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Best Practices for High Impact Online Advertising

July 27, 2010


Agenda

 Review trends in online advertising formats


 Present insights into consumer online shopping behavior
 Editorial placement and user initiated ads’ fit within the online media mix
 Introduce results of comprehensive In-Text brand & user experience study
 Close & questions

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comScore:
A granular 360° view of the online activities of 2 million global users

Designed to be representative of the total online population.


3
TRUSTe certified for information privacy & security.
Kontera:
In-Text Advertising Leader
PREMIUM SITES PREMIUM BRANDS
(EXCLUSIVE IN-TEXT INVENTORY)

Kontera Synapse Engine

140MM+ Monthly UU’s WW


15,000+ Vertical & Niche
85MM PV’s Analyzed/Day

4
Kontera Aggregates Audiences by Detailed Topics of Interest

HIGHLY
QUALIFIED
AUDIENCE

TOPICAL
AGGREGATION

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Long Term Advertising Forecast

Global Advertising Expenditures By Medium Digital Marketing Forecasts - Global


US$ MM $ Bn $89.9 B 09-12
500 CAGR: $479 B CAGR
3.1%
90
$438 B 6.8% 12.3
CAGR: 30%
450 80 14.1%
6.6% 7.4%
400 7.7% 8.9% 7%
70
350 10.3% $60.5 B
60 5.6
16.2%
300 12.4%
11.2 13%
50
250 20.0%
23.3% 40
200 9.1

150 30
39.2% 40.2%
100 20 25.8
28.1 13%
17.7
50 10
0
0
2009 2012
2009 2012
Television Newspapers Internet Search Display + Rich Media
Magazines Radio Outdoor
Cinema Classified Other
Source: ZenithOptimedia, December 2009 Source: IDC, November 2009

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Where do user-initiated ad formats like in-text fit in?

• Display – Reach Buys


• Demo Targeted Display
Awareness • Video (premium & ad nets)

• Behaviorally Targeted Display


• Contextually Relevant Display
Consideration
• Contextually Relevant Video

• Search
Choice /
Action • Display – Performance
• Lead Gen

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Where do user-initiated ad formats like in-text fit in?

This study pointed out that in-text is effective for mid-funnel marketing objectives

Awareness In-Text:
• Search/contextual-like targeting
• Display-like creative canvas
Consideration

Choice /
Action

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Search continues to lead in revenue but display grew 4X faster in Q4
2009 driven by banners and video

ONLINE ADVERTISING SPENDING IN Q4 2009

Dollars % of Total % Change vs.


(Millions) YA
Search $2,900 47% +4%
Total Display $2,300 37% +15%
Related
Banner Ads $1,400 23% +8%
Rich Media $441 7% +2%
Video $306 5% +48%
Sponsorship $110 2% +26%
Classifieds $594 9% -23%
Lead Generation $374 6% -14%
TOTAL ONLINE $6,300 100% +3%
SOURCE: IAB Internet Advertising Revenue Report, 2009 Full-Year Results,
AB & PricewaterhouseCoopers
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In the U.S., half as many clickers on any ad in 2009 vs. 2007

July 2007 March 2009

Clickers
Clickers 16%
32%

Non-
Non-
Clickers
Clickers
68%
84%

Source: comScore, Inc. custom analysis


10 Total U.S. Online Population,
July 2007 & March 2009
Display advertising’s early mistake:
Click is the wrong metric for measuring ad effectiveness

Does this one person’s click effectively reflect


the branding impact of exposing the other 999
people to the same ad?

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Hundreds of branding effectiveness studies have confirmed that
online advertising moves the needle

comScore Norms for Display Advertising

Unaided Awareness 17%

Aided Awareness 25%

Ad Awareness 62%

Top of Mind Awareness 13%

Favorability 19%

Intent to Purchase 21%

12 Source: comScore Ad Effx norms


The vast majority of display inventory isn’t contextually relevant –
targeting is increasingly important

Top Publisher Categories


Share of Total U.S. Internet Display Ads

Social Networking 27%

Portals 21%

Entertainment 11%

e-mail 10%

News/Information 8%

Sports 3%

Online Gaming 2%

Lifestyles 2%

Business/Finance 2%

Retail 2%

13 Source: comScore Ad Metrix, March 2010


Six in ten consumers: Internet is important when making buying
decisions; 56% of those say this has increased in the past year

Importance of the Internet in Making Purchasing Decisions

Q. In the past 3 months, how important


has the Internet become in providing Q. How has this changed versus a year ago?
you with information to help you make Source: comScore Survey – April 2010
buying decisions?

Source: comScore Survey – April 2010

56%

16%
31%
Significantly Increased
59%
40% Somewhat Increased
10%

% of those who found the Internet important


Slightly/very important
Slightly/very unimportant
Neither important nor unimportant

14 Source: comScore survey, April 2010


Consumer loyalty to specific retailers and brands decreased over two
years, likelihood to shop online for deals and use coupons has risen

Q. Please indicate how you are cutting your shopping expenses

July April % Chg


2008 2010 (07/08 to 04/10)

Reducing gift spending 41% 57% +16%


Shopping at different retailers 20% 33% +13%
Shopping online for deals 24% 32% +8%
Signing up for retail point programs or customer loyalty
22% 29% +7%
programs
Using coupons more often when making purchases 59% 64% +5%
Buying different brands (including generic brands) 52% 57% +5%
Shopping less frequently 68% 72% +4%
Shopping only when there are sales (i.e. one day sales) 40% 43% +3%
Shopping at secondhand stores, garage sales, etc. 30% 31% +1%
Buying in bulk at warehouse/discount retailers like Costco,
27% 28% +1%
Sam`s Club, BJ`s etc.
Shopping at auction sites such as ebay.com 13% 13% 0%
Only shopping for basic necessities 66% 62% -4%

Source: comScore Surveys,


15 July 2008 & April 2010
Consumers are turning to an increasingly fragmented set of sites for
product research

170

160
Blogs (+49% y/y)
150

140
Travel Info (+26% y/y)
130
Comp. Shopping (+24% y/y)
120
Coupons (+20% y/y)
110 Total Internet (+11% y/y)

100

16 Source: comScore Media Metrix, June 2010


Display ads successfully build sales – both online and offline

$ per 000 Exposed

% Lif t: 16.6%

$11,550
$9,905

% Lif t: 27.1%

$994 $1,263

Online Of f line

Control Test

Source: ―How Online Advertising Works‖, comScore, 2009


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Given these Trends in Online Ad Formats &
Consumer Online Shopping Behavior …

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The Marketers’ Challenge:
How to Maximize Reach and Consumer Engagement

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Three Main Objectives

1. Connect with the


Truly Qualified

2. Do this at Scale
across the Web

3. Deliver Impact,
without Noise

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One approach…

To reach the consumer where & when they are engaged…

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Within the editorial content

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In-Text Delivers Editorial Placement and User Initiated Ads

PUBLISHERS TOPIC AGGREGATED MOST RELEVANT


TOPICS
BEST HOW IT ADS
ARE
PHRASES ARE
WORKS
ARE SELECTED
IDENTIFIED
LINKED
PAGEVIEWS

How to Promote Your Business


Wireless The new rules of marketing require you to strike an emotional
chord with your customers, and combine effective
communications tools with social-media platforms to get your
business from good to great.

Small Business Social media: a significant tool


Rand has observed that small businesses feel very empowered
when they start using it. Social media is also a cost savings that
best business
has become a best business practice.
practice While there used to be a
cost for experimentation, today the cost is getting closer and
closer to nonexistent.
Internet Service
Immediacy is another benefit on the online age. You can
always regroup. ―That’s the beauty of the digitalized message,‖
said Federico. ―If your customers are not excited by what you’re
telling them, go back to the drawing board.‖

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Marrying the Science of Search with the Art of Display

Science Art

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A Targeted Display and Consumer Engagement Platform

Video Freedom

will become the new chair of


at a news conference Tuesday..
the 2010 Winter Olympics and

Expandable Related Content

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In-Content Placement & User Initiated Engagement Open a Realm
of Possibilities

Brands Are Placed In:

• The Center of Attention


• The Center of Interest

Reach is:

• Qualified
• Delivered at Scale

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But Does it Work?

We tested Kontera In-Text Efficacy During a 3 month Period

 Advertiser Branding Metrics:


– Brand and Product Awareness
– Brand and Product Perception & Consideration
– Brand and Product Purchase Intent
– Brand-Driven Consumer Intent and Behavior

 End User Experience Factors:


– Page Clutter
– Ad Relevancy to Page Content
– Intrusiveness of Ad
– In-Text Publisher Site Trust

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Brand Case Study Results
comScore Study of Kontera

Client — Global CPG Brand

Objective — Introduce New Product Offering

Target — Women

Challenge — Crowded Category in a


Competitive Marketplace

Product Differentiation — Innovative Technology

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Brand Study: Experimental Test and Control Design
Respondent
hovers on
Respondent underlined text
visits site
and exposed Respondent Send survey
Test Cell invite
Administer
to underlined exposed to Survey
text prompts advertising

Analyze
Weight control
Differences
group to match test
group

Respondent No ad Send survey Administer


visits site invite Survey
Control Cell exposure The partnership with Kontera and
and exposed comScore in measuring Brand Lift
to underlined via Survey methodology allows for
text prompts the following efficiencies:
• Allows for less than 20MM
impressions to recruit Exposed
• Eliminates the need to allocate
bonus inventory to recruit Control
since comScore node can capture
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straight from the page
What is Lift?

15 Site Visitors

50% 5 incremental Site


10 Site Visitors Lift visitors

0 0
Not Exposed to the Exposed to the
Advertising (Control) Advertising (Test)
(e.g.: organic search, offline (e.g.: viewed online
advertising, natural intent) advertising)

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Brand awareness results were 4-5x comScore norm

Unaided Awareness Top of Mind Awareness

69%
Kontera campaign
73%Kontera campaign

LIFT LIFT

comScore Norm: 17% comScore Norm: 13%

Source: comScore Ad Effx study, May 2010


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In-text drove a 40% lift in a key brand perception

Has products that lead trends

40%
Kontera campaign

%
LIFT
Source: comScore Ad Effx study, May 2010
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In-Text Results

Brand Perceptions

Brand Purchase Intent

42%
comScore Norm: 21%
%
LIFT
Source: comScore Ad Effx study, May 2010
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Favorability & purchase intent were also positively
impacted

Product Favorability Product Purchase Intent

77%
Kontera campaign
68% Kontera campaign

LIFT LIFT

Source: comScore Ad Effx study, May 2010


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Consumers remembered the campaign’s primary call to
action

Message Association

Campaign Wide

Call to Action Slogan


155%
LIFT

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The product’s sister brand also benefited from the
campaign

In-Text Halo Effect


Product Recall

Measured Lift of Brand’s


Established Product Line
49%
Kontera campaign

LIFT

Source: comScore Ad Effx study, May 2010


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Site Visitation and Engagement

Sprint Sites

direct to site

view advertising campaign

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In-text also lifted search and site visitation for the brand

Panel Activity 3 Weeks After First Exposure

Product Website Visits Product Searches

151%
Kontera campaign
400% Kontera campaign

LIFT LIFT

Source: comScore Ad Effx study, May 2010


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Agency / Client Reaction

―Becoming ―one‖ with the content and providing


organic value is what we believe is a big win in a
crowded marketplace. We are very pleased with
the results of this study.‖

David Cohen
EVP, US Director of Digital Communications
May 2010

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User Experience Study Results
User Experience Study: Experiment Test and Control Design

Respondent
hovers on 140K invites =
Respondent 10% of the target
underlined
visits site who will hover;
text and is Send survey
Test Cell and exposed Administer .01% response
exposed to invite
to underlined Survey
In-Text ad rate
text prompts
N=57

Standard survey response rate


range is: .005% (banner) to 1% Analyze
(floating) of all recruitable units. Differences
Kontera recruitment is within
range, given nuance in hover,
etc.

Respondent Respondent Send survey Administer


visits site does not hover invite Survey
Control Cell on underlined 1.3MM invites =
and exposed
to underlined text and is only 90% of the target
text prompts exposed to the who does not hover;
In-Text links
.01% response rate
N=75**
**Control sample was adjusted to be in
roughly the same proportion as Exposed
sample, and matched for demos where
necessary
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In-Text is a Cleaner, Less Cluttering Ad Format

“This Ad Format Clutters the Page”


(Percent of Consumers who Highly Agree)

70%
60%
50%
40%
30%
20%
10%
0%
Interstitial Video Rectangle Banner Kontera Google
In-Text Text

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In-Text is in the Middle in Terms of Intrusiveness

“This Ad Format is Intrusive”


(Percent of Consumers who Highly Agree)

70%
60%
50%
40%
30%
20%
10%
0%
Interstitial Video Rectangle Kontera Banner Google
In-Text Text

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In-Text Viewed as More Relevant to Page’s Content

“The Ad is Related to Content”


(Percent of Consumers who Highly Agree)

25%

20%

15%

10%

5%

0%
Kontera In- Google Rectangle Interstitial Banner Video
Text Text

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Users Trust Sites with In-Text Ads More than Sites with
Google Text Ads or Banner Ads

“I Trust Websites Featuring this Ad Type” “I Trust Websites Featuring this Ad Type”
(Percent of Consumers who Highly Agree with the statement) (Percent of Consumers who Highly Disagree with the statement)

16% 40%
14% 35%
12% 30%
10% 25%
8% 20%
6% 15%
4% 10%
2% 5%
0% 0%
Video Kontera In- Interstitial Banner Rectangle Google Text Interstitial Video Rectangle Kontera In- Google Text Banner
Text Text

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Kontera Delivers on Every Step of the Purchase Funnel

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Thank You!

Graham Mudd Ammiel Kamon


gmudd@comscore.com ammiel@kontera.com
Twitter: @grahammudd

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