Four Studies Offer Positive Proof That Online Advertising Builds Brands

Standard-sized banners can increase brand awareness, message association, brand favorability and purchase intent, but larger Ad shapes are even better at improving key branding metrics. And Rich Media delivered with the IAB's new Ad shapes do a better job at increasing brand recall. These are some of the findings of four separate studies, conducted by the IAB and member companies DoubleClick, MSN and CNET Networks, Inc. The research was designed to evaluate the brand effectiveness of online marketing units including the Ad shapes introduced by the IAB in February. The impact of different technologies and a variety of ad placements were also included in these analyses. Dynamic Logic conducted the IAB and MSN studies; Diameter executed the DoubleClick study; and Millward Brown IntelliQuest conducted the CNET study. Test campaigns with different creative formats and sizes for two advertisers were tested among 30 sites, nine advertisers, and 170,000 respondents over two months.

The IAB Study

The IAB research studied the effect of the new Ad shapes on key branding metrics. Standard online banners were also evaluated.

Ads from a soft drink company, Genuity, (formerly GTE Internetworking), Vaniqa (a Bristol-Myers Squibb prescription cream for women), and uBid (an online auction Web site) were measured on four IAB member sites: CNET, iWon, MSN and Snowball.

While standard banners work, bigger banners work better. The larger IAB ad formats proved to be more effective at building brand awareness, message association and intent to purchase.

Larger ad shapes were 25 percent more effective in lifting brand awareness and message association with as little as one exposure. Persuasion metrics such as purchase intent showed gains as the number of exposures increased.

Key Findings:

Just one look. A single impression using the "Large Rectangle" or "Skyscraper" delivered from nine to 66 percent increases in branding metrics.

A banner ad on iWon for Vaniqa lifted:

Bigger IS Better. The Skyscraper and Large Rectangle performed 25 percent better than the control on key branding variables.

• Skyscrapers and Large Rectangles performed similarly across the advertisers' Web sites. The Large Rectangle has a slight edge in ad effectiveness in this study, producing an average lift of 27 percent versus 23 percent for Skyscrapers.
• The new ad units had a substantial advantage over banners in message association and purchase intent, moving consumers further along in the purchase decision process and increasing purchase intent (16 percent lift for the Large Rectangle and 14 percent for Skyscrapers versus six percent for banners).
• Bigger formats can help launch new products. After a single exposure to the Skyscraper, Vaniqa boosted brand awareness seven points, to 30 percent. The Large Rectangle performed even better, increasing brand awareness by ten points up to 33 percent.
• Message association increased from 14 percent to a high of 28 percent for the Large Rectangle format.

Details of the study are posted at www.iab.net.

The DoubleClick Study

DoubleClick's research confirmed the IAB's results regarding size and ad effectiveness, and added important observations about the impact of ad technologies and ad placement.

Size matters. All four ad shapes performed extremely well, increasing brand recall significantly. The greatest gains were noted for the Large Rectangle which recorded an average lift of 86 percent in brand metrics. Large Skyscrapers followed next (an average 64 percent lift). The 468x60 banner received a 56 percent average gain and the small Skyscraper showed a 40 percent average lift.

Advertising Applied Technology. Gif, Flash, Audio and Video ads all showed increases in branding metrics. Flash ads improved brand measures by 71 percent, while Audio produced a 14 percent improvement on average. Video delivered a comparable lift of nine percent and Gif showed a change in branding of four percent.

Location, location, location. Full-page interstitial ads performed better than on-the-page or over-the-page units. Interstitial ads improved the four brand metrics by 194 percent over the baseline measures. Over-the-page units improved branding by 52 percent and on-the-page units yielded a 55 percent rise.

The MSN Study

A separate study, commissioned by MSN, produced similar conclusions confirming the positive effects of bigger banners. This research tested two campaigns with different creative formats and sizes. The research also demonstrated that rich-media ads (DHTML and Flash) produced the best results.

Brand Awareness by Technology Format

Message Association by Technology Format

Click-Rate Metrics Underestimate ROIs

The actual return on investment from online advertising can be 25 percent to 35 percent higher than most marketers believe, according to Jupiter Media Metrix. More marketers rely on direct response metrics, including click-rate (60 percent) and cost per conversion (75 percent), while only 15 percent currently conduct formal online branding measurement. The actual number of customers driven to Web sites by online advertising is underestimated by these traditional click-rate metrics.

Key findings will be presented in detail August 7-9 at Jupiter's Online Advertising Forum.

Online Ad Viewers, Not Clickers, Most Loyal Customers

Web users who view an ad and later go to a marketer's site by typing in the URL or finding the site through a search or other means are 60 percent more likely to repeat their conversions than those who clicked on the ad. Also, ad viewers are twice as likely to reach the confirmation page as those who clicked. According to research conducted by Engage:

• 25 percent of ad-related conversions are directly related to clicks.
• Post-impression or branding conversions are 44 percent greater than post-click conversions.
• The majority of post-impression conversions occur within one day of the ad impression and nearly four in ten occur in the first 30 minutes.

High Tech Ads Streaming In

Spending on streaming media-enabled promotion and advertising will grow exponentially from $44 million in 2000 to $3.1 billion by 2005, according to The Yankee Group.

In addition to inserting advertising messages into audio and video content online, streaming media-enabled advertising also includes online product information and infomercials that users can retrieve on demand.

Online Sells Offline

More than eight in ten (86 percent) of US online adults either clicked on ads or viewed product information online and made an offline purchase based on those activities, according to Cyber Dialogue. Two in ten respondents said they changed their opinion of a brand based on online information or ads.

SUPERSTITIAL Ads on Par With Television Commercials

SUPERSTITIAL ads stand on equal footing with TV, delivering respondent increases in recall, communication and persuasion metrics. SUPERSTITIAL ads also convey the exact same copy points as effectively as TV with equivalent purchase intent, according to Harris Interactive. Using complementary SUPERSTITIAL ads and TV spots for Mercury Mountaineer, Miller Lite and Nextel, separate panels of respondents were polled regarding key message communication, brand recall, ad likeability and purchase intent.

Key findings include:

• 66 percent of respondents agreed that SUPERSTITIAL ads are more TV-like.
• 62 percent of respondents agreed that the SUPERSTITIAL ads remind them of commercials they've seen on TV.
• Overall, brand recall was similar across both media (81 percent for SUPERSTITIAL ads, 93 percent brand recall for TV commercials).

 Business and Financial Sites

Good news for business and financial sites: over the last year the proportion of Europeans visiting business and finance sites has doubled in several markets, and the time spent on these sites has increased by up to 60%. The biggest market is the UK (5.24 million visitors), closely followed by Germany (4.73m), France (3.11m) and Italy (2.70m). France is gaining rapidly, though, with internet users visiting business and financial sites doubling in one year: from 18.5% to 38% (May 2000 - May 2001). http://uk.jupitermmxi.com, 4th July 2001.

 Wired Europeans Watch Less TV, But Read More Newspapers Than The Norm

Now that two in five Europeans have online access, consumer consumption of traditional media is changing. In markets with heavier TV-watching habits, those with online access are watching between 10% and 15% less TV each week than offline users. Commentators forecast that TV watching will fall further with growing consumer adoption of broadband online access. Forrester Research Inc., 9th July 2001

 Net usage in the office a neglected indicator?

Household-based panels can be misleading as to the true extent of net usage; according to Nielsen Net Ratings, at-work users spent about 2.5 times more time on the net per month than at-home users, they visited 3.5 times more sites and had more than twice the number of internet sessions per month. Nielsen Net Ratings, 16th July 2001

 Profits dispel news of crashes

Even as dot-com retailers crashed in Europe last year, online retail sales nearly tripled. As sales grow to 152 billion euros in 2006 -- 6.4% of retail ­ it is forecast that successful retailers will target profit-rich, supply-poor categories. Forrester, June 2001

 UK continues to lead Europe and the United States for visitors to e-commerce websites

Of the eight countries included in the survey (UK, France, Germany, Spain, Denmark, Norway, Sweden and the US), the UK enjoyed the highest percentage of home Internet users visiting an e-commerce website in May. Netvalue, June 25th 2001.

 E-Banking: human touch still important, according to 79% in a Europe-wide survey

As English and French e-commerce sites boom, with sites seeing double the amount of visitors in one month alone, research indicates that less client contact can have a harmful affect on customer loyalty. Europemedia, July 2001

 Students an underestimated sector in ecommerce marketing

Those who dismiss the college and university sector should go back to school: in a recent survey, only one per cent of students said they had "never used the Internet" while over a third, 35.4%, said they used it daily. Meanwhile, 58% said they had made purchases on the Internet. (Survey of 800 students nationwide carried out by Virginstudent.com.) Revolutionmagazine.com, 11th July 2001

 Internet direct purchase figures on the up

A recent report finds that during the past quarter 54% of buyers reported using the Internet to purchase direct materials -- an increase from last quarter's level of 46%. These online buyers reported sending 9.8% of their total direct materials order over the Internet (The National Association of Purchasing Management (NAPM) and Forrester Research, Inc. NAPM/Forrester Research Report On eBusiness) Forrester.com, 16th July 2001.

 ...Meanwhile, Internet indirect purchase figures remain stable

The same report finds that nearly 73% of organizations use the Internet for indirect purchases -- an increase from the 71% reported last quarter. Op cit., www.forrester.com, 16th July 2001.

 Further rise in the importance of eMarketplaces

Lower purchase prices and streamlined transactions are luring buyers into eMarketplaces. Forrester research reveals that firms expect to save more than 4% on total purchases through eMarketplaces in 2001, and to double these savings over the next two years. The largest eMarketplace expenses go to usage fees, ranging from 29% to 65% of total costs. forrester.com, 16th July 2001

 Online shopping in Europe alive and well: European retailers will reap €103 Billion in gross profits through 2006.

Even as some dotcoms bombed, European online buying has steadily grown. And it's going to stay that way. With online retail growing to 152 billion in 2006, retailers must focus on capturing the 103 billion in potential gross profit generated over the next six years by targeting ripe categories and countries, according to a new report by Forrester Research. 27th July 2001.

 Teenagers search on the Net, but buy in shops.

A new study shows that almost 90 percent of youth between the ages 13 and 17 have never bought anything online. Also, of this same group, nearly 30 percent acknowledged searching for products on the internet before buying them in the shops. Adage.com, Jupiter Media Metrix, Amazon, ebay.com, July 2001.

 E-commerce sites overlook word of mouth communication

It's good to talk: e-commerce sites do not take enough advantage of "word-of-mouth" communication, according to a study by Jupiter Media Metrix. The research shows that 45 per cent of consumers choose e-commerce sites through "word-of-mouth" recommendations but only seven percent of companies track email pass-along rates, which is one of the few quantifiable ways to analyse viral marketing effectiveness. Internet News, Jupiter Media Metrix, July 2001

 Effectiveness of Internet advertising confirmed.

Europe-wide research shows the continued benefits of Net advertising, especially for fast-moving products. Almost 80 percent of web surfers looking specifically for information on such consumer packaged goods (CPGs) had responded positively to new media advertising, compared with just 64 percent for the sample group as a whole. As many as 46 percent of the sample group had visited a website as a result of online advertising. (Survey of 6000 respondents conducted by Datamonitor). Yahoo News, 16th July 2001

 Nielsen Nat Ratings for May 2001 reaffirm challenges faced by European net advertisers

While net usage continues to grow in Europe, net Ratings for May show that the average UK user per month only spends 6 hours online, compared to 9 hours 40 minutes in the US. Meanwhile, European advertisers have to grab users¹ attention more quickly: though Europeans view more sites than North Americans they spend less time on each page. EuropeMedia, 16th July 2001

 Advertising on the Net predicted to outstrip revenue interactive TV.

By 2005, £11.1 billion will be generated through advertising and commerce activities on PC¹s connected to the Internet, compared to £3.2 billion on interactive TV. According to the latest report from the leading Internet research company Jupiter MMXI, over seven million households currently have Digital TV (DTV). By the end of 2005, that figure will have increased to one half of all UK households. www.jupitermmxi.com, 16th July 2001.

 Effectiveness of Net and Wireless Ads Confirmed in Major Survey

Ad recall among Net users is high, according to a survey of 4,620 European residents. The survey monitored those who remembered having seen or received an online or wireless ad in the last six months. Sixty four per cent of those responded to the ad by either requesting further information or by purchasing a product. 27th July 2001. Internet News, Datamonitor.

 Nine out of ten in the UK satisfied with their ISP

What¹s more, 3 out of ten of these are "very satisfied". The most recent quarterly survey by Oftel showed that the number of homes now online in UK stands at 10 million: up by 4 million from this time last year. The figures mean that every eight seconds one UK household gets connected to the Net for the first time. MORI Poll, July 2001

 ITV Digital, formerly ONdigital, attracting more subscribers

ITV Digital, formerly ONdigital, added 48,000 subscribers during the quarter ending June 30, bringing the total to 1,135,000. A total of 400 pubs per week are signing up for the service. ITV chief executive Stuart Prebble said: "These are solid figures. The rebranding is a major step in the evolution of this business and the decision to put the powerful ITV brand behind the platform is an indication of our shareholders¹ commitment to it." www.europemedia.net, July 2001.

 Text messaging getting even closer to the 1bn barrier

The number of text messages sent in the UK climbed still closer to the 1bn barrier in June. A total of 950m messages were sent, up 7m on May's figures, according to the Mobile Data Association. Media Guardian, July 2001.