Online Advertising Really Moves Offline Product
Steve Warshaw, VP, Business Development, ACNielsen Phil Cara, Director, Yahoo! Inc.
Consumer Insight | Summer 2004|
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woman goes online to research a question about her dog’s health. While surfing Yahoo!, she sees a dog food ad. Later that week, she goes to the store and encounters the same brand of dog food. She buys it. Breakthrough stuff? Absolutely. It may sound ordinary: Consumer sees ad; consumer responds. Yet in the world of e-commerce, manufacturers of consumer packaged goods have never been sure how often exposure to a product message online translates into a product purchase offline. Now they ...view middle of the document...
3 1.1 3 6 9 12 15 2.5 5.3 5.0 6.6 6.6 10.6 12.7
| Consumer Insight | Summer 2004
Source: CMR Q1 through Q3, 2003
Traditionally, the makers of laundry soap and facial tissue haven’t found Internet advertising an attractive investment. In 2003, while banks devoted more than 12% of their total advertising budget to the Internet and moviemakers over 6%, consumer package goods firms spent an average of 1.5%—or less—on Internet promotion [See chart 1]. They have reasons for being Internet-averse. Many consumer goods firms invested in web sites and e-commerce when the Internet first emerged, thinking they could sell
products online. Most didn’t see a gratifying return on that investment and backed off. At the same time, it’s been difficult to tell what the money they did spend on Internet promotion bought them. Compared to TV, radio and print, online promotion has had few tools for tracking effectiveness in driving offline purchases. Service providers like Yahoo! have been able to measure “clicks” on a site. However, knowing if clicks translated into follow-up action was difficult.
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Growing Internet Usage
The days of being able to sidestep the Internet as a medium for one’s message are dwindling, though. For one thing, the Internet today is second only to TV and radio in usage. A 2003 survey by SRI-Knowledge Networks indicates that the Internet has become a
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Chart 2: The Internet Is Now Third in Media Consumption
Share of Voice
Internet 14% Newspapers 4% Radio 27% Magazines 3%
promotional offers are served directly to Yahoo! target consumers as they travel through the Yahoo! network. After the campaign, Consumer Direct matches back the Yahoo! users who saw the ad and are also Homescan panelists. Their store purchases during this period are then logged and compared with those of another group that was similar in prior purchase behavior and demographics, but not shown the ad. Success is measured by sales growth of the advertised product within the exposed group during the promotion vs. the unexposed group. What Consumer Direct and its clients are finding is that Internet-based advertising works. Every program has shown sales lift, with the average lift being 15–20%. Some gained as much as 35%. Growth came from attracting new customers as well as stimulating existing customers to buy more of an item. The campaigns also reported improvements in awareness, purchase intent and equity. Pepsi was one program participant. “This has been a terrific win for us,” said John W. Vail, director of digital media and marketing for Pepsi-Cola North America, as quoted in The New York Times. In the Pepsi market trials, the soda manufacturer departed from their standard promotion format of focusing on one small test market at a time to sample a more diverse audience. “With Yahoo!, we can get a broader, national footprint,” Vail said. “Just having the ability to get a read on sales was a tremendous...