Augustine Fou- 1 -
Usefulness of
Advertising
Dr. Augustine Fou
http://linkd.in/augustinefou
acfou @mktsci .com
March 2014
Augustine Fou- 2 -
Author’s Commentary
“From our custom research with N > 2,500
respondents, we triangulated the questions...
Augustine Fou- 3 -
In the past WEEK, do you recall seeing ANY of the following types of ads?
44% Don’t Recall ANY Ads
Sour...
Augustine Fou- 4 -
Who’s Ignoring Which Ads?
Source: Harris Interactive via MarketingCharts Feb 2014
Augustine Fou- 5 -
“Which of the following help you decide to buy a specific low-
cost/big-ticket item (e.g. soda, candy, ...
Augustine Fou- 6 -
Closer Look - Comparison
Most useful for
“big ticket” items
Most useful for
“low cost” items
Corroborat...
Augustine Fou- 7 -
Role of the Channel
0% 20% 40% 60% 80% 100%
Email
Mobile App
Direct Mail
SMS Text Message
Website
Socia...
Augustine Fou- 8 -
• Recommendations
from friends
• Consumer
opinions/ratings
posted online
big-ticket
item
low-cost
item
...
Augustine Fou- 9 -
Young U.S. Consumers’ Attitudes
Source: Millward Brown March 2014
Augustine Fou- 10 -
Where Digital Ads Fit
in the Purchase Funnel
Augustine Fou- 11 -
Main Types of Digital Ads
Impressions
(CPM/CPV)
Clicks
(CPC)
Leads
(CPL)
Sales
(CPA)
• Display ads
• V...
Augustine Fou- 12 -
Digital Ad Spend (IAB H1 2013)
Impressions
(CPM/CPV)
Clicks
(CPC)
Leads
(CPL)
Sales
(CPA)
Search 43%
$...
Augustine Fou- 13 -
Digital is Mainly Performance
Source: IAB, 1H 2013 Digital Advertising Report, Oct 2013
Augustine Fou- 14 -
Cross-channel Cost
Comparisons
Augustine Fou- 15 -
Comparative Media Costs
Cost per Thousand (CPM): Cost to reach 1,000 users or impressions
Source: Morg...
Augustine Fou- 16 -
Comparative Media Costs
Cost per Thousand (CPM): Cost to reach 1,000 users or impressions
$450
$250
$1...
Augustine Fou- 17 -
Dr. Augustine Fou – Digital Consigliere
“I advise clients on optimizing
advertising across all channel...
Augustine Fou- 18 -
Related Articles
Augustine Fou- 18 -
http://www.slideshare.net/augustinefou/why-digital-tactics-kick-t...
Augustine Fou- 19 -
APPENDIX
Augustine Fou- 20 -
Primary role of each channel in customer journey
Global Marketers’ Perception
Source: Experian via Mar...
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Usefulness of Advertising by Augustine Fou Marketing Consigliere

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First hand research to corroborate that TV advertising is mainly for awareness while digital ads/channel is mainly for performance (i.e. for harvesting leads)

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Usefulness of Advertising by Augustine Fou Marketing Consigliere

  1. 1. Augustine Fou- 1 - Usefulness of Advertising Dr. Augustine Fou http://linkd.in/augustinefou acfou @mktsci .com March 2014
  2. 2. Augustine Fou- 2 - Author’s Commentary “From our custom research with N > 2,500 respondents, we triangulated the questions 1) „do you recall seeing specific kinds of ads?‟2) „are ads useful?‟and 3) what is useful in your purchase decision for big ticket items and/or low-cost items? We believe the combined answers yield useful insights about what consumers value at each stage of their purchase journey (or purchase „funnel‟).” -- Dr. Augustine Fou
  3. 3. Augustine Fou- 3 - In the past WEEK, do you recall seeing ANY of the following types of ads? 44% Don’t Recall ANY Ads Source: Marketing Science Custom Research, March 2014
  4. 4. Augustine Fou- 4 - Who’s Ignoring Which Ads? Source: Harris Interactive via MarketingCharts Feb 2014
  5. 5. Augustine Fou- 5 - “Which of the following help you decide to buy a specific low- cost/big-ticket item (e.g. soda, candy, toilet paper, shampoo)” N = 1,000 70% Think Ads Don’t Help Source: Marketing Science Custom Research, March 2014
  6. 6. Augustine Fou- 6 - Closer Look - Comparison Most useful for “big ticket” items Most useful for “low cost” items Corroborates the hypothesis that low cost items like soup and soda need awareness type ads, while big ticket items like cars and computers need digital ads.
  7. 7. Augustine Fou- 7 - Role of the Channel 0% 20% 40% 60% 80% 100% Email Mobile App Direct Mail SMS Text Message Website Social Media (not paid) Search Radio Print Ads Online Display Ads Social Display Ads TV Greeter (Awareness) Influencer (Consideration) Closer (Decision) Source: Experian Marketing Services March 2014 Sorted by Awareness
  8. 8. Augustine Fou- 8 - • Recommendations from friends • Consumer opinions/ratings posted online big-ticket item low-cost item Consumers rely on peers...
  9. 9. Augustine Fou- 9 - Young U.S. Consumers’ Attitudes Source: Millward Brown March 2014
  10. 10. Augustine Fou- 10 - Where Digital Ads Fit in the Purchase Funnel
  11. 11. Augustine Fou- 11 - Main Types of Digital Ads Impressions (CPM/CPV) Clicks (CPC) Leads (CPL) Sales (CPA) • Display ads • Video ads • Social display • Mobile display • Search ads • Mobile search • Affiliate revenue share • Completed lead forms sold on cost- per-lead basis
  12. 12. Augustine Fou- 12 - Digital Ad Spend (IAB H1 2013) Impressions (CPM/CPV) Clicks (CPC) Leads (CPL) Sales (CPA) Search 43% $18.1B Video 7% $2.9B Lead Gen 4% $1.7B 11% Other $4.8B Source: IAB, 1H 2013 Digital Advertising Report, Oct 2013 $35.5B Display 19% $8.0B Mobile 15% $3.7B$2.8B NOTE: revenues annualized from actual 1H 2013 figures from IAB (assumes $42B annual ad spend) CPM Performance • classifieds • sponsorship • rich media • email $6.5B
  13. 13. Augustine Fou- 13 - Digital is Mainly Performance Source: IAB, 1H 2013 Digital Advertising Report, Oct 2013
  14. 14. Augustine Fou- 14 - Cross-channel Cost Comparisons
  15. 15. Augustine Fou- 15 - Comparative Media Costs Cost per Thousand (CPM): Cost to reach 1,000 users or impressions Source: Morgan Stanley Research 2010 Broadcast TV $28 Radio $10 Magazines $16 Newspaper $16 Out of Home $5 Internet $3 Traditional vs digital media costs Traditional media CPM Digital media CPMs Comparing costs of various media Relative costs of media how do media costs compare media costs compared Understanding the Economics of Digital Compared to Traditional Advertising and Media Services Digital media compared to traditional advertising digital versus traditional marketing Augustine Fou- 15 -
  16. 16. Augustine Fou- 16 - Comparative Media Costs Cost per Thousand (CPM): Cost to reach 1,000 users or impressions $450 $250 $140 $30 $15 $7 $2 $0 $50 $100 $150 $200 $250 $300 $350 $400 $450 $500 Direct Mail Mail Order Catalog Drive Time Radio Prime Time TV Online Video Ads Online Display Online Search pay for mailing costs Offline: w/o Unit Costs ONLINE: WINNER pay for media costs no mailing or media costs Offline: w/ Unit Costs Augustine Fou- 16 -
  17. 17. Augustine Fou- 17 - Dr. Augustine Fou – Digital Consigliere “I advise clients on optimizing advertising across all channels. One main area of focus is reducing ad waste due to fraud – fake impressions, clicks, leads, and sales.” FORMER CHIEF DIGITAL OFFICER, HCG (OMNICOM) MCKINSEY CONSULTANT CLIENT SIDE / AGENCY SIDE EXPERIENCE PROFESSOR AND COLUMNIST ENTREPRENEUR / SMALL BUSINESS OWNER PHD MATERIALS SCIENCE (MIT '95) AT AGE 23 @acfou ClickZ Articles: http://bit.ly/augustine-fou-clickz Slideshares: http://bit.ly/augustine-fou-slideshares LinkedIn: http://linkd.in/augustinefou
  18. 18. Augustine Fou- 18 - Related Articles Augustine Fou- 18 - http://www.slideshare.net/augustinefou/why-digital-tactics-kick-traditional-tactics-in-cost- effectiveness http://www.slideshare.net/augustinefou/why-users-interact-with-ads-by-augustine-fou http://www.slideshare.net/augustinefou/video-ads-vs-tv-ads-by-the-numbers-comparison-by- augustine-fou http://www.slideshare.net/augustinefou/mythbusting-tv-advertising-by-augustine-fou http://www.slideshare.net/augustinefou/digital-channel-comparison-for-customer-acquisition- by-augustine-fou http://www.slideshare.net/augustinefou/branding-dollars-shift-from-tv-to-digital-video-by- augustine-fou http://www.slideshare.net/augustinefou/digital-ad-spending-branding-vs-direct-response-by- augustine-fou
  19. 19. Augustine Fou- 19 - APPENDIX
  20. 20. Augustine Fou- 20 - Primary role of each channel in customer journey Global Marketers’ Perception Source: Experian via Marketing Charts, March 2014

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