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BRAND ADVERTISING ONLINE
January 2011




               IN GERMANY
               Is the ‘ClICk’ the rIght CurrenCy for DIsplay aDvertIsIng effeCtIveness?




               exclusively presented at




               Linda abraham                                           ChriStOph SChuh
               Chief marketing Officer, comScore, inc.                 Chief marketing Officer, tOmOrrOw FOCuS aG
               mike Shaw                                               karin rOthStOCk
               director, marketing Solutions, comScore, inc.           head of research, tOmOrrOw FOCuS media
               ZOSia riCh
               research manager, marketing Solutions, comScore, inc.
H
                                                                                     How Online Adver
                                                                                                    rtising Works




How Online Adve
              ertising Wo
                        orks: Measu
                                  uring Displ Ad Effe
                                            lay     ectiveness in German
                                                                       ny

BACKG
    GROUND
In today economic
        y’s          cally challen
                                 nging times, some adve   ertisers and their agenciies, in the quest for
                                                                                                q
immedia returns, a moving campaign spe from CP campaign that requir payment based on
        ate          are         c            end         PM          ns            re          b
the nummber of deliveered ad imprressions to C
                                             CPC program where pay
                                                          ms           yment is bas sed on the number of
clicks on an ad. How
        n            wever, the in
                                 ncreasing soophistication of online audiences has led fewer and fewer
                                                                                   s           a
Internet users to clic on ads, to the extent that, as Dou
                     ck          o                        ubleClick rep
                                                                      ported in its 2
                                                                                    2009 Year-inn-Review
benchmark report, th average click-through rates acros its image, flash, and riich media ca
                     he           c          h            ss                                   ampaigns
had falle to just 0.1
        en           11% in Germ many compa  ared with 0.07% in the United Kingdo and 0.10 in the
                                                                                    om         0%
US. Mo markets in Europe sa a decrea in their CTR from 2008, with Ger
        ost                      aw          ase          C                         rmany seein a 15%
                                                                                               ng
decline.

Are low click rates evidence th display ad campaig have no had any im
      w                       hat                 gns       ot         mpact on coonsumer
behavioour? Or, dooes online display adv
                              d        vertising wo in a sim
                                                  ork       milar way to traditiona offline
                                                                       o          al
advertis
       sing with m multiple exposures ov
                                       ver time ne eeded to effect a cha
                                                            e          ange in co onsumer
behavioour?

      many, as in o
In Germ           other markets including t US, the Internet is no yet broadlly viewed as a useful
                              s,          the       I            ot                     s
medium to promote branding (Fig
                              gure 1).

                    Fig
                      gure 1: The In
                                   nternet is not proportionat
                                                             tely used for Brand Adver
                                                                                     rtising


    63% T Total      Measured Med Spend:
                                dia
    dollar are
         rs                 $186
                               6B
     spen on
         nt
      Braand
    Marke eting

                                                                                                  On 23% online
                                                                                                     nly
                                                              Online Med Spend:
                                                                       dia
                               $118B
                                   B                                                             dolla are spent on
                                                                                                     ars          n
                                                                     $26
                                                                       6B                         Bra Marketing
                                                                                                     and

      Br
       rand                                                            $6
                                                                        6B

Direct Re
        esponse                                                        $2
                                                                        20B
                                                                                                 77% online dollars
                                                                                                    %
                              $68B
                                                                                                 are spent on Direct
                                                                                                                   t
    37% Total                                                                                         Response
    dollars are                                                                                      Marketing
  spent o Direct
        on
    Resp ponse
    Mark keting


Source: Le
         ehman Brothers Think Equity Partners, US 20
                      s,             P             008


TV is th firmly root
       he           ted front-run
                                nner when co          valuate whic medium to use for a branding
                                            ompanies ev          ch        o
campaig Many still view onlin as a dire ct response channel, most suitable for driving traffic or
        gn.                     ne                              m         e
quickly increasing pu
                    urchase inten (Figure 2) .
                                 nt




                                                                                                             PAGE 2
H
                                                                                                  How Online Adver
                                                                                                                 rtising Works




                             Figure 2: Which medi
                                     :          ium is best fo branding campaigns?
                                                             or         c
            4%
                                  5%                   5%                   6%
            9%                                                                              Prom
                                                                                               moting Loyalty
                                 10%
            7%                                        20%
           10%                   15%                                        32%
                                                                                            Drivin Traffic / Purchase
                                                                                                 ng
                                                      15%                                   Intentt
                                 23%
                                                                            21%             Prom
                                                                                               moting Conside
                                                                                                            eration
                                                      24%
           70%                                                              16%             Gene
                                                                                               erating Familia
                                                                                                             arity
                                 47%
                                                      36%
                                                                            25%             Creatting Awarenes
                                                                                                             ss


            TV               Magazine
                                    es            New
                                                    wspapers               Online

Source: B
        Bain & Company ‘In search of a premium alter
                     y,                            rnative: an actio plan for online brand advertis
                                                                   on                             sing’ (2010)

There is a clear disc
        s           crepancy bettween the Int
                                            ternet metric that curren exist and those that branding
                                                         cs             ntly       d
advertise require. In order to measure bra
         ers                    m          anding campa   aigns, advertisers look fo measures such as
                                                                                   or          s
brand aw wareness, re
                    ecall, purcha intent, a
                                ase        and likelihood to recomm
                                                          d            mend, whilst the Internet tends to
offer immmediate mettrics such as ad impress
                                s           sions, click-th
                                                          hroughs and interaction rates; none of which
                                                                       d
effective provide m
        ely         marketers wit what they need to jus
                                 th         y             stify or increase branding investmen online
                                                                                    g          nts
(Figure 33).

                   Figu 3: Which metrics are m
                      ure        m           most suitable for measurin brand buil
                                                                      ng         lding
                                              campaigns? ?
         5
         55%       % panelists                                                          What bran get
                                                                                                nds
                                            What brannds
                 45%                        want / nee
                                                     ed


                         30%
                                 23% 22% 20%
                                           % 19% 18
                                                  8% 16%
                                                         14% 12%
                                                         1
                                                                                                    8%       7%      7%




 Source: Bain & Compan Building Brands Online: An Interactive Advertising Action Plan, 2009
                     ny,                                                         P


This pap reports the results of comScore research into the impact of online display ad
         per                      o        e           i                    e        dvertising
leveraging comScor  re’s proprieta panel of 2 million Internet user more tha 400,000 of whom
                                  ary       f                     rs,      an
reside in Europe. Ad
        n           dditional to th the Prem
                                  hat,     mium Ad Network TOMO  ORROW FOC  CUS Media analysed
the click rates of mo than 8 billion display ads, served in Novemb and Dec
        k           ore          b         y           d          ber      cember 2010 on their
                                                                                     0
premium network in Germany.
        m

Instead of relying upon cookies to measure behaviour, comScore has obtaine explicit pe
                                  s             e                                    ed         ermission
from a rrepresentativ cross sec
                      ve          ction of Intern users in countries ac
                                                net                       cross the glo
                                                                                      obe to meas
                                                                                                sure their
online acctivities over time. The re
                      r            esults presennted in this paper will dem
                                                             p            monstrate tha wholesale reliance
                                                                                      at        e




                                                                                                                          PAGE 3
H
                                                                                   How Online Adver
                                                                                                  rtising Works




on click-
        -through rate as a mea
                    es       asure of disp
                                         play advertisi effectiven
                                                      ing        ness distorts marketers’ views of
                                                                             s
how onli compares to other me
        ine                   edia.

The pheenomenon of cookie dele
                   f            etion poses a significant challenge an has rende
                                                            c          nd           ered inaccura much
                                                                                                ate
of the co
        ookie-based research co  onducted to date on the effectivenes of online advertising. Cookies
                                                          e             ss
are sma pieces of code inserte into the c
       all                       ed            computer bro owser of the user whose behaviour is being
                                                                        e            e
examine in an att
       ed,         tempt to uni   iquely identi fy the compputer and thereby monit its activit While
                                                                                     tor        ty.
conceptually an apppealing appr  roach, the pr  revalence of anti-spyware software (now built into most
                                                            f
browser allows Inte
       rs)          ernet users very easily to delete their cookies as they see fit. Research co
                                 v             o           r                                    onducted
by comS Score and o others has shown that, because of cookie de
                                               ,           o           eletion, any attempt to measure
compute users’ acti
        er         ivity over time using cook  kies alone will be subject to substant error leve as the
                                                          w             t           tial       els
cookies are deleted, and this will typically und
                                 l             derstate the impact of the advertising being meas
                                                                        e           g           sured.

     ERMAN ONL
THE GE       LINE ADVER
                      RTISING LAN
                                NDSCAPE

In 2009, the German online indu
        ,            n            ustry accoun
                                             nted for 16.5% of all advertising spen and was the third
                                                                                  nd,
largest a           medium in Germany, folllowing TV and magazine according to the OV Online
        advertising m             G                                   es,          g      VK
Report 22010/01. For the first time online surp
                    r             e,          passed conssumer publicaations.


                     Figu 4: 2009 Online advertis
                        ure       O             sing spend in Germany
                                                            n
                                   Affiliate
                                 Netwworks,
                                € 308 million


                                                             Conventio
                                                                     onal
                                                                Online
                                                                     e
                       S
                       Search                                 Marketin
                                                                     ng,
                     Maarketing,                             €2,168 million
                    €1,6 million
                       624




Source: O
        OVK Statistic 200 – OVK Online Report 2010/0
                        09                         01

The Ge erman online advertising industry g
                    e             g           grew by 12 2% to over €4 billion iin 20091, ex    xceeding
expectattions. At €2.2 billion, con
                                  nventional o
                                             online advertising still acc
                                                                        counted for t
                                                                                    the majority of gross
advertising sales in 2009, follo
                    n            owed by sea  arch marketiing with €1.6 billion. Th affiliate networks’
                                                                                    he          n
segment also topped €300 million for the first time.
                    d                         t

Increasingly, adverttiser budget are migra
                               ts            ating to the online me
                                                        e           edium, with conventiona online
                                                                                          al
advertising alone ac
                   chieving a do
                               ouble-digit sh
                                            hare of the media mix in many sector Online ad
                                                        m                      rs.        dvertising
in Germany is expeccted to have grown by 14 in 2010, reaching a to of €4.7 b illion1.
                                            4%          r           otal

ZenithOptimedia rec  cently reporte that, in 20
                                  ed           010, Germany was the world’s third largest ad market in
                                                                      w                         m
terms of ad spend, surpassed only by the U.S. and Japan. They also anticiipate that th global
                                              e                       y                         he
Internet will grow by 48% betwee 2010 and 2013. The report further suggests th in 2013 television
                                  en          d           r                         hat         t
        tinue to take the majority of market sh
will cont                                     hare worldwide while the Internet will account for 17.9% of
all ad spend, almos equaling that of news
                     st                       spapers. Tak
                                                         ken in combination, thes projection clearly
                                                                                   se          ns
demonstrate the faith that mar    rketers and their agenccies have in the Interne as an ad
                                                                     n              et          dvertising
medium.


1
    Source: O
            OVK Online Report 2010/01




                                                                                                           PAGE 4
H
                                                                                             How Online Adver
                                                                                                            rtising Works




In econo omically diff
                     ficult times, advertisers’ ability to co
                                                            omprehensively and acc curately meaasure the
effective
        eness of adv vertising beccomes even more important. Typica    ally, markete use click
                                                                                   ers         k-through
rates (CCTRs) to assess the effec  ctiveness of an online caampaign. Hoowever, CTR are extrem
                                                                                   Rs          mely low,
and hav continually declined ov the past f
        ve           y            ver          few years. The markets listed in Figu 5 saw an average
                                                           T            l          ure
decline o 28% in jus one year. In Germany CTRs decre
         of           st                      y             eased by 15% in 2009 an are now at a level
                                                                        %           nd          a
of only 00.11%, whils the averag CTR on ads hosted on Tomorro Focus site in Novem
                     st            ge                                  ow          tes         mber and
Decemb 2010 was just 0.07%. The market listed in Fi
        ber          s             .           ts           igure 5 saw an average d
                                                                        a          decline of 28 in just
                                                                                               8%
one year.

In addition, accordin to DoubleClick, it se
                    ng                    eems that CTRs are inv
                                                         C             versely corre
                                                                                   elated to the relative
                                                                                               e
        cation of the audience This mea
sophistic           eir        es.         ans that the few people who do c
                                                          e                        click on ads are not
                                                                                               s
necessaarily represe
                   entative of the people an advertis
                               t                         ser wants to reach. Ma
                                                                       o           arkets wher online
                                                                                               re
advertising spend is higher, and consumers see more campaigns, have even lo
                   s           d          s               c            h           ower CTRs. As users
become accustomed to conducting online ac
                    d                     ctivities, it apppears that CTRs decline..
                            Figure 5: Worldwide Click-Throug Rates
                                   5                       gh
                                                                            0,2
                                                                              2%
         India
                                                                       0,18%
                                                                0,16%
 Netherlands
                                                           0,14%
                                                                       0,18%
        C
        China
                                                      0,12%
                                                           0,14%
        S
        Spain
                                                      0,12%
                                                      0,12%
       Fr
        rance
                                                      0,12%
                                                       0,13%                   20
                                                                                008
       many
    Germ
                                                  0
                                                  0,11%
                                                                               20
                                                                                009
                                                    0,12%
          Italy
                                               0,10
                                                  0%
                                               0,1%
                                                  %
           US
                                               0,10
                                                  0%
                                               0,1%
                                                  %
      Canada
                                            0,09%
                                               0,1%
                                                  %
     Aus
       stralia
                                      0,07%
                                         0,08%
           UK
                                      0,07%

Click-throu rates across Static Image, Flash and Rich Media formats
          ugh          s                            h
Source: Doubleclick DAR for Advertiser a cross-sectio of regions, January – Decem
                      RT              rs             on                         mber 2008 / 200
                                                                                              09


For the German Pr    remium Disp  play Network TOMORRO FOCUS MEDIA, w
                                              k           OW     S          which serves about 4
billion ad per month the averag CTR in 20 was 0.14 on avera (CTR-Re
         ds           h,          ge          010         4%     age         eport TF Med
                                                                                        dia). This
data sho  ows, that click rates in a premium network like TOMORRO FOCUS MEDIA are slightly
                                                          e       OW        S           e
higher t than the ave erage CTR in Germany but still quite low, ranging from 0.08% for a classic
                                              y,         q
skyscrap up to 0.8
         per         86% for a bannderole ad (F
                                              Figure 6).

         Figure 6: Exa
                     ample CTRs on TOMORRO FOCUS NETWORK 20
                                o        OW      N        010


          Average Click Rates (on
                                n TOMORRO
                                        OW FOCUS                          CTR in % 
          Network 2010) 
          Banderole Ad                                                      0,8
                                                                              86 
          Wallpaper                                                         0,5
                                                                              56 
          Panorama Ad                                                       0,4
                                                                              44 




                                                                                                                     PAGE 5
H
                                                                                    How Online Adver
                                                                                                   rtising Works




         Super Bann
                  ner                                                0,1
                                                                       15 
         Medium Reectangle                                           0,1
                                                                       11 
         Skyscraper                                                  0,0
                                                                       08 

Source: CTR-Analysis, TO
                       OMORROW FO
                                OCUS Media, Ja
                                             an-Dec 2010


One fact that seem to be driv
        tor        ms          ving this is th at more and more branding campaig do not ha a call
                                                                                 gns        ave
to action in the cre
        n          eative. The task of thes ad forma is buildin up brand awareness loyalty,
                                              se         ats        ng           d          s,
recommmendation etc instead of high click-thr
                   c.                         rough rates. The new ove
                                                                     ersized ad fo
                                                                                 ormats and video-ads
                                                                                            v
        mportant step towards the Internet as a branding channel like TV.
are an im                                     s

        Figure 7: Exa
                    ample for an Oversized Cr
                                            reative without direct call to action




So, do lo CTRs me that the advertising is not effective? comSco research indicates th this is
         ow           ean                                              ore          h          hat
not the c
        case. The re esearch show that the u of CTRs to measure effectiveness results in marketers
                                  ws          use                       e            s         m
basing ttheir conclus sions on acctivity that o ccurs, in most cases, for a mere 0.1% of all the ads
                                                                        f
delivered (and focus on peop who migh not even be in the ad
        d            ses         ple           ht                      dvertiser’s ta
                                                                                    arget segmen while
                                                                                               nt),
ignoring the effects that the othe 99.9% of the ads pote
                                  er                       entially have on consum
                                                                       e           mers. In othe words,
                                                                                               er
the CTR can be quite misleadin in evalua
        R                         ng          ating campaign impact. It is essentia to establis a new
                                                                                    al         sh
currency in the nea future that is able to measure the success of advertising effects in branding
        y            ar           t                        e           o             g
campaig gns. To further confirm that conclu   usion, we move from an analysis of CTRs an to an
                                                          m            a                       nd
investiga
        ation of the c
                     clickers them
                                 mselves.

NATURA BORN C
     AL     CLICKERS: STUDY DES
                      S       SIGN

In July 2
        2007 in the UU.S., comSc
                               core conduct  ted the first study that ex
                                                           s           xamined how Internet us
                                                                                    w            sers click
on the a ads to which they have been expos
                    h                        sed. The stu has sinc been upd
                                                           udy         ce           dated to allo for an
                                                                                                ow
analysis of trends. c
        s           comScore’s proprietary te
                                p            echnology pa  assively meaasures all the digital activ of its
                                                                                    e             vity
panelists and collec complete URL/click s
         s,         cts        e             stream data. The information collect
                                                           .                        ted also included the
actual creative used in the adve
                    d          ertising. With
                                            hout collectin any personally identifia
                                                          ng                         able data, comScore
used its proprietary panel to ob
                               bserve Intern users’ on
                                            net           nline behavio and asso
                                                                       our          ociated ad exposure,
                                                                                                e
including whether o not the panelists clic
         g          or         p            cked on an ad. The ad exposure a
                                                                      d              and click da were
                                                                                                 ata
integrate into a database and panelists’ sit visitation was categor
        ed                                    te                       rised accordding to the comScore
site cate
        egories.




                                                                                                            PAGE 6
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                                                                                          How Online Adver
                                                                                                         rtising Works




The pan nelists were ssegmented based on the weight of their monthly CTRs, form
                                 b            e          t          y            ming 3 groups: Heavy
clickers (clicking on 4+ ads), Mod
                                 derate clicke (clicking on 2-3 ads) and Light clic
                                             ers         o           a            ckers (clickin on just
                                                                                               ng
1 ad). Non-clickers ccomprised a fourth groupp.

      sults of the 2
The res            2010 update showed th
                               e          hat, despite accounting for only 4% of the total Internet
                                                                    f                       l
populatio the Hea
        on,        avy clickers accounted for 63% of all clicks on display a
                                                                   o             ads in the month. A
                                                                                            m
staggering 88% of th U.S. Internet populatio did not click on any ad at all, (Figu 8).
                   he                      on                      d             ure


      Fig
        gure 8: Heavy clickers acc
                    y            count for a sm proporti of the U.S Internet po
                                              mall     ion        S.          opulation
                  2%
                    3%
                     %
                  7%                               20%

                                                   26%                              63%

                 88%
                                                   54%                              19%
                                                                                    18%

       % Internet Po
                   opulation                   % Clickers                                 s
                                                                                   % Clicks
                                         Non      L
                                                  Light    Mod
                                                             derate       Heavy

Source: co
         omScore, Natur Born Clickers (US), August 2
                      ral           s              2010


Over tim comScor has obser
        me,          re         rved a meas urable declin in the num
                                                         ne         mber of user clicking on display
                                                                                  rs
ads, furrther diminishing the imp
                                portance of the click. Over a three year period the perce
                                                        O                        d,        entage of
Internet users who d not click in a month g rew from 68 in July 20 to 84% in March 200 and to
                     do                                 8%         007            n        09
88% in A August 2010 As the num
                    0.          mber of click
                                            kers continue to decline, the click be
                                                        es          ,            ecomes prog
                                                                                           gressively
irrelevan as a key m
        nt          measure of a successful ccampaign.


                            Figure 9: Growth in U
                                   9            U.S. non-clickers
                                                                        88%
                                               84%
                                                 %



                      6
                      68%




                   Jul 2007
                     ly                    March 2009                August 20
                                                                             010

Source: co
         omScore, Natur Born Clickers (US), July 200 – August 201
                      ral           s              07           10


Looking at a series o display ad campaigns in Germany a similar pattern emerg
                    of         d            s           y,         p              ges. Only 15 of the
                                                                                              5%
total German online population actually click
                                a           ked on a display ad in August 2010. Heavy click
                                                                   A                          kers, who
accounte for 3% of the German online popu
        ed         f           n            ulation, generated 62% of the clicks (F
                                                                                  Figure 10).

The pro              eavy clickers in German is about the same as in the U.S . and accounts for a
        oportion of he             s           ny          t            s
similar p
        proportion of the clicks. This leads to questions such as who are these cliickers, and how does
                                  T                                                            h
their online behaviou compare to the overalll Internet pop
                     ur                                    pulation in Germany?




                                                                                                                  PAGE 7
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                                                                                        How Online Adver
                                                                                                       rtising Works




                   Figu
                      ure 10: German heavy clicckers accoun for a small proportion
                                                          nt
                                     of the Inte
                                               ernet population
                   3%
                   4%
                   8%                               19%

                                                    27%                              62%
                                                                                       %


                   85%
                     %
                                                    54%                              20%
                                                                                       %

                                                                                     18%
                                                                                       %

        % Internet Po
                    opulation                   % Clickers                         % Cli cks
                                       Non    Lig
                                                ght        Moder
                                                               rate    Heav
                                                                          vy
Source: co
         omScore Marke
                     eting Solutions, Germany, Augu 2010
                                                  ust


     LING GERMA DISPLAY AD CLICK
PROFIL        AN      Y        KERS

If clicker as a grou were representative o the total German Inter
         rs         up                        of         G             rnet populatio we woul expect
                                                                                     on,         ld
their onlline behaviou patterns to mirror thos of the Ge
                     ur                        se         erman online population at large. com
                                                                       e                        mScore’s
analysis shows that this is not so. Heavy cliickers are, in fact, quite different acr
        s                        s                        n                         ross the boa
                                                                                               ard—on a
monthly basis, they spend two and a half tim more minutes online and visit a
                                 a            mes        m              e           almost three times as
many pa  ages as nonn-clickers (Fig
                                  gure 11). Heeavy clickers are disprop
                                                          s            portionately sskewed commpared to
the muc larger nu
         ch          umber of no  on-clickers aand, as suc do not accurately r
                                                          ch,                       represent th online
                                                                                                he
behaviour of the Ger rman online audience.

                                  Figure 11: Tot minutes on
                                               tal        nline per visitor

           3.000                                                                   2.845
                                                                                       5

           2.500
           2.000                                            1.746
                                                                6
           1.500               1.166
           1.000
             500
               -
                          Non-Clic
                                 ckers                Light Clic
                                                               ckers           Heavy Clic
                                                                                        ckers

Source: co
         omScore Marke
                     eting Solutions, Germany Augus 2010
                                                  st


A simila pattern em
        ar           merges when delving into site catego visitation (Figure 12), where the visitation
                                  n             o           ory                      ,
profile o clickers is very differen from that o non-clicke This furth supports the fact that clickers
        of                        nt            of          ers.        her         s
differ gre
         eatly from the overall poppulation in th online be
                                                heir        ehaviour. The most dram
                                                                        e           matic differences seen
were in time spent on gambling career ser
                                  g,             rvices, and education. A possible hyypothesis th would
                                                                                                  hat
explain this is that cclickers tend to be youn
                                  d             nger and une employed. Certainly, one can say th while
                                                                        C            e             hat
clickers spend a sub  bstantial amoount of time online, they are not representative o the audien most
                                                            y                        of            nce
markete want to re
        ers          each. If markketers target campaigns based on CT
                                                             b          TRs, they risk shifting the balance
                                                                                     k            e
towards a specific ty of user who is unlikel y to embody the desired target segm
                     ype          w                         y                       ment.




                                                                                                                PAGE 8
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                                                                                                                   How Online Adver
                                                                                                                                  rtising Works




                                                 Figure 12: Site cate
                                                                    egory distribu
                                                                                 ution by composition indeex
                                                  for cl
                                                       lickers and n on-clickers compared to total Internet
                                                                                 c           t            t
                           106
                                                      Se
                                                       ervices
                           105                 Search/Naavigation
                                                     Enttertainment
                                                       Portals
                                                        P
                           104                                     Retaill
                                                           Conversation Media
                                                                       nal
                                                   Direct
                                                        tories/Resourcees    Telecomm munications
            Non Clickers




                                                                           Technology y
                           103
                                                                       ormation Auctio
                                                               News/Info              ons
                                                                  Busine
                                                                       ess/Finance Community
                                                                                      C
                           102                                               Travel          Games
                                                                                       Business to Bus
                                                                                       B             siness
                                                                                    Auto
                                                                                       omotive          ISP
                           101                                                                      orts
                                                                                                  Spo
                                                                                        Regional/Local
                                                                              Real Estate                    Educattion
                           100                                                               Governmment
                                                                                                   Hea
                                                                                                     alth
                                                                                                            Career S
                                                                                                                   Services      Gambling
                            99

                            98
                                 70       80        90        100       110      120
                                                                                   0       130       140       150
                                                                                                                 0       160        170       180
                                                                                                                                                0
                                                                              Heavy Clickers
                                                                                  y
      Source: co
               omScore Marke
                           eting Solutions, Germany, Augu 2010
                                                        ust


      Non-clic  ckers represe the majo
                             ent        ority of Intern users an favour sit focused on services, search,
                                                      net        nd          tes
      retail, ne ews and infoormation. Th are more focused on the functio
                                        hey           e                      onality of the Internet an how it
                                                                                          e           nd
      fulfills a particular ne
                             eed. They sppend less tim online tha clickers and navigate through pag more
                                                     me          an                                   ges
      efficientl Typically those with less time, busy mothe for exam
                 ly.                                             ers        mple, are les likely to click on
                                                                                           ss
      campaig but clear would not be conside
                gns           rly                    ered less imp
                                                                 portant; on the contrary, they would often be
      deemed the most va     aluable segm
                                        ment for many advertisers
                                                      y          s.

      When lo  ooking at the demograph profile of clickers and non-clicker we can se that there are few
                            e          hic                       d           rs          ee         e
      differenc in their g
               ces          gender profil Women a slightly more likely to be light cli ckers and males are
                                        le.         are          m           o                      m
      slightly m
               more likely to be heavy clickers, howe
                            o          c            ever the diffe
                                                                 erence is ver nominal. (F
                                                                             ry          Figure 13)


                                                       Figure 13: Clic
                                                       F             ckers are gen
                                                                                 nder neutral
                           Non-Clickers
                                      s                                  Light Click
                                                                                   kers                                Heavy Clic
                                                                                                                                ckers
120
100
80
60
40
20
 0
                   M
                   Male               Female                        Ma
                                                                     ale               Female                    M
                                                                                                                 Male                 Female

      Source: co
               omScore Marke
                           eting Solutions, Germany, Augu 2010
                                                        ust


      Taking t this further w can look at whether th age of a person has any impact o their prop
                            we         a           he                               on           pensity to
      click. In Figure 14, w can see th heavy cliickers tend to be younge over-index
                            we         hat                               er,        xing highest amongst
      18-34 ye olds, wit the oldest users far le likely to exhibit this behaviour. L ight clickers are also
               ear          th                    ess                    b
      over- inddexed among younger users, but in
                             gst                  nterestingly peak amongs users aged 55 and abo
                                                               p         st         d            ove.




                                                                                                                                           PAGE 9
H
                                                                                              How Online Adver
                                                                                                             rtising Works




                                   Figure 14: Age impa
                                                     acts on the propensity to click
                                                                 p

                   Non-Clic
                          ckers                             Light Cli
                                                                    ickers                         Heavy Clickers
                                                                                                         C
150
140
130
120
110
100
 90
 80
 70
 60
       18-24 25-34 35-44 45-54 55
                       4        5+                 18-2 25-34 35-
                                                      24        -44 45-54 55+
                                                                          5              18-
                                                                                           -24 25-34 35
                                                                                                      5-44 45-54 55+
               omScore Marke
      Source: co           eting Solutions, Germany, Augu 2010
                                                        ust


          RSTANDING HOW ONLIN AD EXPO
      UNDER                 NE      OSURE CHA
                                            ANGES BEH
                                                    HAVIOUR

      comSco has conducted a serie of ad effe ctiveness stu
              ore                    es                      udies across Western Eu
                                                                         s          urope (Germmany, UK,
      France, and Spain) which sho that disp
                           )        ow                       sing, despite a lack of clicks, can have a
                                                 play advertis           e
              ant, positive impact on consumer behaviour. When com
      significa                     n                                    mparing the passively-o
                                                                                   e            observed
      behaviour of Interne users exp
                           et       posed to dis play ads wit that of a comparable set of non-
                                                             th                    e            -exposed
      users, mmatched on ddemographics and prior o
                                                 online behaviour, comSco determin that:
                                                                         ore       ned

               •   Display ads lifted vis
                                        sitation to the advertiser’s website by 72% on ave
                                                      e            s                      erage
               •   Display ads increase the likelih
                                         ed           hood of cons sumers conducting a traddemark sear query
                                                                                                     rch
                   using the advertiser’s branded te  erms by an average of 94
                                                                  a            4%


                             Figure 15: Lift generated by display ads in Europe
                                        L            d            a           e
                                                                             94%

                                   72%




                       Adve
                          ertiser Site Visitation
                                       V                            Trademark Searc Queries
                                                                                  ch

      Source: co
               omScore “Whith the Click in Europe?” Febru
                            her            E            uary 2010


      Comparring these Eu uropean data with corres
                                         a          sponding da in the U.S (49% lift in U.S. site visitation
                                                              ata          S.
      and 40% lift in the n
            %             number of U.S. tradema search qu
                                        U          ark        ueries), the aggregation of European studies
                                                                           a                     n
      shows c
            consistently hhigher lifts am
                                        mong Interne users expo
                                                   et         osed to display advertisin
                                                                                       ng.

      Addition comScor research, published in the Jou
             nal        re                                 urnal of Advvertising Re esearch (Fig
                                                                                               gure 16),
      evaluate both the online and in-store sale impact ac
             ed                                es           cross 139 ca
                                                                       ampaigns in the US ma
                                                                                    n          arket. On
      average it showed a average lift of 27% in online sales and 17% in offline sale
             e,         an         l           n            s          n            es—despite a CTR of
      0.1%.




                                                                                                                    PAGE 10
H
                                                                                              How Online Adver
                                                                                                             rtising Works




             Figure 16 Dollar sales lift among h
                     6:           s            households exposed to on
                                                          e           nline advertis
                                                                                   sing
                                                                       % Lift: 17%
                                                                             :
                                                                                 $11,550
                                                                                       0
                                                                      $9,905



                    % Lift: 27%

                  $994
                     4            $1,263


                         Online                                                ffline
                                                                              Of
                                                Co ntrol     Test
                                                                t
Source: “W
         Whither the Click?” 139 comSco studies in th June 2009 Jo
                                      ore           he           ournal of Advert
                                                                                tising Research
                                                                                              h

comSco has also evaluated th ability of c
       ore                       he           campaigns to increase classic brand
                                                         t           c            ding metrics, such as
awareneess, favourab
                   bility, and lik
                                 kelihood to re
                                              ecommend, all of which can be sign  nificantly imp
                                                                                               pacted by
display campaigns. Further, comScore has demonstrated that the quality of t
                                             s                       e             the creative used in
online a has been shown to relate strong to the ef
       ads         n                          gly        ffectiveness of the adveertising. While certain
brands would not d dream of air   ring a TV a before it passed cer
                                             ad                      rtain creative or persua
                                                                                  e            asiveness
thresholds, the prac
                   ctice of testin creative quality in digital has only recently b
                                 ng                                               begun to unf  fold, and
must als be incorpo
       so          orated into th ad effectiv
                                 he           veness equation.

While coomScore is j  just beginnin to expand its advertis
                                  ng          d            sing measur rement servic ces in Germ
                                                                                               many, our
experien in other markets sug
        nce                      ggests that th
                                              hese additional metrics can provide valuable new insight
                                                                        c
into how online adve
       w            ertising works Depending on the bran the objec
                                  s.          g            nd,         ctive of the ca
                                                                                     ampaign as well as a
variety o other facto that have proven to p
        of           ors          e           play a role in the effectiv
                                                           n            veness of the campaign, such as
                                                                                     e          ,
creative quality, and media place ement, inves
                                             stments in onnline branding advertising may well fa
                                                                        g            g         avourably
compare to TV in ter
        e            rms of ROI.

    ARY
SUMMA

This stu
       udy leads to several key conclusions with impo
                                  y            s,          ortant implicaations for alll stakeholde in the
                                                                                                  ers
German and interna
       n            ational digital eco-system First, the group of Internet users who click on display
                                              m.                                                   n
ads is sm and gett
        mall         ting smaller. Second, the online beha
                                              e            aviour of click
                                                                         kers is so dif
                                                                                      fferent from the much
                                                                                                   t
larger group of non- -clickers that clickers sim
                                               mply do not represent th desired a
                                                                         he           audience for the vast
majority of advertiseers. Third, th
                                  hese pattern s are observved not only in Germany but are consistent
                                                                        y              y,
across t globe. La a growin body of st
        the          ast,         ng           trong eviden proves th online dis
                                                          nce           hat           splay campa aigns can
build bra
        ands through increasing consumer en
                     h                         ngagement, whether it is site visitatio search activity, or
                                                                        s             on,
ultimately online as w as offlin sales. Cle
                      well        ne          early, evaluat
                                                           ting campaig effectivene using CT
                                                                        gn             ess         TRs is at
best shoort-sighted and, more like significan under-va
                                  ely,         ntly        alues the ability of the onnline channe to build
                                                                                                  el
brands. The major implication fo the indust is that if digital is to receive its fa share of branding
                                  or           try                                    air
spend, ffocus must s shift away fro the click to new met
                                   om         k            trics that bet reflect bo the quality of the
                                                                         tter          oth
creative as well as th multiple ways in which online ads can build bra
                     he           w            h                         ands.




                                                                                                                    PAGE 11
H
                                                                                    How Online Adver
                                                                                                   rtising Works




ABOUT COMSCOR
            RE

comSco Inc. (NAS
        ore,        SDAQ: SCOR) is a globa leader in measuring the digital world and prefer
                                               al           m           e             d          rred
source o digital business analyti
        of                         ics. comScor helps its clients better understand, leverage an profit
                                                re           c                       ,           nd
from the rapidly evol
        e            lving digital marketing lan
                                   m            ndscape by providing dat analytics and on-demand
                                                             p           ta,
software solutions fo the measu
        e           or            urement of on nline ads and audiences, media plann
                                                             d                       ning, website
                                                                                                 e
analytics advertising effectivene
         s,          g            ess, copy-tessting, social media, search, video, mo
                                                             m                      obile, cross-m
                                                                                                 media, e-
commer  rce, and a broad variety of emerging f
                                   o            forms of digital consumer behaviour. comScore services,
                                                                                                 s
which no include th product su
         ow         he             uites of recen acquisition Nedstat, Nexius XPlor ARSGrou and
                                                nt            ns         N           re,         up
Certifica are used by more than 1,600 clients around the world, including global le
        a,                                      s            e                        eaders such as
                                                                                                 h
AOL, Ba aidu, BBC, Best Buy, Car Deutsche Bank, ESP Facebook, France Te
                                   rat,         e           PN,                     elecom, Financial
Times, FFox, Microso MediaCor Nestle, St
                    oft,           rp,          tarcom, Terr Networks, Universal M
                                                             ra                     McCann, Veriz zon
Services Group, ViaMichelin and Yahoo!.
        s                          d

For more information please visit www.coms
       e           n,                    score.com or e-mail Mike Shaw at
                                                    r           e
mshaw@@comscore.c  com .


ABOUT TOMORRO FOCUS
            OW

TOMOR   RROW FOCU AG is on of Germa
                      US            ne          any's leading publicly tra
                                                            g            aded interne groups. Th group
                                                                                    et           he
operates in three areas: trans
         s                          sactions, addvertising an technologies. The t
                                                             nd                      transactions division
comprise HolidayCheck, a hote review and travel book
          es                       el          d           king portal an ElitePartn
                                                                         nd         ner, a premiu dating
                                                                                                um
site.
The adv  vertising division includes TOMORR    ROW FOCUS Media, one of the prin
                                                            S            e          ncipal Germa online
                                                                                                 an
marketin businesse Alongside group-own
         ng           es.                       ned websites such as FOCUS Onlin Finanzen
                                                             s                      ne,         n100 and
jameda, the business markets partner site such as CHIP Online FAZ.NET, GuteFrage
                                               es            C           e,          ,          e.net and
meinesta  adt.de. TOM MORROW FOCUS Med ia is the se
                                   F                        econd bigges Ad Netwo in Germ
                                                                         st          ork        many and
reaches more than 6    60% of the German inter
                                   G            rnet populati (internet facts 2010-I II). Since December
                                                             ion                                D
2009 the advertising division has also includ ADJUG Ltd, which operates two online mark
         e            g                         ded                     o           o            ketplaces
for last-m
         minute adver  rtising space in the UK an Germany
                                   e            nd          y.
In the t technologies division, TO  OMORROW FOCUS Technologies GmbH and CELLULAR GmbH
                                              W                                     d            R
provide an extensive range of fix and mob ile internet services.
                      e            xed

For more information please visit www.tomo
        e          n,                    orrow-focus.c
                                                     com or e-mail Karin Roths
                                                                             stock at
k.rothsto
        ock@tomorroow-focus.de .




                                                                                                          PAGE 12
H
How Online Advertising Works
               r




                      PAGE 13
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How Online Advertising Works
               r




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Brand Advertising Online in Germany in english

  • 1. BRAND ADVERTISING ONLINE January 2011 IN GERMANY Is the ‘ClICk’ the rIght CurrenCy for DIsplay aDvertIsIng effeCtIveness? exclusively presented at Linda abraham ChriStOph SChuh Chief marketing Officer, comScore, inc. Chief marketing Officer, tOmOrrOw FOCuS aG mike Shaw karin rOthStOCk director, marketing Solutions, comScore, inc. head of research, tOmOrrOw FOCuS media ZOSia riCh research manager, marketing Solutions, comScore, inc.
  • 2. H How Online Adver rtising Works How Online Adve ertising Wo orks: Measu uring Displ Ad Effe lay ectiveness in German ny BACKG GROUND In today economic y’s cally challen nging times, some adve ertisers and their agenciies, in the quest for q immedia returns, a moving campaign spe from CP campaign that requir payment based on ate are c end PM ns re b the nummber of deliveered ad imprressions to C CPC program where pay ms yment is bas sed on the number of clicks on an ad. How n wever, the in ncreasing soophistication of online audiences has led fewer and fewer s a Internet users to clic on ads, to the extent that, as Dou ck o ubleClick rep ported in its 2 2009 Year-inn-Review benchmark report, th average click-through rates acros its image, flash, and riich media ca he c h ss ampaigns had falle to just 0.1 en 11% in Germ many compa ared with 0.07% in the United Kingdo and 0.10 in the om 0% US. Mo markets in Europe sa a decrea in their CTR from 2008, with Ger ost aw ase C rmany seein a 15% ng decline. Are low click rates evidence th display ad campaig have no had any im w hat gns ot mpact on coonsumer behavioour? Or, dooes online display adv d vertising wo in a sim ork milar way to traditiona offline o al advertis sing with m multiple exposures ov ver time ne eeded to effect a cha e ange in co onsumer behavioour? many, as in o In Germ other markets including t US, the Internet is no yet broadlly viewed as a useful s, the I ot s medium to promote branding (Fig gure 1). Fig gure 1: The In nternet is not proportionat tely used for Brand Adver rtising 63% T Total Measured Med Spend: dia dollar are rs $186 6B spen on nt Braand Marke eting On 23% online nly Online Med Spend: dia $118B B dolla are spent on ars n $26 6B Bra Marketing and Br rand $6 6B Direct Re esponse $2 20B 77% online dollars % $68B are spent on Direct t 37% Total Response dollars are Marketing spent o Direct on Resp ponse Mark keting Source: Le ehman Brothers Think Equity Partners, US 20 s, P 008 TV is th firmly root he ted front-run nner when co valuate whic medium to use for a branding ompanies ev ch o campaig Many still view onlin as a dire ct response channel, most suitable for driving traffic or gn. ne m e quickly increasing pu urchase inten (Figure 2) . nt PAGE 2
  • 3. H How Online Adver rtising Works Figure 2: Which medi : ium is best fo branding campaigns? or c 4% 5% 5% 6% 9% Prom moting Loyalty 10% 7% 20% 10% 15% 32% Drivin Traffic / Purchase ng 15% Intentt 23% 21% Prom moting Conside eration 24% 70% 16% Gene erating Familia arity 47% 36% 25% Creatting Awarenes ss TV Magazine es New wspapers Online Source: B Bain & Company ‘In search of a premium alter y, rnative: an actio plan for online brand advertis on sing’ (2010) There is a clear disc s crepancy bettween the Int ternet metric that curren exist and those that branding cs ntly d advertise require. In order to measure bra ers m anding campa aigns, advertisers look fo measures such as or s brand aw wareness, re ecall, purcha intent, a ase and likelihood to recomm d mend, whilst the Internet tends to offer immmediate mettrics such as ad impress s sions, click-th hroughs and interaction rates; none of which d effective provide m ely marketers wit what they need to jus th y stify or increase branding investmen online g nts (Figure 33). Figu 3: Which metrics are m ure m most suitable for measurin brand buil ng lding campaigns? ? 5 55% % panelists What bran get nds What brannds 45% want / nee ed 30% 23% 22% 20% % 19% 18 8% 16% 14% 12% 1 8% 7% 7% Source: Bain & Compan Building Brands Online: An Interactive Advertising Action Plan, 2009 ny, P This pap reports the results of comScore research into the impact of online display ad per o e i e dvertising leveraging comScor re’s proprieta panel of 2 million Internet user more tha 400,000 of whom ary f rs, an reside in Europe. Ad n dditional to th the Prem hat, mium Ad Network TOMO ORROW FOC CUS Media analysed the click rates of mo than 8 billion display ads, served in Novemb and Dec k ore b y d ber cember 2010 on their 0 premium network in Germany. m Instead of relying upon cookies to measure behaviour, comScore has obtaine explicit pe s e ed ermission from a rrepresentativ cross sec ve ction of Intern users in countries ac net cross the glo obe to meas sure their online acctivities over time. The re r esults presennted in this paper will dem p monstrate tha wholesale reliance at e PAGE 3
  • 4. H How Online Adver rtising Works on click- -through rate as a mea es asure of disp play advertisi effectiven ing ness distorts marketers’ views of s how onli compares to other me ine edia. The pheenomenon of cookie dele f etion poses a significant challenge an has rende c nd ered inaccura much ate of the co ookie-based research co onducted to date on the effectivenes of online advertising. Cookies e ss are sma pieces of code inserte into the c all ed computer bro owser of the user whose behaviour is being e e examine in an att ed, tempt to uni iquely identi fy the compputer and thereby monit its activit While tor ty. conceptually an apppealing appr roach, the pr revalence of anti-spyware software (now built into most f browser allows Inte rs) ernet users very easily to delete their cookies as they see fit. Research co v o r onducted by comS Score and o others has shown that, because of cookie de , o eletion, any attempt to measure compute users’ acti er ivity over time using cook kies alone will be subject to substant error leve as the w t tial els cookies are deleted, and this will typically und l derstate the impact of the advertising being meas e g sured. ERMAN ONL THE GE LINE ADVER RTISING LAN NDSCAPE In 2009, the German online indu , n ustry accoun nted for 16.5% of all advertising spen and was the third nd, largest a medium in Germany, folllowing TV and magazine according to the OV Online advertising m G es, g VK Report 22010/01. For the first time online surp r e, passed conssumer publicaations. Figu 4: 2009 Online advertis ure O sing spend in Germany n Affiliate Netwworks, € 308 million Conventio onal Online e S Search Marketin ng, Maarketing, €2,168 million €1,6 million 624 Source: O OVK Statistic 200 – OVK Online Report 2010/0 09 01 The Ge erman online advertising industry g e g grew by 12 2% to over €4 billion iin 20091, ex xceeding expectattions. At €2.2 billion, con nventional o online advertising still acc counted for t the majority of gross advertising sales in 2009, follo n owed by sea arch marketiing with €1.6 billion. Th affiliate networks’ he n segment also topped €300 million for the first time. d t Increasingly, adverttiser budget are migra ts ating to the online me e edium, with conventiona online al advertising alone ac chieving a do ouble-digit sh hare of the media mix in many sector Online ad m rs. dvertising in Germany is expeccted to have grown by 14 in 2010, reaching a to of €4.7 b illion1. 4% r otal ZenithOptimedia rec cently reporte that, in 20 ed 010, Germany was the world’s third largest ad market in w m terms of ad spend, surpassed only by the U.S. and Japan. They also anticiipate that th global e y he Internet will grow by 48% betwee 2010 and 2013. The report further suggests th in 2013 television en d r hat t tinue to take the majority of market sh will cont hare worldwide while the Internet will account for 17.9% of all ad spend, almos equaling that of news st spapers. Tak ken in combination, thes projection clearly se ns demonstrate the faith that mar rketers and their agenccies have in the Interne as an ad n et dvertising medium. 1 Source: O OVK Online Report 2010/01 PAGE 4
  • 5. H How Online Adver rtising Works In econo omically diff ficult times, advertisers’ ability to co omprehensively and acc curately meaasure the effective eness of adv vertising beccomes even more important. Typica ally, markete use click ers k-through rates (CCTRs) to assess the effec ctiveness of an online caampaign. Hoowever, CTR are extrem Rs mely low, and hav continually declined ov the past f ve y ver few years. The markets listed in Figu 5 saw an average T l ure decline o 28% in jus one year. In Germany CTRs decre of st y eased by 15% in 2009 an are now at a level % nd a of only 00.11%, whils the averag CTR on ads hosted on Tomorro Focus site in Novem st ge ow tes mber and Decemb 2010 was just 0.07%. The market listed in Fi ber s . ts igure 5 saw an average d a decline of 28 in just 8% one year. In addition, accordin to DoubleClick, it se ng eems that CTRs are inv C versely corre elated to the relative e cation of the audience This mea sophistic eir es. ans that the few people who do c e click on ads are not s necessaarily represe entative of the people an advertis t ser wants to reach. Ma o arkets wher online re advertising spend is higher, and consumers see more campaigns, have even lo s d s c h ower CTRs. As users become accustomed to conducting online ac d ctivities, it apppears that CTRs decline.. Figure 5: Worldwide Click-Throug Rates 5 gh 0,2 2% India 0,18% 0,16% Netherlands 0,14% 0,18% C China 0,12% 0,14% S Spain 0,12% 0,12% Fr rance 0,12% 0,13% 20 008 many Germ 0 0,11% 20 009 0,12% Italy 0,10 0% 0,1% % US 0,10 0% 0,1% % Canada 0,09% 0,1% % Aus stralia 0,07% 0,08% UK 0,07% Click-throu rates across Static Image, Flash and Rich Media formats ugh s h Source: Doubleclick DAR for Advertiser a cross-sectio of regions, January – Decem RT rs on mber 2008 / 200 09 For the German Pr remium Disp play Network TOMORRO FOCUS MEDIA, w k OW S which serves about 4 billion ad per month the averag CTR in 20 was 0.14 on avera (CTR-Re ds h, ge 010 4% age eport TF Med dia). This data sho ows, that click rates in a premium network like TOMORRO FOCUS MEDIA are slightly e OW S e higher t than the ave erage CTR in Germany but still quite low, ranging from 0.08% for a classic y, q skyscrap up to 0.8 per 86% for a bannderole ad (F Figure 6). Figure 6: Exa ample CTRs on TOMORRO FOCUS NETWORK 20 o OW N 010 Average Click Rates (on n TOMORRO OW FOCUS  CTR in %  Network 2010)  Banderole Ad  0,8 86  Wallpaper  0,5 56  Panorama Ad  0,4 44  PAGE 5
  • 6. H How Online Adver rtising Works Super Bann ner  0,1 15  Medium Reectangle  0,1 11  Skyscraper  0,0 08  Source: CTR-Analysis, TO OMORROW FO OCUS Media, Ja an-Dec 2010 One fact that seem to be driv tor ms ving this is th at more and more branding campaig do not ha a call gns ave to action in the cre n eative. The task of thes ad forma is buildin up brand awareness loyalty, se ats ng d s, recommmendation etc instead of high click-thr c. rough rates. The new ove ersized ad fo ormats and video-ads v mportant step towards the Internet as a branding channel like TV. are an im s Figure 7: Exa ample for an Oversized Cr reative without direct call to action So, do lo CTRs me that the advertising is not effective? comSco research indicates th this is ow ean ore h hat not the c case. The re esearch show that the u of CTRs to measure effectiveness results in marketers ws use e s m basing ttheir conclus sions on acctivity that o ccurs, in most cases, for a mere 0.1% of all the ads f delivered (and focus on peop who migh not even be in the ad d ses ple ht dvertiser’s ta arget segmen while nt), ignoring the effects that the othe 99.9% of the ads pote er entially have on consum e mers. In othe words, er the CTR can be quite misleadin in evalua R ng ating campaign impact. It is essentia to establis a new al sh currency in the nea future that is able to measure the success of advertising effects in branding y ar t e o g campaig gns. To further confirm that conclu usion, we move from an analysis of CTRs an to an m a nd investiga ation of the c clickers them mselves. NATURA BORN C AL CLICKERS: STUDY DES S SIGN In July 2 2007 in the UU.S., comSc core conduct ted the first study that ex s xamined how Internet us w sers click on the a ads to which they have been expos h sed. The stu has sinc been upd udy ce dated to allo for an ow analysis of trends. c s comScore’s proprietary te p echnology pa assively meaasures all the digital activ of its e vity panelists and collec complete URL/click s s, cts e stream data. The information collect . ted also included the actual creative used in the adve d ertising. With hout collectin any personally identifia ng able data, comScore used its proprietary panel to ob bserve Intern users’ on net nline behavio and asso our ociated ad exposure, e including whether o not the panelists clic g or p cked on an ad. The ad exposure a d and click da were ata integrate into a database and panelists’ sit visitation was categor ed te rised accordding to the comScore site cate egories. PAGE 6
  • 7. H How Online Adver rtising Works The pan nelists were ssegmented based on the weight of their monthly CTRs, form b e t y ming 3 groups: Heavy clickers (clicking on 4+ ads), Mod derate clicke (clicking on 2-3 ads) and Light clic ers o a ckers (clickin on just ng 1 ad). Non-clickers ccomprised a fourth groupp. sults of the 2 The res 2010 update showed th e hat, despite accounting for only 4% of the total Internet f l populatio the Hea on, avy clickers accounted for 63% of all clicks on display a o ads in the month. A m staggering 88% of th U.S. Internet populatio did not click on any ad at all, (Figu 8). he on d ure Fig gure 8: Heavy clickers acc y count for a sm proporti of the U.S Internet po mall ion S. opulation 2% 3% % 7% 20% 26% 63% 88% 54% 19% 18% % Internet Po opulation % Clickers s % Clicks Non L Light Mod derate Heavy Source: co omScore, Natur Born Clickers (US), August 2 ral s 2010 Over tim comScor has obser me, re rved a meas urable declin in the num ne mber of user clicking on display rs ads, furrther diminishing the imp portance of the click. Over a three year period the perce O d, entage of Internet users who d not click in a month g rew from 68 in July 20 to 84% in March 200 and to do 8% 007 n 09 88% in A August 2010 As the num 0. mber of click kers continue to decline, the click be es , ecomes prog gressively irrelevan as a key m nt measure of a successful ccampaign. Figure 9: Growth in U 9 U.S. non-clickers 88% 84% % 6 68% Jul 2007 ly March 2009 August 20 010 Source: co omScore, Natur Born Clickers (US), July 200 – August 201 ral s 07 10 Looking at a series o display ad campaigns in Germany a similar pattern emerg of d s y, p ges. Only 15 of the 5% total German online population actually click a ked on a display ad in August 2010. Heavy click A kers, who accounte for 3% of the German online popu ed f n ulation, generated 62% of the clicks (F Figure 10). The pro eavy clickers in German is about the same as in the U.S . and accounts for a oportion of he s ny t s similar p proportion of the clicks. This leads to questions such as who are these cliickers, and how does T h their online behaviou compare to the overalll Internet pop ur pulation in Germany? PAGE 7
  • 8. H How Online Adver rtising Works Figu ure 10: German heavy clicckers accoun for a small proportion nt of the Inte ernet population 3% 4% 8% 19% 27% 62% % 85% % 54% 20% % 18% % % Internet Po opulation % Clickers % Cli cks Non Lig ght Moder rate Heav vy Source: co omScore Marke eting Solutions, Germany, Augu 2010 ust LING GERMA DISPLAY AD CLICK PROFIL AN Y KERS If clicker as a grou were representative o the total German Inter rs up of G rnet populatio we woul expect on, ld their onlline behaviou patterns to mirror thos of the Ge ur se erman online population at large. com e mScore’s analysis shows that this is not so. Heavy cliickers are, in fact, quite different acr s s n ross the boa ard—on a monthly basis, they spend two and a half tim more minutes online and visit a a mes m e almost three times as many pa ages as nonn-clickers (Fig gure 11). Heeavy clickers are disprop s portionately sskewed commpared to the muc larger nu ch umber of no on-clickers aand, as suc do not accurately r ch, represent th online he behaviour of the Ger rman online audience. Figure 11: Tot minutes on tal nline per visitor 3.000 2.845 5 2.500 2.000 1.746 6 1.500 1.166 1.000 500 - Non-Clic ckers Light Clic ckers Heavy Clic ckers Source: co omScore Marke eting Solutions, Germany Augus 2010 st A simila pattern em ar merges when delving into site catego visitation (Figure 12), where the visitation n o ory , profile o clickers is very differen from that o non-clicke This furth supports the fact that clickers of nt of ers. her s differ gre eatly from the overall poppulation in th online be heir ehaviour. The most dram e matic differences seen were in time spent on gambling career ser g, rvices, and education. A possible hyypothesis th would hat explain this is that cclickers tend to be youn d nger and une employed. Certainly, one can say th while C e hat clickers spend a sub bstantial amoount of time online, they are not representative o the audien most y of nce markete want to re ers each. If markketers target campaigns based on CT b TRs, they risk shifting the balance k e towards a specific ty of user who is unlikel y to embody the desired target segm ype w y ment. PAGE 8
  • 9. H How Online Adver rtising Works Figure 12: Site cate egory distribu ution by composition indeex for cl lickers and n on-clickers compared to total Internet c t t 106 Se ervices 105 Search/Naavigation Enttertainment Portals P 104 Retaill Conversation Media nal Direct tories/Resourcees Telecomm munications Non Clickers Technology y 103 ormation Auctio News/Info ons Busine ess/Finance Community C 102 Travel Games Business to Bus B siness Auto omotive ISP 101 orts Spo Regional/Local Real Estate Educattion 100 Governmment Hea alth Career S Services Gambling 99 98 70 80 90 100 110 120 0 130 140 150 0 160 170 180 0 Heavy Clickers y Source: co omScore Marke eting Solutions, Germany, Augu 2010 ust Non-clic ckers represe the majo ent ority of Intern users an favour sit focused on services, search, net nd tes retail, ne ews and infoormation. Th are more focused on the functio hey e onality of the Internet an how it e nd fulfills a particular ne eed. They sppend less tim online tha clickers and navigate through pag more me an ges efficientl Typically those with less time, busy mothe for exam ly. ers mple, are les likely to click on ss campaig but clear would not be conside gns rly ered less imp portant; on the contrary, they would often be deemed the most va aluable segm ment for many advertisers y s. When lo ooking at the demograph profile of clickers and non-clicker we can se that there are few e hic d rs ee e differenc in their g ces gender profil Women a slightly more likely to be light cli ckers and males are le. are m o m slightly m more likely to be heavy clickers, howe o c ever the diffe erence is ver nominal. (F ry Figure 13) Figure 13: Clic F ckers are gen nder neutral Non-Clickers s Light Click kers Heavy Clic ckers 120 100 80 60 40 20 0 M Male Female Ma ale Female M Male Female Source: co omScore Marke eting Solutions, Germany, Augu 2010 ust Taking t this further w can look at whether th age of a person has any impact o their prop we a he on pensity to click. In Figure 14, w can see th heavy cliickers tend to be younge over-index we hat er, xing highest amongst 18-34 ye olds, wit the oldest users far le likely to exhibit this behaviour. L ight clickers are also ear th ess b over- inddexed among younger users, but in gst nterestingly peak amongs users aged 55 and abo p st d ove. PAGE 9
  • 10. H How Online Adver rtising Works Figure 14: Age impa acts on the propensity to click p Non-Clic ckers Light Cli ickers Heavy Clickers C 150 140 130 120 110 100 90 80 70 60 18-24 25-34 35-44 45-54 55 4 5+ 18-2 25-34 35- 24 -44 45-54 55+ 5 18- -24 25-34 35 5-44 45-54 55+ omScore Marke Source: co eting Solutions, Germany, Augu 2010 ust RSTANDING HOW ONLIN AD EXPO UNDER NE OSURE CHA ANGES BEH HAVIOUR comSco has conducted a serie of ad effe ctiveness stu ore es udies across Western Eu s urope (Germmany, UK, France, and Spain) which sho that disp ) ow sing, despite a lack of clicks, can have a play advertis e ant, positive impact on consumer behaviour. When com significa n mparing the passively-o e observed behaviour of Interne users exp et posed to dis play ads wit that of a comparable set of non- th e -exposed users, mmatched on ddemographics and prior o online behaviour, comSco determin that: ore ned • Display ads lifted vis sitation to the advertiser’s website by 72% on ave e s erage • Display ads increase the likelih ed hood of cons sumers conducting a traddemark sear query rch using the advertiser’s branded te erms by an average of 94 a 4% Figure 15: Lift generated by display ads in Europe L d a e 94% 72% Adve ertiser Site Visitation V Trademark Searc Queries ch Source: co omScore “Whith the Click in Europe?” Febru her E uary 2010 Comparring these Eu uropean data with corres a sponding da in the U.S (49% lift in U.S. site visitation ata S. and 40% lift in the n % number of U.S. tradema search qu U ark ueries), the aggregation of European studies a n shows c consistently hhigher lifts am mong Interne users expo et osed to display advertisin ng. Addition comScor research, published in the Jou nal re urnal of Advvertising Re esearch (Fig gure 16), evaluate both the online and in-store sale impact ac ed es cross 139 ca ampaigns in the US ma n arket. On average it showed a average lift of 27% in online sales and 17% in offline sale e, an l n s n es—despite a CTR of 0.1%. PAGE 10
  • 11. H How Online Adver rtising Works Figure 16 Dollar sales lift among h 6: s households exposed to on e nline advertis sing % Lift: 17% : $11,550 0 $9,905 % Lift: 27% $994 4 $1,263 Online ffline Of Co ntrol Test t Source: “W Whither the Click?” 139 comSco studies in th June 2009 Jo ore he ournal of Advert tising Research h comSco has also evaluated th ability of c ore he campaigns to increase classic brand t c ding metrics, such as awareneess, favourab bility, and lik kelihood to re ecommend, all of which can be sign nificantly imp pacted by display campaigns. Further, comScore has demonstrated that the quality of t s e the creative used in online a has been shown to relate strong to the ef ads n gly ffectiveness of the adveertising. While certain brands would not d dream of air ring a TV a before it passed cer ad rtain creative or persua e asiveness thresholds, the prac ctice of testin creative quality in digital has only recently b ng begun to unf fold, and must als be incorpo so orated into th ad effectiv he veness equation. While coomScore is j just beginnin to expand its advertis ng d sing measur rement servic ces in Germ many, our experien in other markets sug nce ggests that th hese additional metrics can provide valuable new insight c into how online adve w ertising works Depending on the bran the objec s. g nd, ctive of the ca ampaign as well as a variety o other facto that have proven to p of ors e play a role in the effectiv n veness of the campaign, such as e , creative quality, and media place ement, inves stments in onnline branding advertising may well fa g g avourably compare to TV in ter e rms of ROI. ARY SUMMA This stu udy leads to several key conclusions with impo y s, ortant implicaations for alll stakeholde in the ers German and interna n ational digital eco-system First, the group of Internet users who click on display m. n ads is sm and gett mall ting smaller. Second, the online beha e aviour of click kers is so dif fferent from the much t larger group of non- -clickers that clickers sim mply do not represent th desired a he audience for the vast majority of advertiseers. Third, th hese pattern s are observved not only in Germany but are consistent y y, across t globe. La a growin body of st the ast, ng trong eviden proves th online dis nce hat splay campa aigns can build bra ands through increasing consumer en h ngagement, whether it is site visitatio search activity, or s on, ultimately online as w as offlin sales. Cle well ne early, evaluat ting campaig effectivene using CT gn ess TRs is at best shoort-sighted and, more like significan under-va ely, ntly alues the ability of the onnline channe to build el brands. The major implication fo the indust is that if digital is to receive its fa share of branding or try air spend, ffocus must s shift away fro the click to new met om k trics that bet reflect bo the quality of the tter oth creative as well as th multiple ways in which online ads can build bra he w h ands. PAGE 11
  • 12. H How Online Adver rtising Works ABOUT COMSCOR RE comSco Inc. (NAS ore, SDAQ: SCOR) is a globa leader in measuring the digital world and prefer al m e d rred source o digital business analyti of ics. comScor helps its clients better understand, leverage an profit re c , nd from the rapidly evol e lving digital marketing lan m ndscape by providing dat analytics and on-demand p ta, software solutions fo the measu e or urement of on nline ads and audiences, media plann d ning, website e analytics advertising effectivene s, g ess, copy-tessting, social media, search, video, mo m obile, cross-m media, e- commer rce, and a broad variety of emerging f o forms of digital consumer behaviour. comScore services, s which no include th product su ow he uites of recen acquisition Nedstat, Nexius XPlor ARSGrou and nt ns N re, up Certifica are used by more than 1,600 clients around the world, including global le a, s e eaders such as h AOL, Ba aidu, BBC, Best Buy, Car Deutsche Bank, ESP Facebook, France Te rat, e PN, elecom, Financial Times, FFox, Microso MediaCor Nestle, St oft, rp, tarcom, Terr Networks, Universal M ra McCann, Veriz zon Services Group, ViaMichelin and Yahoo!. s d For more information please visit www.coms e n, score.com or e-mail Mike Shaw at r e mshaw@@comscore.c com . ABOUT TOMORRO FOCUS OW TOMOR RROW FOCU AG is on of Germa US ne any's leading publicly tra g aded interne groups. Th group et he operates in three areas: trans s sactions, addvertising an technologies. The t nd transactions division comprise HolidayCheck, a hote review and travel book es el d king portal an ElitePartn nd ner, a premiu dating um site. The adv vertising division includes TOMORR ROW FOCUS Media, one of the prin S e ncipal Germa online an marketin businesse Alongside group-own ng es. ned websites such as FOCUS Onlin Finanzen s ne, n100 and jameda, the business markets partner site such as CHIP Online FAZ.NET, GuteFrage es C e, , e.net and meinesta adt.de. TOM MORROW FOCUS Med ia is the se F econd bigges Ad Netwo in Germ st ork many and reaches more than 6 60% of the German inter G rnet populati (internet facts 2010-I II). Since December ion D 2009 the advertising division has also includ ADJUG Ltd, which operates two online mark e g ded o o ketplaces for last-m minute adver rtising space in the UK an Germany e nd y. In the t technologies division, TO OMORROW FOCUS Technologies GmbH and CELLULAR GmbH W d R provide an extensive range of fix and mob ile internet services. e xed For more information please visit www.tomo e n, orrow-focus.c com or e-mail Karin Roths stock at k.rothsto ock@tomorroow-focus.de . PAGE 12
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