Internet Advertising Effectiveness

8/13/2019 Internet Advertising Effectiveness

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L. Flores, Worldwide Advertising Conference, Rio de Janeiro, November 2000 Page 1 of 18

Internet Advertising Effectiveness: What did We Learn and Where are

We Going?

By Laurent Flores, Vice-President, Division Director

Ipsos-ASI Interactive

[email protected]

The paper’s overall objective is to share the author’s experience of how

internet advertising works and how it contributes to brand building. Byleveraging over 5 years of research measuring internet advertising effects,

the author reviews the value of different online advertising formats ranging

from banner and sponsorship to rich media. He then investigates the current

challenges and potentials of internet advertising with a specific emphasis on

the promising challenge of mixed media strategies, integrating online

advertising and other traditional types of advertising.






Whatever the form of communication, the nature of the response expected depends on the

nature of the campaign objectives. These objectives should therefore guide the advertiser in evaluating campaign effectiveness:

- Is the primary objective of the campaign to induce an immediate response such as

purchase? If so, then the level of click and revenue generated could be goodindicators of this effectiveness.

- Is the campaign primary objective to increase awareness and change consumer perception of the brand over time? Then, the simple level of click may be misleading

and even more so, irrelevant. We then need measures of branding effects such asrecall, communication and persuasion.

Thanks to the IAB study in 1997, we know that exposure to banner advertising does

activate a response before and beyond click. The recent release of the AdKnowledge E-Analytics Online Advertising Report (2000) provides an even stronger perspective on the

potential impact of the simple ad exposure on conversion events. The report clearly

states:

“On average, across multiple advertisers and campaigns tracked by AdKnowledge over

the last 6 months, there are more conversion events from users who only viewed an ad,but did not click, than from users who clicked. This yields three important conclusions:

1) The potential ROI impact of Internet advertising is much greater than

previously thought, because advertisers only track sales from clicks and tend to ignore the brand impact on sales.

2) Advertisers who base decisions only on clicks or even post-click conversionsmay miss important effects of their campaign, including the impact of animpression on the propensity to convert.

3) As noted in our Q3 1999 Online Advertising Report, Repeat Conversions are

also a significant source of returns on an advertising investment.”

These findings further emphasize the need to measure effects induced by ad exposureitself and antecedent to any kind of behavior or ‘interaction’ such as click. This

measurement will likely take place before the last stages of the ‘Expanded ARF Model’ proposed by Harvey in 1997, where measures of level of attention (recall), perception

(communication) and persuasion can help predict and better understand the brandingeffects of online advertising.

Indeed, since early 1997, when we started measuring internet advertising, we thought

that, like for traditional advertising, the consumer experience of online advertisingdepends on his/her ability to be exposed to the stimulus. Once exposed, he/she needs to

notice the stimulus (Recall), he/she needs to get the message (Communication) before being persuaded (Persuasion). Persuasion can take different forms—from attitude change

to behavior change—depending on the advertising objective. However, the internetintroduces an additional dimension that we call ‘Alienation’ (Figure 1). This refers to the

fact that the internet is an active medium. Unlike television, the internet puts theconsumer in control of the experience, moving the role from being a passive receiver to

that of an active receiver. The challenge is then to build advertising pull strategies, rather then advertising push strategies. The measures of successful internet advertising are not




only relying on Recall, Communication, and Persuasion as in traditional media, but also

on a measure of Alienation. The former measures refer to the ad’s ability to involve theconsumer rather than to disturb his/her surfing experience. Measures such as Likeability,

Interest, and Suitability of the ad fall into this category of measures.

Review of Key Findings

We will review findings in the light of our ‘Internet Advertising Consumer Model’ to

understand the value of:

1. Different Advertising Formats (such as banners, banners with daughter window,

shared real estates, and interstitials)2. Sponsorship

3. Broadband Advertising

This learning comes from different studies that Ipsos-ASI Interactive conducted over thelast three years. They all have in common the objective of understanding the value of the

creative. They were conducted in a pre-test or laboratory type of environment, where weare able to control the consumer experience, and represent a valid approach to our

objective of understanding the branding effects of online advertising. Although some of the information might seem intuitive in nature, we now have data to support strategies in

line with where the common sense of marketing has been directing advertisers.

Before we actually enter the data presentation, we can never suff iciently insist on one of our most important l earnings—that no single ad model works like a magic bul let . In

other words, research shows that no single ad type has consistently outperformed theothers. Along the same lines, we also found that the objective of a part icul ar ad should

dri ve the expectations for its perf ormance . Time has proven that objectives may run

H:\PRESENTATIONS\MARIANNE\1099ARF.PPT, 6

“Internet Advertising Consumer Model”(Figure 1)

Minimize

Alienation

Persuasion

Communication

Recall




from basic branding to relationship marketing to sales generation, and that click-through

can no longer be a sufficient and exclusive performance indicator.

1. Reviewing the Value of Different Ad Formats

From Table 1, it becomes clear that not only can larger ad units (such as banners with

daughter windows or interstitials) get substantially more notice and can communicatemore, but they can also double the level of click in comparison to simple banners.However, as highlighted before, this does not necessarily mean that bigger is always

better. In fact, experience shows that in some cases this could happen to the disadvantageof the consumer experience. This is where the Alienation factor of our Internet

Advertising Consumer Model comes into play. The ad can be too disruptive for the valueit brings to the consumer; he/she will take away a negative perception of the ad and the

brand…and in some cases of the site itself! The following chart (Figure 2) illustrates this by showing that Recall and Click tend to decline when the file size of the ad is bigger.

Bigger file sizes may bring better effect and animation, but they also bring higher downloading time resulting in consumers’ waning captive attention and higher propensity

to leave the page.

ARF - Laurent Flores - [email protected]

Ad Format Effect(Table 1)

Banners

Shared Real

Estate

Banner with

DW Interstitial

% % % %

Recall 100 175 183 202

Clicked on ad 100 185 215 239

Conveyed primary message 100 194 128 183




It is also interesting to notice that better response is not necessarily linked to bigger filesize. In fact, it has been systematically found that interactive components built into a

simple banner ad, such as drop-down screen or click-and-drag, can double the levels atwhich consumers will click. Not surprisingly, the more surfers can do within an ad—and

thus with the brand—without leaving the content, the more likely they will interact withit (Figure 3).


The Impact of File Size(Figure 2)

40

59

71

60

31

6359

54

40

29

28

35

32

2827

19

17

15

1-10 11-15 16-20 21-30 31-40 41-50 51-60 61-75 76+

Recall Click

File Size


Interactive Ads Increase Response(Figure 3)

12 %

29 % 27 %

34 % 33 % 32 %

Banner Pop-Up Interstitial

Click Through

Click Within

Interaction




The lesson is that we need to always remember that the medium is an active medium. Be

creative, but within the space and limitations that the medium offers!

2. Reviewing the Value of Sponsorships

As quoted in our introduction, sponsoring has grown at an exponential rate since 1994 to

account for a total of 27% of total online advertising expenditure (source IAB 99). It istherefore important to investigate its effectiveness. Using the methodological design of

our copy-testing methodology, where respondents are exposed to a controlledenvironment of 5 pages of content, during the course of 1999 we had the chance to run a

series of tests able to assess the branding effectiveness of sponsoring advertising. We willshare the main highlights of these studies in the following paragraphs.

As in television, we qualify sponsoring advertising as the basic association of a brand

name with a site. Of course, this level of association may vary in its intensity, dependingon the level of brand presence within the site. This may range from a simple banner to

heavy brand presence on all pages and background, to dedicated content brought anddeveloped by the brand in conjunction with the site. When the research project was run,

we managed to get examples mixing different levels of brand presence:

- One simple banner ad located in the middle of the evaluated site: ‘Banner Only’ - Brand Logo on Home Page only (‘YYYY prefers XXX, on the top/right of the

page’): ‘Home Page Only’ - The same Brand Logo on 3 pages: ‘3-page’ - Brand logo on each page of the site (5 pages): ‘5-page’

- Partnership statement: ‘YYYY in partnership with XXX’ on each page: ‘Brand Light’ - Brand Logo and Product in Background of every page: ‘Brand Heavy’

Figure 4 shows level of brand Recall for each type of sponsorship varying from simple banner (‘Banner Only’) to heavy presence of the brand within the site (‘Brand Heavy’).

Results are indexed to ‘Banner Only’ (100).

Recall of Sponsorships for Brand (Index to Banner Only)

(Figure 4)

Yes

Brand A

Brand B

Brand C

a/b/c/d/e/f = Si nificant at the 90% confidence level

156 155

13 0

10 0

20 8

24 2

5-page

A

(154)

3-Page

B

(151)

Hompage Only

C

(152)

Banner Only

D

(152)

Brand Light

E

(153)

Brand Heavy

F

(166)






3. Reviewing the Value of Broadband Advertising

In our review of different types of internet advertising, we would not be complete if we

did not provide a perspective on the value of broadband advertising. Recent publicationsall seem to suggest an upside potential of ‘rich media’ advertising (Briggs, Stipp) in its

ability to increase brand building. The paradox in the case of broadband advertising is therelative lower reach of high-speed connections in comparison to narrowband connection.

Although US penetration for 2000 is under 10% (among online households) Jupiter Communication predicts that nearly a fourth of US households will have high speed

internet access in 2003. We therefore think that knowing up front the value and upside potential of broadband advertising will help further legitimize the medium as a viable and

powerful brand building vehicle and will further foster its development.

Table 3 shows a comparison between rich media and narrowband advertising. The rich

media data come from original projects we conducted with Excite@Home in 1998 and1999, the narrowband data come from our copytesting database.

Results clearly suggest the upside potential of broadband advertising in its ability to get

recalled and get clicked. Interestingly, ad likeability is not significantly different betweenthe two types of advertising. This simply suggests that the value of the creative is the key

to any positive consumer feedback; although broadband offers expanded possibilities,narrowband advertising can be effective when creativity is properly leveraged.

Furthermore, the same studies also provide insights on the consumer perception of the

broadband ad model in comparison to other mediums such as television and print


‘Rich Media’ Advertising Effect(Table 3)

Rich Media Narrowband

Banners

(I & II)% %

Recall 100 78 -22

Click 100 65 -35

Likeability 100 105 +5

* Advantage to Rich Media




advertising, and in comparison to the more traditional internet narrowband ad models

(Table 4).

Data suggest that broadband advertising seems to be a hybrid of television and print

advertising, far more so than narrowband advertising. Although television leads the group

in terms of its ability to ‘engage’ the audience, broadband follows immediately and performs better than print and narrowband. The real added value of the model relies on itsabove-average ability to involve the consumer. Interaction, interactivity, and the benefits

they bring in terms of enhanced learning about the product seems to answer consumer needs for a more personalized experience by:

- providing information that they want to know

- delivering information that they can trust- helping them understand the product

- being relevant to them

Furthermore, in our mind, the overall results also suggest that each medium offersspecific individual benefits able to enhance the consumer experience in a complementaryfashion. While television is able to ‘engage’ a large audience and ‘get the word out’ (a

medium of ‘reach’), it seems that rich media advertising has the ability to provide adeeper and more personalized experience.


Television Print Broadband NarrowBand

Base: Total (2602) (2602) (2602) (2602)% % % %

a b c d

Top Box (Agree a Lot)

Fun 31 bcd 5 24 bd 12 b

Engaging 29 bcd 9 23 bd 13 b

Enjoyable 28 bcd 8 19 abd 9 b

Helps you understand the product 15 19 a 29 abd 19 a

Relevant to you 15 17 ad 22 abd 14

Provides the information that you

want to know 10 17 ad 26 abd 15 a

Delivers information that you cantrust 8 d 12 ad 16 abd 6

Broadband Perception(Table 4)




Current Trends and the Way Forward

Since our involvement in the internet industry, we always considered that everyday

brings something new and challenging. Although this remains true, more than three yearsof experience in measuring advertising and brands online certainly gives you a better read

on current and future trends. The following paragraphs just represent our modestcontribution to the subject.

1. The Importance of ‘Copy’ in Creating ‘Quality Advertising’

Of course, for ‘traditional’ advertising researchers, this affirmation may sound obvious.

However, it is only recently that sufficient data allowed us to affirm the same for internetadvertising.

For decades now, research in traditional media has shown that good creative/copy can actas a real media multiplier. We think that the same is true for online advertising. In our research, we systematically found that copy quality is key to any brand success. Figure 5

illustrates this. In this example, six different banners were developed for the same brandusing same strategy. Results clearly suggest that depending on which creative is used,

ROI may dramatically changed. If Ad 1 or Ad 6 were used in place of Ad 4, theadvertiser may have lost up to four times the ability of consumers to recall the brand.

This is important, of course, but even more so in a media that is becoming more and morecrowded. On one hand, according to AdRelevance, a division of MediaMetrix, the

number of sites looking for advertising constantly increase as well as the number of advertisers investing online, on the other hand consumers become themselves more and

more demanding. Our research systematically shows that the more experience theconsumer has online, the less accepting he/she is of advertising (Table 5).


Online Experience and Advertising

Perception(Table 5)

1997 or later Before 1995

% %

Ad Ratings (% Agree Strongly)

Entertaining 19 15

Believable 24 21

See again 28 17

More interested 18 12

Irritating 7 15




Therefore, the challenge for advertisers is to create ‘quality advertising’--the kind of

advertising able to invite the consumer to a deeper brand experience, noticeable, non-

disruptive and attractive. Is this a trend that our data confirm? The answer isunfortunately, “No”! In fact, we actually noticed a decrease in ad recall between 1998and 1999, (Figure 6) true for both broadband and narrowband advertising:

Unlike television advertising, as we have shown in France and the US (Flores 1998),

quality of online advertising is not yet sufficient. We will share a comment made by RichLeFurgy, Chairman of the IAB, that concurs our finding. Back in 1999 Rich clearly

stated that “we have yet to see the day when as much time goes into creating banners astelevision ads”. We think that this time has not yet come although things are progressing.

In fact, we want to use this information as a wake up call for the whole industry. We

believe that online advertising has a real ability to contribute to brand building but willonly do so if properly leveraged by advertisers and their agencies! Then let’s start

thinking Quality rather than Quantity only! Let’s make sure that our experience andrecommendation will not only serve the US internet industry but also the global internet

industry. For example, let’s work towards keeping the same level of advertising recall inBrazil in 2000 and the following years (in Brazil the 2000 average recall equals the 1998

US recall average), let’s leverage our experience in the US to insure that internetadvertising becomes a real synonym of quality! (Figure 7)


Ad Recall Declines(Figure 6)

100%

63 %

100%

75 %

Sept. '98 June '99 May '98 May '99

Broadband

(Excite@Home

studies)

Narr owband (Banner Avg.)

Indexed to earlier read




2. The Importance of Media: Adjusting Media Strategy to Campaign Objective

In traditional advertising, our review of advertising effectiveness will not be complete

without exploring the contribution of media weight to advertising effectiveness. Thesame is true for online advertising, where our experience shows that media weight can be

an important component of effectiveness. In fact, our online tracking data regularlyshows that branding effects can not be observed without a minimum of media pressure.

Even if this sounds straightforward, too many times we’ve seen online ad budgets beingshut down or decreased to the profit of other media. If so, how can we expect significant

and measurable effects of any online marketing program? As Figure 8 shows, we knowthat online advertising awareness is reactive to media investment: The more you spend on

quality copy, the better your chance to be noticed and change consumer perception.


Recall Average: Brazil vs US(Figure 7)

100% 100%

75 %

Brazil 2000 May '98 May '99

Brazi l Average US Average

Indexed to US May 98 Average

H:\PRESENTATIONS\MARIANNE\1099ARF.PPT,15

Smoothed 8 weeks

M a r c h 2 8

M a r c h 7

F e b r u a r y 2 2

F e b r u a r y 8

J a n u a r y 2 5

J a n u a r y 1 1

D e c e m b e r 2 8

D e c e m b e r 1 4

N o v e m b e r 3 0

N o v e m b e r 1 6

N o v e m b e r 2

O c t o b e r 1 9

P e r c e n t

40

30

20

10

0

Brand Online Ad Awareness

7 Million Imp. 300,000 Imp.

Impressions

Recall Does Move with Spend(Figure 8)




Once media weight has been accepted as being an important component of any campaignsuccess, the next challenge is to optimize frequency of exposure. Existing research seems

to be contradictory on this topic, but in our mind this is probably because things arediscussed or evaluated in regard to different objectives.

The first data available on the subject go back to early work conducted by DoubleClick in

1996. At that time, DoubleClick looked at ‘banner burnout’ in terms of level of click.They concluded “after the fourth impression, response rates dropped from 2.7% to under

1%. We call this banner burnout, the point at which a banner stops delivering a good Return On Investment (ROI)”. Other more recent research (July 2000) from

DynamicLogic suggests that “there is a direct correlation between the branding value of online advertising and the frequency of exposure; by increasing exposure levels from one

to four or more, advertisers can virtually double the impact the advertising has on Brand Awareness”. As pointed out earlier, these data may be contradictory at first sight but in

fact are not. Each supports different levels of frequency necessary to generate different

types of effect; branding effect for DynamicLogic or click for DoubleClick. If thesefindings were misinterpreted, the debate would raise more questions than answers,whereas discussed earlier in this paper, evaluation should depend on the campaign

objective. If the campaign objective is sales lead, sales, or any other type of directmarketing objective (usually measured by click), common sense will agree on the fact

that repetition cannot dramatically increase ROI. People are either interested and thenclick, or not interested and then don’t click. However, in the case of brand building, click

may provide additional benefit but is not the only measure to look at…recall, awareness,liking, image are key to the evaluation process and are indeed likely to move with

multiple exposures!

Our own experience of online brand building is in line with these first findings andsuggests that optimal levels of frequency depend on the value of the copy and the brand

itself. Better copy means lower necessary frequency. A more reactive brand to onlineinvestment means lower necessary frequency.

3. The Promise of Mixed Media Strategies: Building One to One Relationships in a

Mass Marketing World

The 90’s have been the years of marketing and branding where companies started to fully

recognize the value of brand as their most important asset. For a short period of time,marketers may have taken the time to enjoy their new corporate power, however the

environment brought them two new challenges: globalization and the internet. Challengessuch as: How can I market my brand to a global consumer? How do I need to adapt my

brand to the challenges and opportunities of the internet? Can I just continue to use mytraditional techniques and build my brands on the lessons from the past that have been so

successful so far?

Of course, the answer is “no”. In the case of the internet, we think that the challenge istwofold. Marketers need to:




- Be tactical, to understand the specifics of the internet and use it appropriately. For

online advertising, understand what works and what does not work.- Be strategic, to use the internet in synergy with other media to specifically leverage

the medium as a powerful means to deepen the consumer relationship with the brand.

Once the former has been properly learned, we think that the latter offers the most promising reward for today’s marketers. The one strategy of our modern world is and

should be ‘One to One 360° Branding’ to make sure that the consumer is surrounded bythe brand anytime, anywhere. In this strategy, the internet offers the invaluable asset of

building individual relationships, whereas other media, such as television, offer brand building for ‘the mass’. When used together, our experience shows that television and the

internet can dramatically benefit the brand and the consumer. The following example(Table 6), from continuous online advertising and brand tracking, shows early indication

of synergies between television and the internet. When appropriately used together, the perception of the brand among respondents who recall both television and online

advertising is better than the perception among those who remember either television or

online alone.

This is true for all key image dimensions. It is also interesting to notice that online

advertising awareness alone does make a difference. For these respondents, image perception is better than those not able to recall any advertising for the brand.

Furthermore, the data also suggest the additive power of online in its ability to offer deeper information, interaction, and knowledge. The attribute ‘Educates you about the

proper use of medicine’ is a good example of this. When respondents are aware of bothtelevision and internet advertising, then image endorsement is at its highest. This suggests

that the additional interaction provided by online advertising makes a difference thanks toits ability to better connect with the consumer, giving him/her the chance to better

experience the brand, its usage, etc.

Advertising Effect on Brand Image(Table 6)

Brand Advertising Awareness

Online Only TV Only TV and

Online

None

% % % %

Fast acting 17 35 37 24

Long lasting 25 28 37 16

Effective for body aches and pains 33 41 43 25

Effective for headaches 42 45 45 29

Effective for arthritis pain 33 21 37 13

Worth the price you pay 25 32 51 19

Works effectively on migraines 8 18 28 11

Has no side effects 25 37 45 26

Educates you about the proper use of medicine 25 34 45 19

Trusted source for health information and

treatment

17 21 23 13




Is this exception or legion? Our experience confirms that all markets can benefit from thissynergy—packaged goods, automotive, services, durables, and even over-the-counter

products, as our previous example show. Furthermore, we strongly think that the internetcan allow marketers to truly ‘re-invent their brands’.

The Pampers example below is a good example.

Moving away from the traditional type of television commercial (comparing Pampers to

X and showing Pampers’ better functionality), a new television advertising campaign wasdeveloped. In this campaign, no products were shown, the Pampers name appeared at the

end, pushing the audience to visit the www.pampers.com site. The whole theme of the adwas ‘parenting’, all along showing animals feeding their newborns, and highlighting the

benefits and importance of parental care. The ad was highly emotional and tender. Not tomention, we should all know that emotion can be a powerful trigger for relationship

development and enhancement. This is exactly what the strategy was. This time, the

internet was at the marketers’ disposal to fully leverage this emotional trigger. Visitors tothe site are welcome by the ‘Pampers Parenting Institute’ (Figure 10). The site clearlystates:

You'll find practical tips and helpful advice on every aspect of parenting, provided by some of the world's leading experts. You'll also find the latest Pampers product information. Pampers is proudly committed to supporting

families in every way.

Through use of its site, Pampers wants to move the consumer relationship to another level by providing value, tips, and information to new parents. With of all that, does

anyone have any doubt that parents experiencing the brand will not consider Pampers products for their next purchase?

Www. Pampers.com(Figure 9)






References

http://www.thestandard.com/artcile/display/0,1151,14934,00.html

http://www.ana.net/about/ananews/05_09_00a.htm

http://www.adknowledge.com/update/index.html

Briggs, Stipp (2000), How Internet Advertising Works: New Evidence and Directions for

Future Study, Up Coming.

Bush, Harris (1998), Advertiser Perceptions of the Internet as a MarketingCommunication Tool, Journal of Advertising Research, March-April 17-27.

Flores, Laurent (1998), ‘20 ans de Communication de Marque : Au travers des périodes

de crise et de croissance, une analyse franco-américaine de l’évolution des critèresd’efficacité publicitaire’, IREP, October, Paris

Harvey B, (1997), The Expanded ARF model : bridge to accountable advertising future,

Journal of Advertising Research, March-April 11-19.

Internet Advertising Bureau (IAB) - IAB online advertising effectiveness study - October 1997.

Jupiter Communications - Online Advertising Through 2003, Online Growth a Catalyst

for Changes in Traditional Business.

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Internet Advertising Effectiveness