Online is the New Primetime Gian Fulgoni Chairman
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Transcript of Online is the New Primetime Gian Fulgoni Chairman
Online is the New Primetime
Gian FulgoniChairman
Online is the New Primetime
Gian FulgoniChairman
Web Content 2008
June 18, 2008
MEASURING THE DIGITAL WORLD
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Why is Online the New Primetime?Why is Online the New Primetime?
■ It’s where the audience is.
■ There are powerful new tools for online media planning and analysis
■ We have proof of the power of online advertising:– Correct metrics
– Can measure latent impact
– Can show impact on offline (e.g. in-store) sales
– Can demonstrate long term branding benefit
■ Budgets rapidly shifting online as effectiveness and efficiency of online marketing is demonstrated, but Internet marketing still underutilized by many industries
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comScore Customer Knowledge Platform:A 360° View of 2 Million Global Internet Users
Passively Observed Behavior and Survey Measurement Designed to be representative of the online population Projectable to the total U.S. population Ernst & Young certified for information privacy & security
DEMOGRAPHICS• Self-reported and validated
• Appended Segments (e.g. Claritas, Acxiom)
• Individual & Household Level
WEB VISITING & VIEWING• All Web Site/Page Click Stream• Content Viewed• Search Engine Queries• Keyword Used
SURVEYS• E-mail or Contextual “Pops”
• Behavior-activated Surveys
• Observation of All Surveys Taken Across All Suppliers
ONLINE TRANSACTIONS• All Secure Session Activity
• Purchases and Subscriptions
• Price Paid, Shipping & Handling, Promotions
• Applications/Configurations
MARKETING STIMULI• Online Ads
• Referral Links
OFFLINE PURCHASING• Linked using Name and Address
• Client CRM Databases
• Retailer Loyalty Card Data
• IRI Scanner Panel Data
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The Internet is a already a massive medium, but still growing rapidly in a variety of ways
The Internet is a already a massive medium, but still growing rapidly in a variety of ways
■ 191 million U.S. people age 2+ online in a month, spending an average of 30 hours online per person*– But 77% of 841 million global Internet users now outside of U.S.
■ 99% of online population search in a month, conducting 80 searches per searcher**
■ 73% of online population stream a video, viewing an average of 83 videos per viewer per month***– Up 50% vs YA
■ 67% of online population visit a social networking site, spending 4 hours per month per visitor*
■ Online consumer spending totaled $200B in 2007, up 20% vs. YA – Non-travel represents 8% of consumer spend (excl. food, gas, and autos)
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User Generated Content Sites Growing RapidlyUser Generated Content Sites Growing Rapidly
5
People(000)
Monthly Unique Visitors (000)
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The Internet is the 3rd most used medium and about to become 2nd only to TVThe Internet is the 3rd most used medium and about to become 2nd only to TV
Newspapers 8% Magazines
7%
Watching TV 37%
Video or DVDs 12%
Radio 19%
Internet* 17%
Source: Forrester Research, March 2007
* Excludes work usage.
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Internet’s reach exceeds TV’s from 7 am to 8 pmInternet’s reach exceeds TV’s from 7 am to 8 pm
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Source: National People Meter, comScore Media Metrix 2007
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Internet Ad Revenues Continue to SurgeInternet Ad Revenues Continue to Surge
Quarterly Internet Advertising Revenues($ Billions)
1998 1999 20072006200520042003200220012000
Source: Interactive Advertising Bureau (IAB), PricewaterhouseCoopers (PwC) estimates.
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$21.1B in 2007, Up 26% Over 2006
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Ad Dollars are Flowing OnlineAd Dollars are Flowing Online
Internet
Outdoor
Cable TV
Magazines
Direct Mail
Miscellaneous
Overall
Trade Journals
Yellow Pages
Broadcast TV
Radio
Newspapers
$21 Billion
$ 7
$26
$14
$61
$39
$295
$ 4
$14
$46
$19
$44
MediaAdvertising Dollars Spent in 2007* Percent Change from 2006
Source: Global Insights as published in BusinessWeek* Other sources may define categories differently, leading to different results
60% of all ad spending in traditional media goes to branding campaigns
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Yet, online is only 7% of total ad spending!Yet, online is only 7% of total ad spending!
2007 Estimate($ in Millions)
Source: Advertising Age by Robert J. Coen, McCann-Erickson Inc; Newspaper Association of America; Radio Advertising Bureau; Simba Information; Outdoor Advertising Association of America; Interactive Advertising Bureau (IAB); Lehman Brothers
% Total
Direct Mail $ 60,988 21%
Broadcast TV $ 45,749 15%
Newspaper $ 42,939 14%
Internet $ 21,100 7%
Cable TV Networks $ 20,479 7%
Radio $ 18,592 6%
Yellow Pages $ 14,538 5%
Consumer Magazine $ 13,695 5%
All other $ 55,977 19%
Total $ 296,100 100%
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U.S. Online Advertising:One third branding; two thirds direct response
U.S. Online Advertising:One third branding; two thirds direct response
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Source: Interactive Advertising Bureau (IAB), PricewaterhouseCoopers (PwC) estimates.
Total Online Advertising 2007: $21.2 Billion
•Search is the biggest piece of online advertising•Branding spending still under-developed
Display 24%
Search 41%
Classifieds 16%
Other 9% Rich 10%
Display Search Classifieds Other Rich / Video
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The Web Already Delivers More Advertising Than TV!The Web Already Delivers More Advertising Than TV!
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2.2 x
Monthly GRP’s Monthly Impressions Per Person
Source: Display Impressions: comScore Ad Metrix, Jan -08, Television GRP’s: comScore Estimates
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The CPM’s are just much, much lower for Internet.The CPM’s are just much, much lower for Internet.
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Frequent news about moves onlineFrequent news about moves online
■ “Online is getting to the point where it may be more important than the 30-second TV spot.” Joel Ewanick
VP Marketing Hyundai Motor America
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■ “The country’s third-largest advertiser (General Motors) is getting ready to shift fully half of its $3 billion budget into digital and one-to-one marketing within the next 3 years.” Advertising Age March 17, 2008
• Even ad-spending giant P&G is considering cutting its overall ad budget by as much as 10% this year and aggressively moving ad dollars to the Web. WSJ May 12, 2008
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New Tools Put Online Media Planning and Analysis on a Par with other MediaNew Tools Put Online Media Planning and Analysis on a Par with other Media
■ Panel-based measures correct problems with site server data
■ Using the correct metrics allows improved media planning and analysis– Also, look beyond clicks
■ Intelligence is now available showing advertisers and publishers detailed data on all online ad campaigns
■ Detailed segmentation of users is helping build more powerful media plans
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The Cookie Deletion Problem: Overstated Reach and Understated FrequencyThe Cookie Deletion Problem: Overstated Reach and Understated Frequency
■ 30% of Internet users delete their cookies in a month
■ These deleters do so an average of 4 times a month– 5 different cookies for same site in a month on one computer
■ True for 1st party site cookies and 3rd party ad serving cookies
■ Cookie deletion creates large errors:– 2.5 times overstatement of unique visitors in server logs
– 2.5 times overstatement of reach and a similar understatement of frequency in ad server logs
■ Need to adjust basic site server statistics using panels
A comScore Study of Yahoo and DoubleClick Cookies
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Analysis of Marriott Visitor Non-Buyers (VNBs)Analysis of Marriott Visitor Non-Buyers (VNBs) Dollar Share of Lost Sales Among VNBsDollar Share of Lost Sales Among VNBs
A: Lost Opportunity Analysis
8% Bought at Marriott
92% Became Visitor Non-
Buyers (VNBs)
87%That Visit Another Travel Site
88%Did Not Convert
12% Bought
Elsewhere
12.9 Million Unique Visitors
13% Had No Other Travel
Activity
25%
14%
10%10%
8%
7%
7%
19%
IC Hotels
Hilton
Other
Priceline
Hotels.com
Choice Hotels
Expedia Starwood
Looking Beyond your Site Server DataWhat’s the Size of my Lost Opportunity?
Looking Beyond your Site Server DataWhat’s the Size of my Lost Opportunity?
$462M Sales Opportunity Gap$462M Sales Opportunity Gap
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Decline in Online Ad Click-Through RatesDecline in Online Ad Click-Through Rates
2.50%
1.12%
0.41%
0.20%
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
Rich Media Non-Rich Media
2002
2006
Sources: Doubleclick, eMarketer, Eyeblaster, ABI Research estimates
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Clickers on Display AdsSource: comScore, Total US Online Population, July 2007
“Natural Born Clickers”comScore Study with Tacoda and Starcom“Natural Born Clickers”comScore Study with Tacoda and Starcom
Clickers
Non-Clickers
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Clickers Follow the 80/20 RuleClickers Follow the 80/20 Rule
Source: comScore, Total US Online Population, July 2007
Clickers are predominantly younger (25 - 44) with lower income (under $40K)
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Those Who Viewed the Ad But Did Not Click Drove Majority of Site Engagement and SalesThose Who Viewed the Ad But Did Not Click Drove Majority of Site Engagement and Sales
% of Exposed People% of Exposed People
Include View-Through Effects When Measuring the Campaign – Clicks Are NOT Enough
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Majority of Sales Impact of Display Ads Occurs OfflineMajority of Sales Impact of Display Ads Occurs Offline
Impact of Display Ads
Offline68%
Online32%
Offline Online
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Clicks on Display Ads Are a Misleading Metric and They Don’t Reflect Brand-Building Effects
Clicks on Display Ads Are a Misleading Metric and They Don’t Reflect Brand-Building Effects
■ Only use for direct response ad campaigns (or search)
■ Clicks don’t measure all of a campaign’s sales impact, including the cumulative (latent) and offline impact of ads
■ Clicks don’t tell you anything about brand building effects
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New competitive advertising intelligenceNew competitive advertising intelligence
■ comScore Ad Metrix– Number of ad view impressions…per advertiser…per site
– Precise reach and frequency, full demographics and behavioral stats
– Transcription of actual ads
– Post-buy analysis
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Auto Industry Ad LeadersAuto Industry Ad Leaders
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Advertiser
Total Display Ad
Views (000)Share of Voice*
Ad-Exposed Unique Visitors
(000) Reach Average
Frequency
General Motors 1,687,065 33.00% 102,574 56% 16.4
Toyota 1,356,782 26.00% 62,428 34% 21.7Ford Motor Company 1,075,831 21.00% 94,987 52% 11.3
Source: comScore Ad Metrix, Jan 08
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Automakers using Portals and Auto Resource SitesAutomakers using Portals and Auto Resource Sites
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Source: comScore Ad Metrix, Jan 08
Total Display Ad
Views (000)
Ad Exposed Unique Visitors
(000) ReachAverage
Frequency
Yahoo! Sites 935,550 72,041 39% 13.0
Microsoft Sites 584,889 39,615 21% 14.8
Fox Interactive Media 550,288 41,660 23% 13.2
AOL LLC 316,772 33,808 18% 9.4
AutoTrader 113,764 3,698 2% 30.8
Edmunds.com 97,579 4,359 2% 22.4
KBB.com 83,529 4,669 3% 17.9
eBay 80,918 15,027 8% 5.4
Time Warner - Excl. AOL 53,674 8,855 5% 6.1
Google Sites 50,306 16,192 9% 3.1
Top Properties where Auto Manufacturer Display Ads Appear
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Top Sites Deliver Far Less Than Their Nominal Reach and Need Ad Networks to Expand Effective Reach
Top Sites Deliver Far Less Than Their Nominal Reach and Need Ad Networks to Expand Effective Reach
Reach of U.S.Internet Audience
Source: comScore Custom Analysis, December 2007
Bottom 50% of Viewers for Each Site
3.1%3.8%
2.5% 2.1%
Yahoo Sites Google Sites MSN-Windows Live AOL
% of Total Page Views
% of Page Views Viewed by Bottom 50% of Site Users
Average PVs per Light User (bottom 50%)
10.3 14.7 7.4 7.3
At Least Half of Top Sites Audiences Are Hard to Reach by a Typical Campaign
AOL Media Network
AOL Media Network
74.4% 72.4%
58.7% 56.5%
MSN-Windows LiveGoogle SitesYahoo! Sites
AOL Media Network MSN-Windows LiveGoogle SitesYahoo! Sites
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Why have so many advertisers been slow to adopt online?Why have so many advertisers been slow to adopt online?
■ Are the wrong metrics being used, i.e. clicks instead of ROI?
■ Is it lack of proof that online advertising works?
■ Is there a bias that online is only for direct response?
■ Do some advertisers not realize what paid search can do for them?
■ comScore’s clients have been busy proving the results– Search
– Display advertising
– Offline impact (in-store sales)
– Latent effects
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“The Role of Search in Consumer Buying”2006 comScore Study with Google“The Role of Search in Consumer Buying”2006 comScore Study with Google
Source: Google/comScore “The Role of Search in Consumer Buying” Press Release, March 21, 2006; based on holiday-related purchases completed online and offline across 11 product categories for 60 days post-search
Direct Online Effects 16%
Latent Offline Effects 63%
Latent Online Effects 21%
The Three Components of how Search Drives Buying
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THE SEARCH MARKETING OPPORTUNITYAll CPG Categories
THE SEARCH MARKETING OPPORTUNITYAll CPG Categories
Nearly half of Internet Users search on CPG related terms or visit CPG related sites.
USING SEARCH
Source: comScore Marketing Solutions; 3 Months Ending April 2007 – Total U.S.
Food
Baby
Personal Care
Household
93.7MM 43.8MM
26.0MM 15.7MM
35.9MM 9.8MM
7.3MM 1.7MM
% INTERNET REACH
UNIQUE VISITORS
UVs USINGSEARCH
“The Digital Shelf”:comScore Study with P&G, Yahoo and SEMPO
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SEARCHERSU.S.
POPULATION
Average Income $63k $45K
Average Age 41 46
Female 78% 50%
4 yr. College or Better Education 45% 22%
Demographic & Life Stage Questions: Base: Searcher (n = 2,011); Non – Searcher (n= 803) = Significant difference at 95% confidence
Demographic Profile
Searchers are more affluent, youngerand more likely to be female
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Searchers can be influenced to switch brands based on factors other than price
Thinking about your last purchase, did you switch brands?
Why did you switch?
Searchers Non-Searchers
QA14/11a: Did you switch to another brand? Base: Searchers (n = 1,893); Non-Searchers (n = 751)
QA15/12a: Why did you switch? Base: Searchers (n = 625); Non-Searchers (n = 208)
= Significant difference at 90% confidence.
Price (Main Reason for
Switching)
• Searchers 27%• Non-Searchers 38%
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Query: Unbranded (i.e., “fuel efficient car”)
Methodology: Testing the Brand’s Placement
1. Control (No branding – “Brand X” does not appear on the SERP)
2. Brand appears in Top Sponsored result only
3. Brand appears in Top Organic result only
4. Brand appears in both Top Sponsored and Top Organic results
5. Brand appears in Side Sponsored result only
Top Organic Only
3
Top Sponsored Only
2
Top Organic AND Top Sponsored
4
Side Sponsored
5
Top Sponsored
Control, brand not mentioned
1
Top Organic
Subjects entered an unbranded query and saw one of the following search engine results pages (SERP):
Source: Enquiro Search Solutions, Inc., July 2007.
Note: All subjects (N=2722) are 25+ and considering purchasing a new car within the next year (test brand: major import auto maker).
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Test Brand
Other
None
A 16% Point Increase in Brand Association When Brand Is in Top Sponsored and Top Organic Results
A 16% Point Increase in Brand Association When Brand Is in Top Sponsored and Top Organic Results
When you think of fuel-efficient cars, which come to mind?
42% point gap between test brand and another brand
16%
ControlSide
SponsoredTop Sponsored
ListingTop Sponsored& Top Organic
Top OrganicListing
0%
10%
20%
30%
40%
50%
60%
70%
Source: Enquiro Search Solutions, Inc., July 2007; Note: There is a significant (7% point) increase from Control to Side Sponsored, as well.
Query: Unbranded (i.e., “fuel efficient cars”)
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A 2.2x Lift in Aided Brand Recall When Brand Is in Top Sponsored and Top Organic ResultsA 2.2x Lift in Aided Brand Recall When Brand Is in Top Sponsored and Top Organic Results
Which of the following brands do you remember seeing in the search results page you just viewed?
Side Sponsored
TopSponsored
Top Sponsored & Top Organic
Top OrganicListing
2.2x
1.5x
x
Test Brand
Other0%
10%
20%
30%
40%
50%
60%
70%
Source: Enquiro Search Solutions, Inc., July 2007.
Query: Unbranded (i.e., “fuel efficient cars”)
Test Brand
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What about the impact of Internet ad campaigns on in-store sales?
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Close the Loop Studies (Done with Yahoo!)Close the Loop Studies (Done with Yahoo!)
■ Dozens of studies to assess the impact of paid search and banner ads on online and offline sales
■ Real world analysis: comScore panelists divided into two matched groups (exposed and non-exposed to advertising)– Search only
– Display ads only
– Search and display ads together
– Neither
■ Passively measured behavior, no surveys involved
– Linked to in-store sale through CRM databases, retailer loyalty cards (e.g. Kroger),
IRI scanner panel
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Search + Display Ad Effectiveness Results:comScore Norms for Offline Sales LiftSearch + Display Ad Effectiveness Results:comScore Norms for Offline Sales Lift
Incremental Impact On Offline $’s
0%
10%
20%
30%
40%
50%
60%
Search &Display
Search Display
Control Test
Search ads generate a greater lift in offline sales, but have a far lower reach and cost substantially more than Display ads
Offline $$ Per (000) Exposed
11% 8% 80%% of All Exposed
Users
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Some Summary Thoughts for the FutureSome Summary Thoughts for the Future
■ The move to online advertising is in full gear
■ It will spread rapidly as traditional advertisers understand its impact
■ Panel data needed for accurate consumer metrics
■ Reach and cumulative frequency are mandatory metrics if traditional branding ad dollars are to be moved online
■ Measure latency and offline impact of online campaigns to show true (higher) ROI
■ Search can be a branding tool
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