Targeting & Measurability Most Important Benefits of Online Advertising

by Jack Loechner, Feb 6, 2013, 6:15 AM

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According to a new Marin Software study, conducted by Forrester Research, marketers are using online advertising to drive revenue outcomes, but face challenges without ample visibility into key performance metrics. The study suggests that advanced ad management programs can help advertisers scale ad programs, enable insight into data, offload operational headaches and improve program performance.

US Interactive Marketing Spend ($US Millions)
Media	2013	2014	2015	2016	CAGR
Social Media	$2,760	$3,453	$4,217	$4,995	26%
Email marketing	1,875	2,066	2,262	2,468	10%
Mobile marketing	4,238	5,697	7,057	8,237	38%
Display advertising	19,783	19,783	23,919	27,600	20%
Search marketing	24,613	27,515	30,433	33,319	12%
Total	49,571	58,515	67,888	76,620	17%
Percent of all ad spend	20%	22%	24%	26%
Source: Forrester Research, January 2013

Key findings of the study show that advertisers value online advertising because it’s flexible, targetable and drives immediate revenue outcomes. 83% of respondents are already held accountable for revenue outcomes; 79% say that driving revenue is a primary objective for online initiatives. 74% look to technology to ameliorate problems.

Benefits of Online vs. Offline Advertising (Top 3; % of Respondents)
Benefit	Most Important	Second	Third
More accurate targeting	23%	17%	18%
Campaign measurability	15	21	13
More efficient marketing ops	10	10	16
Adjust strategies dynamically	9	14	17
Better ROI on marketing campaigns	12	13	13
Cost savings	13	11	6
Better conversion rates	7	9	6
Access to consumer response data	6	4	9
Source: Forrester Research, January 2013

Most respondents said paid search, audience buying, retargeting and contextual ads when asked which online program types are most important for their business goals.

Importance of Marketing Program in Achieving Business Goals (Scale 1-5, 5=Extremely Important, 4=Very Important; % of Respondents)
Program	Very Important	Extremely Important
Traditional paid search ads	35%	43%
Audience buying	47	26
Retargeting	40	28
Contextual display ads	44	21
Mobile paid search ads	35	28
Traditional display ads	38	19
Product listing (e.g. Amazon, eBay)	36	18
Pay per click ads on social networks	25	5
Source: Forrester Research, January 2013

48% of respondents outsource management of paid search to agencies, 35% use free or propriety tools, and 17% purchase 3^rd party tools to aid search program management.

Online advertisers focused on real-time buying of targeted or direct response media will gain prominence over the next 18 months, according to the report. With the trend underway, the emphasis is on driving immediate and quantifiable revenue outcomes.

• 83% say that their online advertising efforts are held accountable to revenue outcomes
• 6% believe that their organizations are less focused now on driving revenue directly from online ads than in 2011
• 55% expect revenue targets for their online ad programs to increase slightly in 2013, while 25% expect a significant increase

65% of respondents focus on driving sales, 64% on leads. The number one measurement is site traffic, with online sales tracked by 48% and 25% measuring offline or customer value metrics.

Metrics Used to Measure Online Ad Program Effectiveness
Measurement Metric	% of Respondents
Site traffic	69%
Online conversions	63
Online sales and revenues	48
Performance by product line and business unit	25
Influence along path to conversion	23
Customer lifetime value	20
Offline conversions and revenues	20
Competitive benchmarks	19
Source: Forrester Research, January 2013

For additional information about this research, please access the complete PDF report file from Forester Consulting  through Marketing Charts here.

 

 

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