Connected Advertising Blog

There was a time, 15 – 20 years ago or more, when media plans consisted of distinct media, each with a life of its own. The only connection they had was their relative impact on TRPs, reach and frequency. If there was one media that appeared to be too expensive, you simple asked where you could make up the TRPs. Perhaps this is a bit of a simplification, but not much. The challenge in today’s environment is that, too often, digital media is viewed through a very similar lens.

When planning digital media, there is a disconnect between the channels. Search budgets are allocated irrespective of display, email is treated independent of social (if there is a social component) and offline activities are seldom weighed when planning online efforts. What the traditional planning process misses is the inherent integration of all these aspects, whether it is intended and managed, or not. It goes beyond leveraging synergies. By ‘disconnecting’ these channels, you run the real risk of undermining their inherent value.

Not too long ago, there was an argument that leveraging the synergies of the digital channels was the sole purview of the national advertiser. With the advances in our understanding of consumers, and the capabilities of technology, this is no longer the case. Consumers are fine-tuning their own experiences on the web and mobile to target localized content. Between geo targeted ad delivery on the internet, re-marketing technology, and GPS enabled mobile devises, local businesses have as much at stake, and opportunity, with integration as do the national advertisers; perhaps more. With each channel, such as display, social or mobile, we can see the connections between channels.

The fact is, people don’t often click on display ads. But, it would be a mistake to assume that this means display is not effective. People who are exposed to display ads, will search for the company or product in the search engines, or type the company website into their browser. In fact, according to a ComScore study there is a 45.7% lift in site visits as a result of exposure to display ads over a 4 week period. If you are not managing your search campaign in synergy with display, you’ll not only miss opportunities, but you’ll also make false attributions.  Your search campaign needs to highlight keywords, ad copy and landing pages that are directly related to the display ads. One of the most dangerous pitfalls in online advertising is creating experiences that diverge from consumer expectations. If your display ads set up expectations that are not experienced through your search, you’ll lose the customer. Unfortunately, when not integrating the two, you’re likely to assume the search campaign stumbled; not seeing the connection to the display program that initiated the search in the first place. By planning from an integrated approach, you’ll leverage the synergies and minimize the mistakes.

Social networks are growing and many consumers see this as the primary mode of communicating online. According to Nielsen, the average user of social media has increased their time in the space by 143%. In total, Americans are spending 210% more time on social networks than a year ago. Email, offline, and even online display advertising can all leverage the power of social media by providing customers with an easy way to become a fan or a follower. Of course, you’ll need to give people a reason. For small businesses, using the social networks can drive customers to the store, running time sensitive offers; Inventory can be move with very targeted messaging; create unique content messaging to niche areas of your customer base. One click from an email, or a display ad, or visit driven by in-store POS can be the start of long relationship with customers. But, it can only happen if you seen the connections between the different media.

Every year it seems like we have more reasons to believe we live in a world of change. Over 2009 and moving quickly into 2010, mobile has exerted itself as a true medium for non-phone two way digital communication. Google is aggressively pushing forward with integrating online and mobile experiences so users can research at their desktop and have the same information available on their mobile. While display advertising is still nascent, location based searches are growing strong. So, you have to managed your location information online. If you don’t, users can easily receive old or even entirely wrong information about your business. Understanding how your address and phone number are managed online is key to developing successful mobile experiences – the two are very connected. Search marketing has also evolved to present click-to-call phone numbers as well as URL. Facebook and twitter have mobile services that let people take the social network with them wherever they are. On the mobile platform, we are seeing the convergence of location information, search, social and display advertising. If you don’t manage the integration of your digital advertising, consumers could very easily have 3, 4 or even more very different experiences with your business, all on the same 3 inch screen.

Integration, and targeted advertising, are available to businesses of every size. I’ve only highlighted a few examples of the inter-connectedness of digital advertising. All are within the control of small and medium size businesses. Whether you take the reins directly, or have an agency handle the heavy lifting for you, make 2010 the year you decide to integrate your digital marketing efforts.

According to Comscore’s time spent share study, Mirosoft experienced 43% YOY growth in the number of hours spent on its properties worldwide. At 3,920MM hours, MS tops the next runner up (Google) by over 56%. Given the nature of these two companies, this differential should not be too surprising. Google has many contacts at smaller durations, MS fewer contacts at longer engagements.

What is telling is the differential between MS and Yahoo!;  about 242% more time spent. While Yahoo! is doing well in the US with 11.2% of total time spent vs. 8.6% for MS, Yahoo! is falling short globally, where the real growth will be seen. Combine the standing with the 14% decline to total hours on Yahoo! properties, and Yahoo! has a real problem to overcome. If Yahoo! is trading on engagement, this is going to be a problem. Yahoo! is going to need to give the global market place reason to care.

Not surprisingly, Facebook has seen phenomenal growth of 193% jumping from 474MM  from 1,387MM hours.

Showing the continuing the challenge of display advertising that I wrote about a few months ago, ComScore, along with Starcom, release another study last month. Back then, about 16% of the users made up 80% of the clicks; now less than 10% do. 84% don’t click at all.

I find this trend interesting in light of a newly released study,”Americans Reject Tailored Advertising and Three Activities that Enable It” from the University of Pennsylvania – Annenberg School for Communication, in which 66% of respondents did NOT want ads that were specifically targeted to their interests.

There is an obvious challenge here. Users don’t like our display ad messages, and are not comfortable with the technology that can help us make them better. All is not entirely lost, as a significant portion are influenced by ads, as they are followed up by searches or direct-to-site navigation. But, much of the technology that lets us see that, is the very technology that consumers would rather we not use.

ComScore and iProspect studies on search and display ad relationships.

Key take-aways:
- Though it depends on the industry, there is potentially an additional activity of 60% versus the direct clicks (31% click, 21% say they type in the URL – iProspect).
- Approximately 1/3 of users have clicked on a display ad in the last 30 days(ComScore) to 6 months (iProspect)
- Conversely, 2/3 of users do not click on any display ads
- About 16% of users make up 80% of the clicks from display ads (ComScore)
- CTRs are in general decline, at about 0.1% (ComScore)
- Display ad value is quantifiable beyond the CTR based on search and direct URL entry following ad exposure.

Display ad costs should be measured against the incremental value based on KPI lift factors. On average display exposure increases site visits from 4.5% (control group not exposed to display ads) up to 6.6% (test users exposed to display ads). In other words, the incremental lift is 2.1 percentage points. (ComScore). Views and repeat visit tracking are important parts of media metrics. There is no way to properly assign value with out them.

Both studies are worth reading.
ComScore: How Online Avertising Works: Wither the Click?
iProspect: Search Engine Marketing and Online Display Advertising Integration Study

Narrative:
iProspect released “Search Engine Marketing and Online Display Advertising Integration Study” this month. Though it is very thought provoking, it needs to be interpreted from the right perspective. Primarily, this is not a study about ads, it is a study about users. This distinction is important because if the presentation the numbers is not interpreted properly, it can lead to some erroneous conclusions.

To illustrate my point:

“The key message from this study is that online display advertising is far from dead — its 31% direct response rate confirms that,” said Robert Murray, CEO, iProspect.

When we look at response rates, we look at how many times our ads are clicked versus how many times they are shown, or the CTR. What Robert Murray is referring to is that 31% of the people surveyed said that the had clicked on a display ad at some point over the past 6 months.

As I looked at the iProspect study, I recalled the ComScore study released in December 2008. It reviewed integration from an ad perspective and the user perspective rather than just the user perspective alone. I think this is important for several reasons:

1) Cost basis: most display advertising is still sold on a CPM. The value of a “user” has to be relative to the cost of the communication.
2) Industry: behavior varies greatly by industry.
3) Exposure: are users cognizant of how many exposures they receive before they react. This goes to cost basis.

When we look at each part of these two studies, we see some commonalities:

1) Both studies found that roughly 1/3 of users clicked on an add (ComScore in the last month, iProspect in the last 6 months).
2) There are strong synergies between search and display advertising. ComScore showed a 38% lift in advertiser’s branded search after display ad exposure, while the iProspect study simply showed that, of those who said they saw an ad, the response of 27% was to conduct a search on the brand, product or category.

The divergence
As a person with roots in media, on and off-line, every time someone suggests buying more ads, or bigger ads, I ask several questions. Key among them is: What is the incremental value of spending the money?

This is where the ComScore study is more helpful. It measures the lift in KPIs, such as site visits, competitive searches, TM / Brand searches and incremental sales. Contrast this with the iProspect study, which is survey based, and depends on users recollections over a six month period, with no control group against which to compare the test subjects. If you want to know the real value of additional advertising, it has to be measured not in absolute terms, but relative to the outcome of not increasing the advertising. In other words, what was the incremental affect received from spending more money.

One of the interesting findings on the ComScore study is that there is a 45.7% lift in site visits over a 4 week period as a result of exposure to display ads . Of those not exposed to the advertising, 4.5% eventually reach the test advertiser’s site, while 6.6% of those who were exposed reached the site, either by clicking, using search or navigating to the site directly. Another way to read this is that 68% of the people who reached the display advertisers’ sites would have done so with or with out the advertising. So while the total visit was 6.6% of the users who saw display ads, these ads contributed 2.1% of the users’ visits.

What is important is that the results vary greatly by industry. From a low of 21% lift in the travel industry to a high of 114% in the auto (though with a very low base % of visits to start).

On the flip side, there is also an increase in competitors’ sites visits following exposures to display ads. Over a 4 week period, the lift is 23.4% (13.5% vs 16.6% of users).

In essence, what display advertising does is spark shopping activity in general.

In addition to the number of people who eventually reach the advertisers’ sites, the way they get there is important; it directly affects the core measurement of CTR. Every one I speak with about the impact of display advertising acknowledges that the click is only one way to measure the influence of display advertising, but they are usually lost when trying to measure non-click activity. The iProspect study shines a light on the other behaviors as reported by users. 21% said they typed in the advertiser’s URL, while 27% did a search on the product, brand or company. Combining this insight with the lift that the ComScore study shows, and you can get some idea of a factorization you can apply to the CTR to estimate net visits resulting from display advertising. Though it depends on the industry, there is potentially an additional 60% versus the direct clicks (31% click, 21% say they type in the URL).

All this amounts to one fact: Direct measurements are ineffective. The only way to assess the real value of advertising is with robust tracking and analytics.