Changing Media Consumption

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2 Changing Media Consumption Television viewership remains a stable and consistent choice for consumers. Online usage has grown by +54% over the past 4 years Minutes Per Day Online/Mobile +54% Television +5% Radio -6% Newspapers -33% Others -18%

3 Why We Know Our Advertising Is Important

4 Why We Know Our Advertising Is Important Two-thirds of buyers who purchase in-store access the internet for furniture information. Sources used to look for information on furniture while shopping: Source: 2012 Google/Complete Retail Furniture Study, U.S. QRT1- Which of the following sources, if any, did you use to look for information on furniture?

5 Consumer Online Behavior There is a direct correlation between website traffic and in-store sales.

6 Online Advertising Goal Drive qualified website traffic = Increased store traffic = INCREASED SALES

7 Tracking Traffic Tracking shoppers through your door is not the only traffic you should be counting.

8 Promote Engagement with Pre-Roll Advertising :15 commercial running as forced viewing prior to video content desired by browser. An extension of TVsight, sound, motion and a call to action. Relatively high click through rate.

9 Online Video Consumption is Increasing Digital Video Viewers in millions Source: emarketer Comparative Estimates Aug. 2013

10 Message Recall When online pre-roll advertising is combined with traditional TV, it results in a 10% increase in consumer recall. 30% Message Recall 20% TV + Pre-Roll Video Ad TV Source: Neilsen & IAB. A Comprehensive Picture of Digital Video and TV advertising, 2012

11 Behavioral Targeting Surfing the web leaves a trail. We analyze the browsing history to determine an interest in buying furniture.

12 Behavioral Targeting We buy the internet differently than we buy traditional media. Traditional Demo driven, i.e. W, Shot gun approach Internet Driven by browsing history (web behavior) Allows us to find hand raisers Delivers a one-on-one impression

13 On Which Websites Do We Deliver the Message? Our on-line buys appear across more than 500 websites based on where the individuals we want to target browse. These include: marthastewart.com coolhouseplans.com epicurious.com goodhousekeeping.com designsponge.com elledecor.com apartmenttherapy.com freshome.com midwestliving.com countryliving.com bhg.com hookedonhouses.net housebeautiful.com kudzu.com casasugar.com younghouselove.com traditionalhome.com curbly.com Plus local news and information websites

14 Sample Placements

15 Behavioral Targeting Why is Powell s advertising on Yahoo Finance? - We bought the person, not the page. The person accessing this page visited: - Elledecor.com - Pinterest - Coolhouseplans.com - Trivetts.com

16 Geo-Targeting Delivery of our message is designated to a specific geographic footprint. We can target as specifically as a single zip code.

17 A Smart Program The HHL on-line program learns as it goes: The buys focus impressions to sites and prospects that are most inclined to click increasing the efficiency of the buy over time.

18 Getting Started Our Recommendation A combination of banner ads and pre-roll advertising. Banners provide reach (more gross impressions). Pre-roll provides greater click through rates and many of the same advantages of broadcast TV.

19 Reporting We monitor program performance on an on-going basis. Day(s) Campaign Tactic Impressions Clicks CTR% Avg. CPM Avg. CPC 8/21/13-9/2/13 Labor Day Animated Banner Ads 666, % $3.75 $3.75 8/21/13-9/2/13 Labor Day Pre Roll Video 181, % $13.75 $3.44 Campaign Total 848,485 1, % $5.89 $3.59

20 CASE STUDIES

21 Geo-Targeting GOAL: Deliver the message to an area that does not receive our regular advertising.

22 Performance Results Anne Arundel Campaign 3/1/13-7/30/13 Web Site Visitors % increase +9% increase

23 Campaign Performance Website Traffic Media Campaign Run Dates: 11/6 12/1/2013 Pre-Roll and Animated Banners Compared to Previous 3 Weeks: (10/11 11/5/2013) Compared to Same Period 2012: (11/6 12/1/2012) Visits: 70.65% Visits: 68.20% Uniques: 79.93% Uniques: 69.93% Pageviews: 16.55% Pageviews: 26.29% New Visits: 9.07% New Visits: 6.65%

24 How Much Are HHL Retailers Spending On Online Advertising? Costs vary by market. Roughly 5 10% of traditional media spend is being moved into online initiatives. We see this percentage increasing over time.

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