shopping and tendsto have positive results in terms ofbrand recognition and opinion.

Accordingly, behavioural targetingis perceived as a means of bolsteringthe effectiveness of onlineadvertising in the future, althoughits impact has to be measured.

Monitoring theperformance of onlineadvertising is becominga key challenge

Advertisers see measuringthe effectiveness oftheir campaigns as a keychallenge in their interactivecommunications strategy

The internet is reputed to bea quantiable medium butadvertisers are still dissatised

with the tools available to themfor evaluating its performance.Faced with an overwhelmingamount of generated data, theyexpress a need for transparentand comparable information.

The majority of advertiserswith whom we met conrmed

that measuring effectiveness isinstrumental to their online strategy.Some advertisers wish to furtherbroaden their measurement tools,for example by analysing web trafcor assessing engagement moresystematically. Others highlightthe need for a better handling ofavailable data. They also insist onthe need to converge Web data withdata from other communicationsources in order to enhancemulti-channel monitoring.


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Background

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Numerous metricsare available, but theclickthrough rate is still themost widely-used indicator

A study conducted in March2010 by eMarketer25reveals that60% of respondents rely on theclickthrough rate to measure theeffectiveness of their interactivemarketing campaigns (Figure 1).

This indicator is measured muchmore extensively than other metricssuch as the amount of incrementalsales generated, the campaignROI, the brands reputation andthe engagement on the Web.

The tendency to use this indicatorcan be explained by its user-friendliness and by the difcultiesexperienced by some advertisersin implementing more suitable

or transversal indicators.

The clickthrough rateunderestimates theactual impact that displayadvertising has on the brand

A study carried out by comScore in2009 indicates that the number ofclickers is declining progressively.The number of internet usersclicking on advertisements decreasedby 50% between 2007 and 2009

and in 2009 only 16% of internetusers clicked on advertisements.Moreover, a small portion of internetusers accounts for almost all clickson online advertisements (8% ofusers produce 85% of clicks). Theproles of those internet users thatdo click on advertisements are alsoquite specic (young people betweenthe ages of 25-44 with income ofless than USD 40,000 per year)and do not always correspond to

the advertisers target audience26

.

This study also outlines thenumerous effects brought aboutby display advertising which arenot taken into account by theclickthrough rate. For example,a signicant portion of internetusers return to the website severaldays after being exposed to theadvertisement. It also appearsthat prior exposure to displayadvertising campaigns has a positive

impact on search behaviour.

Perhaps the most limiting factor ofthe clickthrough rate is that it doesnot provide any information on thekind of impact that exposure to anadvertisement gives rise to, whetherthis is in terms of awareness, recall,engagement or purchase intent.

Customised measurement toolsare therefore required in order

to effectively monitor onlineadvertising: we have identied sevenkey approaches for this purpose.

Figure 1 Indicators used by advertisers in the USA to measure the performance oftheir online marketing campaigns

60%

49%

46%

40%

38%

32%

27%

22%

17%

Clickthrough rate

Lead generation

Response rate

Incremental sales

Return on investment (ROI)

Brand awareness or reputation

Requests for information

Engagement with Web content

Media impressions


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Seven key approachesto effectively measuringonline advertising


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Dening the objectives ofonline communicationsstrategies

The online strategy isthe convergence pointof media buying andmarketing imperatives

The advertisers we interviewedallocated 15%-30% of their

total advertising budgets toonline advertising. Some onlineadvertisements even representedmore than 50% of the total campaignbudget. Despite a moderate increasein online expenditure in 2008 and2009 and, in particular, a tight reinon display advertising expenditure,all of these advertisers expect toinvest even more heavily in onlineadvertising over the coming years.

Advances in Web use now enableadvertisers to take advantageof a wide range of online toolsthat go beyond the traditionaltrade-off between search anddisplay in order to develop theironline communications:

Brand websites andco-branded websites

Resources for measuring customerprospects and lead generation

Presence on community networksRich media campaignsContent sponsoring, brand content

As a result of these two trendstowards greater use of i) onlineadvertising and ii) newly developedonline advertising tools, advertisersare asking themselves severalquestions: How much of theadvertising budget should beallocated to the internet? Howmuch should be allocated toeach form of advertising withinthe online strategy? Which

online tools are best able to meetmy campaign objectives?

The answer to these questionslies in devising and measuringan online strategy, takinginto account two factors:

A marketing factor which aims toassess the effectiveness of onlinemethods with regard to campaignobjectives in terms of the impact

on the brand (awareness, recall,brand preference, etc.) and/or performance (online andofine sales growth, generationof opportunities, etc.)

A media buying factor which aimsto manage communication budgetsby assessing the Webs potentialto contribute effectively to themedia strategy (target coverage,message repetition, media mix)

From an organisational point ofview, we realised that measuringthe performance of onlineadvertising represents a challengefor both Marketing and Mediadepartments. There are severalorganisational models which takeinto account these two factors.

Increases in onlinebudgets must be based onappropriate performancemeasures, in order to

justify and optimisedigital investments.Matthieu CouturierMedia Director, Leclerc

We have a wide range ofonline resources available(search, display, socialnetworks, brand websites,media partnerships, etc.)

which we use in differentways depending on theobjectives of our brandcampaigns. For each one,

we use specic measurementindicators and assessthe nal contributionmade by online resourcesto the effectiveness ofour brand strategy.Julien GuiraudDigital Marketing, Manager, Coca-Cola

The Web offers specicindicators which are veryinstructive. However, it isessential to converge Web

performance measureswith those of otheradvertising channels inorder to develop a coherent

strategy across all media.Frdric GuichardMarketing Director,Danone Still Water division

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To be effective, the internetmust be embedded in theoverall marketing strategy

Many online indicators are availableto digital media managers. Suchan array of indicators allows forspecic, and often more responsive,measurements to be taken ofinternet advertising. But a wide

variety of indicators does not always

provide a suitable measurementof the effectiveness of a marketingstrategy. Some advertisers runthe risk of infobesity. Ratherthan measuring data using abroad spectrum of indicators, itis more important for advertisersto synthesise and compare databetween different media (theWeb, TV, radio, press, etc.). Mostadvertisers emphasise the need forintegrated measuring and tracking

systems, in three areas in particular:

Understanding mediacoverage and repetition

Analysing the impact ofcampaigns on the brand

Measuring the impact on sales

More sophisticated advertisersdesign strategies which incorporateall types of media. These arethen applied to tracking systemsmanaged by Web experts. Theonline strategy is not consideredin isolation, but in terms ofits contribution to the overallmarketing and sales objectives.

Online tools are becomingincreasingly specic andtheir performance must beevaluated in each campaign

The ability to create online toolsfor different campaigns provides

advertisers with an edge in what is ahighly competitive market. Bespoketools such as brand websites, one-off initiatives, brand content and

social network campaigns shouldbe individually measured in termsof their visibility, engagement orimpact on the brands image.

It is equally important to ensureclear visibility in monitoring onlinecampaigns by using comparableindicators and analyses which areregularly shared. To assess onlineperformance over the long term and

shed a strictly opportunistic andshort-term view, particular emphasismust be placed on preparing annualperformance reports. Due to rapidadvancements in this form of media,the ability to learn is crucial.

In view of the differentpossible objectives, suitableindicators need to bedened and implemented

We provide below a rough outlineof the different objectives an onlineadvertising campaign may have:

Branding:the purpose ofbranding campaigns is to bolsterdifferent components of the brand,such as awareness, image orpurchase intent. These campaignsgenerally form part of a widermedia strategy and it is theircombined impact with othermedia which is often measured.

Developing customer engagementalso falls within the framework ofbranding and aims to broaden theonline brand experience, but withthe specic objective of interactingdirectly with the internet user.

Growing ofine salescontinuesto represent the ultimate objectiveof a brand campaign, withthe exception of institutionalcampaigns. This objective canbe more specically soughtor measured for certaincampaigns and as such evaluated

with greater precision.Growing online sales:these

campaigns specically aim to

generate sales on the brandwebsite or on partner networks.Such campaigns can alsosimultaneously pursue conversionand branding objectives.

Generatingleads is based on aperformance-oriented approach,but does not aim to increaseonline purchases. The objectiveis to get to know the internetuser using interactive resourcesfor classication purposes, such

as games and questionnaires.Boosting coverageand messagerepetition: with rising penetrationrates, the Web is quickly becominga mass medium which allowsfor greater message exposure.One of the objectives of a Webcampaign can be to strengthen themessage coverage and repetitionachieved through other media.

Reducing acquisition costscanbe another ambition of an onlinecampaign. This is fundamental forperformance-focused advertisers.

These different objectives are notincompatible and the same campaigncan, for example, aim both todevelop the impact of the brand andgenerate an increase in shop sales.

For each of these objectives, differentindicators can be used. The followingpage presents an initial but by nomeans exhaustive list, which gives

an idea of the range of measurementtools available to advertisers. Thesame indicator can often be suitablefor measuring different objectives.


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Seven key approaches to effectively measuring online advertising

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Effectiveness is measuredcampaign by campaign,on a weekly, even daily,basis. But long-term

performance reportscovering all campaignsmust also be prepared inorder to unlock synergies

between online resourcesand devise strategies forthe following year.Irne LabusDigital Analytics Director, Havas Digital


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Nine categories of indicators for measuring online performance

Display

number of impressions number of visible advertisements number of advertisements viewed exposure timew

Conversion

clickthrough rate conversion rate post-view conversion rate post-click conversion rate

Traffic

number of visits generated number of pages viewed length of visit abandon rate

Interaction

interaction rate interaction time expansion rate rate of videos viewed rate of videos viewed in full video viewing time activity on social networks

Subscription

number of subscriptions (requests for information,

games, newsletters, etc.) subscription rate recommendation rate (social networks, viral

e-marketing campaigns)

Media

gross rating point (GRP) memorised coverage coverage rate message repetition rate

Distribution

additional sales generated revenue generated lead conversion rate impact on the frequency and

volume of purchases retail outlet traffic generated by the Web

ROI

acquisition cost (offline vs. online) ROI (revenue generated/

advertising expenditure)

Post-tests

impact on awareness impact on advertisement recall impact on brand image impact on purchase intentions impact on recommendations


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Which indicators should be paired with which objectives?

INDICATORS

Online

advertising

campaign

objectives

Display Conversion Traffic InteractionSub-

scriptionCoverage

Offlinesales

ROI Post-tests

Contributing

to the brands

development

Developing

engagement

Growing

offline sales

Growing

online sales

Generating

leads and

classifying

potential

customers

Boosting

coverage

and

repetition

Reducing

customer

acquisition

costs


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For several years now wehave considered the Webto be a key medium fordeveloping our brands. Ouronline investments increaseannually by almost 15%.One of our main focuses isestablishing strong long-term relationships with

partner websites such asMSN for the Coca-Cola zeroGaming Zone, Skyrock forthe Kohop mutual aid site,and Yahoo! for Coca-Colalight. It is therefore crucialthat we measure internetusers exposure to thesecampaigns and the impactthis has on the image they

have of our brands.Julien GuiraudDigital Marketing Director, Coca-Cola

Measuring the Webscontribution tobranding objectives

Advertisers value the Webto an increasing extent asan effective medium fordeveloping their brands

In view of the growing numberof advertising slots, numerous

performance-based offers havebeen developed by advertisingsales agencies. These modelscomprise pay per click or pay peraction(purchases, appointments,registrations, etc.) advertising,and prove very popular withadvertisers whose objectivesare focused on conversion.

Nevertheless, advertisers do not onlyregard online advertising as a means

of generating trafc or purchases.The advertisers we interviewedconrmed that ever greaterattention is placed on the impactthe Web has on brand awarenessand image. This trend is especiallytrue of certain industries such asluxury goods or consumer goods,

which incorporate the Web morewidely in their media strategies.Branding tools are also becomingincreasingly varied (brand websites,rich media campaigns, presence onsocial networks, content sponsoring,etc.). Measuring the effectiveness ofbranding tools therefore representsa key priority for advertisers.

As demonstrated in a study by Bain& Company, although performanceinvestments represented 59%27of the market in the United Statesin 2009, 61%28of these sameadvertisers judged the internet tobe well-suited to addressing their

branding needs (Figure 2).

The all-inclusive aspectof this assessment shouldnot conceal the individualobjectives of advertisers,which can be classiedin three categories:

Online retailers whosecommunication budgetscorrespond to objectivesof increasing web trafc

and online salesAdvertisers who view the Web

purely as a means of promotingthe brand and whose mainobjective does not necessarilyfocus on acquiring customersor increasing sales (forexample, in the luxury goods orconsumer goods industries)

Advertisers who combinebranding with online salesand customer acquisition (for

example, in the automotiveand telecoms industries)

Measuring brand effectivenessis becoming increasinglyimportant for these last twocategories as they refocus theirbudgets on digital media.


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Figure 2 Breakdown of advertising expenditure and advertisers marketing objectives USA, 2009

Creating awareness

59 %

perfomance

61 %

branding

Generatingfamiliarity

Promoting

consideration

Driving

traffic/Purchaseintent

Promoting loyaltyHybride

Performance

CPM

37 %

59 %

4 %

26 %

15 %

20 %

32 %

6 %

Advertising expenditure - 2009 Marketing objectives for which

advertisers believe the internet to be

most suitable - 2009


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In addition to the clickthroughrate, several studies haveassessed the impact thatthe Web has on brandawareness, recall and image

While advertisers continue to benaturally inclined to using TVfor building or developing brandawareness, many studies showthe Webs potential impact on the

different components of a brand:

Impact on brand awareness

To determine the impact thatadvertising has on brand awareness,Nielsen analysed the impact ofseveral campaigns broadcasted onTV and on catch-up TV on the Web29.It appears that in certain sectorssuch as the automotive and beverageindustries, the Web doubled the

brand recall compared with TV(Figure 3).These higher onlinerates can be explained in particularby the internets capacity to retainthe users attention and also by alower number of advertising spots.

By studying several thousandcampaigns, Millward Brownestablished that the most effectivecampaigns (top 20%) scoredsix points more on aided brandawareness than the overall average30.The least effective campaigns(bottom 20%) scored half ofthe overall average in terms ofthe impact on brand awareness,demonstrating the broad rangeof impacts. These wide-rangingresults highlight the impact thatformat, design quality and targetingaccuracy have on brand awareness.

20%

27%

37%

29%

40%

55%

44%

50%

Automotive Beverages Household

products

Restaurants

Figure 3 Brand recall at D+1 of viewers exposed to a TV or online videoadvertisement Nielsen IAG Panel, 2009

Figure 4 Video ad recall rate after exposure TV vs. Web Nielsen IAG Panel, 2009

Improved advertisingmessage recall

The Web is proving to be a successfulmeans of stimulating message recallin particular with the emergenceof video formats. A Nielsen study31reported that an online videoadvertisement had a recognition rateof 54% one day after exposure and

44% six days after exposure, stillhigher than the recognition rate ofa TV message at D+1 (Figure 4).Targeting, as well as the more active

viewing environment, can once againexplain the Webs performance.

54%52% 52%

47%46%

44%

44%

42%

1 2 3 4 5 6 7

Number of days after exposure to the campaign

TV (J+1)

Exposed to a TV advertisement

Exposed to an online video advertisement


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Improved brand image

Several studies also revealed thepositive impact of the Web on thebrands image. For example, ananalysis conducted on a displayadvertising campaign run byMcDonalds in 2009 shows thatthe online campaign improvedbrand identication by 10%.Similarly, a LOral campaign

succeeded in improving brandidentication by 9%32.

The impact that online advertisingcampaigns have on the brandsimage can be further improvedby appropriately combiningdifferent interactive advertisingformats. A study carried out byNielsen in 200933demonstratesthat mixing display and videoformats considerably improves

a brands image in comparisonwith a display-only campaign,notably in terms of innovation(41%) and performance (30%).

Positive impact onpurchase intent

By studying display advertisingcampaigns run by four advertisersfrom different industries,Mdiamtrie NetRatings revealedthat the purchase intent ofinternet users who viewed thesecampaigns increased by 11%34.The impact on purchase intent isinuenced by the type of websiteon which the advertisement is run.The Dynamic Logic35study carried

out for OPA (Online PublishersAssociation) reports that campaignspublished on premium websites havea stronger impact on purchase intentthat those published on advertisingportals or networks (Figure 5).

rise inpurchase

intentionsafter exposureto a displayadvertising

campaign

Figure 5 Difference in purchase intentions between exposed and non-exposedinternet users according to the media used USA, 2009

100 100 100 100

270

210190

NS

Non-exposed Exposed

Professional content

premium websites

Market average

MarketNorms

Portals Networks


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Post-tests usedwith greater frequency tomeasure effectiveness

Some of the advertisers weinterviewed within the frameworkof this study carry out post-teststudies which specically analyseonline media. These tests allowthem to measure the impact thattheir own online campaigns have

on their brand. These analysesvery rarely apply to Web-onlycampaigns since the advertisers

we met hardly ever use this type ofapproach. The tests can also be usedto measure the impact of mixingmedia on branding objectives.

Measuring exposure toonline advertising is anew way of guaranteeingthe visibility of onlineadvertisements

With the increasing number ofadvertising banners and the growinguncertainty surrounding theiractual visibility, some indicatorsfor measuring advertising visibility

have been developed whichassess the effectiveness of thebanner displayed and calculateits effective display time.

These approaches aim to measurewith greater accuracy the actualimpact of display advertising. Theyalso enable advertisers and agenciesto measure the performance ofpages, formats and advertisingslots in order to optimise their

campaign. Advertising salesagencies also use these indicatorsto optimise the performance oftheir advertising slots and thereforedifferentiate their product offering.

The graph inFigure 6,publishedin an Alenty study for APPM36(now SPM - Syndicat de la pressemagazine) shows the differencein performance of various formatsin terms of their visibility time.

During post-tests onmultimedia campaigns,

we notice, for example, theincremental impact of onlineadvertising on internet users

who are also exposed to TVto some extent. This enablesus to allocate budgetsbetween different media

in a way that improvesthe overall impact of thecampaign on our audience.Matthieu CouturierMedia Director, Leclerc


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Measuring exposure timeis a good way of improvingthe effectiveness of onlinecampaigns. It provides amore realistic image of acampaigns effectivenessthan simply measuringthe display time. More andmore advertisers are usingthis indicator and it willcontinue to be improvedover the coming years.Mathieu MorgenszternGeneral Manager, Isobar

These approaches are currentlybeing trialled in France and arelikely to be more widely used in the

years ahead. They should lead tothe development of pricing modelslinked to the advertisements actualdisplay time (guaranteed visibility)and facilitate the classication ofadvertising spaces according to theiraverage exposure time. This couldcreate a more transparent market

with clearer distinctions betweenpremium and standard slots.

Measuring interaction withrich media formats is a keyindication of the impact acampaign has on a brand

In order to measure interaction,time and frequency indicatorshave been developed:

The interaction rate (or Dwellrate) measures the percentageof internet users who interact

with a given bannerThe interaction time (Dwell time)

measures the average time duringwhich internet users interact withthe advertisement (for example,

video viewing time or expansiontime of an expandable banner)

The Dwell indicator is calculatedby multiplying the interactionrate with the interaction time

These indicators offer an interestingalternative to the clickthroughrate which is often inadequate forformats which do not necessarilyincorporate a call to action. AnEyeblaster study recently showedthat interaction rates for richmedia formats are around 10%,

while only 4 in 1,000 internetusers click on standard formats37.

A correlation can be observedbetween interaction and impact onthe brand. A Microsoft Advertisingcase study38 reported an increaseof 7 points in terms of brandawareness for advertisements

with higher interaction rates.

There is also a correlation betweenthe Dwell indicator and the internetusers subsequent browsingbehaviour. A study conducted in

2009 by Microsoft/Eyeblaster39

on 800 campaigns showed thatthe 10% of campaigns with thehighest Dwell rate generated:

70% more trafc83% more time spent

on the website125% more pages viewed

in comparison with the10% of campaigns withthe lowest Dwell rate.

Monitoring interaction indicatorsin real time provides a keyindication of the reputation andrecognition of the brand. Theaverage results recorded in theEyeblaster study40were as follows:

8.7% interaction rate53 seconds

Rich mediainteraction ratearound

10%


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There are signicant differencesbetween industries: for example, theentertainment industry generatesdouble the average Dwell rate dueto the creative nature of its content.

According to the advertisers weinterviewed, levels of maturity inrich media and video formats varyconsiderably. Most advertisersemphasise that the specic

indicators available for measuringinteraction time offer an interesting,responsive and cost-effective rstinterpretation of the campaignseffectiveness. Nevertheless, they

would not be willing to replacemore detailed post-tests becausethey do not provide any indicationof the impact on the brands image.

Analysing browsingbehaviour measures thebrand experiencegenerated by onlineadvertising

Advertisers whose main objectiveis not to increase sales, but todevelop their brands presence andimpact on the internet are to anincreasing extent aiming to develop

the brands experience. On theWeb, this can be represented by

visits to a brand website or a partnerwebsite or by participation in aspecic action linked to the brand.

To evaluate the impact of theseactions, we can measure thetarget internet users engagementby determining the impacta campaign has on his/hersubsequent browsing behaviour.

Measuring advertisingvisibility meets theexpectations of advertisers

who seek to understandthe impact their internetcampaigns have onbranding. This conceptneeds to be standardised,but it will be as fundamental

for measuring onlineadvertising performance asimpressions and clicks.

Alain LevyChief Executive Ofcer, Weborama

10 15 20 25 30

Dynamic banner

Dynamic square banner

Skyscraper

Standard banner

Square banner

Figure 6 Average visibility time by format (in seconds) Estimates accordingto Alenty data 2009


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In addition to theclickthrough rate, wemeasure the brandexperience offered tointernet users. Whatever themeans of communication,

we endeavour tomeasure engagement inthe form of committedinteractions (videos viewed,comments posted, gaming

sessions, calls, etc.)Julien GuiraudDigital Marketing Director, Coca-Cola

The Webs ever growingcoverage currently makesthis an essential formof media for expanding

coverage and increasingmessage repetition oncertain targets.Matthieu CouturierMedia Director, Leclerc

This can take several forms:

Time spent by the targetinternet user on the advertisersor partners website

Number of pages viewed bythe targeted internet user

Actions carried out on the website(viewing a video, registeringfor a competition, signingup to a mailing list, etc.)

Depth of browsing (i.e., thenumber of pages visited onthe same clickstream)

Engagement on social networks

However, these indicators cannotbe standardised and comparedacross the market. They are specicmeasurement tools which are usedin one or more campaigns and

which are customised in line withthe brands multimedia strategy.

The Webs potential as abranding medium dependson the ability to comparedifferent media in terms ofcoverage and repetition

In order to compare differentmedia more easily, for the pastfew years media agencies havebeen referring to the Web GRPconcept. This is when the grossrating point is applied to theinternet, and is dened as follows:

GRP = the percentage of atarget audience reached by anadvertisement x the messagesaverage repetition per targetedindividual. The limitation inusing this indicator on the Webessentially concerns the qualityof the method used to gauge theWeb audience, attributable tothe large number of publishers(for example, compared with

the number of TV channels).

Nevertheless, some of the advertiserswe interviewed use the Web GRPwhen preparing their media strategy,often alongside a recognition beta,

which measures the recognitionrate for different advertising mediafor a given target audience. Thisbasis is then used to determinethe memorised coverage.

Measuring the effectiveness ofonline advertising is a key issuein managing campaigns and

justifying the media. Selectingwhich types of media to uselargely depends on coverageindicators and planning tools.


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What are the branding objectives ofmy online advertising campaign?

My brands reputation?

Recognition and association of the slogan with the brand? Brand awareness and image (opinion, preference)? Purchase intent?

What are the best interaction andengagement indicators for measuring theeffectiveness of my image campaigns?

Interaction rate/time? Average number of pages viewed after the campaign? Average length of visits? Number of videos viewed? Others?

Key questions for advertisers

What impact do these campaigns haveon these different branding objectives?

By comparison with other media? When combined with other media?

How often should they be measured?


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Processes and resources

Conduct post-tests on onlineadvertising campaigns

Process

Conduct post-tests with marketresearch institutes to assess theimpact that online advertising has onthe different aspects of branding.

Target deliverables

Analysis of the impact of onlineadvertising campaigns on

Awareness RecallAssociation of the message with the brand

Purchase intent

Comparison of how the internet and othermedia score on these components

Separate analysis by product andby target

Comparison with market norms

Comments

Nowadays, these analyses are frequentlycarried out on other media, in particular TV.However, a growing number of advertisers,

notably in the consumer goods industry,conduct regular post-tests to assessthe performance of their online brandingcampaigns. This investment is vindicatedby the increasing portion of communicationbudgets allocated to online strategies.

Measuring interaction inrich media campaigns

Process

Assess the impact of rich media/videocampaigns with interaction indicators

Interaction rate Interaction time Dwell compound indicator

(time x interaction rate)

Target deliverables

Analysis of the performance of richmedia campaigns

Comparison of the respectiveperformance of rich media campaigns

Definition of objectives

Comments

These analyses can only be conducted onrich media campaigns, on which advertisersare spending an increasing portion of their

budgets. A large number of ad serversprovide advertisers with data, but thesedata are used inconsistently today.

Measuring the actualexposure of onlineadvertising campaigns

Process

Measure the actual exposure of thesecampaigns, i.e., how effectively banners areviewed by internet users, and measure theaverage exposure time of these campaigns.

Target deliverables

Percentage of displayed advertisementswhich are actually visible

Average exposure time of displayedadvertisements

Comments

These indicators are currently beingtrialled, and although they shouldbecome more widely used, their high

technical cost is slowing down take-up.In the long term, these indicators couldhave a strong impact on purchasingmodels by enabling advertising salesagencies to develop advertisingoffers with guaranteed visibility.


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Measuring the impactof online campaignson ofine sales

The internet has become asinuential as TV in promotingthe impulse to purchase

The internet is having an increasingimpact on consumer behaviour andbuying strategies. Online advertising

is proving to be an effective meansof enhancing product visibility,reinforcing purchase intent andtriggering the decision to purchase.Measuring the impact of exposureto online advertising on sales andnot only online sales is thereforea key indicator for advertisers.

Similarly to ofine media, exposureto online advertising awakens theconsumers intention or impulseto purchase. In 2009, 24% ofFrench internet users interviewedby IFOP41responded that theycould be enticed to buy a productadvertised online. The samepercentage of respondents saidthat TV advertising could inuencethem in the same way (Figure 7).

Furthermore, a study conducted byIAB NetImpact in 2009 revealed thatexposure to an online advertisingcampaign increased internetusers purchase intent by 11%42.

After having been exposed to anonline advertising campaign, 59%of internet users said that theyintended to purchase or use theadvertisers products, compared to53% of internet users who had not

been exposed to the campaign.

These studies reveal that thereach of online advertising isnot only restricted to onlinesales. Understanding the impacton ofine sales has becomeessential for advertisers todevelop their media strategies.

7%

9%

17%

20%

24%

24%

Outdoor display advertising

Radio

Press

In-store advertising

TV

Internet

Figure 7 Advertising media having the greatest impact on the impulse to purchase(% of respondents) France, 2009


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Online advertising hasbecome essential toconsumers in preparingtheir purchases

In addition to fuelling the impulseto purchase, consumers relyincreasingly on the internet as asource of information and a mediumfor preparing their purchases. In2010, eight out of ten internet users

surveyed by Mdiamtrie respondedthat they consulted a website beforepurchasing a product, representing3% more than in 200943. Internetusers primarily seek reliableinformation by checking descriptionsof the product they wish to buy(66%), consumer reports (63%) orother websites such as those allowingconsumers to compare prices (55%).

For 29% of French internet users, theinternet is the most reliable mediumfor nding information aboutpotential purchases (Figure 8).Thisis even more the case in the tourism(63%) and automotive (53%)industries44where purchases are lessfrequent but involve higher amounts.

In this context, internet users believethat online advertising plays a key

role in the purchasing process.According to an IFOP study forMicrosoft Advertising on the impactof online advertising on preparingpurchases, some three out of fourinternet users consider that onlineadvertising helps them nd moredetailed product information thanother media (Figure 9).On thelookout for the best prices, 69%of internet users associate onlineadvertising with the possibility

of nding printable coupons45

.

internetusers

check theinternet beforepurchasing a

product

8out of10

Figure 8 Media considered the most reliable (% of respondents) France, 2009

6%

12%

13%

19%

20%

29%

Outdoor display advertising

Radio

Press

In-store advertising

TV

Internet


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As the internet becomes morewidely used for preparingpurchases, online advertising isproving to be an effective meansfor driving brand awarenessand guiding consumers. Onlineadvertising is central to corporatedigital strategy, alongside websitedevelopment and e-CRM solutions.

Online advertising

signicantly increases salesmade through bricks-and-mortar distribution networks

Several international studieshave shown the impact ofonline advertising on physicalsales. Internet users thathave been exposed to onlineadvertising are more inclined topurchase products in stores.

By analysing the purchasingbehaviour of a panel of 185million consumers, the marketresearch institute comScorehighlighted the importance ofexposing internet users to displayadvertising campaigns which, onaverage, increase online sales by42% and in-store sales by 10%46.

The study also revealed that thevalue of an average shoppingbasket of an internet user whohad been exposed to advertising

was 7% higher than one whohad not (Figure 10).

rise inonline sales

after exposureto displayadvertising

42%

Figure 9 Advantages of online advertising France, 2009

48%

66%

67%

69%

70%

75%

Higher level of advertisement

recall than with other media

Easy access to the website to order the product

More time to see the product than with TV advertising

Easy access to the website

to order the product

Access to printable reductions

More information available

than with other media

Additional product information

available by clicking on advertisement


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These results highlight theadvantage for advertisers of steppingup their investments in onlinemarketing in order to boost theeffectiveness of their traditional saleschannels. Measuring the impact ofonline advertising on a regular basisshould be part of this approach.

Measuring the impact ofadvertising campaigns

on consumer behaviourand purchase volumethrough post-tests

Post-tests are used to measurethe impact of national advertisingcampaigns on sales in thedistribution network. The traditionalmedia (TV, radio, cinema, pressor display advertising) have beenusing post-tests for years to analysethe impact of online campaigns

on sales. It should be noted thatthe impact of the internet alonehas never been tested since veryfew major national advertisingcampaigns are 100% Web-based.

This system measures the impactof an advertising campaign interms of the amount, frequencyand type of purchases on a givenpanel of consumers. The analysescan be ne-tuned to focus onspecic targets or exposure levelsin order to identify adjustments tobe made for future campaigns.

Econometric models arepowerful tools that steerinvestments according totheir impact on sales. Inorder to be truly pertinentthey require an observation

period of at least two yearsMathieu MorgenszternGeneral Manager, Isobar

Figure 10 Increase in the number of buyers after exposure to a display advertisingcampaign USA, 2008

1,0%

6,3%

1,5%

6,9%

Onl i ne Offline

% of buyers who were not exposed to the ad

% of buyers who were exposed to the ad

+42% +10%


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Advertising (includingonline advertising) clearlyhas a direct and visibleimpact on sales. This is dueto the highly complementarynature of online advertisingand traditional media.

For Citron, combining TVand online advertising has

proven to be particularlyeffective. We systematicallymonitor the correlationbetween advertisingcampaigns and salesdata which allows us toassess this impact on thebasis of experience.Philippe BoutronMedia Director, Citron

Econometric models can beused to measure the impactof advertising on the Web andother media on sales over time

Econometric models illustratesales curves in relation toadvertising. They are useful inplanning advertising actions.

Only a small percentage of theadvertisers we interviewed useeconometric models to assess theimpact of advertising on sales.

The impact of onlineadvertising on sales is oftenmeasured empirically

The impact of online advertisingon sales can also be assessed ina more empirical manner by

using special purpose systems.Point-of-sale surveys can alsobe used to gather informationconcerning a consumers originand reasons for visiting, withouthaving statistical signicance.

Cross-checking sales data with theadvertising media plan also revealsthe trends and impacts of thedifferent media (and combinationsthereof) on sales. These analysescan be ne-tuned based ongeographic or demographic criteria.

Advertisers may occasionallyencounter difculties during theirimplementation and so Web teamsand distribution network teams arerequired to work closely together.


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What is the purchasing behaviour of mycustomers/prospective customers? How doesonline advertising inuence this behaviour?

What percentage of customers seeks informationand prepares their purchases on the internet? What type of information do they look for? What triggers the purchase? What is the multi-channel approach? How doesonline advertising inuence this approach?

What impact does my online advertisingcampaign have on sales and on mydifferent distribution channels?

Do online advertising campaigns boost in-store trafc? Do online advertising campaigns reachand attract new targets? What is the increase in sales generated by online advertising? What is the impact on the amount,frequency and type of purchase? How does this impact evolve over time?

How can I implement an effectivemulti-channel communications strategy?

How does online communications t

into my multi-channel strategy? What resources are required? Do my competitors measure the impactof online marketing on sales?



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Processes and resources

Using post-tests to measurethe impact of onlineadvertising campaignson ofine sales

Process

Survey of a panel of consumers to

measure the impact of advertising ononline sales by comparing the purchasingbehaviours of those that have beenexposed and those that have not beenexposed to the online advertising.

Target deliverables

Increase in purchases by thoseexposed to the online advertising

Exposure to online advertising impactsthe amount and type of purchases

Comments

Measuring the impact of advertising onoffline sales requires the involvement ofmarket research institutes in order to collectand analyse data. These analyses arecarried out annually or for major campaignsand generally cover several media.


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Measuring mediamix effectiveness

Increase in simultaneousTV and internet use

Like TV, the internet has becomea part of everyday life. A studyconducted by Thinkbox inpartnership with IAB UK on the

complementary nature of TV andthe internet revealed that 47% ofrespondents used both media atleast once a day47. Just a few yearsago, advertisers still considered thatthe internet could only be used fortargeting and conversion. Internethas since become a powerful medium

with a reach that is increasinglycomparable to that of TV.

Consumers are increasingly

using different types of mediasimultaneously, especially TVand the internet. A Nielsen studyshowed that the time spent watchingTV while using the internetincreased by 34.5% in 200948.

According to Microsoft, 70% ofEuropean consumers watch TVand use the internet at the sametime at least once a month andnearly 40% on a daily basis49.

Consumer experience hastherefore become central tothe media mix strategy.In order to adapt to these changes ithas become essential to understandand evaluate the impact ofmedia mixing. Broadly speaking,advertisers need to identify theimpact of mixed media campaignsinvolving the internet and traditional

media such as TV. What additionalcoverage does the internet provide?What is the impact on brands andsales? What is the right mediamix? What is the best way to planthe campaign? Changing practiceshave placed these key questionshigh on advertisers agendas.

The internets expandingrole in media plans

The amount invested in onlineadvertising has risen over the lastseveral years and is increasinglycombined with other media50.In 2009, 64% of TV advertisersin France used the internet fortheir advertising campaignscompared to only 32% in 2004.Kantar Media reported that88% of the top 500 advertisersin France advertised online.

As a result, advertisers arestepping up the integrationof online advertising in theirmarketing strategies.


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The internet is not onlya medium with a local,

social or inuential reach,it is also, like TV, a formof mass media. For Eviansinternational Skatingbabies advertisingcampaign, the Web provided

signicant additionalcoverage, with even greater

penetration in the uppersocioeconomic category.At present, our videocampaign has been viewedover 100 million times.Frdric GuichardMarketing Director,Still Water division,Danone

Online advertising boostscampaign effectiveness

Optimising the advertising budget

There is no hard and fast ruleconcerning the optimum budgetallocation. However a recent studyconducted in Germany among thelargest advertising networks inpartnership with Procter & Gamble

looked into what portion of thebudget of a media campaign shouldbe devoted to online advertising51.The study demonstrated that,for the same budget, advertisingcampaigns were more effective

when at least 15% of that budgetwas spent on online advertising.The study also revealed thatdisplay advertising had nearly thesame impact as TV advertising

with a much lower budget.

Several of the advertisersinterviewed reported thatincreasing the proportion of theirmarketing budget spent on onlineadvertising had enabled them toreduce their acquisition costs.

Extending the advertising reach

Increasing the portion of onlineadvertising in the media mix canbe a way of reaching a broaderpopulation for the same budget. Astudy carried out by Nielsen for analcoholic beverage manufacturerrevealed that by reallocating 10%of the TV advertising budget to theWeb, the advertiser succeeded in

increasing its audience by 3.4%and boosting the campaignstotal GRP by 20.7 points52.

Impact on the brand

A quantitative and qualitativestudy performed by Thinkbox53in 2008 demonstrated that usingonline advertising to round out aTV campaign increased brandingindicators by an average of 18

points (Figure 11)and purchaseintent by an average of 21 points.

Numerous studies corroboratethese results and demonstratethat combining internet and TVadvertising, for the same budget,optimises the impact on the brand.

I feel like I know

this brand really well

Brand offers

something unique

I am familiar

with this brand

Seen on TV only or online onlySeen neither on TV nor online

Seen both

3329

5348

39

7167

63

77

Figure 11 Number of respondents who said they would use/buythe brand in the future


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The challenge of measuring theeffectiveness of cross media

Although the majority of advertisersrecognise the advantages of the Web,particularly in terms of providingadditional reach, accuratelymeasuring media mix effectivenessis no easy task. Forrester ResearchInc. conducted a survey amongmarketing managers54that showed

that nearly 70% of advertisers wouldlike effectiveness indicators for TVand online advertising to be moreeasily comparable (Figure 12).

Several ways of measuringthe impact of media mix

Panels

Conducting post-tests withconsumer panels is one way ofmeasuring the performanceof cross-media advertisingcampaigns. By comparing theimpact on consumers exposed to

advertising on one medium withthose exposed to several media,the advertiser can implementperformance drivers such as:

optimising budget allocation byidentifying the best media mix;

customising advertising formatsto the type of message;

ensuring the consistencyof the message deliveredacross all channels;

improving the denitionof campaign targets.

Advertising budgetshare-shift

Statistical models can be usedto measure the contributionof each medium to the overallcampaign. These models measurethe performance of differentmedia plan scenarios on the basisof historical sales data, mediaplans and customer segments.

Basically, the purpose of thesesimulations is to measure thechange in the reach, frequencyand GRP achieved by reallocatinga percentage of the TV (orother media) budget to onlineadvertising. This method allowsadvertisers to measure andoptimise budget allocation.

Figure 12 What do you think about advertising effectiveness indicators?

16%

14%

14%

25%

12%

20%

59%

70%

65%

Comparing marketing effectiveness across media

(TV, Internet, print, etc.) is a challenge for my company

I wish it were easier to compare TV

ratings with online data

Internet usage measurement is more useful

than television viewing measurement

DisagreeNeutralAgree


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What are the advantages of onlineadvertising compared to traditional media?

At rst sight, on reach and repetition? In hindsight, on brand image and reputation? Ultimately, on sales?

How should I effectively manage the media mix? TV and the internet, radio and the internet?What are the most effective combinations? What methods should be used to meetthe campaigns objectives? What is the right media mix? What is thebest way to plan the campaign? How can I deliver consistent messages across all channels? Which media mix should be used for different targets?



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Analysing the impact ofonline advertising onbrowsing behaviour

Prior exposure to onlineadvertising campaignsimpacts internetusers browsing andsearching behaviour

Long-term impact on web trafc

By analysing the results of170 advertising campaigns across apanel of 2 million internet users, themarket research institute comScore55found that advertising not onlyincreased direct trafc, it alsoimpacted web trafc over the longterm. Four weeks after rst exposureto the campaign, the lift (numberof additional visitors) generatedby the campaign rose progressively

to 2.1 points (Figure 13).

Therefore, the clickthrough rateand number of visits generateddirectly by the campaign onlyprovide a partial view of the impactof online advertising on web trafc.

Display advertising boosts onlinesearches related to the brand

Online advertising exposurestimulates online searches. Variousstudies have shown that displayadvertising triggers a signicantrise in the number of campaign-related searches, demonstratingthe intrinsically complementarynature of display advertising

and search. Advertisers shouldidentify and assess this impact,so as not to underestimate thebenet of trafc generated bydisplay advertising on search.

According to comScore56, theprobability that consumers inEurope perform a search on thebrand, or keywords relating to thebrand, is multiplied by 2.3 afterexposure to an online advertising

campaign (Figure 14).

Another study conducted byiProspect revealed that one thirdof internet users had performedat least one search related toan online advertising campaignin the past six months57.

Figure 13 Percentage of internet users that visit the advertisers website afterexposure to a campaign USA, 2008

2,1%

3,1%

3,9%4,5%

3,5%

4,8%

5,8%

6,6%

Week 1 Week 2 Week 3 Week 4

Visitors not exposed to the campaign

Visitors exposed to the campaign

Lift : +1,4%

Lift : +1,7%

Lift : +1,9%

Lift : +2,1%


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Online searches for brands aregenerally carried out on genericterms related to the advertisementscontent. Therefore, one of the majorchallenges for advertisers is toensure consistency between displayadvertising campaigns and keywordspurchased in search engines andbetween advertising and creativecontent across different media.

It is therefore important to analysenot only the impact of displaycampaigns on the number of searchrequests generated in search engines,but also the origin of website trafc(banners, search engines, sponsoredlinks, URLs, related websites) inorder to fully understand the impactonline advertising has on web trafc.

Display advertising promotessite engagement

Display advertising also has animpact on internet users behaviouron the advertisers website58, interms of the time spent and numberof pages viewed. A study conductedby OPA in 2009 showed that internetusers site engagement increased bynearly 50% after being exposed toa display campaign (Figure 15).

Using tracking tools toanalyse post-campaignbrowsing behaviour

What do internet users do afterhaving clicked on an advertisingbanner? How many of themactually click? What sections ofthe websites do they visit? Howmuch time do they spend on the

website? Tracking or analysing

web trafc allows for a betterunderstanding of how advertisingcampaigns impact internet users.

Tracking is used to:

Assess the conversion ratebetween the advertisementdisplayed and the actionperformed on the website(purchase, registration, etc.)

Monitor clickstreams (pages and

sections visited, depth of visit)Measure the time spenton the website

Trace the web trafc origin(banners, search engines,sponsored links, URLs,related websites, etc.)

These analyses ultimatelyoptimise the conversion funnelby simplifying clickstreams.

rise intime spent

on advertiserswebsite after

exposure

50%

Figure 14 Increase in the numberof search engine requests followingexposure to an online campaign USA, 2009

x1,9

x2,7

Brand

keywords

Keywords

related

to the campaign


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Our online campaignsare aimed at boosting siteengagement. Therefore, itis important that we usetracking tools to analyseclickstreams, as thecampaigns success dependson maintaining quality

at each step of the visit.Frank DesvignesE-business director, BNP Paribas

Post-view analysis is akey area for improvementin our online campaigns.Conversion indicators(requests for trials,catalogues, etc.) andbrowsing behaviour analyses(time spent, sections viewed,depth of visit, etc.) allow usto categorise our audienceand assess the impact of ouradvertising campaigns.Philippe BoutronMedia Director, Citron

When analysing browsingbehaviour, it is important todistinguish between site centricand user centric approaches.

The rst approach consists ofanalysing the internet usersclickstream (categories visited,time spent, actions performed)and may be correlated to theadvertisement in the event that

web trafc is generated by clickingon an advertising banner. Thisapproach offers a wealth ofinformation but it does not allowfor cross-checking against internetusers previously exposed to thead. It also precludes analysing theimpact of the advertisement onbrowsing behaviour on the website.

The second approach consistsof using cookies to analyse the

browsing behaviour of internetusers that have been exposed tothe ad. This system is installedon the advertisers ad server andprovides an accurate measurementof the ads impact on the basisof conversion indicators.

The ads impact can bemonitored over a given periodof time (generally 30 days).

These two approaches arecomplementary and not onlylet advertisers learn more aboutinternet users but also enablethem to tailor their websites tointernet users expectations.

Multi-exposure analysisand the impact of messagerepetition are high-potentialunexplored areas

As the internet offers an abundanceof information, internet usersmay not always notice advertisingbanners the rst time they aredisplayed and message repetition hasbecome a key campaign performancedriver for most advertisers.

Figure 15 - Internet user site engagement after exposure to an online campaign USA, 2009

100 100

155 151

Visitors not exposed to the campaign

Time spent by unique visitor

Visitors exposed to the campaign

Number of pages seen by unique visitor


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Multi-exposure analysishas become essential foradvertisers. They need toknow how many timesan internet user has beenexposed to an advertisementbefore buying online. Theyalso want to know if an

internet user has beenexposed to one or morecampaigns before clickingon a sponsored link in orderto find the right mix between

search and display.Irne LabusDigital Analytics Director, Havas Mdia

Millward Browns study on formateffectiveness revealed that thegreater the repetition, the biggerthe impact on brand indicators59.

Yet this technique is not without itsrisks. Advertisers have to nd theright level of capping* to be able tolimit the risks related to advertisinginvasiveness and the brand image.

In order to optimise performance,the analysis of campaigneffectiveness focuses on three areas:

Analysis of advertisingperformance based on campaigncapping. This allows advertisers tooptimise message repetition andimprove the conversion rate.

Analysis of advertising exposureto customers who have bought or

who are in the process of buying

a product (product consultation,recommendations, incompleteorder). This allows advertisersto identify the amount of repetitionthat generates the bestconversion rate.

Analysis of the impact of repetitionon brand awareness and image.

Many advertisers seeweb trafc analysis andclickstream optimisation askey performance drivers

Analysing and understandingclickstreams are recognised as keyperformance drivers by advertisers.

Although all advertisersacknowledge the importance of these

drivers, their level of integrationand maturity of use variesconsiderably. The recommendedapproach taken by certainadvertisers is to implement uniedtracking systems based on relevantindicators selected in line withpre-dened campaign objectives.

Maturity in the use of tracking toolsdepends on the advertisers needs.For example, online retailers have

already been using clickstreamanalysis for several years as they aresubject to ROI-related objectives for

which clickstream optimisation is akey performance driver. Branding-oriented advertisers make lessuse of this technology but areincreasingly aware of the potentialof these tools for customer analysisand multi-channel approaches.

*According to IAB, capping is the maximumnumber of times a user is exposed to the sameadvertisement of a given campaign over a de-

signated period of time


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How much trafc does eachsource contribute to my website?

Display advertising? Search engines? Sponsored links?

What are my customers clickstreams?

What is the post-click/post-view conversion rate? Which sections of the website did they visit? How much time on average did they spend on the website? What is the abandon rate at the different steps of the visit?

Documents

IAB SRI Online Advertising Effectiveness v3