Measuring the Effectiveness of Online Advertising: Lessons LearnedCom score measuring online advertising

Lessons Learned

Measuring the Effectiveness of Online Advertising:

Gian Fulgoni, Chairman, comScoreTodd Curtis, Senior Consumer Insights ManagerDigital and Applied Analytics for Marketing Effectiveness, General Mills

2© comScore, Inc. Proprietary and Confidential.

Topics

The explosive growth in online advertising

The challenge of accurately measuring its effectiveness

The C-Level challenge: clicks and cookies

One solution: continuous online behavioral panels

Lessons learned


Cross Media Advertising Market Spending:

Online Ranked Third Behind TV and Newspapers

SOURCE: IAB Internet Advertising Revenue Report, 2009 Full-Year Results, April

2010, IAB & PricewaterhouseCoopers

14.3% share of total


Online Now Equivalent to 28% of TV Ad Dollars and Approaching

Cable TV Ad Spending

Source: CAB Analysis of Nielsen TV Data

Online from IAB / PWC

Total TV Cable TV Online

$81.9

$25.0 $22.7

Total Ad Spend in 2009 ($Billions)


Search, followed by Display, dominates U.S. online advertising

Percent of 2009 Online Advertising Revenue


Display Ad Spending De-accelerated Markedly Under Impact of

Recession but Rebounded Strongly in H2 2009

Total Display Ad Spending* in $ Billions and % Chg vs. YA

$1.9 $1.9 $1.8

$2.0 $1.9 $1.9 $1.9

$2.3

Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09

% Chg

vs. YA

+27% +13% +5%0% +15%0%+0% -4%

*Total Display Ad Spending includes banners, rich media, video and sponsorships

SOURCE: IAB Internet Advertising Revenue Report, 2009 Full-Year Results, April

2010, IAB & PricewaterhouseCoopers


Number of Online Display Ad Impressions Continues to Surge

Through Q2 2010

7

0

200

400

600

800

1000

1200

Q2 '09 Q3 '09 Q4 '09 Q1 '10 Q2 '10

9741,050 1,064

1,0901,173

Millions

(+20% Y/Y)


6% of

Branding

Dollars

Despite having grown to become a major advertising medium, the Internet is

lagging badly in capturing branding dollars because of a focus on direct

response metrics such as the click

Source: Brand.net analysis based on data from Barclays Capital, Think Equity

Partners, LLC, and DMA

63%

37%

$91B

$55B

$6B

$18B

2009 US Measured

Media Spend: $147B

Bra

nd

ing

Dir

ec

t

Re

sp

on

se

30% of DR

Dollars


Measuring Advertising Effectiveness:

Lessons from the Net: How not to do it …


Click Rates on Individual Campaign Ads are Minimal

Source: DoubleClick for Advertisers, U.S. Advertisers, January – December 2009

DoubleClick Rich Media Formats Only

A Cross-Section of Major U.S. Verticals

0.15%

0.08%

0.09%

0.06%

0.10%

0.09%

0.10%

0.07%

0.08%

0.09%

Auto

B2B

CPG

Financial Services

Media/Entertainment

Retail

Tech

Telecom

Travel

Wellness

Click-Through Rate on Individual Ad Campaigns by Industry Vertical for

DoubleClick Rich-Media Format


Non-Clickers84%

Clickers16%

Non-Clickers68%

Clickers32%

Only 16% of internet users clicked on at least one display ad in

March 2009, down from 32% two years earlier

July 2007 March 2009

Source: comScore, Inc. custom analysis

Total U.S. Online Population July 2007 and March 2009 data periods

In the U.S., Half as Many Clickers on Any Display Ad in 2009 vs. 2007


But. Agency and Advertisers Still Preoccupied with the Click

Source: Feb 2010 Collective Survey of 420 Agency

and Advertiser Executives

0% 20% 40% 60% 80%

CTR

CPC

CPA

Ability to Drive Brand Awareness

Interaction Rate

Ability to Drive Brand Favorability

64%

61%

48%

35%

33%

25%

What Metrics Do You Use To Evaluate

Ad Network Performance?


If Not The Click, Then What?

“A click means nothing. A click earns no revenue and creates

no brand equity. Your online advertising has some goal – and

it’s surely not to generate clicks. You want people to visit your

website, seek more information, purchase a product, become a

lead, keep your brand top of mind, learn something new, feel

differently, etc. Regardless of whether they clicked an ad or

not, the key is to determine how that ad unit influenced a

consumer to think, feel, or do something they wouldn’t have

done otherwise.”

John Lowell

SVP Director, Research & Analytics

Starcom


Clicks on Display Ads Are a Misleading Metric

and Don’t Reflect Brand-Building Effects

Clicks don’t reflect the cumulative (latent)

impact of ads

Clicks don’t tell you anything about brand

building effects

Only use clicks to evaluate direct response ad

campaigns (or Search)

Evaluate the effectiveness of online ad

campaigns using behavioral impact over time

14


Cookie Deletion Creates Havoc in Ad Measurement

Cookie deletion creates audience measurement issues

Cookie Deletion*

Year Method

Belden 43% 2004 Survey

Nielsen 44% 2005 Survey

Jupiter 39% 2005 Survey

comScore 31% 2006 Electronic U.S.

Forrester 50% 2008 Survey

comScore 24% 2009 Electronic Europe

* % of responders/users deleting cookies during past month


Deletion Rates Add to the Problem: Number of Different Cookies Per

Machine Per Month for Same Site Among Deleters

No. of Different

Cookies for Same

Web Site

No. of Different Ad

Server Cookies for

Same Campaign

U.S. 5 7

Europe 4 8

Source: comScore


The Cookie Deletion Problem: Overstated Audiences and Ad

Campaign Reach, but Understated Ad Frequency

Cookie deletion creates major problems:

– 2.5 times overstatement of unique visitors as

measured by Web site server logs

– 2.5 times overstatement of reach and a similar

understatement of frequency in ad server logs


A Solution: Continuous Behavioral Panels That Don’t

Use Cookies for Tracking


Powerful Platform from the Industry Leader

Global Panel of 2 Million Users, Largest of Its Kind

360° View of Consumer Behavior

Advertising

Exposure

Online / Offline

Transactions

Search

Behavior

Demographics

Life Stages

Online

Video

Web Visiting

and Viewing

The Only Global Measurement of

Audience and e-Commerce

41 Media Metrix Reported Countries

170+ Countries with Sample Presence

Mobile

Usage


Measuring the Retail Sales Impact of Online Ad Campaigns

300+ comScore studies conducted to assess impact of paid search and

online ads on offline sales

Real world analysis: comScore panelists divided into matched groups

(exposed and non-exposed to advertising)

– Search only

– Display ads only

– Search and display ads together

– Neither

Passively measured behavior:

• Online activity through comScore behavioral panel

• Linked to in-store buying through CRM databases, retailer loyalty cards,

credit card data, IRI scanner panel

Analytical design compares behavioral changes across exposed and

unexposed groups from pre- to campaign time periods


June 2009 Journal Of Advertising Research:

comScore’s “Whither the Click?”

Journal of Advertising Research

“What We Know About Advertising: 21 Watertight Laws for

Intelligent Advertising Decisions”

comScore’s “Whither the Click?”

– 300+ comScore studies conducted to assess behavioral impact

of paid search and online display ads.

21

Even with Minimal Clicks,

Display Advertising can Lift:• Site visitation

• Trademark search

• Online and offline sales


Display Ads Lift Site Visitation Across All Verticals

4.5%

0.9%

1.3%

0.6%

9.1%

7.0%

5.8%

4.8%

6.6%

1.9%

2.3%

1.1%

13.8%

10.0%

7.2%

5.8%

Average, N=139

Automotive, N=38

Finance, N=16

CPG & Restaurant, N=10

Retail & Apparel, N=21

Media & Entertainment, N=24

Electronics & Sof tware, N=14

Travel, N=9

Advertiser Site ReachWeeks 1-4 after first exposure

Control Test

% Lift: 46%Δ Lift: 2.1%

% Lift: 114%Δ Lift: 1.0%

% Lift: 86%Δ Lift: 1.1%

% Lift: 77%Δ Lift: 0.5%

% Lift: 52%Δ Lift: 4.7%

% Lift: 42%Δ Lift: 2.9%

% Lift: 25%Δ Lift: 1.5%

% Lift: 21%Δ Lift: 1.0%


Display ads successfully build retailer sales both online and

offline – even with minimal clicks

$994

$9,905

$1,263

$11,550

Online Off line

$ per 000 Exposed

Control Test

% Lif t: 27.1%

% Lif t: 16.6%

% Lift: 27%

% Lift: 17%

Source: comScore “Whither the Click?”

Journal of Advertising Research June 2009


Measuring Advertising Effectiveness:

An Advertiser’s Perspective …


TV – Ad Development Process

Target &

Insight

Idea

Creative

Media

Plan

In-Market

Purchase


Digital – Ad Development Process

Target &

Insight

Idea

Creative

Media

Plan

In-Market

Purchase


In-Market Key Questions to Answer

Media Reporting

– Did the advertising reach the targeted audience?

– What websites displayed the ad?

Effectiveness and Efficiency

– Did the campaign drive purchasing?

– What is the ROI?

– Why?

What’s next?


Media Reporting – As Early as Possible

Do you know who saw your ad?


Media Reporting – As Early as Possible

Do you know where your ad is displayed?

Viagra.com

Allgals.com

Adultvideo.com

Spankwire.com

XXXMatch.com


Media Reporting Metrics

Key Metrics – Developing…which ones matter?

Total Impressions

Unduplicated Reach

Frequency

Demo Impressions

Target

US (Local Country)

20%

12%14%

9%6%

4%7%

4%

24%

1 2 3-4 5-6 7-8 9-10 11-15 16-20 21+

Campaign Frequency Example

Experimenting with others…

GRPs: Household, individual, targeted

High value task, social media, earned media impressions

Impressions by geography


Did the Campaign Drive Purchase?

Purchase is stronger than stated intentions

Effectiveness

– Test/Control (Single Source) – Newer touch points

– Marketing Mix -- Large spends by campaign

Why?

– Online advertising trackers

– Custom surveys

– Result Roll-ups


Media Measurement Evolution

Experimental Commercialization

• Digital Video• Social Media• Viral/Earned• Mobile

•Paid Search

• TV• FSI• Promotions• Print• Radio

Measurement Continuum

Usage

•Digital FSI

•Digital Banner

•Relationship Marketing

•Rich Media

• Scale increases need for measurement precision


comScore -- 82% of Online CPG Brand

Campaigns Increased Sales

Average $ Sales lift in retail stores was 22%

Campaigns comScore has analyzed …

– Pizza, Snack Bars, Pasta, Meals, Cereal, Frozen Snacks, Tea, Cookie

Mixes, Toothpaste, Juice Drinks, Deodorants, and more

Average $ lift was 22%82% of campaigns

showed a positive

sales lift

Percent Lift in

Dollar Sales

No. of Offline Sales Effectiveness Studies

Source: comScore CPG Ad Effectiveness Study


Short Term Offline CPG Brand Sales Lift From Online Advertising

Matches Longer Term TV Impact:

TV (BehaviorScan) Internet (comScore)

+8%+9%

BehaviorScan tests conducted over one year period

comScore studies over three months*

*Assumes 40% HH Internet Reach Against Target

Hypothesis: More precise targeting ability of the Internet

allows more impressions to be delivered against target

audience in a given period of time


Effectiveness Drivers (Digital)

Standard ROI principles apply

Business size, seasonality, etc

US Impressions

Reach your target

Frequency: 5-10 impressions per campaign

Digital is scalable

Strength of branding, message, creative, and placement


Creative Power: Over 50% of the impact of advertising is driven by

the strength of creative

Ad Quality 52%

Media Weight

13%

Other35%

*Quality of creative is based on ARS Persuasion Score which measures changes in

consumer preference through a simulated purchase exercise with and without

exposure to the creative .

comScore ARS Global Validation Summary includes an evaluation of 396 TV ad

campaigns, utilizing sales data from R. L. Polk New Vehicle Registration, IMS

HEALTH, IRI InfoScan, Markettrack, Nielsen SCANTRACK or Nielsen Retail Index.

Media Weight = Medi Plan elements, such as GRPs, wearout & continuity/flighting of airing

Ad Quality = quality of the creative based on ARS Persuasion Score*.

% Influence on Market Share ShiftsSource: Source: comScore ARS Global Validation Summary

Creative is 4x More

Impactful in

Influencing Sales

Than

Planning Variables

Numbers represent the percent variance in market share shifts explained by the corresponding

factors.


Five Universal Truths about the Role of Creative in Advertising

Getting Creative Strategy Right from the Start Is Critical

Consider the Sum of the Parts as a Key Part of the Creative Process

Sound Creative is Critical, but Context Matters Too

The Importance of Emotion Cannot Be Ignored

Manage Advertising Wearout to Maximize Effectiveness


What’s Next …

Continued measurement experimentation

across touch points

– Online video

– Earned media

– Paid search

– Rich media

– High value tasks

– Gaming

How do consumer touch points work together?


How Do Media Vehicles Work Together?

TVFSI

Radio

Internet

MobileEarned Media

Direct Mail

Package

Trade

Print

In-StoreRelationship Marketing

• Cross media interactions provide additional insights


Industry Needs

Tools to track complete digital efforts

Strong partnerships for data integration and

single source experimentation


Thank You!

Technology

Measuring the Effectiveness of Online Advertising: Lessons LearnedCom score measuring online advertising