How to Build Brands Using Online Advertising: Lessons Learned

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1 How to Build Brands Using Online Advertising: Lessons Learned IAB Chile Seminar on Interactive Marketing Gian Fulgoni, Chairman, comscore Inc.

2 Discussion Online Advertising in Latin America The Correct Metrics to Use to Measure Online Ad Effectiveness Not the click Latency must be measured Understanding the Media Plan Delivered Reach and Frequency Delivered 2

3 Advertising Revenues in Latin America ($ Millions) F TV $10,075 $9,625 $10,842 Online (Search + Display) 1,509 1,691 2,066 Newspaper 2,912 2,644 2,797 Magazines 1,084 1,001 1,128 Radio 1,113 1,010 1,106 Outdoor Total Media 17,687 16,864 18,913 Online as a Percent of Total Media 8.5% 10.0% 10.9% Online Change, YOY 47.7% 12.0% 22.2% 3

4 Search Dominates Online Advertising Spending in Latin America 2009 Total Online Advertising Spending: $1.7 Billion 4

5 The Internet is lagging badly in capturing branding dollars 2009 US Measured Media Spend: $147B 63% Brandin g $91B 6% of Brand Dollars 37% Direct Response $55B $6B $18B 30% of DR Dollars 5 Source: Brand.net analysis based on data from Barclays Capital, Think Equity Partners, LLC, and DMA

6 The Correct Metrics to Use to Measure Online Ad Effectiveness: It s not the Click! 6

Powerful Platform: Global Panel of 2 Million

Global Measurement of Audience and e-commerce

and Viewing Demographics Life Stages Online /

Behavior 41 Media Metrix Reported Countries

7 Powerful Platform: Global Panel of 2 Million Users: 150,000+ in Latin America The Only Global Measurement of Audience and e-commerce 360 View of Consumer Behavior Web Visiting and Viewing Demographics Life Stages Online / Offline Transactions Streaming Video Search Behavior 41 Media Metrix Reported Countries 170+ Countries with Sample Presence Media Exposure 7

8 In the U.S., Half as Many Clickers on Any Ad in 2009 vs 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 Clickers 32% Clickers 16% Non Clickers 68% Non Clickers 84% Source: comscore, Inc. custom analysis Total U.S. Online Population July 2007 and March 2009 data periods 8

9 Ad Clickers Follow the 80/20 Rule 84% of Internet users don t click on ANY ads Despite comprising only 8% of the total online population, moderate and heavy clickers account for 85% of all click-thrus 4% 4% 8% 22% 26% 67% 84% 52% 18% 15% % Internet Pop % of Clickers % of Clicks Heavy Moderate Light Non Source: comscore, Natural Born Clickers (US), March

10 Does the Click Tell Us Anything About Branding Impact? Global Click Rates on Individual Campaigns are Pitifully Low Worldwide Click-Through Rates* Norway Ireland Luxembourg United Kingdom Finland Australia Canada Sweden United States Hungary Switzerland Denmark France Italy 0.07% 0.08% 0.08% 0.08% 0.09% 0.10% 0.10% 0.10% 0.10% 0.11% 0.11% 0.12% 0.12% 0.12% Germany New Zealand Spain Turkey Austria Netherlands Belgium China Greece India Singapore Hong Kong United Arab Emirates Malaysia 0.13% 0.14% 0.14% 0.14% 0.15% 0.16% 0.17% 0.18% 0.18% 0.20% 0.20% 0.21% 0.26% 0.29% *Click-through rates across Static Image, Flash, and Rich Media formats 10 Source: DoubleClick DART for Advertisers, a cross section of regions, January December 2008

11 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? 11

12 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 12

13 Understanding Behavioral Impact Of Ad Exposure: comscore s Methodology AD EXPOSED GROUP LIFT METRICS Test and control groups matched on demographic and behavioural variables BALANCED UNEXPOSED GROUP Site Visitation Site Engagement Search Behavior Buying Behavior 13

71% Source: Average of 20 Studies Published

14 comscore Whither the Click in Europe? Display Ads Lift Visitation to Advertiser Site Even With Minimal Clicks % Lift: 99% % Lift: 75% % Lift: 73% % Lift: 80% % Lift: 71% Source: Average of 20 Studies Published in comscore s Whither the Click in Europe? Feb

15 comscore Whither the Click in Europe? Display Ads Increase No. of Trademark Search Queries Even With Minimal Clicks % Lift: 91% % Lift: 89% % Lift: 81% % Lift: 136% % Lift: 114% Source: Average of 20 Studies Published in comscore s Whither the Click in Europe? Feb

16 European Audiences Show a Greater Response to Display Ad Campaigns Than U.S. Audiences Over a 3 week period following display ad exposure, European audiences show a higher lift in advertiser site visitation and trademark search than their U.S. counterparts Lift in Site Reach 16

17 The.Fox U.K. Ad Studies Objective: Partnering with.fox Networks, comscore examined the effectiveness of display vs. video ad formats as well as the frequency of exposure to the campaign ads Methodology: Four U.K. campaigns were examined from different sectors (Travel, Finance, Government and Utilities) comprising over 300 million impressions served to U.K. Internet users across various ad formats in comscore used its panel of 70,000 U.K. Internet users to passively track online behaviour to understand the impact of advertising on specific activities linked to campaign effectiveness over time, namely: -- Advertiser Site Visitation -- Trademark Search Queries 17

18 Campaign Overviews Sector Finance Travel Public Sector Utilities Campaign Objectives Branding campaign to raise awareness of the brand and also drive consideration of one of their leading products Price-led promotional campaign to both raise brand awareness and increase passenger bookings Public service campaign aimed at making the population aware of a key upcoming voting event, supported by the launch of a new site, and to encourage registration Awareness-building campaign for a leading utility firm focusing on the environment and sustainability 18

19 Reach & Frequency Information by Campaign Campaign Overall Campaign Reach Average Frequency of Exposure Online Gross Rating Points (GRPs) Formats Used Finance 8.2MM (23%) Only Video Travel 26.4MM (72%) Display Public Sector 22.8MM (62%) Display + Video Utilities 16.9MM (46%) Display 19

20 Overall Campaign Summary Advertiser site reach within 4 weeks of first exposure to display ad Sector Unexposed Group Exposed Group Absolute Percentage Point Lift % Lift Finance 1.98% 5.47% % Travel 0.33% 4.88% ,379% Public Sector 0.19% 1.05% % Utilities 0.05% 0.55% ,000% Reach of advertiser search queries within 4 weeks of first exposure to display ad Sector Unexposed Group Exposed Group Absolute Percentage Point Lift % Lift Finance 3.97% 7.43% % Travel 0.20% 2.40% ,100% Public Sector 1.97% 3.50% % Utilities 1.07% 2.55% % 20

21 Campaign Search Queries Climb Steadily With Increased Display Exposures While Video Has a More Immediate Impact with Fewer Exposures Absolute Percentage Point Lift in Campaign Search Term Reach Exposed Group vs Control Group Campaign Breakout: Video Only: Financial Display Only: Travel, Utilities & Public Sector 21

22 Within the Public Sector Campaign, Video Generated Higher Lifts than Did Display 22

23 The Key to Ad Effectiveness Measurement is Behavior. This.Fox research is valuable because it looks beyond the usual data used by the industry for media trading. As opposed to relying on the usual simplistic denominators of click-thru and last event attribution, this research centres on consumer behaviour proxies that are better placed to reflect communication goals, defining success based on a mix of visitation, engagement and search behaviour across a four week period. By addressing difficult planning considerations such as cross format and multiple touchpoint attribution, this.fox research better reflects the way Havas Digital believes campaigns must be evaluated if the digital media industry is to continue to grow in terms of significance for major advertisers." Anthony Rhind Global Co-CEO, Havas Digital 23

24 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 Offline Control Test 24

25 Short Term Offline CPG Brand Sales Lift From Online Advertising Matches Long Term TV Impact BehaviorScan tests conducted over one year period comscore studies over three months* +8% +9% TV (Bscan) Internet (comscore) *Assumes 40% HH Internet Reach Against Target 25

26 Relating Campaign Effectiveness Results to the Media Plan Reach and Frequency Actually Delivered Target Reached 26

27 The Cookie Deletion problem Cookie deletion creates audience measurement issues Cookie Deletion* Year Method Country Belden 43% 2004 Survey U.S. Nielsen 44% 2005 Survey Italy Jupiter 39% 2005 Survey U.S. comscore 31% 2006 Electronic U.S. Forrester 50% 2008 Survey U.S. comscore 24% 2009 Electronic U.K. * % of responders/users deleting cookies during past month 27

28 Deletion Rates Add to the Problem: Number of Different Cookies Per Machine for Same Site / Campaign Among Deleters Web Site Cookies Ad Server Cookies U.S. 5 7 U.K. 4 8 Source: comscore 28

29 Cookie Deletion Skews Campaign Delivery Relative to Plan The high rate of deletion of first party ad server cookies causes unique visitor (people) counts in web site analytics data to be severely overstated The high rate of deletion of third party ad server cookies causes: Ad reach to be significantly under-achieved relative to plan Frequency to be similarly over-delivered It s critical to understand the characteristics of the media plan that were actually delivered if accurate conclusions are to be drawn about plan effectiveness 29

30 Introducing MMX 360: Panel-Centric Hybrid Measurement Complete and Fully Reconciled Measurement PANEL People Measurement Reach, Demographics, Affinity, Duration SERVERS Census Coverage of Usage Anywhere QUERY TAGS Content Categorization 30

31 Panel Measurement Strengths However Tracks real people and measures person demographics Better duration and usage measurement UVs not affected by bots or cookie deletion Measures ad impressions delivered by demographic Captures cross site visitation A panel is still a sample: Universe limited to home and work Niche audiences difficult to measure Challenging to recruit adequate sample sizes of users in large enterprises due to IT security policies 31

32 Panel-Centric Unified Audience Measurement Panel-Centric Unified provides best of breed by combining strengths of both Web site-server and panel measurement Panel-Centric Unified involves beaconing of Web site data processed with comscore s filtering technology to eliminate extraneous traffic, combined with panel to provide accurate people-based demographics, duration, reach, intensity Adding census data from beacons increases accuracy for niche and long tail sites, heavy work visitation sites and out of home Internet access Provides most accurate measurement of unique site visitors, ad reach and frequency 32

33 Measuring Online Advertising Effectiveness: Lessons Learned Clicks are an inappropriate metric for measuring effectiveness of display advertising Online advertising can have substantial impact even in the face of minimal clicks Online advertising needs to be measured with an eye toward its latent and branding impact on consumer behavior Compelling evidence that online is a particularly effective and efficient branding medium, lifting site visitation, trademark search queries and both online and offline buying even in the face of minimal clicks Measuring behavioral impact can increase confidence in the effectiveness of display advertising as a branding strategy Because of cookie deletion, ad server data overstate reach and understate frequency actually delivered Unified server and panel data can provide most accurate R/F data 33

34 Thank You!

The Evolution of Digital Advertising: From Direct Response to Branding Gian Fulgoni Executive Chairman and Co-Founder comscore, Inc

The Evolution of Digital Advertising: From Direct Response to Branding Gian Fulgoni Executive Chairman and Co-Founder comscore, Inc comscore, Inc. Proprietary. Topics for Today The Click Search vs. Display