Commentary

Targeting & Measurability Most Important Benefits of Online Advertising

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 3rd 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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About the Author

Jack Loechner is the Editor of The Center for Media Research's daily Research Brief. You can reach him at jack@mediapost.com.