Nielsen: Brand_building_beyond_clicks Apr 2013
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  • 1. Beyond Clicks and Impressions: Examining theRelationship Between Online Advertising andBrand BuildingExecutive SummaryAdvertisers increasingly think of online as a place to build their brands, but need greaterconfidence that their online investments are helping them achieve their brand goals. Thispaper explores both the role of online ads in brand building, as well as the best metrics formeasuring the success of Internet ads against marketers’ goals. Leveraging Nielsen’s advertisingeffectiveness solutions to examine this relationship, the following conclusions will be discussedin this paper:1. Click-through rate is not the right metric to measure brand impact – virtually no relationship exists between clicks and brand metrics or offline sales.2. There is emerging evidence that brand metrics in response to online campaigns are correlated with offline sales impact.3. Online ads can succeed in driving brand impact, though success is not guaranteed and advertisers must embrace new online branding metrics to separate themselves from the competition.Advertisers areincreasingly buildingbrands onlineThere’s an old adage that advertisersfollow consumers’ eyeballs, and overthe course of the last 10 years, there hascertainly been a remarkable rise in thenumber of consumers online and theamount of time they’re spending there.Since 2003, the number of Americanswith Internet access has grown 34 percentfrom 186.7 million to 249.3 million, ac-cording to Nielsen. This growth has notcome in a vacuum – online has increas-ingly become integrated into consumers’lives – they access online at work (nearly27 hours per user per month), on mobile(43 percent of US adults now own smart-phones), and even concurrently with othermedia (20% of U.S. adults watch TV whileusing either a PC or mobile device on adaily basis, according to the Media Behav-ior Institute USA TouchPoints study.)Additionally, more and more advertisingdollars are finding their way online. In the2011 Advertising Outlook published byThe Cambridge Group (a Nielsen com-pany), a survey of over 300 advertisingdecision-makers from a variety of indus-tries indicates that digital budgets haveincreased more than any other type ofmedia in 2011.But what’s interesting is this growth is notonly from e-commerce advertisers lookingto generate web traffic or drive sales.The Cambridge Group report also showsthat in 2011 54 percent of those surveyedbelieve online ads are highly effective at“enhancing brand/product image,” com-pared to just 38 percent of respondents ina 2008 version of the study. As consum-ers have integrated the Internet into theirlives, advertisers are increasingly inter-ested in ways to better reach consumers,deliver messages, and build ongoingrelationships through this medium. Inother words, these advertisers are lookingto truly build their brands online.
  • 2. 2 Copyright © 2011 The Nielsen Company.With more and more advertisers look-ing to include online brand building intheir media mix, they are looking for twothings: confidence that their online in-vestments are helping them achieve theirbrand goals, and metrics that give themthe ability to demonstrate success acrosstheir campaigns.Is CTR a good measureof brand impact?Online’s early history as a direct-responsesales channel gave way to traditionalmetrics such as click-through rates (CTR),impressions and conversions, whiche-commerce marketers used to developstrategies for optimizing online sales.However, the broadening of advertisers’objectives to include brand building hasled to questions about whether thesemetrics can be used to accuratelymeasure how well online campaignsperform against brand marketers’ goals.Many brand marketers run onlinecampaigns with the objective to drivein-store rather than online conversions.Nielsen is able to measure whether onlinead campaigns influence offline purchasebehavior through Nielsen Sales Effect,which connects online exposure to off-line sales using the Nielsen Homescanconsumer purchase panel.It’s clear from those findings that onlineadvertising can have a substantial impacton offline purchase behavior. However,as shown in Figure 1, CTR itself does notpredict changes in in-store sales due tothe ad campaign. Picking the campaignswith the best CTR would not deliver thebest overall uplift in sales. Moreover,evaluating a campaign solely on thenumber of clicks greatly underestimatesthe number of potential consumersinfluenced by the campaign.Click-Through RateSalesLiftFigure 1: Correlation of Sales Lift and Click-Through RateSource: NielsenThe random scatter of the points indicates a lack of relationship between sales lift and click-through rate.Standard BrandEffect questions:• Ad Recall: “Do you recall seeingan ad online for product X in thelast 7 days?”• Brand Awareness: “Have youheard of brand X?”• Message Association: “Whichbrand do you most associatewith the message X?”• Purchase Consideration: “Willyou purchase brand X in the nextmonth?”• Brand Favorability: “What is your opinion of brand X?”
  • 3. Copyright © 2011 The Nielsen Company. 3Figure 2: Correlations with Click-Through Rate-1.0 -0.5 0.0 0.5 1.0Ad Recall DeltaBrand Awareness DeltaMessage Association DeltaPurchase Consideration DeltaBrand Favorability DeltaSource: NielsenNo strong correlations emerge between CTR and any of the Brand Effect metrics.Other brand campaigns are designed toimpart information upon consumers,make them more aware of a new productor service, or change feelings or inten-tions about a brand or product. Using theNielsen Online Brand Effect methodology,(See Page 5) Nielsen examined how wellexposure to online ad campaigns influ-ences these brand objectives.Interestingly, research shows that click-through rate for a given ad campaign alsofails to predict the rate of success in ac-complishing these attitudinal objectives.(See Figure 2.)As expected, there is a small positive re-lationship between consumers clicking onan ad and their ability to remember thatad (Ad Recall). However, the connectionis still weak and likely due to morenoticeable ads increasing both the likeli-hood of recall and the likelihood of a click.But there is no measure of branding –whether the message resonated with con-sumers or if it was successful in changingconsumer awareness, opinions or intent– that has any relationship to CTR.But are brand metricscorrelated with sales?Digging further into Nielsen research,there is evidence that attitudinalmeasures, such as Purchase Intent,are important predictors of offlinesales and thus, are a powerful way foradvertisersto gauge the success of theirbrand campaigns online.While based on a small number of cases,looking at campaigns measured by bothNielsen Online Brand Effect and NielsenSales Effect, there was strong alignmentbetween increased purchase consider-ation following an online campaign and aboost in offline product sales. Campaignsin which consumers reported increasedpurchase intent after viewing an ad alsoshowed a boost in product sales. Caseswith flat purchase intent showed nosignificant change in sales.Overall, it is clear that traditional directresponse metrics such as click-throughrate fail to indicate whether online cam-paigns will impact consumer attitudes oroffline sales. As a result, advertisers needbetter brand metrics that can serve asan indication of the sales impact of theironline ads.
  • 4. 4 How do online adsimpact consumerattitudes?One of the key questions weighing onadvertisers’ minds is, “Are my online brandads working?” To answer this question,Nielsen analyzed results from over 500online ad campaigns measured by NielsenOnline Brand Effect over the last year anda half.In short, the answer is yes. Brand ads doon average succeed in moving the needlefor most measured Brand Effect metrics,as shown in Figure 3.Despite some claims that “no one paysattention to online ads,” Nielsen researchshows that the average increase betweenthe control and exposed groups is highestfor Ad Recall, an indication that consum-ers do remember exposure to an online adcampaign. It should come as no surprisethat the first step to influencing consum-ers through advertising is ensuring thatthey notice and remember the ad itself.The next question brand advertisers wantto answer is whether online ad campaignscan actually change the opinions andintentions of consumers. Following AdRecall, Message Association showed thenext highest average change, indicatingthat online ads can also succeed in con-veying a brand’s intended message.Nielsen research also shows that onlineads often increase overall awareness forthe advertised brand. This is an especiallyimportant factor in driving new productsuccess – clearly, consumers must becomeaware of a new product before they canbuy it.The “lower funnel metrics” – Brand Favor-ability and Purchase Intent —are far moredifficult to influence than Awareness,Recall and Association, given that thesemetrics require a change in consumeropinion or behavior.4%-1%1%3%BrandAwareness6%Ad RecallMessageAssociationPurchaseConsiderationBrandFavorabilityFigure 3: Average Online Brand Effect ResultsWell-executed online advertising can drive branding metrics.Source: Nielsen
  • 5. . 5-10%-5%0%5%10%15%Brand AwarenessAd Recall Message Association Purchase Consideration Brand FavorabilityWeak Ads Average Ads Strong AdsFigure 4: Average Online Brand Effect ResultsAverage Nielsen Online Brand Effect results for strong, average, and weak performing ads. Results arecalculated as the average percentage point difference between the exposed vs. control groups on each metric.Source: NielsenCopyright © 2011The Nielsen Company. All rights reserved. Nielsen and the Nielsen logo aretrademarks or registered trademarks of CZT/ACNTrademarks, L.L.C. Other product and servicenames are trademarks or registered trademarks of their respective companies. 9/2011Varying results acrosscampaignsWhile our analysis indicates mostly posi-tive results across the different Brand Ef-fect metrics on average, perhaps an evenmore important conclusion is that thereis a lot of variance in the performanceof online ad campaigns we’ve measured,as shown in Figure 4. We find somecampaigns are very successful across allmetrics, some campaigns succeed only oncertain dimensions, and others underper-form across the board.More generally, stronger performingweb ads drive noticeably greater posi-tive impact on all five branding metricscompared to average or weak ads. Justas TV ads perform better based on thequality of the creative and programmingcontext, online ads are similarly impactedby factors such as creative, publishercontent and type of ad unit. In fact, onlineadvertising potentially offers a greaterrange of possibilities than TV in terms offormat (display vs. video), dimension/size,or publisher. In many cases, understandingonline ad impact and what makes a strongvs. weak ad is even more complex thanunderstanding TV ad impact.Using brand metrics toseparate from the packJust as TV ad effectiveness research hastaught advertisers which levers to pullin optimizing their TV campaigns, overtime, online ad effectiveness research canbe similarly leveraged to help marketersunderstand those factors that drive themost successful web campaigns.Those who embrace these new metricsand collect trustworthy data on ef-fectiveness across media platforms willbe substantially better positioned thanothers, and likely to separate themselvesfrom the competition.
  • 6. 6 Copyright © 2011 The Nielsen Company.Ad campaigntaggedwww!" TAGwww!"#$#$#$#$#$#$#$%&!()*+,+-.%/#0!11 User exposedto ad runninganywhere online2 Exposure infoencrypted by Nielsenand passed throughFacebook platform3 4 Control andexposed groupspolled by Nielsenon FacebookNielsen Online Brand Effect MethodologySource: NielsenHow Nielsen OnlineBrand Effect WorksNielsen Online Brand Effect measures on-line advertising effectiveness using simple,strategic standardized poll questions thatare an integrated part of the Facebook experience. (Note: Nielsen reports dataonly in aggregate to clients and receivesno personally identifiable informationfrom Facebook).Brand Effect questions are asked both ofa sample of respondents exposed to thead being measured, as well as a controlsample that is demographically matchedto the exposed group but did not see thead. The difference in exposed vs. controlscores is reported for each measure.Facebook’s large and highly engaged user base enables samples to be builtrapidly, meaning shorter turnaround timefor results. Because polling occurs afterexposure and within the normal Facebook user experience, no interruptive pop-up orclick-away surveys are required. Finally, reduced sample bias through shorter, stra-tegic polls, truer measurement of impactthrough 24-hour latency, and validateddemos of Facebook’s expansive user base ensure a more accurate read of online adeffectiveness.Studies are compared against a normativeNielsen database to determine overalleffectiveness and awareness results.About This White PaperThe data and insights in this white paperare compiled from a range of Nielsenresources. For more information, contact your Nielsen representative.About NielsenNielsen Holdings N.V. (NYSE: NLSN) isa global information and measurementcompany with leading market positionsin marketing and consumer information,television and other media measurement,online intelligence, mobile measurement,trade shows and related properties.Nielsen has a presence in approximately100 countries, with headquarters in NewYork, USA and Diemen, the Netherlands.For more information, please visit www.nielsen.com.