Lessons LearnedMaximizing returns with digital Media

FIVE KEy LEssons LEarnEdabout This Booklet

While advertising has evolved tremendously with the advent of new digital technologies, its goal today is much the same as it has always been—to elicit feelings, emotions, perceptions and actions that ultimately build brand loyalty and increase sales. Finding ways to do this in the most efficient manner is vital, and being able to quantify a return on marketing investment is a must.

as digital advertising continues to grow in both importance and sophistication, so does the need for guiding principles about how to get the most out of this medium. Through comscore’s extensive research in the digital advertising space, we’ve identified Five Key Lessons Learned, which help to shed light on the current state of the industry and guide marketers down a path toward more effective planning, stronger evaluation and overall improved results.

CLICKs arE aT BEsT an InCompLETE mETrIC and aT worsT a mIsLEadIng onE.

CooKIE dELETIon has ThE poTEnTIaL To CrEaTE haVoC In mEdIa pLannIng, ExECuTIon and CampaIgn EVaLuaTIon.

dIgITaL CampaIgns haVE ThE aBILITy To BuILd Brands and LIFT E-CommErCE and rETaIL saLEs, and as In TradITIonaL TV adVErTIsIng, CrEaTIVE pLays a CrITICaL roLE.

ThE aBILITy oF ConTEnT To EngagE ConsumErs Can ampLIFy ThE EFFECT oF an ad pLaCEd wIThIn ThE ConTEnT.

whEn sELECTIng From a VarIETy oF mEdIa-pLaCEmEnT sTraTEgIEs, IT Is ImporTanT To ConsIdEr ThE rELaTIVE CosTs and BEnEFITs oF EaCh.

1

2

3

4

5

1.

CLiCks are aT besT an inCoMpLeTe MeTriC and aT

WorsT a MisLeading one

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. regardless of whether they clicked an ad or not, the key is to determine how that ad unit influenced consumers to think, feel or do something they wouldn’t have done otherwise.

John LoWeLLsVp / direCTor, researCh & anaLyTiCssTarCoM Usa

and ThErE arE

50% FEwErCLICKErs now Than In JuLy 2007.

source: doubleClick for advertisers, January to december 2009 *Click-through rates on individual ad campaigns by industry vertical for doubleClick rich-media formats only; U.s. advertisers.**Click-through rates across static image, flash & rich media formats; a cross-section of regions.

This phenomenon of low click-through rates is not observed in isolation. It’s something we see around the globe and in nearly every vertical industry.

0.15%auto

0.05%Finland

0.11%germany

0.10%Tech/media/ Entertainment

0.07%australia

0.12%switzerland

0.09%Cpg/retail/

wellness

0.07%uK

0.14%netherlands

0.08%Travel

0.08%sweden

0.17%greece

0.07%Telecom

0.06%Financial services

0.09%Canada

0.19%singapore

0.10%usa

0.30%malaysia

source: comscore Custom analysis, March 2009 & July 2007

16%CLICKErs

84%non-

CLICKErs

Click-Through rates* by Vertical Industry

Click-Through rates** by region

perhaps most notably is the fact that so few people actually click on any ads.

ThErE arE sEVEraL rEasons why ‘ThE CLICK’ Is noT an approprIaTE mEasurE oF onLInE adVErTIsIng EFFECTIVEnEss

84%oF aLL u.s. InTErnET usErs do noT CLICK on any ads In a gIVEn monTh

2.

Cookie deLeTion has The poTenTiaL To CreaTe haVoC

in Media pLanning, exeCUTion and CaMpaign eVaLUaTion

I spend a lot of time fighting against media metrics that don’t matter.

kaTe sirkin eVp gLobaL researCh direCTor sTarCoM MediaVesT groUp

hIgh CooKIE dELETIon raTEs

30% of all U.s. and 24% of all eU internet users delete their cookies in a month, and they do so an average of 4 to 6 times a month. deletion rates for 1st party (i.e. website) and 3rd party (i.e. ad server) cookies are similar. Cookie deletion can result in 2.5x overstatement in unique visitors to a website, and a similar overstatement of reach and understatement of frequency in ad campaigns.

CooKIE-BasEd mEasurEmEnT and TargETIng approaChEs oFTEn rEsuLT In InaCCuraTE mEdIa pLannIng, ExECuTIon and CampaIgn EVaLuaTIon

CooKIEs mEasurE CompuTErs, noT pEopLE

due to cookie-based targeting, it’s difficult to ensure the correct person is actually being served an ad. also, because the demographic data in cookies comes from a variety of sources – such as registration data, modeled demos based on content consumption and estimations by zip code – the quality of cookie data varies, meaning the results do too. For these reasons, campaign delivery often misses its target.

in the below example, the advertiser’s target was women aged 35-54 years old. however, post-campaign evaluation using the comscore panel showed the majority of exposed consumers were outside of the target audience.

why is cookie-based measurement sub-optimal?

a CooKIE Can’T TELL ThE dIFFErEnCE because of multiple users on a computer, you might intend to reach a 35-year-old woman with your ad when it is actually being served to her 45-year-old husband or 18-year-old daughter who is using her computer.

40% 60%

20.6% (age 15-24)

22.4% (age 25-34)

25.3% (age 35-44)

17.3% (age 45-54)

14.4% (age 55+)

40% of exposed consumers were men

only 43% of females exposed to the campaign met the targeted age group

percent Composition of Exposed audience

? ?

cookie a

day 1

a o

ne-w

eek

sna

psho

t

day 7

cookie deleted

cookie deleted

cookie B cookie C

The site reads ThrEE distinct cookies, which means this onE visitor is counted ThrEE times.

source: comscore Custom analysis, april 2010 source: comscore Custom analysis, april 2010

3.

digiTaL CaMpaigns haVe The abiLiTy To bUiLd brands and

LiFT e-CoMMerCe & reTaiL saLes, and as in TradiTionaL

TV adVerTising, CreaTiVe pLays a CriTiCaL roLe

dIgITaL adVErTIsIng proVIdEs an EFFICIEnT mEans oF BuILdIng Brands and LIFTIng BoTh E-CommErCE and rETaIL saLEs

digital advertising’s Impact on In-store sales* for Cpg Brands among households Exposed to online display advertising

source: comscore-dunnhumby Cpg offline sales Lift studies, 2008-2009*advertising’s impact on retail sales is measured by linking the comscore panel of 1 million U.s. internet users to their retailer loyalty card data from dunnhumby, which provides a measure of the panelists’ in-store buying activity.

Exposure to display ads doesn’t just impact online sales—it lifts in-store sales as well.

retailer dollar sales Lift among households Exposed to online display advertising

source: comscore adeffx offline sales Lift for internet; iri behaviorscan® for TV, 2000-2009*behaviorscan® tests conducted over one-year period and reflect Cpg ad campaigns’ typical reach, while the comscore studies were conducted over a three-month period and reflect a 40% household internet reach against target. it is possible that some wearout of the TV creative could have occurred during the one year of the TV campaigns.

For rETaILErs, ThE LIFT In rETaIL saLEs Can BE upwards oF 5x hIghEr Than ThE LIFT In E-CommErCE saLEs

For Cpg brands, digital advertising can generate nearly the same in-store sales lift in a three- month period as TV advertising does in one year.

100%

80%

60%

40%

20%

0%

-20%no. of offline sales effectiveness studies

per

cent

lift

in $

sal

es average $ lift was 22%

82% of campaigns showed a positive

sales lift Comparison of In-store sales Lift* for Cpg Brands resulting from online advertising vs. TV advertising

online sales in-store sales

$9,905$11,550

$994 $1,263non-exposed

exposed

Lift: 27%

Lift: 17%

+8% +9%

source: comscore report, “how online advertising Works: Whither the Click” (published in the 2009 Journal of advertising research)

dIgITaL adVErTIsIng has dELIVErEd on ITs promIsE oF EFFICIEnCy and EFFECTIVEnEss, BuT CrEaTIVE has BEEn LargELy oVErLooKEd

48% mEdIa pLan & wEIghT,

prICE, oThEr

52% CrEaTIVE QuaLITy**

percent Influence on shifts in Brand sales*

source: comscore ars global Validation summary *numbers represent the percent variance in sales shifts explained by the corresponding factors.**Creative quality is based on the ars Consumer Choice score, which measures changes in consumer brand preference through a simulated purchase exercise. a lift in the score is highly correlated with in-market sales lifts.

This shouldn’t be the case given that more than half of the impact of advertising comes from the quality of creative.

advertising on digital has become more sophisticated and production costs associated with rich media and video campaigns continue to rise, making the stakes higher than ever.

all advertising is a combination of art and science, logic and emotion, conviction and motivation. until recently, digital advertising focused on the left brain area of science, logic and conviction. while these are important, it is clear that the next frontier is art, emotion and motivation, which come from that elusive butterfly creativity.

I have always believed that the Internet will usher in the next generation of creativity. Creativity that not only can we see, hear and feel, but also measure its impact.

rishad TobaCCoWaLa ChieF sTraTegy & innoVaTion oFFiCer ViVaki

now is the time for creative to take center stage in digital advertising.

sTrong CrEaTIVE Can InCrEasE EFFECTIVEnEss, BuT dIgITaL dIspLay ads oFTEn don’T InCLudE ThE ELEmEnTs nEEdEd To maxImIZE adVErTIsIng’s ImpaCT

percent of digital and TV ads* Containing Key strategic Elements

source: comscore ars integrated database*Cases drawn from comscore ars test databases and balanced by category (n=100 for digital display ads, n=3,681 for television ads); majority of cases involved Cpg brands.

percent Lift in retail sales of Cpg Brands among households Exposed to online display advertising

source: comscore ars-dunnhumby Case study of Major Cpg brands (blinded, n=13), 2009-2010 *key strategic elements included in this analysis were: brand differentiating key Message, new product/new Feature information, product Convenience, Competitive Comparison and superiority Claim.

Elements present* Elements not present

-20.6

0.06.0 7.3

21.8

31.1 32.0 33.4

75%

50%

25%

0%

-25%

48.0 48.4

75.0 75.980.0

Key strategic elements, which have been proven to improve the quality of an ad’s creative and therefore its impact on sales, are used at a much lower rate in digital ads than in TV ads.

whEn ThEsE sTraTEgIC ELEmEnTs arE usEd In dIgITaL CampaIgns, ThEy’VE dEmonsTraTEd an aBILITy To InCrEasE rETaIL saLEsas in traditional TV advertising, digital campaigns that effectively leveraged these strategic elements generated the greatest offline sales lift.

digital display ads(rich Media, banners,

rectangles)

Television ads

brand differentiating key Message 17% 31%

new product /new Feature information 19% 44%

product Convenience (explicit & stated) 0% 9%

Competitive Comparison 10% 24%

superiority Claim 13% 26%

whEn IT ComEs To dIgITaL adVErTIsIng, prICE-rELaTEd InCEnTIVEs arE usEd muCh morE FrEQuEnTLy Than In TradITIonaL TV ads

In many ways the Internet is being used today in a manner more similar to newspapers and magazines than TV as it relates to the inclusion of price and promotion information in digital ads.

ThE InCLusIon oF prICE-rELaTEd InCEnTIVEs In onLInE dIspLay ads drIVEs oFFLInE saLEs

percent of digital and TV ads* Containing Value Elements

percent Lift in In-store sales for Cpg Brands among households Exposed to online display ads

source: comscore ars integrated database*Cases drawn from comscore ars test databases and balanced by category (n=100 for digital display ads, n=3,681 for television ads); majority of cases involved Cpg brands.

source: comscore ars-dunnhumby Case study of Major Cpg brands (blinded, n=13), 2009-2010

digital display ads(rich Media, banners, rectangles)

Television ads

Value (economy/savings) 22% 2%

Value (special offers, Coupons, etc.) 38% 2%

This begs the question:

is online the new print?

60%

40%

20%

0%no Value

informationCoupon

onlyFree

samplesexplicit Value

Claim

26.8% 28.4%

39.5%

48.9%

4.

The abiLiTy oF ConTenT To engage ConsUMers Can aMpLiFy The eFFeCT oF an ad pLaCed WiThin The ConTenT

as consumers spend more and more time online, it’s critical for marketers to reach our consumers at the right time, with the right message, communicated in the right way. Tools that help drive those insights help us stay on the cutting edge.

gayLe FUgUiTT ViCe presidenT ConsUMer insighTs generaL MiLLs

pLaCIng an ad wIThIn hIghLy EngagIng ConTEnT Can hELp To maxImIZE ThE ad’s ImpaCT

ThErE aLso appEars To BE a hIgh CorrELaTIon BETwEEn EngagEmEnT & agE

what is engagement?

• Level of focus & attention• Loss of self-consciousness• altered sense of time• intrinsic rewards• immersion

a comscore ars study involving online video found that consumers who were highly engaged with the video content generated a stronger ars Consumer Choice score for the ad placed within the content than unengaged viewers. This higher score is correlated with in-market sales lifts, demonstrating the ability of content to amplify an ad’s impact.

Engaging content has a greater impact on older consumers.

engaged Viewers

Unengaged Viewers

percentage Lift

ars Consumer Choice score 118 87 36%

source: comscore ars Custom analysis, october 2010*ars Consumer Choice score measures changes in consumer brand preference through a simulated purchase exercise. a lift in the ars Consumer Choice score is highly correlated with in-market sales lifts.

source: comscore ars Custom analysis, october 2010*ars Consumer Choice score measures changes in consumer brand preference through a simulated purchase exercise. a lift in the ars Consumer Choice score is highly correlated with in-market sales lifts.

Comparison of ars Consumer Choice score* for Engaged vs. unengaged Video Viewers

Comparison of ars Consumer Choice score* for Engaged vs. unengaged Viewers by age segments

age 16-29

ars Consumer Choice score engaged Viewers

ars Consumer Choice score Unengaged Viewers

10795 11788 12083

age 30-49 age 50+

13%Lift

33%Lift

45%Lift

5.

When seLeCTing FroM a VarieTy oF Media-pLaCeMenT sTraTegies, iT is iMporTanT To Consider The reLaTiVe CosTs

and beneFiTs oF eaCh

noT aLL TargETIng Is CrEaTEd EQuaL. EaCh has TradEoFFs In TErms oF CosT, rEaCh and ImpaCT

sELECT mEdIa-pLaCEmEnT sTraTEgIEs

Likelihood to Search For Advertised Brand Post-Exposure

Lift Index

Cos

t Ind

ex

1800

1600

1400

1200

1000

800

600

400

200

0

0 200 400 600 800 1000 1200

From audience targeting to contextual buys and from retargeting to efficiency or premium buys, there are many placement options that media planners must now consider. because each offers different pros and cons, it is important to select a media-placement strategy that best fits the specific campaign objective.

audIEnCE TargETIng: Targets consumers based on past interest or interaction with related products/content but who have not yet visited the advertiser’s site

ConTExTuaL TargETIng: Targets sites with related, page-level content

EFFICIEnCy prICIng: based on cost-per-click engagement with creative

prEmIum prICIng: based on high-visibility placements on premium publishers

rETargETIng: based on data that confirms users have previously visited an advertiser’s site

run-oF-nETworK (ron): includes ads that appear anywhere in the network, often optimized by conversion

source: comscore report, “When Money Moves to digital, Where should it go?”, september 2010note: all campaigns in this study ran between July 2009 and March 2010 and were sold and delivered by ValueClick Media.

Contextual Targeting

premium pricing

The larger the circle, the greater the

reach.

Efficiency pricing

run-of-network

audience Targeting retargeting

as shown in the above chart, retargeting provides the highest lift in search at an efficient cost, but it doesn’t deliver as high a reach as other strategies. Meanwhile, run-of-network placements provide a large reach at an efficient cost but garner relatively low lifts in search.

When considering a media-placement strategy, the best option often differs based on long-term versus short-term goals. For example, some placements – like efficiency, pricing and ron – optimize quickly to deliver traffic to a site (i.e. drive traffic within the first week), but they don’t always sustain these audiences over time (i.e. traffic drops off after the first week). When it comes to longer-term effects, audience, Contextual and premium strategies have been shown to work well, although retargeting outperforms these three.

source: comscore report, “When Money Moves to digital, Where should it go?”, september 2010note: all campaigns in this study ran between July 2009 and March 2010 and were sold and delivered by ValueClick Media.

© 2011 comscore, inc.

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Many of the findings herein are based on data and insight gleaned from comscore services and solutions. research data or a portion of text less than one paragraph in length may be cited, provided that each is sourced to comscore. For example, “source: comscore, inc.” or “according to comscore, ....” Copies of graphs or data tables must include the following copyright notice affixed to all material: “Copyright © 2011 comscore, inc.”

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