Overview. Copyright 2011 MASB
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1 MASB Standards Project Measuring & Improving Return from Interactive Advertising Digital Advertising Effects: What is Known? E. Craig Stacey Stern Center for Measurable Marketing New York University Randy Bucklin UCLA February 2011 Austin Marketing Accountability Standards Board of the Marketing Accountability Foundation
2 Overview The Interactive Project: Reminder Summary from 2010 Meeting State of the Marketplace Highlights from Recent Research by Academics Current Industry Practices Summary/Q&A 2
3 The Interactive Project Objectives To identify one or more established metric(s) that may quantify the relationship of display advertising to financial performance For brands that are largely purchased online For brands that are largely purchased offline 3
4 Interactive Project Team Leads: Craig Stacey (NYU) Randy Bucklin (UCLA) Heroes: TBD Admin: Meet: Allan Kuse (MASB/MMAP Center) Meg Blair (MAF/MASB) 1st Thursday every month (2 ET) 4
5 Interactive Project Next Steps (Feb 2011) Review of Literature and documentation (Randy Bucklin 10/09+) Nielsen Online uncomfortable as data provider Continue meetings Continue in What is Known phase and review at Summits Review status of Project with Board (Craig/Randy 11/11) Need to recruit data partner(s) to participate Need to recruit 3 marketers to participate Determine any other resources required (Craig/Randy - Final Frame-up p( (Craig/Randy - Analytics timetable (Craig/Randy Results documented (Craig/Randy - 5
6 Summary from 2010 Meeting Academic research has investigated many of the effects of display advertising Clickthrough, awareness, consideration Purchase, purchase intent Industry practice in applying basic metrics and optimizing targeting appears to be advancing rapidly Issues that still need further work include Measuring the media (impressions, GRPs, cookies, etc.) Connecting display advertising with sales outcomes Academic research to date has been very limited Challenges in modeling the effects of display alongside other marketing activity and media, especially for offline sales Attribution to display versus search 6
7 Ad Spend vs. Media Time 8% 10% 15% 23% % 4% 27% 5% 44% 47% Ad Spend Media Time television newspaper internet magazines radio Source: emarketer, ZenithOptimedia 7 7
8 Advertising Influences Online Search Consumers increasingly use television and internet simultaneously l Significant association found between TV advertising and branded search Elasticity of 0.07, comparable to empirical generalization of advertising s impact on sales Practitioners should account for cross-media synergies Joo, Wilbur, and Zhu (2010), Does Television i Advertising i Influence Online Search 8
9 Advertising Influences Search and Behavior Advertising has both direct and indirect effects on consumer response Traditional mix model only detected response to television advertising Biggest driver of consumer response was organic search volume Marketing drives organic search drives sales Pauwels, Srinivasan, i and Stacey (2011), Interdependencies d Between Advertising, i Search, and Consumer Response 9
10 Advertising Influences Online/Offline Behaviors Are online metrics leading indicators of brand performance? Input data for owned, earned, and paid media Online metrics drive sales as much as TV and price This even holds for toilet tissue! Pauwels, Rutz, and dsrinivasan, i (2010), Are Online Metrics Leading Indicators of Brand Performance 10
11 Putting It All Together Feedback Feedback Benefits The image cannot be displayed. Your computer may not have MARKETING enough memory to open the image, or the image may have Online been corrupted. Restart Offline your computer, and then open the file again. If the red x still appears, you may have to delete the image and then insert it again. Feedback Benefits Feedback CONSUMER REACTION ONLINE The image CHANNEL cannot be displayed. Your computer may not have enough Web memory visitsto open the image, or the image may have been Information corrupted. Restart requests your computer, and then open the Quote file again. requests If the red x still appears, you may have to delete the image and then Orders insert it again. Thoughts, feelings Search click-through Social Media likes Website views - Costs OFFLINE The image CHANNEL cannot be CHANNEL displayed. REACTION Your computer may not have enough Thoughts, Information memory to feelings requests open the image, or the image may have been Distribution Quote corrupted. requests Restart your computer, and then open the Orders file again. If the red x still Affiliate prominence appears, you may have to delete the image and then Retail insert site again. promotion Feedback Financial Results Financial Results Sales, Profits The image cannot be displayed. Your computer may not have enough memory to open the image, or the image may have b Pauwels, Rutz, and dsrinivasan, i (2010), Are Online Metrics Leading Indicators of Brand Performance 11
12 Industry Practices for Measuring Digital Effects Approaches include: Lift from A/B tests (for CPG and online) Surveys (awareness, attitudinal, purchase intent) Model-based estimates (e.g., mix models) 12
13 Display Ads Build Sales Dollars per Exposed User % Lift: +16% % Lift: +27% $9,905 $11,550 $994 $1,263 Online Offline comscore, Inc. Control Test 13
14 Two Screens are Better Than One 14
15 Value of Social Media Ad Impressions 15
16 Global Marketing ROI ROI Incremental Revenue per $ spent $0.45 $0.85 $1.22 $2.18 $1.74 $1.09 $ $1.12 $1.05 $0.94 $0.84 $0.34 $0.24 Total Online Ads Co-op op Promotions Magazines PR TV In-store Outdoor AdsNewspapers Marketing ROI* Program Advertising Promotions *short-term only Short Term Long Term Global benchmark based on studies conducted by Nielsen Source: Nielsen 16
17 Summary The media landscape continues to evolve, and we must keep up with it Digital advertising works at every level of the purchase funnel Paid, earned, and owned media all need to be considered d Definite synergies exist between media channels Q&A and discussion 17
18 A Thank You to Industry Experts comscore InsightExpress Marketing Evolution Nielsen 18
19 Thank-you! Marketing Accountability Standards Board of the Marketing Accountability Foundation
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