The document discusses trends in online display advertising between 2001-2009. It notes that click-through rates for display ads have declined significantly over time. Several analyses are presented on how different industries, companies, and types of ads performed during this period. The document advocates measuring advertising effectiveness in new ways beyond just impressions, and focusing on creative quality and actual business outcomes.

2. If you believe what you read… What are we doing here? “ Demand for display ads has ebbed, particularly as the rate at which consumers click on display ads bottoms out at a fraction of a percentage point.” 5/8/09 “ Online display advertising sucks.” 3/10/09 “ The demise of a popular but unsustainable business model [online display advertising] now seems inevitable.” 3/19/09 “ Online display-ad spending will fall in 2009, probably sharply. It will probably fall again in 2010.” - Henry Blodget 10/20/2008

4. Sector Shift ’03 – ‘08: Financial services becomes #1, retail declines, auto gains Source: Nielsen Online % of Total Online Impressions 2003 vs. 2008

5. Ad impressions for Automotive increase steadily year-over-year and display seasonality Total Ad Impressions for Automotive Industry 2003 - 2008 Source: Nielsen Online

6. Fi-Serve impressions rise dramatically during the period banks begin to falter Source: Impressions from Nielsen Online vs. S & P Banking Index Did all those loan ads work too well?

7. 2008 Online Advertisers: The year of Phones and Loans Top 10 Advertisers 2008: Ad Impressions by Brand During 2008 Source: Nielsen Online

8. Financial services down YOY for ‘09 – but they are still spending; insurance enters the scene Top 10: Impressions by Brand 1-2/08 Top 10: Impressions by Brand 1-2/09 Drop off the list in 2009 Insurance enters list in 2009 Source: Nielsen Online Brand Impressions LowerMyBills.com 1,968,822,000 ConsumerInfo.com 869,059,000 Citibank, N.A. 630,858,000 TrueCredit 357,224,000 LendingTree.com 203,927,000 Travelers Insurance 166,594,000 Countrywide 149,095,000 Allstate 118,959,000 Citi Credit Cards 99,322,000 MBNA Bank 63,704,000 Brand Impressions LendingTree.com 7,102,587,000 GetSmart 3,146,130,000 LowerMyBills.com 2,079,711,000 ConsumerInfo.com 1,546,808,000 Citibank, N.A. 1,163,221,000 Orchard Bank 785,641,000 WAMU 718,657,000 Countrywide 571,346,000 GMAC Mortgage 333,794,000 Household Bank 275,064,000

9. Source: Nielsen Online Change in Share of Impressions by Industry Jan/Feb 2008 vs. Jan/Feb 2009 Health, B2B & Telecommunications grow strongly in ‘09

10. Source: comScore Ad Metrix, February 2009 Clutter down over 11% 2008 – 2009; must account for some of the volume drop Great!

11. Overall trends in ad effectiveness deltas (% impacted) remain stable since ‘06 Source: Dynamic Logic MarketNorms, Last 3 Years, Q4/2008, N=2,380, n=3,889,602;

12. Trends in Purchase Intent remain stable; Fi-Serve dips in Q4 ’06 and then stabilizes Source: Dynamic Logic MarketNorms, Last 3 Years, Q4/2008, N=2,380, n=3,889,602; Financial Services Norms, Last 3 Years, Q4/2008, N=277, n=567,275

14. It’s the creative: Large variation in performance between best/worst performers Percent Impacted Source: Dynamic Logic MarketNorms, Last 3 Years, Q4/2008, N=2,380, n=3,889,602

18. Online advertising is broken.

19. We need to fix it.

20. Why have we not achieved our goals? To this point our focus has been on… This has led to…

21. How do we fix it? The problem is… The solution is…

22. We must recognize that Counting is not the same as Accountability    > Online Driving: CPG Purchase, Ratings, Box Office ,Telco

23. We must build for Engagement and then guarantee against it Time based advertising measures. Video Total Campaign Duration {hrs} % of Total Campaign Duration Avg. Exposure Duration per Person {sec} Average Frequency Time Per Impression TOTAL 12,983 100% 9.9 0.2 0.1 Site A 2,856 22% 7.4 2.5 0.6 Site B 4,934 38% 10.6 4.9 2.7 Site C 4,025 31% 8.9 2.8 1.8 Site D - 0% - - - Site E 1,169 9% 11.3 4.6 2.3 Site F - 0% - - -

25. Most people do not click on Display Ads Clickers Non-Clickers Source: comScore, Total US Online Population, July 2007 comScore Tacoda Study: Natural Born Clickers

26. Clickers follow the 80/20 rule Source: comScore, Total US Online Population, July 2007 Clickers are predominantly younger (25 - 44) with lower income (under $40K)

27. Decline in online ad click-through rates Sources: Doubleclick, eMarketer, Eyeblaster, IAB Research estimates In 2008, comScore measured click rates as less than 0.1%

29. How Display and Search impact offline retail sales Higher offline sales lifts are found for search advertising vs. display but when combined the synergy provides even more lift Source: Norms from the comScore Ad Effectiveness Database, N = 137 Tests Incremental Impact on Offline Sales per (000) Exposed

30. Advertisers: Are you hitting your target? Area of improvement Likely Waste Source: comScore Campaign Metrix

32. The Long Road to Conversion 60 90 30 21 14 7 2 1 16.7 18.5 13.8 12.3 10.7 8.4 5.5 2.2 Cumulative Frequency

33. The Digital Purchase Funnel

34. Last-Ad ROI and the Purchase Funnel Social Media, Portals, Video, News, Entertainment, Sports, Music, Technology, Travel, etc… A few Publishers Benefit While the Majority Suffer Week 1 Week 2 Week 3 Week 4 Week 5+ Search Engines Affiliates Awareness Interest Desire Action Repeat

35. Search & Display combined lift over Search only Portals Networks Content sites 54% 56% 47% 35% 10% 7% 68% 52% 97% AOL MSN Yahoo! 24/7 Ad.com Value Click CBS Digital Trip Advisor weather.com Impact is especially pronounced on content sites and portals Source: Microsoft Atlas Publisher/Advertiser data 2008

36. Short windows = Shortsighted ROI Search In-Stream Video Social Media Portal 75% of View Conversion Windows are Less than 14 Days Month 1 Month 2 Month 3 94% more data beyond the last ad. $ Sale

39. Larger creative sizes get more clicks Source: DoubleClick DART for Advertisers, U.S. advertisers, DoubleClick Rich Media in-page and expanding formats only, January–July 2008 Creative Size 0.00% 0.05% 0.10% 0.15% 0.20% 0.25% Half Page Ad (300x600) Large Rectangle (336x280) Medium Rectangle (300x250) Wide Skyscraper (160x600) Skyscraper (120x600) Rectangle (180x150) Leaderboard (728x90) Full Banner (468x60) Half Banner (234x60) Click-Through Rate 0 20000 40000 60000 80000 100000 120000 140000 160000 180000 200000 Area (in Pixels) CTR % Area (in Pixels)

40. Larger creative sizes get more interactions Source: DoubleClick DART for Advertisers, U.S. advertisers, DoubleClick Rich Media in-page and expanding formats only, April–July 2008 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% 5.00% Creative Size Interaction Rate 0 20000 40000 60000 80000 100000 120000 140000 160000 180000 200000 Area (in Pixels) Interaction Rate % Area (in Pixels) Half Page Ad (300x600) Large Rectangle (336x280) Medium Rectangle (300x250) Wide Skyscraper (160x600) Skyscraper (120x600) Rectangle (180x150) Leaderboard (728x90) Full Banner (468x60)

44. Display is alive and kicking Nonstop innovation breathes new life into the medium

45. Ad innovations shape new behaviors Brand advertisers can opt for appealing trade-offs Viewthrough 0.1% 0.3% KPI conversion 24% 12% Time ∆ on page + 1:38 + 0:08 Time on Toyota.com 7:49 14:34

47. So what is it…

49. Go to: dpaconference.com Download the whitepaper Get the bigger picture… Contact: kathryn@primaryimpact.com