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Digital Marketing Factbook: A Glimpse Inside
Source: MarketingProfs.com
How US consumers spend their time online has shifted significantly in the past five years, according to Online Publishers Association (OPA) data presented in the Digital Marketing Factbook (Q4 2009) recently published by MarketingProfs.
The Digital Marketing Factbook, designed to be a comprehensive source of data and research for online marketers, includes chapters on email, search, and social media—with 144 pages of findings, including 110 charts and graphs from 60+ sources.
In 2004, US consumers spent 42% of their online time on communications-related activities such as reading and sending email, whereas now they spend only 27% of their time doing so, according to the OPA data cited in the Factbook.
What’s filled the gap? Community-focused social networking sites such as Facebook, which now account for 13% of users’ time, up from virtually nothing in 2004:
Key findings:
- In addition to devoting more of their online time to community sites, consumers today are spending more time on content sites and search, and less time on commerce sites, than they were in 2004.
- As for what specific activities US adults perform online today:
—90% send or read emails
—88% use search engines
—76% check the weather
—75% buy a product
—72% get news
—66% to make or buy a travel reservation
—60% to look for news or information about politics
(According to April 2009 data from the Pew Internet & American Life project included in the Factbook.)
Overview
The “Online Overview” that opens the Digital Marketing Factbook presents the information above, as well as data on Internet usage worldwide, typical marketing budgets, most successful and most used tactics, and marketing ROI—including, in all, 21 charts.
Following the overview are chapters on email, search, and social media marketing, all of which are sampled in this article.
“The Digital Marketing Factbook is more than just a compendium of charts. Marketers can use this information-packed resource to plan their online marketing campaigns and implement go-to-marketing tactics,” said MarketingProfs President Roy Young.
“Armed with data regarding consumers’ online habits, preferences and inclinations, you’ll be able to best craft your digital message to reach loyal customers, reach new ones and retain them.”
The Factbook is available for purchase by nonmembers for $199—or $119 for MarketingProfs Premium Members. Basic Members (just provide your email address to become one) can obtain a copy for $159 until Saturday, Oct. 31.
What Marketers Say
Senior marketers were asked which components of their current digital marketing programs—search, email, display advertising, social networking, and mobile advertising—delivered the best results. Only 11% cited social networking—an especially striking figure when you consider that consumers spend 13% of their online time on social networks, and this percentage is likely to grow.
Here’s what senior marketers said of the results they get from components of their campaigns:
Key findings:
- Search marketing delivers the best results (33%); search and email still constitute the core of a solid online media plan.
- Mobile advertising… whoa.
Email Marketing
Nearly everyone uses email, and this medium is repeatedly ranked as one of the most cost-effective (and effective) forms of marketing.
The Email Marketing section of the Digital Marketing Factbook covers how, when, and why consumers and businesses use email, as well as providing marketing benchmarks, such as average open rates, that can help you judge your own efforts. In all, this section of the Factbook contains 18 charts.
What Consumers Say
Global email users were asked the following question: As a result of opening permission-based emails, how often do you normally take each of the following actions?
Key findings:
- Consumers in Asia appear more responsive to email offers than those in other regions, though a higher percent of consumers in North America would enter a sweepstakes or promotion.
- Asian consumers are also more likely to forward emails than consumers based elsewhere: 51% forward emails, compared with 39% of North Americans and 32% of Europeans.
- In another question, consumers were asked about what makes a subject line effective. The results showed that discount offers have universal appeal, but many subject lines are much more popular in Asia than in Europe or the United States (familiar brand names, new product announcements).
- European and North American consumers respond much the same to subject lines, although Europeans are more likely than Americans to find free product offers attractive (66% vs. 57%).
What Marketers Say
Looking at the most important email marketing initiatives that businesses consider implementing, we see that the top-ranked ones reflect a desire to improve relevancy. Some 66% of respondents are looking to increase the performance of their campaigns and 52% are looking to improve segmentation and targeting:
Other findings:
- According to a survey of 623 email marketers, almost 50% of respondents report that sending emails at midday (10 a.m. to 2 p.m.) is the best time of day to do so.
- The start of the business day (6 a.m. to 10 a.m.) is considered second best at 31.5%. Though every emailer should test for himself or herself what the best time of day is, this can help guide initial efforts.
Search Engine Marketing
The first stop for just about any type of information imaginable is an online search. This section of the Digital Marketing Factbook is full of information about how consumers seek information and how businesses are ensuring that their potential customers find it: e.g., which search engines are the favorites worldwide, how those favorites perform in different regions, and how to improve search marketing efforts.
This section of the Factbook contains 34 charts.
What Consumers Say
A survey of 320 Internet users found that search engines were the most valuable information source for someone making a purchasing decision:
Key findings:
- Survey respondents ranked online rating systems second and discussion forums third.
- Consumers ranked social networking sites low among the options; it will be interesting to see whether consumers come to rely more on these sites in the months and years ahead.
Not all searches take place on search engines. Though not nearly as large as Google, a site like eBay hosts about as many monthly searches as Microsoft or Ask. With such volume, search marketers should be taking these sites into consideration when planning PPC strategies:
Other findings:
- Data from comScore suggests an interesting trend: a steadily increasing length in the phrases people use when searching for something. This means that the long tail of lesser-used, but more productive search phrases of 3+ words is growing. More exact searches mean more efficient targeting. More sophisticated usage as search becomes more mainstream is the most likely factor responsible.
- Hitwise data based on a sample of 10 million U.S. Internet users shows the same phenomenon: the length of search queries has increased over the past year. Searches of eight or more words increased the most (18%), although two-word searches made up the majority of searches, amounting to 23% of all queries in 2009. Understanding the middle of the long tail is a key part of maximizing the efficiency of a PPC campaign.
What Marketers Say
The search marketing firm SearchIgnite put together an aggregate analysis of its clients’ activity in Q2 2008 compared with Q2 2009 to see the effects of the market downturn. What it found is that its clients have been able to get more PPC impressions and clicks while spending less.
For marketers with intact budgets, this is good news, because it means decreased competition and more cost-efficient PPC ads:
Social Media Marketing
The Social Media Marketing section of the Digital Marketing Factbook features the latest stats on usage of social media, including data for how usage differs across various demographics. Learn about who is reading blogs, chatting with friends or business contacts, putting up a blog, tweeting or creating a Facebook or MySpace page.
This section contains 37 charts.
What Consumers Say
Of the 418 social network users surveyed online by Knowledge Networks, almost one-quarter “sometimes” turn to social media for information on travel or travel services and “sometimes” got purchase advice on clothing or shoes, but very few do so “regularly.”
Other findings:
- According to BIGresearch’s Simultaneous Media Usage Survey of 22,000 consumers, women are far more active on social networks than men, with the exception of the career-oriented LinkedIn.
- According to a study of 711 women social network users, nearly half of all social networking women belong to four or more networks. Based on focus groups conducted by ShesConnected, the primary reason given for joining multiple sites was “no one site meets all of my needs or interests.” This insight may be particularly useful for marketers trying to help meet certain product-specific information needs.
- Some 57% of white-collar Baby Boomers report they use the networking site LinkedIn, while another 55% have a Facebook profile. This data comes from a survey of 1,660 business professionals age 45 to 63.
What Marketers Say
According to a survey of CMOs, 65% of companies use social networking sites for marketing. Those firms that do use social media do so toward a wide range of marketing objectives:
About the data: The Digital Marketing Factbook, designed to be a comprehensive source of data and research for online marketers, includes chapters on email, search, and social media—with 144 pages of findings, including 110 charts and graphs from 60+ sources.
The Factbook is available for purchase by nonmembers for $199—or $119 for MarketingProfs Premium Members. Basic Members (just provide your email address to become one) can obtain a copy for $159 until Saturday, Oct. 31.
2 comments October 28, 2009
Online Spending Passes TV in UK
Source: eMarketer
Online ad spending has been fortunate in the economic downturn—recession-resistant due to its high level of accountability, Internet ad revenue growth has remained positive as spending in all other media dropped.
In the UK, the effect has been so dramatic that online took the biggest slice of advertising revenues in the first half of 2009. Research from the Internet Advertising Bureau UK (IAB UK), PricewaterhouseCoopers (PwC) and the World Advertising Research Centre (WARC) put online revenues at 23.5% of the total from January to June, 1.6 percentage points ahead of TV.
This makes the UK the first major economy to see online spending overtake television.
“Internet advertising has beaten all expectations to achieve growth in the most challenging market conditions,” said Guy Phillipson, chief executive of the IAB UK, in a statement. “Online display has performed notably well against its peers in TV, print and radio despite more than £1.5 billion being wiped off the advertising industry.”
Paid search led online growth, while spending on display ads and classifieds fell.
Interestingly, the UK TV lobby is fighting back. Lindsey Clay, marketing director of industry body Thinkbox, told The Guardian that it is “meaningless to sweep all the money spent on every aspect of online marketing into one big figure and celebrate it. Online marketing spend is made up of many things, including e-mail, classified ads, display ads (including online TV advertising) and, overwhelmingly, search marketing. They should be judged individually.”
“Of course online encompasses a wide range of formats and approaches,” commented Karin von Abrams, eMarketer senior analyst. “And the UK is a unique market, where—thanks to the BBC—a large portion of TV broadcasting is not ad-supported.
“But few interactive marketers will want to forgo the celebrations,” Ms. von Abrams continued. “The UK has been especially hard-hit by the global recession, and the pace of recovery is still uncertain. Online advertising is rightly credited with saving the UK ad industry from meltdown in this difficult period. These Internet spending figures will also give advertisers renewed confidence, and encourage further investment in online strategies.”
Keep up on the latest digital trends. Learn more about an eMarketer Total Access subscription, today.
Check out today’s other article, “Behavioral Targeting Misses Mark.”
Add comment October 7, 2009
Consumer-Goods Brands Likely to Triple Online Spending in India Next Year
But the Medium Still Faces Challenges as Broadband Penetration Lags
By Robin Thomas
Fast-moving-consumer-goods brands in India are upping their spending on online advertising — and how. According to the WebChutney Digital Media Outlook Report 2009, the online spending of the FMCG category, which stands at about $3.3 million (Rs 16 crore), is expected to increase to almost $14.8 million (Rs 72 crore) in 2009-10, a whopping 353% jump.
For a long time, FMCG brands have been using TV and print media, and though these media still lead the pack, the use of online advertising is also on the rise. For instance, in August 2009, Coca-Cola India launched its campaign for Sprite on the internet first. Pepsi, ITC Group and Colgate-Palmolive are some other FMCG brands that have begun using online advertising in a big way. In fact, the second half of 2008 saw Pepsi increasingly take to online advertising.
Amardeep Singh, co-founder and VP of Interactive Avenues, explained: “FMCG brands are increasingly spending online. Today you have clients like Colgate-Palmolive, Sony, ITC Group and so on who are getting active online and using the internet as a medium to build reach. With the growing number of internet users, people have started using the internet as a reach-building medium, and thus more advertisers are waking up to the fact that the internet is fast becoming an integral part of their media plan.”
On the other hand, Saurabh Bhatia, co-founder and chief business officer of video-ad network Vdopia, said, “FMCG brands in India are increasingly spending online, and this is a growing trend. Nevertheless there is still a long way to go, because FMCG brands are still experimenting with the medium, whereas by now it should have already been a part of their media plan.”
Mr. Bhatia added: “One major reason why FMCG brands must market their products online is because their competitors are not yet there; hence, for an audience, there is very little exposure of the FMCG brand, which, in turn, brings in a lot of freshness and curiosity, which the brands can reap benefits from. Since FMCG is majorly about brand and branding, the internet can play a very critical role. … However, unfortunately the decision makers are mainly from a generation that did not spend their time on the internet, which is another challenge.”
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Exchange4media covers advertising, media and marketing in India through its exchange4media.com website and daily e-newsletter; print magazine, Impact, published weekly; and Pitch, a monthly.
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Mr. Singh explained further: “Until now, brands were looking at performance of the medium to acquire the customer, but the moment they start looking at the reach and frequency metric of the internet, then automatically FMCG advertisers will come on board.
“The internet as a medium is not a static medium but a very dynamic one. With online video coming on board, FMCG brands will use video advertising in a big way. However, for online-video advertising to take off in the country, there is a need to increase broadband penetration, and once the penetration of wireless broadband devices increases, you will see an increase in video consumption. As a result a lot more FMCG brands will also be seen coming on board.”
Said Mr. Bhatia: “At the decision-maker level, there is a lack of understanding amongst the clients about the digital media, hence there is a need to for the internet companies to educate FMCG brands about the value of the internet as a medium, and this is one area where they have not been very successful.
“Broadband penetration must reach the tier-two and -three towns as well. In fact, we are seeing increasing trends of internet consumption beyond metros as well. The presence of online video is a huge, welcome trend for the internet industry per se because it gives an opportunity to the FMCG brands to experience the medium in the most common denominator that they have been using, which is the 30-second commercial, thus making FMCG brands feel that internet advertising is no alien, but can be far more interesting.”
While the FMCG brands are no doubt increasing their online spending, online advertising for these brands is more or less on an experimental basis. However, with increased broadband penetration and the growth of online-video advertising in India, FMCG brands are bound to take to online advertising in a big way.
The story was originally published at Exchange4Media.
Add comment September 2, 2009
Gartner: Mobile Advertising To Grow 74% In 2009
By Mark Walsh
A new Gartner report projects that mobile ad spending worldwide will grow 74% this year to $913.5 million but not really accelerate until 2011, when advertisers are expected to boost mobile spending as part of an overall shift toward digital marketing channels.By 2013, the research firm expects mobile ad spending to surpass $13 billion, with the Asia-Pacific region leading the way, followed by North America and Europe.
“After 2011, the trend will continue as smartphones and flat-rate data plans become more affordable to mainstream users,” states the report, titled “Mobile Advertising Grows Quietly. “The growth in mobile advertising revenues is primarily driven by mobile Web banner ads, but it also has a strong growth component from mobile search, downloadable applications and SMS advertising.”
Underlying the growth of these formats is increased consumer use of smartphones, which Gartner expects to account for 45.5% of all mobile phone sales in 2013, up from just over 9% in 2008. The embrace of smartphones — especially the iPhone — coupled with a rise in flat-rate data plan pricing, signals that a fundamental change is underway in how consumers interact with high-end devices.
While data usage is growing most rapidly among smartphone users, Gartner analyst Andrew Frank points out that that the increased mobile media consumption is leading Web publishers to create more user-friendly versions of their mobile sites, “which in turn is lifting mobile Web access among non-smartphone users.”
A recent NPD report also noted that regular mobile phones have also increasingly adopted smartphone features such as Qwerty keyboards and touchscreens.
The report highlights location-based targeting, long hyped as one of the killer apps of mobile advertising, as still underutilized by finally coming into its own with the spread of GPS technology. “GPS-aware apps now provide a much simpler and more cost-effective means of achieving location targeting, while lowering the risks of consumer backlash,” since no personally identifiable information needs to be sent by users.
Gartner expects location-based ads to find an audience among young mobile users who are increasingly using mobile devices to navigate and connect with friends on the go. The firm suggests that media companies will have to develop (or acquire) local directory services like Yelp and Citysearch to fully take advantage of location-based advertising on cell phones.
Another as-yet unfulfilled opportunity in mobile advertising lies in third-party advertising in mobile apps. Despite the explosion of apps sparked by Apple’s App Store, most have yet to integrate advertising. And among those that have, the prevalence of house ads indicates that revenue growth is significantly lagging the opportunity afforded by rising usage.
Gartner also predicts that mobile handsets will increasingly complement other types of advertising as a “universal back channel,” especially for out-of-home media. The firm’s research supports the idea that young consumers in particular will accept free mobile content subsidized by advertising.
Even so, the report acknowledges that user acceptance generally, and regulation of more highly targeted and personalized forms of advertising, remain a potential hazard for advertisers, content providers and carriers. Other barriers to mobile ad growth cited by Gartner include the proliferation of non-standard devices and metrics and mobile spam, especially in connection with SMS text marketing.
While encouraging advertisers and agencies to look at precise targeting by time and location, the firm advises them to maintain a keen sensitivity to privacy issues and permission strategies.
1 comment September 1, 2009
Do Consumers Care About Web Privacy?
Experience of Ad Net Fetchback Shows Many Opt Out of Opting out
NEW YORK (AdAge.com) — Freaking out about the easier opt-outs proposed by some online-privacy advocates? Maybe you don’t have so much to worry about.
In June, Fetchback, an advertising network that specializes in ad “retargeting,” added a link within its ad units that, when clicked, took consumers to a page that explained who the advertiser was and how the ad got there and gave contact info for Fetchback, as well as a way to opt out of future targeting.
When Fetchback compared the rate at which people opted out before it added the link and after, it found that it actually went down slightly.
It’s early data and a limited sample — two weeks’ worth, both before and after — but it shows that fears that consumers will choose to eschew web targeting en masse are perhaps overblown. In a small number of instances, adding the link actually resulted in messages from consumers who wanted to know more about the advertiser or offer the ad was promoting, and it also generated a few new business queries for Fetchback.
“You’re so focused on [the potential downside] you don’t actually think about how it opens communication,” said Fetchback CEO Chad Little. “Consumers don’t know how easily to get in touch with the person delivering the ad because they don’t know who’s delivering it.”
Similar to Fetchback, Google also affixes an “About This Ad” label on many of its AdSense ads, which leads to a page with privacy information and an opt-out option. The firm didn’t specify how many of its customers had chosen to opt out.
Not the end
It’s not hard to see why those who traffic in online advertising worry. In the ongoing debate surrounding privacy and online advertising, one of the persistent fears is that making it easier for people to opt out of online data collection will be the downfall of the business — billions of dollars gone in a flash as every consumer opts out.
And the Fetchback findings — as well as the enhanced targeting in general — are not likely to satisfy privacy advocates.
If anything, this might be seen as more proof that the entire concept of opting out is flawed, as consumers aren’t aware of what’s going on and, it could be argued, even when they are, don’t particularly care enough to bother jumping through the hoops necessary to opt out.
Right now, retargeting firms and the rest of the online ad industry work in a world where targeting is the default, and consumers can choose to opt out of that. The industry, and particularly ad networks, fear a future where that default would go away and instead consumers would have to opt in to be tracked online.
The opt-in model is favored by most privacy advocates, some of whom are planning to provide Congress with a detailed proposal around the issue this week.
Easier opt-outs
Ideally, the online-ad industry wants to remain self-regulated, and improving the friendliness and ease of opting out is one way to convince legislators and regulators it takes the job seriously. More than a half dozen industry organizations recently launched a new set of regulations in hopes of staving off government involvement.
Opt-out mechanisms feature prominently, but when there is no link in or around an ad unit, opting out for behavioral or cookie-based targeting typically requires users to find the privacy page of the site on which the ad appeared, which directs them to opt-out options.
That’s not good enough, said Mr. Little, in a world where people want access to the info.
“We are trying to solve this problem by making privacy policies worded toward the lowest common denominator,” he said. Some concerns around enhancing opt-out revolve around clients — whether advertisers will care that there’s an extra link in the ad. Mr. Little said he got very little pushback from clients and that the company had to redesign a couple of ads to accommodate the link.
Charles Curran, executive director of the Network Advertising Initiative, a voluntary self-regulatory organization, said publishers need to worry less about being scared that more visible information and opt-out policies will result in an uptick of consumer’s eschewing targeting, and more about the confidence the general public has in the medium.
Meanwhile, on the other end, privacy advocates argue for the strictest possible guidelines, ones that would require that consumers express explicit permission to let ad sellers track them.
One of the most outspoken privacy advocates on the issue, Jeff Chester, who heads the Center for Digital Democracy, said the Fetchback numbers sound “unscientific and self serving.”
Add comment August 25, 2009
A Display Ad That’s Not a Banner Ad
Infiniti Tries Out New Video Technology on Yahoo, CNet and Conde Nast Websites
The browser plug-in turns surfing through images into a “Minority Report”-like experience, letting people sweep through a wall of photos or videos with a mouse, rather than endlessly clicking “next” to browse from photo page to photo page. Users are installing it at a rate of 50,000 a day, the company says, and the technology actually changes web-surfing behavior. Surfers with the Cooliris plug-in look at more photos and watch more video — 12 times as much.
Leaf through video, photos
Like a lot of media startups in Silicon Valley, Cooliris is an ad play. The company developed a version that doesn’t require a browser plug-in and can exist within an ad unit. Consumers can quickly leaf through thousands of images and videos within the unit, or opt to download the plug-in for a full-screen experience. Now the unit has a ad buyer that takes advantage of its potential: OMD for Nissan’s Infiniti convertible.
OMD’s director of digital strategy, Sara Morton, saw a video of a Cooliris demo given at Stanford, and brought in Nissan, which was looking for a way to build awareness for the Infiniti G37. OMD used Cooliris as the basis of its online display campaign, running its ads on CNET, Conde Nast’s Golf.com and Style.com, New York Magazine’s NYMag.com and Yahoo News.
The campaign required that publishers take the technology, as well as the creative, and OMD made it clear they wouldn’t be buying any plain old banners. “OMD brought Cooliris to all the publishers and said, ‘We are not banner-buyers, we are experience-builders. You want in, make it happen,’” Ms. Morton said. “And they did. Consumers will never say, ‘I saw this great banner ad!’”
Publishers fed their own content into the Cooliris unit, dubbed the “embed wall,” which also housed videos and display ads for Infiniti. For example: Yahoo News used the software to display images from the Michael Jackson memorial, intermixed with Infiniti images. Yahoo is in talks to adopt the technology and sell Cooliris campaigns with its own sales force.
As publishers adopt Cooliris for displaying media, the company can then potentially sell a network of its ad units across many publishers, what Cooliris is calling its “publisher network.”
Mining the data
The campaign has just about run its course and Cooliris will be mining the data to learn, among other things, how many thumbnails were served and how many people interacted with the units. Nissan wasn’t interested in conversions, or clicks; rather, it bought the campaign on guaranteed impressions and on interactions with the ad.
“For us, display advertising has a place in the world, but Cooliris gave us the opportunity to move beyond the banner and beyond display advertising,” said Michael Awdish, global digital advertising manager for Infiniti. “Our buyers are much more savvy and more in tune with whats going on on the web.”
The Palo Alto-based company, backed by Kleiner Perkins, DAG Ventures, T-Online and the Westly Group, seems destined to be acquired. The company raised a $15.5 million series B round in April for a total of $18.5 million raised. In addition to ad sales, the startup is focused on porting the software to other screens, such as the iPhone and TV.
For now, the ads are a virtuous cycle: Advertisers want to try something new in online display; publishers want the dollars and engaging content. Of those who interact with the ad, 5% end up installing Cooliris — 14 million in the last 18 months. About 3.6 million actively use the browser plug-in, while 2.2 million have interacted with the “embed wall” on the web.
Add comment August 18, 2009
Microsoft And Yahoo Near Ad Deal: All Things Digital
- By Tiffany Wu
NEW YORK (Reuters) – Microsoft and Yahoo are close to a long-discussed search and online advertising deal, which could be announced in the next week, according to All Things Digital.
The two companies have talked about cooperating for months, after Microsoft’s bid to buy Yahoo was rebuffed last year and Yahoo’s attempt to seal a search advertising deal with Google fell apart under regulatory scrutiny.
The latest discussions involve Microsoft paying Yahoo “several billion dollars upfront to take over its search advertising business and guarantee certain payments back to Yahoo,” according to All Things Digital’s Kara Swisher.
Yahoo is likely to take the lead on selling display advertising for the companies, she wrote.
Microsoft Senior Vice President of Online Audience Business Group Yusuf Mehdi, search head Satya Nadella, top digital executive Qi Lu and others flew to Silicon Valley on Thursday to iron out remaining issues, related with technology deployment, the blog said.
If all goes well, a deal could be announced within the next week, Swisher wrote, citing sources at both companies. But she cautioned that an agreement was not certain, since both companies have been in talks before.
Representatives for Microsoft and Yahoo declined comment. Yahoo is scheduled to report quarterly results next Tuesday, and Microsoft on Thursday.
Yahoo Chief Executive Carol Bartz said in May that any deal to spin off or combine its search assets will require a partner with “boatloads of money.” She said at the time that Yahoo was talking “a little bit” with Microsoft, but gave no details.
Microsoft withdrew its $47.5 billion offer to buy Yahoo in May 2008 after Yahoo’s board said the price was too low. The software giant then offered to buy Yahoo’s search advertising assets for $1 billion upfront, and guarantee $2.3 billion in annual revenue for five years.
Google is the dominant player in the search market, with a 65 percent market share in June, according to comScore. Yahoo was second with 19.6 percent, while Microsoft was third with 8.4 percent. While Microsoft’s share remains small, its new search engine Bing has won positive early reviews.
Shares of Yahoo rose 3.9 percent to $16.82 in morning Nasdaq trading. Oppenheimer raised its price target on Yahoo shares to $19 from $13.25, with a ‘perform’ rating, saying the company was likely to benefit from a rebound in large advertiser spending.
(Reporting by Tiffany Wu; Editing by Derek Caney)
Add comment July 21, 2009
Advertising Will Change Forever
Digital Spending Will Nearly Double in 5 Years, But Ad Budgets Won’t
Posted by Josh Bernoff on 07.20.09 @ 02:30 PM
 Josh Bernoff |
Here’s one of the things we do at Forrester Research: we interview as many marketers as we can about their plans, identify trends and project future likely conditions, and then we put together some numbers to make a projection. If you’ve ever seen a Forrester projection, it comes from a process like this.
This means that inside every projection is an idea or ten about the future. Those ideas can be powerful, and they come from research with marketers and consumers.
My colleague at Forrester, Shar Van Boskirk, just published our five-year interactive marketing forecast. The idea inside it is the real kicker.
In this recession, marketers have learned that interactive marketing is more effective, and advertising less effective, per dollar spent. While budgets for online have decreased, they decreased less than other budgets. Six out of ten marketers we surveyed agreed with the statement “we will increase budget for interactive by shifting money away from traditional marketing.” Only 7% said “we have no plans to increase our marketing budget.”
Unlike the last recession, digital marketing is no longer experimental. Now it looks more like advertising is inefficient, relative to digital. More than half of the marketers we surveyed said that effectiveness of direct mail, TV, magazines, outdoor, newspapers, and radio would stay the same or decrease within three years. In contrast, well over 70% expected the effectiveness of channels like created social media, online video, and mobile marketing to increase.
The result is that digital, which will be about 12% of overall advertising spend in 2009, is likely to grow to about 21% in five years. Along the way overall advertising budgets won’t grow much.
This is huge.
It means we are all digital marketers now, since digital is at the center of many campaigns anyway.
It means media is in trouble, or at least in the middle of a transformation. For example, online video ads, which will be about $870 million this year, will grow to over $3 billion in 2014. What will this do to networks plans to put more of their shows online in places like Hulu. How will it accelerate some newspapers plans to become more and more centered around online?
And it means that social “media,” which will account for $716 million this year between social network campaigns and agency fees, will generate $3 billion in five years. And this doesn’t even count displays ads on social networks (which are in the display ads category.) Of all the parts of digital marketing, social network marketing one is poised for the most explosive growth.
Pundits have been declaring the end of mass media and advertising for years now. From my 14 years of experience analyzing this stuff, I’ve learned that things die very slowly, but there are real trends you can see. If you’re in advertising, you’d better learn to speak digital, because that’s the way the world is going.
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Josh Bernoff is the co-author of “Groundswell: Winning in a World Transformed by Social Technologies,” a comprehensive analysis of corporate strategy for dealing with social technologies such as blogs, social networks and wikis, and is a VP-principal analyst at Forrester Research. He blogs at blogs.forrester.com/groundswell.
Add comment July 21, 2009
Multi-Click Attribution: Tracking the Way Conversions Actually Happen
Interactive marketing has long sold itself on the promise of accountability and ROI measurement. Yet, at the same time there continues to be challenges in solving John Wanamaker’s problem: “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.”
Indeed, the common analytics tracking for online marketing campaigns are simplistic at best. It cannot measure how display ads (seen as branding) can impact search (used mostly for sales). Nor can most analytics tracking attribute the multiple searches and visits a person did that ultimately led to a purchase (See image above).
Enter Havas Digital and Yahoo. Their panel, Search + Display—Moving Beyond the Brand vs. Direct Response Model, not only showcased Havas Digital’s solution to this question but show great case studies of the insight and optimizations gained from a better and more true multi-channel analytics. (Note: all of the images in this post was taken by the Havas Digita/Yahoo PowerPoint presented at ad:tech)
MODERATOR:
Rich LeFurgy, General Partner, Archer Advisors
PANELISTS:
Dan Boberg, VP, Advertiser & Agency Professional Services, Yahoo!
Ed Montes, Executive VP, Managing Director US, Havas Digital US
The Promise for Advance Attribution in Analytics
The benefit of building a system that can do sophisticated attribution tracking lies in being able to track what are known marketing truths but have been difficult to readily measure:
1. Display (Brand) Supports Search (Sales)
There has been countless studies revealing that running display banners, which may or may not have been clicked on, increasing searches for the brand and eventually in to sales. As far as data go, the panelists quote two of the most often cited statistics on the matter:
- Display + Search Provides Improved Branding
“Exposure to a display advertisement increased related trademark term searches (brand, company or product names) by an average of 26 percent” – Yahoo/ComScore study of Fortune 100 advertisers, “Close the Loop: Understanding Search and Display Synergy” - Display + Search Provides Higher ROI
“Users exposed to both search and display ads convert at a higher rate: 22% better than search alone, and 400% better than display only.” – The Atlas Institute, “The combined impact of Search and Display advertising – Why advertisers should measure across channels”
Having an attribution system that can readily attribute how much a display campaign drove search ROI would shift our perception for display as “just” a branding tool.
2. Tracking Beyond the Final Click
By default, most analytics systems attribute sale to the last link the customer clicks on. It completely ignores the fact that people may conduct multiple searches and clicks to a ecommerce website before than actually make a purchase.
All marketers know that the “last click” is not correct. If a search marketer blindly believed in the “last click” and on strict ROI measurement, we would all just bid on our branded terms and go home.
Case Studies
Working with Yahoo, Havas Digital did build such an attribution system that would help track the two issues above. Havas Digital and Yahoo presented several case studies on the system, called Armetis. Here are slides from a few of their case studies.
Case Study #1: When display drives sales-based ROI…for other campaigns
The above is a case study from an automobile manufacturer. While sponsored search drove the most “last click” conversion, the entire marketing picture shows that display advertising assisted in the conversion of 163 visitors. So scaling back down display advertising dollars may, in fact, cause lower sales for other marketing channels like search.
Case Study #2: Why some highly converting keywords cannot stand alone
From the above report, Campaign 2 seems to be both costly at a cost per conversion of $422 and one lowest leads performer. However by looking at search assist, we see it has been drive in assisting in leads for other campaigns. Without such data, a search marketer may have been too eager to kill campaign #2, yet end up driving lower leads for other search campaigns.
Closing Thoghts
While Havas Digital’s Artemis attribution system looks very impressive, there is no such thing as a perfect tracking solution. As the panelists pointed out, there are still large limitations based on the fact that users delete cookies and that cookies need to last (and survive) more than 90 days in order for tracking systems to properly attribute the multiple exposures and clicks that lead to a conversion. Then of course, comes the more complicated questions of how to weigh how far back can a banner show to user “claim” to have assisted in driving a sales one, two or five months later. The joke the panelists mentioned that one flaw is an agency could blanket the entire web with display banners and then claim “attribution” for any sale that happens there after.
In end, however, we do need tools like these to really optimize campaign and paint an ever more accurate picture of what really drives engagement and sales. Yet even the tool described here by both Havas and Yahoo were noted by both companies as still rough and far from complete. Indeed, the quest for ever better analysis is an interesting problem to me; I plan to write a follow-up to this soon on my own blog at Emergence-Media.com.
Add comment July 1, 2009
To Build Display, Yahoo Joins Self-Serve Ad Fray
Targets Small Marketers and Those It Hopes to Convert From Search
NEW YORK (AdAge.com) — Klaussner Home Furnishings, a 2,000-employee regional furniture manufacturer and retailer in Asheboro, N.C., doesn’t exactly fit the profile of a typical Yahoo advertiser. But Klaussner is exactly the kind of advertiser Yahoo wants to convert to display with a self-service platform targeted at small and midsize local marketers.
Today Yahoo rolls out the first version of its self-serve ad product, My Display Ads, a bid to win over local advertisers and convert search advertisers to display. Yahoo isn’t the first to offer self-service display; Google, MySpace and Facebook have all rolled out similar self-serve display ad systems. AOL’s Ad.com is developing its own self-serve system that new CEO Tim Armstrong wants pushed out the door.
But with its scale and premium display properties, Yahoo is applying some heat to this space, as it hopes to convert search advertisers — or businesses that haven’t done any online advertising — to display.
“This just opens up access to small advertisers, which we think is important to the overall market,” said Yahoo Sales Senior VP Joanne Bradford.
It’s a bit of a free-for-all in the local ad market right now, with both automotive and real estate crippled, and the incumbent media, TV, radio, newspapers and yellow pages all struggling with their own compromised business models. But that doesn’t change that it’s a $13.6 billion market that someone is going to sort out.
DIY
“The opportunity here is to get more share out of the local ad marketplace,” said Curt Hecht, president of VivaKi Nerve Center, a unit of Publicis. “Google got there first, but there’s an opportunity to make the self-service side of media a little easier.”
Yahoo partnered with Seattle-based start-up AdReady, which provides creative tools for advertisers to develop their own ads, a bit like what Spot Runner tried to do for the local TV market. Advertisers can pick creative off the shelf from more than 800 display ad templates — including dancing cellphones, ads proclaiming “Amazing Values” or countdown clocks — or bring their own.
Ads can be purchased on a cost-per-thousand impression basis or as part of a cost-per-click auction. The ad inventory fed into the system includes both Yahoo-owned and network properties through Yahoo’s Right Media exchange.
Klaussner had never bought an online ad until it tried My Display Ads as part of a Yahoo pilot in the spring. For its Memorial Day sale, in addition to its normal TV and newspaper inserts, Klaussner blanketed the Greensboro DMA with online display ads.
Foot traffic turned out, well, pretty good. So Klaussner is a convert, and is increasing its spend for its next sale and adding the Raleigh-Durham and Charlotte markets to the next campaign, which it would not have done if it meant buying TV and newspaper advertising there.
“We use Yahoo for our bigger advertisers; it’s something we could never do in the past with small folks,” said Chris Whitesell, director at Klaussner’s digital shop, Spider Digital. “It’s a great opportunity, and we’re going to use it for another client in High Point [N.C.]“
The second type of advertisers Yahoo hopes to win over are those that use search, and thus are accustomed to creating self-serve advertising. The hope is they might want to try display either instead of or in conjunction with search advertising.
Converting search marketers
“Anybody can run a search campaign, but not anybody can run a display campaign,” said Citibank analyst Mark Mahaney. “It’s a natural product offering by Yahoo.”
But it’s not just local advertisers. Mr. Hecht said he thinks some of the bigger search-advertising shops will avail themselves of display, as will national advertisers that want to do something specific in a local market, or even ad networks looking for targeted Yahoo-quality inventory.
It also gives Yahoo a performance-ad product besides search. “Performance inventory is such a dominant force of online advertising right now,” said David Berkowitz, director-emerging media at 360i. “The recession is only enabling that further with the need for accountability.”
My Display Ads has been in development for some time, and the effort pre-dates CEO Carol Bartz and Ms. Bradford. Indeed, it’s the first significant move into a new market for Yahoo since Ms. Bartz arrived in January, and the first news on display, Yahoo’s core business. Still, observers cautioned not to read too much into Yahoo’s local play.
“There are more systemic issues they need to resolve,” said Quentin George, chief digital officer for Mediabrands. “This might give them something incremental, but it’s not going to have that big an effect.”
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Contributing: Abbey Klaassen
Add comment June 23, 2009
