Does Online Display Advertising Work?
Online display advertising regularly commands a high degree of concentration from online advertising professionals. It attracts a high proportion of many online advertising professionals time and in certain sectors, commands a high proportion of online advertising budgets.
As I have mentioned elsewhere in this blog, online is sometimes a victim of its own success. Because you can track almost anything, almost everything has to be completely accountable with no room for doubt or vagueness. Whilst this is powerful to help prove effectiveness, it is perhaps not the most effective way to manage integrated campaigns. After all, how long have advertisers spent millions on press and/or outdoor campaigns without being able to track effectiveness with any conviction. For clarity, I am not saying these traditional channels don’t work, these can be effective but they need to be measured.
With the recession hanging over nearly the entire global economy, advertisers are evaluating all spend. If you are concentrating on purely ROI and not reach or frequency of message, online display often loses out. There is often the argument that display is used to drive awareness or brand consideration, however how many advertisers actually measure this? The other argument is that a different type of audience clicks on display ads, compared to other channels such as search or price comparisons. The latter is true, however as a recent study by Starcom, Tacoda and comScore illustrates that isn’t always a good thing.
The trio identified a group of individuals that they labelled “Natural Born Clickers”. Whilst this was a study in the US, it is more than likely similar here in the UK.
The study illustrates that these “Natural Born Clickers” represent c.6% of the online population. Disproportionally they account for 50% of all display ad clicks. This statistic alone illustrates that there is a small (yet not insignificant) proportion of the audience that skew display campaign results, this generally negates CTR and CPC as metrics. These audiences skew towards Internet users between the ages of 25-44 and households with a low to medium combined income. Heavy clickers behave very differently online than the typical Internet user, and while they spend four times more time online than non-clickers, their spending does not proportionately reflect this very heavy Internet usage. Whilst this audience also spends significantly more time online than the average user they are also more likely to visit auctions, gambling, and career sites.
The study obviously highlights that CTR (Click Through Rate) and CPC are not valid measurements for display advertising. Whilst CPM is much maligned, because the impression does not necessarily mean the ad was seen, it is potentially more valid than CPC as a buying metric. In terms of brand building through display, if you are to buy on a CPM or CPC, I would suggest that you need to measure the impact on brand, awareness, consideration or actual shortlisting of your brand (dependent on your objectives). If your primary focus is on sales at an efficient ROI, in most cases you should aim for CPA. This isn’t black and white as on a number of occasions CPM can be more efficient than any other metric. However, you should test different metrics on different channels. To minimise risk, CPA is the best option.
Above all, remember anything is possible. Don’t just think of display as banners or skyscrapers (although don’t ignore them). Contextual, interactive ads are possible. Sites like Facebook allow users to select or deselect the ads they show. A site like MyDeco make the advertiser central to its contents and champions the advertiser. You also have to be aware of some of the more interactive (intrusive) formats. These often have high CTR, at times these are driven up by accidental clickers, sometimes trying to click off or close. Cookies are often stored and your results are skewed to these formats if a sale is made on that PC. I have always steered away from Pop-unders, subsites etc for this very reason.
The best lesson you can learn from this is, think differently. Challenge your agency or the media partners you work with. Above all, ensure you effectively de-dupe across all channels. CPA can be fraught with issues on both post-impression and post-click sales, if you don’t de-dupe. You won’t be able to evaluate if incremental sales were achieved as a consequence of your campaign.
Remember, I am not saying online display is dead. To the contrary, just be careful with your metrics. Ensure your tracking is robust and be think imaginatively with your placements and how you utilise the online opportunities. Don’t just be another ME TOO.