Fulgoni: The Bottom Line Is Online Ads Work For Branding And Sales
In the keynote, Fulgoni told attendees the Internet is far more successful in increasing sales. And it may be the most measurable medium, but not everything measurable matters.
So, what now? Fulgoni says advertisers and marketers need to forget the click, focus on the sales impact on campaigns and conduct post-buy analysis. They also need to realize that display ads help search advertising succeed and vice versa. Don't forget the power of creative display ads. Online branding campaigns can be effective. Internet advertising has had an impact on retail that is on par with television.
Advertisers and marketers just want some type of metrics that show the online campaign reaches the demographics and promised target segments. Fulgoni says that in any new medium, it's easy to make promises that exceed the ability of the technology. And to some degree, Internet advertising has done that. "One problem is, it's too easy to exaggerate the promises and claims that can be delivered," he says.
Fulgoni believes the industry has failed to eliminate the click as a metric because it once worked well, and search has had great success as a measurement tool. While the click rate for display ads has dropped to 0.1%, this does not mean that online ads don't work. It just means the metrics that the industry uses are wrong.
Still, far too many CMOs think the click matters. "If we want to move those dollars from traditional advertising to the Internet, we can sit here and complain about the percentage of time spent online and not getting our fair share until we're blue in the face, but I don't think that will influence the CMOs of big companies," Fulgoni says. "The CMOs need to know before they change the way they spend money that they will not have degradation in their ROI. Because God forbid it happens -- all hell will break loose."
There are major problems with using the click to measure the success of online ads. A comScore study of Yahoo and DoubleClick cookies that was conducted several years ago revealed that 30% of Internet users delete cookies in a month. A recent study suggests that rates are up 10%. The original metrics did not take into account that people use multiple computers. Nor do they take into consideration that people now delete five different cookies for the same site in a month on one computer.
Cookie deletion creates major problems -- such as 2.5 times overstatement of unique visitors in a server log, depending on frequency of site visitation, as well as up to 2.5 times overstatement of reach and a similar understatement in frequency in ad server logs.
Traditional brand marketers still want metrics on creative, reach and frequency. The cost-effectiveness of online advertising will speak for itself if the industry can determine and better understand the impact that campaigns have and use the correct metrics.
So, comScore combined traditional metrics with a type of ad-serving technology from Microsoft Atlas to create metrics that looks at ad placement. It combines Microsoft's ad-serving data with demographic information from comScore's panel. The Reach and Frequency Planner, or RF Planner, aims to help advertisers determine and predict how consumers will respond to their digital ads.
Richard Huff, senior analyst at Atlas Institute, who leads the project for Microsoft, told attendees in a later panel discussion that it's critical to have an accurate audience measurement tool, and it's important that the industry finally realizes it's time to make a change.
Several comScore studies have confirmed that online campaigns drive offline sales, according to Fulgoni. In the first study, comScore took four categories, 53 brands and 200 of the most trafficked sites. The company looked at people exposed to display advertising and what they did in the month following. Findings reveal that 18% searched on the brand advertised and 29% went to the advertisers' sites. Consumers who were exposed to the display advertising spent 55% more time than the average visitors to these sites the next month. The rise in time spent is matched by a similar increase in page views -- about 51%.
Rather than use the click as a metric, comScore looked separately at the impact of how search and display advertising might change consumer behavior, as well as search and display working together. During the four-week test, the research firm analyzed the increase traffic display ads give to brand sites. The patterns were consistent across automotive, finance, CPG, retail and apparel, media and entertainment, electronics and software, and travel.
Then, comScore analyzed the impact that online campaigns have on retail sales by matching the name and the address of consumers to retail loyalty card databases. The supermarket Kroger, for example, has issued about 60 million loyalty cards, which provide a massive data set to understand the degree that online search and display campaigns drive retail sales. The findings suggest a lift that is five times stronger when people are exposed to search ads alone, compared with display. Search alone produces an 82% lift, compared with display at 16%, and 119% when search and display are combined. About 82% of online ad campaigns measured by comScore have generated an average lift of 22% in CPG brand sales in retail stores.