Digital Accountability:Quantifying Online Ad Impact

Andrew Assad, Microsoft AdvertisingDavid Martin, Nielsen

Is online a good branding medium?Anecdotal evidence says yes…

Coke’s Happiness Machine:• Started online only• Promoted with one tweet and

one Facebook posting• Original budget of ~$60,000

USD

Result:• 3 million US views on YouTube• 1 million BR views on YouTube• Online creative translated into

successful TV spots

St. John’s University, USA

Rio De Janeiro, Brazil

2

Canadian consumers say no…They view online as direct response vehicle

3

What Would Make Online Ads More Influential to You?

1%

1%

4%

5%

11%

18%

29%

Honesty, Health Info

Less Clutter, Less Ads

Relevant to My Wants, Needs

Locally Targeted

Better Ad Creative Content

No Influence On Me, Don't Like Them

Discounts, Coupons, Pricing

Source: Nielsen survey of 1,200 Canadian consumers 13+

Brand advertisers say no…TV and print still get majority of brand spend

Total Ad Spend By Major Media TypeDaily Time Spent by Major Media Type

Source: Forrester TechnographicsZenithOptimedia, IAB Canada 4

The data say yes…Online campaigns studied drove up buying rate and penetration

PENETRATIONHow many buyers?

XTOTAL SALES

BUYING RATEHow much are they buying?

=Of all measured campaign results:

58% had greater impact on penetration

39% had greater impact on buying rate

Furthermore, there is little correlation between CTR and ROIOnline Click-Through vs. Offline ROI

R2 = 0.005

-200%0%

200%400%600%800%

1000%1200%

0.00% 0.05% 0.10% 0.15% 0.20% 0.25% 0.30%

Online Click-Through Rate

Offl

ine

RO

I

5Source: Nielsen SalesEffect

So why isn’t online getting more ad dollars?

Barriers to growth:

• Low economies of scale in Canada• Apprehensive client mentality• US spillover stifles local development• Conservative business culture• English and French consideration• Traditional broadcast media• Hard-to-prove ROI• Creative diffusion, context

6

“Too many ads makes other ads seem less important.

Instead of flooding a screen with many adds, have one ad

at a time.”--Male, 23, Ontario

“…the context they are displayed in should be

more consistent with the products.”

--Female, 54, British Columbia

“Very few on-line ads focus on Canadian

consumers let alone those in my specific

area...”--Female, 59, Ontario

Source: Nielsen survey of 1,200 Canadian consumers 13+IDC Canada, Wunderman Canada, Microsoft Advertising Canada

We need to establish a chain of digital accountability

7

REACH RESONANCE REACTION

Did the ad campaign hit the right target?

Did the ad and message stick with consumers?

Did the ad positively impact consideration and sales?

Reach:Post-Buy Reporting

Why should we care?Many Canadian consumers spend more time online than on TV

9

TV and Internet Consumption by Canadian

Consumers

72%TV Time >

Internet Time

28%Internet Time >= TV Time

Average Monthly Spend on Groceries

$339

$329

Internet Time >= TVTime

TV Time > InternetTime

Plan to Spend More on Groceries in Next Year

12%

10%

Internet Time >= TVTime

TV Time > InternetTime

Source: Nielsen survey of 1,200 Canadian consumers 13+

You can achieve high reach and exposure duration via online ads

Source: Nielsen Post Buy Report

Target Audience Cumulative Build: 25-34 YO Males w/ HHI Greater Than $75K

Time Per Impression Distribution

Online Audience Cumulative Build

More than 50 percent of the target segment were exposed to the online ad for more than a minute.

Source: Nielsen Cross-Media Post-Buy 10

Online also delivers the distinct audience of light TV viewers

• TV dominates the reach metrics for the campaign.

• Clearly, campaign spending is very heavy on TV.

• However, it is possible to reach an entirely distinct segment of consumers on the Internet; those who have had no TV exposure.

11Source: Nielsen Cross-Media Post-Buy

Online can also be more efficient than TV in delivery of target segments

Cost to Reach Desired Audience Online, Indexed to TV

100

76 71 70 64

020406080

100120

TV 18 - 34 18 - 34, HHIncome$100k+

18 - 34, HDTV& videocapablelaptop

18 - 34,boradband &video capable

laptop

12Source: Nielsen Cross-Media Post-Buy

Resonance:Ad Effectiveness Surveys

14

Why is attitudinal data important?Digital plays an especially important role in research

Source: Nielsen survey of 1,200 Canadian consumers 13+Microsoft Advertising Canada

Methods Used to Research Grocery Purchases in Canada

51%45% 41%

20%

5%0%

10%20%30%40%50%60%70%

Review printcirculars

Research inphysical stores

Research online ona computer

Ask a friend orfamily member

Research on asmartphone

By itself, online shows important variation on effectiveness measures

Source: Nielsen IAG 15

Brand Recall by Ad Size23%

20%17%17%

11%13%

5%

13%

7%

0%

5%

10%

15%

20%

25%

Device Campaign 1 Sale Campaign Device Campaign 2

SkyscraperRectangleLeaderboard

Coupled with TV, online exposure boosts branding effects across media

Source: Nielsen IAG TV & Internet: P13+, 11/8/07 - 6/3/08; Primetime Only; Based on time period(s) for advertisers where impressions were also being delivered on Network website for same brand

16

Brand and Message Recall

10%

4%

16%

8%

0%

5%

10%

15%

20%

Brand Recall Message Recall

TV Only ExposedTV + Online Exposed

Source: Nielsen IAG

Social adds another layer of complexityReaching highly social consumers is critical

Source: Nielsen survey of 1,200 Canadian consumers 13+ 17

Number of Facebook Friends, Canadian Consumers

8%

21%

6%

35%

0%

5%

10%

15%

20%

25%

30%

35%

40%

0 to 49 50 to 99 100 to 199 200 to 299 300 to 399 400 to 499 500 ormore

Will Spend More Next YearFacebook is More Influential in Shopping

Number of Facebook Friends

Perc

enta

ge o

f Peo

ple

Engagement Ad

Engagement Ad + Social Context

Organic Impression

The mechanics of “earned” mediaTypical Facebook Page:

18

Social media ads are more effective the closer they get to one’s network

Percentage Difference from Control Group

10%

4%2%

16%

8% 8%

30%

13%

8%

0%

5%

10%

15%

20%

25%

30%

35%

Ad Recall Awareness Purchase Intent

Homepage ad exposureHomepage ad + social advocacyHomepage ad + organic impression

19Source: Nielsen BrandEffectFacebook

Reaction:Online-to-Offline ROI Analyses

What return can I realistically expect?People who research online spend more

21

Amount Spent on Groceries Per MonthBy Research Activities

$283

$343

$352

$358

$363

$200 $250 $300 $350 $400

I typically do not research grocery storepurchases

Ask a friend or family member

Research in physical stores, including thestore where I make the purchase

Research online on a computer

Research by reviewing print circulars

Source: Nielsen survey of 1,200 Canadian consumers 13+

Single-match test/control can measure offline ROI of online campaigns

Campaign Start

Campaign End

Test Cell:Households exposed to the campaign

Test Cell:Households exposed to the campaign

Control CellHouseholds NOT exposed to campaign, but similar on demos and past purchases

Control CellHouseholds NOT exposed to campaign, but similar on demos and past purchases

22

Test/Control Construction

Source: Nielsen SalesEffect

The returns on online investment are real

Over 200 digital campaigns measured, averaging…

• Average increase in sales = 32%• Average short term incremental retail

sales = $1.1m

• Average ROI = 157%• Average increase in penetration =

18%

• Average increase in buying rate = 14%

• Campaigns with sub zero ROI = 13%

Source: Nielsen SalesEffect 23

ROI can differ between CPG product types

Existing BrandsAverage ROI = 164%

Average Penetration▲ = 18%

Average Buy Rate▲ = 13%

Line ExtensionsAverage ROI = 135%

Average Penetration▲ = 21%

Average Buy Rate▲ = 19%

Source: Nielsen SalesEffect 24

Messaging also drives differences in ROI, branding works, but promotions still drive higher ROI

Equity-only Campaigns

Average ROI = 143%

Campaigns with Promotions

Average ROI = 335%

Source: Nielsen SalesEffect 25

The learning cycle is key

26

REACH RESONANCE REACTION

Did the ad campaign hit the right target?

Did the ad and message stick with consumers?

Did the ad positively impact consideration and sales?

Limitations:Measurement Challenges

Challenges we need to overcome

28

• Panels can limit measurement of small campaigns

• Many Canadian campaigns are too small to justify spending on research

• Stated intent versus actual behavior can vary wildly between product categories

• Advertisers are still trying to figure out the absolute value of “fans” and earned media

Thank you!