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Online Lessons Learned: From Search to Branding Advertising in CPG

Search Insider Summit 2011

2© comScore, Inc. Proprietary.

Promotion dominates CPG marketing spending today with much of it translating into temporary price reductions and coupons communicated via print

Source: SAP

67%

22%

11%

Trade Promotion

Media / TV

Consumer Promotion

Internet Accounts for ~5% of CPG Marketing Dollars


The Digital Shelf: comScore study reveals searchers are extremely attractive to CPG marketers

From a comScore study conducted for P&G and Yahoo:

No. of people who used search to look for information on CPG products

Food Products: 44 million households

Baby Products: 16 million

Personal Care :10 million

Household Products: 2 million

CPG searchers have very attractive demos:

– More likely to be younger, affluent and female

Searchers are less price sensitive and can be influenced to switch brands based on factors other then price


Search generates higher offline sales lift than display advertising, but combined the synergy provides an even greater lift

+119%

Incremental Lift in Retailers’ Offline Sales per (000) Exposed

Source: comScore Ad Effectiveness Solutions


For multi-channel retailers, the higher reach of display ads often helps lift total offline sales more than does search. But, synergy gains can be obtained by using display overlaid on a search campaign

Source: comScore Ad Effectiveness Solutions

+11%

% of Households Reached Incremental Impact on Offline Sales per (000) Exposed

198

Total Sales Volume Lift Index

• The overall number of people reached by display ads is typically much higher than search

• As a result, even though the sales lift among those exposed to a search ad is higher, the total dollar sales gained from display ads is often larger than search due to the smaller lift acting on a larger base

Note: 0 equals par in above chart.


-20%

0%

20%

40%

60%

80%

100%

120%

140%

The median offline sales lift generated by online advertising among exposed consumers is +21%, and 83% of campaigns showed a positive sales lift

Median $ lift: 21%

83% of campaigns showed a positive

sales lift

Per

cen

t L

ift

in R

etai

l ($

) S

ales

Offline Sales Effectiveness Studies

Source: comScore AdEffx Offline Sales Lift Norms for CPG, March 2011Note: Retail sales is measured by linking the comScore panel of 1 million U.S. Internet users to their retailer loyalty card data from dunnhumby, which provides a measure of the panelist’s in-store buying activity.

<=0% 1-10% 11-20% 21-30% 31-40% 41-50% >50%0%

5%

10%

15%

20%

25%

17%

14%

19%

10%

17%

10%

14%

% of CPG ROI Studies by Sales Lift

% Sales Lift

% o

f S

tud

ies

comScore Studies Have Shown that Online Display Advertising Can Effectively Lift Offline Sales

Retail Sales Impact of Online Advertising for CPG Brands


The Short-term Offline Sales Lift from Online Advertising Matches Longer-term TV Impact

+8% +8%

comScore tests conducted over a three-month period; assumes 40% HH Internet reach

Hypothesis 1: More precise targeting on the Internet allows more impressions to be delivered against target audience in a given period of time

Hypothesis 2: Online display ads include more messages about price and promotion than TV ads, which tend to be strictly focused on brand building

TV Internet

Offline Sales Impact of Advertising for CPG Brands: TV Versus Internet

BehaviorScan tests conducted over a one-year

period.

(BehaviorScan)

(comScore/dunnhumby)


Median Offline Sales Lift in 3-Months from Online Advertising for CPG Brands

Purchase-Based Targeting Has Been Shown To Drive Higher Lifts In In-store Sales Than Campaigns That Didn’t Leverage This Type of Targeting

*Source: comScore AdEffx Offline Sales Lift Norms for CPG, March 2011

Non-purchased based targeting includes, but is not limited to, the following types of buys: contextual, audience, run of site//run of network, etc. **Source: comScore Audience Advantage, which leverages sophisticated predictive targeting algorithms that are created using anonymous panel and census data sources; targeting was deployed on the Microsoft Network sites.

Note: Retail sales is measured by linking the comScore panel of 1 million U.S. Internet users to their retailer loyalty card data from dunnhumby, which provides a measure of the panelist’s in-store buying activity.

Non-Purchased Based Targeting* Purchase-Based Targeting**

21%

38%


Price and Promotion Elements Are Used at A Much Higher Rate in Digital Display Than in TV

ElementDigital Display Ads

(Rich Media, Banners, Rectangles, etc.)

Television Ads

Brand Differentiating Key Message 17% 31%

New Product/New Feature Information 19% 44%

Product Convenience (explicit & stated) 0% 9%

Competitive Comparison 10% 24%

Superiority Claim 13% 26%

Price Reductions/Coupons/Samples 44% 8%

Percent of Digital Display Ads vs. Television Ads Containing Key Strategic Elements*

Source: comScore ARS Test Databases; Cases are balanced by category (n=100 for digital display ads, n=3,681 for television ads)


Inclusion Of Promotion / Price Incentives In Online Ads Helps Lift Offline Sales

No Value Information Coupon Only Free Sample Explicit Value Claim0.0%

20.0%

40.0%

60.0%

26.8% 28.4%

39.5%

48.9%

Percent Lift in In-Store Sales for CPG Brands Among Households Exposed to Display Advertising

Source: comScore ARS-dunnhumby Case Study of Major CPG Brands(Blinded, n=13)


Video Holds the Key to Capturing Branding Dollars


Online Viewing of Video in February 2011 Reached 83% of Online Users

NUMBER OF VIEWERS 173 Million

% OF INTERNET AUDIENCE 83%

VIDEOS VIEWED 31 Billion

VIDEOS PER PERSON 179

VIEWING TIME PER PERSON 13.5 hrs

Source: comScore Video Metrix, February 2011

88 million Americans will watch an online

video today!


Driven by Rapid Growth, Time Spent Viewing Online Video is Now Equivalent to 8% of TV Viewing

Source: Nielsen for TV. comScore for Online Video

TV Viewing Online Video

36

3

Hours Watched Per Viewer Per Week

+2% vs. YA

+15% vs. YA


Rapid Growth in Long-form TV Programming Online Over Past Year

Yearly growth in videos viewed on long-form TV programming sites

Source: comScore Video Metrix, February 2011 vs. February 2010

105%

Videos per Viewer

71%increase increase

Videos Viewed

Ad loads are in the process of being increased to match TV levels


Brands Trying to Reach their Target with TV Alone Hit A Plateau of Diminishing Returns

0 2,500 5,000 7,500 10,000 12,500 15,0000

10

20

30

40

50

60

70

80

90

100

67.874.1

85.1 87.9

Cost ($000)

Total Reach

Effective Reach(3+ Impressions)

Total Reach and Effective Reach for a TV Campaign as a Function of Cost

Typically 30%+ of Target Audience is not Effectively reached


Simulation Using Single Source TV / Internet Data: Adding Branding Advertising With Online Video Builds Reach with Identical Investment

Media Plan GRPs Cost Total Reach Effective Reach

TV Only 1,000 $10,000 85.1% 67.8%

TV + Internet Combination

TV (90%) 900 $9,000 83.7% 65.8%

Online (10%) 500 $1,000 63.8% 44.0%

TV + Online 1,400 $10,000 90.2% 83.7%

TV Only vs.90% TV + 10% Online

400 0 5.1% 15.9%

Impact of a 90/10 Budget Allocation


Summary Thoughts for CPG: Digital Offers Many Advantages

Search is an important component of consumers’ CPG decision making

Display ads are an effective, more cost efficient and higher reach alternative to print for communicating price and promotion incentives

Rich media and video hold the key to more powerful online branding campaigns

An integrated campaign that involves search, display, video and TV is very powerful:

– Search for high sales lift– Display for high reach communication of price incentives– Combination of TV and video for cost effective reach and branding

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