Click-Through Plus View-Through Completes ROI Measurement

A new comScore Brand Metrix norms database, compiled from nearly 200 brand impact studies conducted across a range of industries and online ad campaigns, finds that the effectiveness of online advertising campaigns in meeting branding objectives such as heightened brand awareness, improved attitudes toward the brand, and increased purchase intent, results ultimately in incremental purchasing.

Evan Neufeld, comScore vice president of advertising solutions, says though "With online display ads yielding click-thru rates of less than 0.1 percent, advertisers can no longer rely on click-throughs to gauge online ad performance. Doing so fails to capture the impact of... view-throughs... on attitude and future behavior... essential metrics in assessing the complete (ROI) in online advertising."

comScore Brand Metrix relies on their panel to parse differences in behavior and attitudes among those consumers exposed to an online ad campaign compared to those who are not exposed, concluding that "... the deleterious impact of cookie deletion... can lead to an understatement of the actual view-thru impact of online ads by a factor of 20 percent or more... "

The report says the data provides compelling empirical support for the belief that there is a quantifiable view-thru impact of online ad exposures on brand value and sales. For the studies in which both retailers' online and offline sales were analyzed, for periods ranging from two weeks to three months after the initial exposure to an online display ad, the incremental online sales lift was 27 percent and offline sales lift was 17 percent

Lift in Retailers' Online and Offline Sales among Internet Users Exposed to Display Ads Total U.S., Home/Work/University Locations

Monthly Sales ($) per Thousand Exposed Consumers

Control

Test

Lift

Online Sales

$994 

$1,263

27%

Offline Sales 

$9,905

$11,550

17%

Source: comScore Brand Metrix, Norms Database, November 2008

The report also says that online ad exposures also yield a lift in various important online behaviors, such as brand site visitation and trademark searches. For example, a substantial lift in visitation to the advertiser's Web sites can be observed in the weeks following an exposure to a display ad, even though click rates are less than 0.1 percent. Specifically, there was a 65 percent increase in lift in the week following the first ad exposure and a 46-percent increase over the four weeks following the first exposure, underscoring the latent branding effect.

Lift in Advertiser Site Visitation Among Internet Users Exposed to Display Ads Total U.S., Home/Work/University Locations

Advertiser Site Reach

Control

Test

Lift

Week Following First Ad Exposure

2.1%

3.5%

65%

Weeks 1-2 After First Exposure

3.1%

4.8%

54%

Weeks 1-3 After First Exposure

3.9%

5.8%

49%

Weeks 1-4 After First Exposure

4.5%

6.6%

46%

Source: comScore Brand Metrix, Norms Database, November 2008

And, the comScore norms data show that online display ads can cause an increase in search queries that involve the advertiser's trademark brand name. Specifically, the average lift in branded trademark searches for the online advertisers studied was 52 percent in the week following the first ad exposure. The norms data also show a substantial continued impact, with a 38-percent lift in trademark searches in the four weeks following the first ad exposure.

Lift in Branded Trademark Search Among Internet Users Exposed to Display Ads Total U.S. - Home/Work/University Locations

Making a Trademark Search

Control

Test

Lift

Week Following First Ad Exposure

0.2%

0.3%

52%

Weeks 1-2 After First Exposure

0.4%

0.5%

46%

Weeks 1-3 After First Exposure

0.5%

0.7%

40%

Weeks 1-4 After First Exposure

0.6%

0.9%

38%

Source: comScore Brand Metrix, Norms Database, November 2008

Neufeld concluded that "Not only does online marketing have the benefits of more attractive advertising rates and a faster growing retail channel, but it's clear from the results of our studies that Internet marketing also generates incremental sales in retail stores."

The Brand Metrix norms database contains the results across ten vertical industries including top-of mind unaided awareness, total unaided awareness, aided awareness, total advertising awareness, online ad recall, favorability, likelihood to recommend, and likelihood to purchase. And, a subset including behavioral metrics, online and at retail stores, of advertiser trademark searches, site visitation and purchasing.

For more information on comScore Brand Metrix, please visit here

Extinction Threatens Yellow-Pages Publishers

Industry's Web Sites Have Small Audiences, and Economic Downturn Has Eroded Ad Dollars; Hearst Unit Throws In With Google

The yellow-pages industry is running out of lifelines.

In recent years, as its customers migrated to the Web -- flocking to sites like Google -- the telephone-directory business followed, hoping the Internet would be its salvation.

But that strategy hasn't panned out. Now, the economic downturn is sending the already ailing business into a tailspin.

The audience for online yellow pages remains relatively small, and traffic growth is slowing. So many directory services are vying for the ad dollars of local businesses that no single site has an authoritative roster.

Meanwhile, ad dollars are drying up as small businesses -- the industry's bread and butter -- find it harder to pay bills or have cut their spending sharply.

Print and online ad spending on yellow pages will plummet 6.3% next year, more than double the rate of decline expected for broadcast TV, according to forecasts by Wachovia analyst John Janedis. Within the next four years, ad spending will fall 39% in print directories alone -- the steepest projected decline across all local-media categories, according to media-research firm Borrell Associates.

"It's pretty darn hard out there for everybody, and those that have less staying power, it just looks like it's going to be a difficult environment to be able to hang on in the long term," said Dave Swanson, chief executive of R.H. Donnelley, a Cary, N.C., yellow-pages publisher, during a conference call on the company's third-quarter earnings.

Facing the real prospect of extinction, the publishers, many of which have considerable debt, have been slashing jobs, scrapping dividends and exiting unprofitable markets. Shares of two of the biggest publishers, R.H. Donnelley andIdearc, have plummeted 99% in the past year.

"The main pure-play companies do not have capital structures that would enable them to endure perpetual high-single-digit or double-digit declines in cash flow and remain viable entities or solvent entities over time," says Mike Simonton, an analyst with Fitch Ratings.

Yellow-pages publishers have spent the past several years attempting to reinvent themselves, launching a slew of digital offerings for advertisers, and retraining their sales forces to sell digital ads alongside print ads.

But Internet revenues remain anemic. At less than 10%, online-ad dollars make up only a modest portion of total revenues and aren't growing fast enough to offset steep declines on the print side, says Mr. Simonton.

Analysts say yellow-pages sales teams face an inherent conflict. While they are pressured to sell both print and online ads, Internet ads are often a third of the price of the print product. The top priority for the sales teams often is to sell the print book first, then sell the digital products.

Even if online revenues were growing at a faster clip, analysts are cautious about the prospects of online-only directories. Yellow-pages ads are the only form of advertising many small businesses buy, and the online ads are typically sold in conjunction with print listings, Mr. Simonton says. That means that if businesses aren't buying the print ad, then the online ad disappears too.

In a last-ditch attempt to succeed online, some publishers have struck ad-sale partnerships with Internet companies like Google. White Directory Publishers, which publishes directories in 90 small to medium-size markets, says it is often more effective for small businesses to have a presence on Google than on a directory Web site. But many small- to medium-size businesses don't have the expertise or time to create effective Web sites or buy and track search ads, so White Directory is offering to do it for them.

"They all believe they have the URL and the Web site that's going to win," Jeff Folckemer, chief operating officer and chief executive-designate of White Directory, part of Hearst Corp., says of the directory companies. "Our philosophy immediately was to go right to the big guys."

Mr. Simonton cautions, however, that even if publishers survive, any growth they achieved since the last downtown, in 2001, will be short-lived. "That extra growth coming from new businesses are the first to fold in a downturn. You basically give back in one downturn what took seven years to grow."

—Shira Ovide contributed to this article.

http://online.wsj.com/article/SB122688313315132107.html

Search marketing remains strong

By Christopher Hosford

Story posted: November 10, 2008 - 9:30 am EDT

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Despite the faltering economy, search marketing is holding up well, as marketers focus on tools that promise the strongest return on investment. How long that will last is uncertain, but for now search ad budgets seem relatively sheltered from the global economic woes.
“We believe that search is not immune to macroeconomic forces, but we also believe it will have the least relative decline of the various marketing tools,” said Craig Macdonald, VP-marketing and product management with interactive marketing analytics company Covario Inc.
Why?
“I can tell you precisely the answer to that,” Macdonald said. “There's less risk in spending money on search. It's very measurable and the cheapest form of lead acquisition out there.”
According to a new Covario study, year-over-year growth in paid search in North America stood at 32% in the third quarter, in line with several other analyses and relatively unchanged from earlier in the year.
“Because you can measure pre- cisely your return on different Web marketing activities, you know what you'll get in return and can dial it up or down,” said Dave Alampi, VP-global marketing strategy and services at enterprise software company Infor.
“Because our strongest area of concentration is the small-to-midsize business market, with smaller deal sizes, we feel it's relatively recession-proof,” he said. “We have no intent to reduce our paid-search dollars at all.”
Forrester Research projects that paid search marketing will grow 26% this year, reaching $11.4 billion in the U.S. In addition, the company's “U.S. Search Engine Marketing Executive Survey” (conducted by Jupiter Research prior to its July acquisition by Forrester) forecasts that search budgets will remain stable through much of 2009.
“Because of its inherent accountability, search offers a safe haven for marketers and advertisers who are pushed by the recession to meet some pretty aggressive goals,” said Evan Andrews, interactive marketing analyst with Forrester. “You can track every cent and every click. Search is comfort food for marketers.”
Still, a possible impact looms as fearful customers rein in their purchasing of consumer goods, depressing b-to-b sales of product components and marketers' budgets.
“The economy is ultimately going to have an effect on search,” Andrews said. “There is no way that a once-in-a-century financial meltdown won't spill over. With search, it's just going to be delayed.”
If search budgets remain relatively healthy, it will likely be at the expense of other forms of marketing outreach.
The Direct Marketing Association projected in October that Internet marketing (including search but excluding e-mail) would grow 19.7% this year but also that direct response newspaper advertising spending would fall 7.6%; telephone marketing would decline 1.5%; and radio ad budgets would drop 2.7%. The DMA projected modest growth in direct-response TV spots (4.5%) and direct mail catalog spending (up 3.1%).
“We're seeing that traditional agencies are getting hit before digital agencies,” said Jeffrey Pruitt, president of the Search Engine Marketing Professional Organization (SEMPO). “Some advertisers are increasing spend because search is working.”
Industry watchers say the rapid growth of search marketing is bound to slow as it matures. Covario compared search's current growth rate of 32% with early 2007, when paid search spending was growing by 83% year-over-year.
Macdonald warned that short-term projections may be misleading, because fourth-quarter budgets are already set. When the economy's impact on business becomes more apparent by early 2009, “budgets will roll down based on that,” he said.
While search is inexpensive and highly measurable, there is evidence it's becoming more efficient as well, reinforcing marketers' opinion of the medium. Covario reports reductions in the average cost-per-click being paid to search engines, largely as a result of improved optimization by large advertisers.
In the third quarter, for example, the average cost-per-click was $1.09, down from an average of $1.19 in the year-earlier period. “But I think cost-per-click will actually start to go up, as marketers loosen up the ROI hurdles they set for their search programs based on what they will or will not pay for keywords,” Macdonald said. “Advertisers will begin to tolerate a 5% to 10% inflation rate over the next several months.”
But will users click through on sponsored links? The Covario study indicates the economy may have an impact here as well.
In the third quarter, click-through rates for Google fell to 1.9%, down from 2.4% in the year-earlier period. MSN's rate fell to 2.2% from 3.0%, while Yahoo was relatively unchanged.

http://www.btobonline.com/apps/pbcs.dll/article?AID=2008311109953