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Not All Ads are Created Equal

Dawn Anfuso
Not All Ads are Created Equal Dawn Anfuso
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While consumers loath telemarketing and SPAM, they accept Web advertising nearly as much as they accept TV commercials and most welcome print advertisements.


These findings by Dynamic Logic add another layer to data released last week by the research company that Web viewers tolerate up to two pop-type ads per hour.


"While it is safe to assume that consumers, in general, do not want more advertising in their lives, they also understand the important role advertising plays in content, commerce, culture, and politics," says Christina Goodman, Dynamic Logic representative. "What is surprising is the breadth of feelings about different advertising formats. Clearly, this research shows there is a big difference between how consumers feel about Telemarketing (93 percent negative) versus Newspaper ads (6 percent negative)."



To sort through why consumers feel the way they do, Dynamic Logic examined six elements of advertising: intrusiveness, frequency, ad/edit ratio, clutter, targeting and creative.


Intrusiveness


At first glance, this AdReaction research might lead people to think that the more intrusive an ad is, the less consumers like it. Telemarketing, for example, is the most intrusive type of advertising and ranks at the bottom of the list. But TV and radio ads are mid to high on the consumer preference list even though they interrupt content for minutes at a time and cannot be closed (without TiVo-like technology). In fact, TV and radio spots are more popular with consumers than formats that take less time and can be quickly closed, skipped, or ended (Web, direct mail, telemarketing). Even Magazine and Newspaper advertising, which rate high on the list overall, often feature full-page ads that block content completely and must be dealt with (page turned).


In the case of the still forming Web advertising market, the transition from the laid-back banner to the bolder formats has irked many consumers while at the same time attracted many more traditional advertisers who were used to more traditional -- intrusive -- units. "So perhaps intrusiveness, by itself, is not the issue," says Goodman. "Rather, it may have more to do with the media conditioning or level of advertising people are accustomed to in a specific format."


Or, it may have more to do with the other five factors.


Frequency


Overplayed advertising can quickly become grating. According to Dynamic Logic, some of the most highly rated ad formats in the AdReaction research list have the best frequency controls. For example, you are not likely to see the same ad in one issue of a magazine or a newspaper. Yet you might see it a few times during a TV show or a Web site visit. And you might get many calls or pieces of mail on the same offer because of bad list management.


Lack of control can make good advertising formats seem flawed. Web advertising has been forced to a defensive position over the last year by a confluence of events: 1) the effectiveness of larger intrusive formats has made them highly sought after and over-sold; 2) a lack of user-based frequency caps (as opposed to publisher-based) has led to over exposure; and 3) some bad apples have taken over many people’s computers unknowingly through technical deception and blasted them with ads. This has poisoned the waters for certain people -- just at the time when online advertising was starting to come back.


Even though an hour of television probably has more intrusive ads than an hour of Web surfing, the frequency is more controlled in television. Moreover, TV ads are typically blocked together at strategic times during the content. Web advertising is starting to employ better frequency controls and putting ads in at appropriate times (like in-between pages).


Ad/Edit Ratios


Although the AdReaction survey seems to show that the higher the ad/edit ratio, the lower the consumer preference, this isn't always the case. Clearly, telemarketing, direct mail and spam are, basically, 100 percent advertising with little to no “editorial” and are least preferred by consumers. But Google, like the Super Bowl or a bridal magazine, is a place where many consumers go to in large part for the ads, demonstrating that just because something has a lot of advertising does not make it inherently unpopular.


Clutter


Dynamic Logic (along with Ogilvy, iVillage and MediaMetrix) collaborated on Web ad clutter research in 2001 and found that perceived clutter does, in fact, reduce ad impact, but what “feels cluttered” will vary person to person. Web sites, like newspapers and magazines, can have many little ads that decorate the pages or a few big ads that are dominant. This depends on the company and even the section. But why does advertising for newspapers and magazines in general rate higher than Web advertising? Perhaps it goes back to frequency.


Targeting


Consumers appreciate advertising that is more relevant than less relevant, but targeting alone does not seem to determine the popularity of an ad medium. Some of the most targeted (and very effective) forms of advertising are telemarketing and direct mail, yet they are lowest on the popularity list. Web advertising can also be very targeted, but overall, it is still in the middle of the pack. Less targeted are TV, outdoor and newspaper, yet they are higher on the preference list.


Magazines, perhaps by their nature, allow for targeting to specific affinity groups -- but the ability to target doesn’t appear to be a key driver for ad format preference among consumers.


Creative


Perhaps the most illusive capability of any advertising is good creative. There can be powerful direct mail pieces, beautiful magazine ads, funny radio ads, and moving TV ads. But those are gems in the rough of a lot of bad ads and noise, it seems. The ad formats found at the top of the AdReaction consumer preference list are those formats that lend themselves well to entertaining consumers (TV or radio), are visually compelling (magazines), or gave consumers specific, timely, “news-like” information they needed at the right time (newspaper and outdoor). Good creative knows its purpose and delivers.


Consumers will remember a lot of brands from a lot of advertising, but they will look more fondly on a medium overall that can deliver quality creative.


"For Web advertising, this research has many lessons," says Goodman. "It is interesting to see that it falls next to TV on the consumer preference list. But it still has a way to go to be seen more favorably by consumers overall."


Dynamic Logic's advice: Long-term, Web publishers may want to consider an ad/edit ratio and strategic commercial slots that fit better into end user surfing habits. Short-term, frequency caps and better creative will allow consumers to enjoy the medium more.


Use: Brand measures like lift in awareness or consideration


You can't click on a billboard, radio, or TV ad but we know they impact awareness, consideration, even purchase intent. Of course, the same is true of online ads. If the campaign has a branding objective, then optimize to it, ideally with a real-time data-driven approach.


Brand marketers want solutions that demonstrate improvement over time, transfer learnings across campaigns from top of the funnel to mid-funnel, and finally, result in sales. Everyone loves search for converting in-market folks but don't always remember to widen the funnel. As a marketer, if you rely on offline media (namely, TV) to be your lone awareness vehicle, then you're subject to over-saturation in television and missing out on cross-media optimized exposure. Complement offline with a digital awareness initiative.

Use: Ideal customer composition


Most advertisers know their customers inside and out, or at least they think they do: They have detailed customer profiles, even personas of Jim the Technophile or Susan the Savvy Bargain Shopper. However, when it comes to reaching those audiences in media delivery, the richness of the Jim and Susan personas are often lost to become coarse gender and age descriptions of "men 25 to 54" and "women 18 to 34," respectively.


Publishers that have personas that perfectly match advertisers' personas are one step ahead of the game. For advertisers, you trust that the targets those publishers claim to have are good proxies for your ideal customers. If there are no publisher persona targets, then we've seen agencies often default to the age and gender target as the next best proxy.


Why use a proxy though? Optimize segment composition in real-time. How? With a survey-based approach. We tried this with a couple CPG brands, with excellent results. The first advertiser wanted to reach previous brand customers. Utilizing real-time survey input to optimize segments, targeting of previous customers increased by 50 percent over the course of the campaign. The second CPG advertiser wanted to reach frequent users, and the same technique resulted in the target composition of this audience growing by 40 percent during the campaign. Results were validated with an offline sales impact study from Nielsen with a 250 percent return on ad spend.

Use: LTV (Lifetime value) of acquired customers


For direct response advertisers, especially in finance and retail, customers acquired cheaply are often low-value customers, especially when promotions are involved. The value of more expensive leads (as measured by account balances or subsequent basket size and purchase frequency) ends up much higher than cheaper direct response leads. An agency that is maniacally focused on low CPA without regard to LTV is doing their advertiser a disservice.


To advertisers, this means arming your agencies with visibility into these LTV measures. It means you need to do homework about customer behavior and transactions so that agencies can also pass information about customer value along to publisher partners, even anecdotally. We once executed a campaign for a bank but we didn't have access to back-end metrics like deposit amounts. As the campaign slowly auto-optimized toward the metric we had, CPA, the agency provided us feedback that we should go back to what we had been doing before day 45 because after that point, although CPA improved, the average starting balance amounts started shrinking considerably. With that bit of feedback, we were able to rejigger settings to pre-day 45 and go back to acquiring higher value customers.

Ignore: CTR


See the aforementioned iMedia article. We almost always provide data about how optimal segments are negatively correlated with CTR. For many agencies, they are glad to get this analysis to provide back to their advertisers as part of ongoing education.



For example, we demonstrated to a customer that pursuing segments that demonstrated higher CTR for the campaign would have led to incorrect optimization. Trying to maximize CTR would have led to a lower quality audience, since "clickier" segments were not the ones with the highest target composition.

Ignore: Ad interaction rate


It is not universally true that ad interaction rate doesn't matter. When the rich media unit has rich functionality like lead capture or submit, some other transactional feature, or a product catalog based on recently shopped items, then interaction is highly relevant. This is usually accomplished with dynamic creative and an XML feed.


However, when ad interactions are really opportunities for an expanded canvas that tell a more elaborate brand story, the benefit is dubious at best. At Rocket Fuel, we repeatedly see that the simpler ads are, the better. In fact, we have run static ads for a campaign alongside the long-looping Flash versions and find that performance is 50 to 300 percent better with simpler creative.


If advertisers want to understand impact of ad interactions, work with your publisher partners to instrument their pixels in ad unit expansion frames. Get ahead of the game and work with your creative partners before the assets are finished. Then the publishers can do the same type of correlation analysis with a brand metric, as well as optimize in-flight if there really is a positive correlation.  

Ignore: Video completion rate


This is in the context of in-banner video. It is a natural extension of the other two "unimportant" metrics. Does it matter that a video plays all the way through to completion? How much does auto-start inflate the metrics? It really doesn't matter what percentage of ads went all the way to the end unless it was all reaching the desired customers. As a marketer, I'd be happy with static ads shown to the right audience over a 75 percent video completion rate to the wrong audience.


A very notable exception to this is when video completions are well-documented to correlate directly with sales, like movie trailers for theatrical releases.

Conclusion


In general, we almost always see that metrics about online ad engagement or interaction (alone) not translate to bottom line results as effectively as lifetime value, ideal customer targets, and changes in brand measures. Ad metrics can definitely be a part of the overall story of the campaign; however, I wouldn't recommend them in isolation. It happens too often that an agency measures (and eliminates) partners along a single dimension like ad interaction rate.


Instead, the advertiser and agency should compare partners along a multitude of dimensions. Better yet, go the extra step and attribute value along all these dimensions. Here are some thoughts to get you started on attribution. It is important to review and compare partners but measure in ways that give you a comprehensive view of their overall campaign impact.


Jarvis Mak  is VP of analytics for Rocket Fuel.


On Twitter? Follow iMedia Connection at @iMediaTweet.


"Successful people are standing" image and "Social media, communication in" image via Shutterstock.

Working moms


Recently, there has been a large focus on the mom blogger community and, in particular, stay-at-home moms. However, brands and businesses are missing out on a huge demographic: working moms.


Working moms should not be forgotten or overlooked. These women typically have more disposable income. They shop, they spend, and they use time very differently than their stay-at-home counterparts.


When it comes to her children, a working mom's time is limited: She wants to pack in as much as she can, when she can. For most working mothers, this means the 48-hour weekend. She is willing to spend more to do more in this restricted time frame, which could mean going to museums or other day outings, or out to family dinners, etc.


Not only will a working mom spend money on things to do with/for her family, she will also spend on things that will allow her to spend the most time as possible with her loved ones. She may be willing to spend more on things that stay-at-home moms do themselves, like cleaning the home or looking for bargains on kids clothes.


Working mothers can also make more time for themselves during their workday and the hours following work before returning home to the family. Their spending priorities are different than stay-at-home mothers. Working and non-working mothers alike spend money on household needs; the non-working mom even more so. However, the working mom is often able to use earned disposable income to treat herself more luxuriously.

Child-free couples


Whether the kids are grown and moved out, or they are child-free by choice, these couples have time and money to spend. This demographic is rapidly growing as more and more couples are choosing not to have children until later in life, or not at all.


These couples are mostly dual income households that have a larger disposable income; they are willing to spend more money to get the most out of their experiences. They want to, and have the money to spend on travelling, eating out, or on retail. They don't have to worry about all the expenses and savings needed for those with children. The empty nesters even have a more flexible schedule to engage in additional individual activities.


This demographic isn't fitting of the majority of messages targeted at childless couples. They are not honeymooners who just haven't started a family yet, or parents just looking to get away on a trip for the weekend without the kids. They are couples who have actively chosen not to have children for various reasons.

Re-commercers


A growing demographic in this new marketplace is the re-commercers. These people are turning to consignment and resale stores for more and more goods and for many reasons. The resale market allows people to find great bargains on many of their household needs, including clothing, home accessories, and children's toys and gear.
           
Many consumers are looking to sell their unused items in these markets as well. Shoppers are becoming more aware of the re-sale value and the cost of ownership for a much wider variety of products than in the past.


Play It Again Sports has been a prime example of this for years, allowing customers to buy used sports equipment at a discounted price or trade in their used equipment for newer equipment. Now, more retailers are following this model and have started a "trade in, trade up" program. For example, Guitar Center and Verizon Wireless have recently instated this resale program, which has influenced a larger number of consumers to return to the store and replace old makes and models with newer ones.


The environmental aspect of re-commerce is another reason why this demographic is growing. With an increase in awareness around the effects that consumption has on the environment, consumers are looking for ways to reduce their carbon footprint and re-use items that still have value. Many of re-commercers put a value on the eclectic and vintage items that they can find in the resale market. These items can be very different than what is offered at the mall or department store, which makes it difficult for consumers to find exactly what they want. For the re-commercer, the relationship with the retailer becomes important for consumer loyalty.

Caretakers


Everyone markets to moms, but brands and businesses should not forget about the au pairs, nannies, and babysitters. These caretakers are the people who are with junior most of the day, five days a week. They are the ones who may decide what the little ones are going to wear in the morning, what they will eat for lunch, what they will play with, and what activities and outings they will participate in.


Marketers of children's products can benefit by targeting this demographic because these caretakers are actively taking part in the experience with the child. If an idea sounds like a good thing to the caretaker, the child will more likely be exposed to the product. Caretakers are an untapped market that puts a large amount of concentration on the child's well-being, even though the parent also does this when with the child. The caretaker is in a different situation because they don't have to concentrate on the other household and family concerns as well.


A caretaker's main focus, as part of his or her job, is to actively take part in the lives of those for whom they are providing care. Because a babysitter or nanny's job is to not only watch but also entertain their employer's children, marketers need to go about reaching caretakers in different ways than they do with parents. 


Jere Doyle is founder, president, and CEO of Prospectiv and Eversave.


On Twitter? Follow iMedia Connection at @iMediaTweet.


"Business chart collection 1" image via Shutterstock.


"Vector drawing parents and children" image via Shutterstock.


"Business people silhouette" image via Shutterstock.


"Collection of people sihouettes" image via Shutterstock.


"Huge collection of silhouettes" image via Shutterstock.

The campaign process


Pre-campaign
Before a campaign starts, measurement of previous marketing campaigns can absolutely point your media buying and planning teams in the right direction. Marketing managers often complain about seeing the same old publishers in media plans crafted by their internal and external strategists. Is that because they have concrete evidence that those partners truly perform well or is it more bottom rung marketing from overworked staff?  


Data-driven marketing organizations have an edge over their competitors by not only knowing what previously worked, but also what previously failed. Sometimes knowing what didn't perform well can lead you to better solutions than trying to further build on already good performance.


Mid-campaign
Optimization approaches come in as many flavors as ice cream. Many marketers say they do optimization, but what does that really mean? Can you articulate what common currency your optimizers are using to compare, for example, your paid social advertising and your promotional emails? Are you confident that your recommendation to pull out of a particular publisher is the right thing to do?


Post-campaign
This is where measurement is usually brought in. "How did we do?" is the question that needs to be answered. The problem is usually that your data teams have tracked a ton of things that make pretty PowerPoint slides, but how can you be sure they are using the right metrics and the right tools? 


For example, email metrics include open rates and click rates while online video has start, stop, and completion rates. How do you compare those two together to know which one you should add more money to and which one you should cancel immediately?

Measurement as an ongoing partner


Marketing measurement should also be used between campaigns to help drive your organization forward.


Evaluate partners
Which publishers or ad networks are actually working? Where should you be spending your dollars? A new Demand Side Platform wants more of your business -- has its track record with your marketing budget proven its worth?


Evaluate team members
Do you need to hire two more analysts? Is your search agency doing well or do you need to find someone else? What about bonuses, promotions, etc.? Are you comfortable with evaluating your team on fuzzy math?


Budget allocation
How much should you even be spending on online video right now? Did your first mobile app perform well enough to justify another build?


Provide creative direction
Which copy and images have been resonating with your audience recently? Can you continue to just build upon the current story or do you need to think outside the box? Marketing measurement can inform the creative team as well as the media team.


"What if" scenarios
How do you calculate how much more budget you need to drive X more conversions? What happens if you kill your email program at the end of the year? You have to cut the budget by 15 percent, where do you start?  When you have a solid measurement approach, these questions are much easier to answer than without.


How can you possibly be making the right moves if your measurement isn't solid?

Measurement as a unifying force


Gets everyone speaking the same language
The best data-driven organizations move in concert with each other. If one team is focused on sales while the other is focused on click-through rates, then you have two teams with different objectives. In some cases, teams can be working against each other and not even know it.


All partners know how they're going to be evaluated
Your media partners want to succeed for you, but without a strong measurement approach, they won't know the parameters of success. Without a strong, centralized measurement methodology, the rules tend to keep changing as new metrics suddenly become prioritized.


Keeps stakeholders accountable
Why did that publisher get put on the plan again? Are they really that good or does your media team just have a good relationship with the sales rep? When your measurement is chaotic, other criteria float to the top as decision influencers. With strong measurement, everyone involved knows their role and can be held accountable.


Measurement can be the catalyst to help you de-silo your marketing efforts. It creates the currency that everyone can follow and build towards.


A strong foundation


It's not that you ignored measurement before, but once you realize just how many decisions are made by measurement, it becomes very clear how important it is to have the proper measurement in place. Unless you have a deep foundation of measurement that can deliver clear insights, you may as well be rolling the dice.


Are you okay with having sub-par solutions in any of the areas above?


In fact, if you're using a last ad measurement methodology or other less reliable proxies for success, you could be optimizing against yourself and hurting your campaign by turning things off that are really working and promoting campaign elements that have little incremental impact on your results.


In a recent internal study here at Visual IQ, we found that over 70 percent of all campaign elements (placements, keywords, etc.) had a 20 percent or more variance in ROI when compared to last ad measurement. That means that you upwards of three-querters of all of your decisions (under last ad) could be absolutely wrong!   


The arrow analogy


When you fire an arrow from 10 feet away, if you're 10 percent off, the arrow still strikes the target -- even if it doesn't hit the bull's-eye. However, if you fire an arrow from fifty feet away, your 10 percent error widens over distance and you completely miss the target and the haystack to which it was attached.


This demonstrates just how important it is to have a very accurate measurement foundation. Once your numbers leave the page and are being used across the organization to drive impact various choices, poor measurement simply compounds already poor decisions.


Josh Dreller is senior director of client and industry solutions at Visual IQ.


On Twitter? Follow iMedia Connection at @iMediaTweet.


"Businessman with banknotes" and "Businessman looking at the board" images via Shutterstock.

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