Is display advertising effective

1. IS DISPLAY ADVERTISING
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EFFECTIVE ?

2. POST CLICK IS NOT THE SOLE DISPLAY AD EFFECT
HOW PEOPLE MAKE BUYING DECISIONS?
2
In offline world we accept that the purchase decisions can and are influenced by many
varied factors and it may take some time before the consumer will make up his mind. Before
a purchase is made, there must be a need, then a customer seeks information about the
available offer, compares different options and only then makes a decision whether to buy
or not. The same situation is with online buying. Internet is not just about instant purchase
decisions, especially in servicesector.
Conversion – performance of a particular action (e.g. purchase, registration at a website or subscription to a newsletter) by an internet
user who entered a given website.
In the web analytics world, it is generally agreed that conversion, or performing a particular
action (e.g. purchase, registration at website or subscribing to a newsletter) by the internet
users who visited a given website, is attributable to the last traffic source. In consequence,
most conversions concerned in analyses are linked to direct traffic or redirection from
a search engine, i.e. the last place visited by an internet user before they reached the
website in question. However, such assumption has some drawbacks.
RESEARCH
INITIAL
NEED
The Path
Starts Here
EVALUATION
PURCHASE
The Path
Ends Here
Advice
Critical
influences
Brand
awareness
Information
Brand
loyalty
Channels
used
Purchase
experience
Brand
perception
Fig. 1. Consumer decision-making process.
1
1

3. 3
Depending on the type of product, the process may take several days or weeks.
Usually, it also involves 3 or 4 visits to websites of the brands whose offers are being
compared. This is reflected in the user engagement statistics. Gemius research shows
that customers who make a purchase spend more time on and display a more active
approach to a website, compared to those who don't make a conversion (seeTable1).
Table 1. Converting vs. all users behaviour on the website, client example.
Source: gemiusPrism
All users 07m 02s
28m 17s 1h 13m 04s29,12
Converting
users
Average visit
duration
11m 56s5,27
Average timePage views
/ visit
A conversion made during the first visit after the interaction with an ad is called an
instant conversion. It mainly takes place in case of low engagement products advertised
online. The decision-making process is short, so is the customer's path leading them to
a conversion. However, in analysed case occured that only about 30% of all conversions
happen in such short notice after exposure to a campaign. Normally, a user needs more
time to decide. A conversion taking place after more than one interaction with an ad is a
long-term conversion. In such circumstances, the role of advertisement in the decision-
making process is crucial but often neglected by marketers as it is hard to monitor.
A user, when exposed to an ad, may take two paths: click on it or not. If they choose to click,
and then a conversion took place, there's no doubt the success must be credited to the
advert. But what if the user didn't click on the ad? Can one take it for granted that the
communication did not work in this case? Not really. The ad could have been memorized
by the user, who may then enter the brand website directly or through a search engine at
a later time.
spent per visitor

4. 100%
80% 79.50%
60% 60.10%
40% 44%
20% 20.40% 23.40% 24.70%
27.50%
0%
1h 6h 12h 24h 5d 10d 20d 20+d
100%
Fig. 2. Conversions – visit sources, client example.
Source: gemiusPrism
Direct
64%
Search
27%
PPC
5%
Website
3%
Display
1%
of conversion
visits come
from PC
Only 1%
dislpay
According to the latest IAB Europe data, in 2013 display ads in Europe noted the largest
increase in ad spend among all categories, reaching €9.2bn (14.9% increase compared
to 2012). Does this mean we are witnessing irrational behaviour on the part of marketers?
Why would anyone invest in ads that do not work? Or it is the method of display creative
measurement that don't take into account the entire influence such type of ads has on
consumers?
percentage of
converting
users
Fig. 3. Cumulative percentage of converting users, client example.
Source: Gemius
Cumulative
4
When analysing data for one of the Gemius clients (a telecom company) on the direct
effectiveness of different sources of traffic it turned out that as little as 1% of conversions
came from display ads. The same result is observed in other cases, with variations of +/- 2%
depending on the branch.
ONLY 1% OF CONVERSIONS COME FROM DISPLAY ADS - MYTH

5. 5
RESEARCH
INITIAL
NEED
EVALUATION
PURCHASE
Advice
Critical
influences
Brand
awareness
Information
Brand
loyalty
Channels
used
Purchase
experience
Brand
perception
Fig. 4. Consumer decision-making process.
First
source
Assist
Last
source
Advertisers may direct their communication to customers at different stages of the decision-
making process. An ad may appear at such time as to trigger a need (first source), foster
information search (assist), or provide a final argument to persuade a customer to make
a conversion (last source).
FIRST SOURCE, ASSIST VS. LAST SOURCE ADVERTISING

6. HOW TO MEASURE THE ACTUAL INFLUENCE OF A DISPLAY
AD ON CONVERSION VALUE?
6
Gemius has checked that in cooperation with its clients. It turned out that the measurement
of the factual influence of a display ad on conversion should take into account:
To verify this theses in above mentioned marketing effectiveness analysis we assumed, that
if an individual visits a website within 30 minutes after seeing an ad, this would mean that
you are dealing with the "post view" effect and the visit should be attributed this particular
display ad.
The manner in which the consumer makes a purchase decision (immediate conversion
vs. long-term conversion, with the latter requiring some time for pondering and revisiting
the site on several occasions).
1.
The decision process stage, where the advertiser conveys his message to the consumer
(first source, assist, last source).
2.
The fact that post click is not the only effect of display ads.3.
Fig. 5. Conversions – visit sources through the path, client example.
When sources of consumer conversions are analysed with consideration of the path leading
to them, as well as the post view effect, it turns out that display ads are not responsible for
the mere 1% of conversions, but:
3.7% of conversions were direct consequence of display ads,
in 9.3% of cases the conversions were supported by display ads,
2.5% of new users who made conversions came to the website thanks to display ads.
DISPLAY DOES WORK IN THE END
Display generated 2.5%
of new customers
(source of first visit)
3.7%
of conversion visits
came from dislpay.Source: Gemius
Natural search PPC Website Social media
First Assist
Last
source First Assist
Last
source First Assist
Last
source First Assist
Last
source First Assist
Last
source
DisplayDirect
First Assist
Last
source
50.8%
20.6%
20.3%
2.5%
5.6%
0.1%
42.2%
21.8%
20.2% 9.3% 5.8%
0.6%
60.2%
18.5% 15.1% 3.7%
2.4% 0.1%

7. Source: Gemius
POST VIEW REALLY MATTERS
7
64%
Fig. 6. Last visit sources by conversion type and campaign interaction (PV vs. PC),
client example.
PC-Instant PV-Instant PC-Long term PV-Long term
28% 4%
4%
Some auxiliary analysis showed that among all the converting users, 92% were post view
ones, who are by 25% more eager to make a purchase compared to the users not exposed
to the ad.
HOW TO SELL WITH ONLINE ADS?
The above approach to measuring display ad effectiveness is a part of a Gemius project
concerning the increasingly popular subject of modelling attribution.
When making their purchase decisions, users visit websites of the brands whose offers they
take into account. Importantly, these are not only the landing pages devoted to the online
campaigns. The customer choices and decisions are influenced by advertising at different
stages of the decision-making process. Gemius has the appropriate knowledge and tools to
envisage the customer decision-making process and recommend solutions for optimization
of marketing activities concerning particular products.
Fig.7 Post Click and Post View conversion rates, client example.
0.19% 0.04% 0.14%0.11% 0.26% 0.15%
Post-view
Post-click
or
Post-view
Post-click
and
Post-view
Post-click No contact All
Source: Gemius

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