Online display advertising is on the increase. Figures from Nielsen Online comparing Q2 2009 with Q2 2008 suggest that not only are the number of display ads up, but also the number of advertisers trying out the media for the first time. And figures from the European Interactive Advertising Association suggest this upsurge is due to continue, with 94% of European marketing executives set to increase their spend in 2010 and 1/3 adding mobile advertising to their strategy.
What’s behind this increasing popularity? Marketers responding to the EIAA study cited the targeting opportunities now available – 4/5 of online publishers now offer some form of targeting according to eConsultancy – and value for money, both the low costs of inventory (driven by an inventory supply surplus vs. demand) and of production.
But I’d also suggest that the rapid development of ad available formats has made the medium more attractive. Where not so long ago the advertiser had the trusty banner, skyscraper and MPU to choose from, now media such as elleuk.com and the Conde Nast sites offer formats as diverse as expandable strips, banners, double skys and double MPUs, all embedded with rich media. This allows advertisers, and premium and luxury brand advertisers in particular, to use online as a strong ‘branding’ vehicle, in addition to the more usual expectation of driving traffic to their web sites and generating measurable response, as these new formats showcase the quality of their offering and the craftsmenship that goes into creating it.
And there’s more reason to invest in rich media ads – it increases the effectiveness of the campaign. A study by Eyeblaster estimated that rich media increases click thru rate by 200% from 0.1% to 0.3%. The most effective form of rich media was video – improving performance over other forms of rich media by 71%.
However, a concern for luxury advertisers is the profile of online ad clickers. ComScore research in the US suggests that not only is a very small percentage of the online population reponsible for the the vast majority of clicks, but also that the ‘clicker’ profile is significantly downmarket of the ideal profile for a luxury brand. This would make sense when one considers the tendency of time-poor affluent consumers to go online with more concrete and rationale objectives, and not be as distracted by, albeit, pleasing frivolities along the way.
However, recent research suggest that the online marketer’s obsession with click-thru-rates with regard to online advertising may be mistaken. EyeBlasters investigation into something they define as ‘dwell time’ (all interactions with the ad short of a click thru – for example mouse overs, user initiated expansions/videos etc) shows a much different picture, with dwell rates of almost 9% compared to click thru rates of 0.3%.
The case for online advertising becomes even more convincing when recent projects looking at post online advertising exposure behaviour are examined. ComScore found the US users were 65% more likely to visit the advertiser’s site than users who never saw the ads. And a benchmarking study by Nielsen in Australia found that recall amongst consumers was 33% after being exposed to online advertising, with an almost 5% increase in purchase intention. Further developments in the measurement of the effectiveness of online advertising will continue to make the case clearer and no doubt more compelling.
Online advertising is a logical step for luxury brands wanting to dip their toes in the digital water and less comfortable with the less controllable channels such as social media, as they can select the environment and control the message. However, it also represents an opportunity for brands who have fully developed search and/or social media strategies and are looking for further opportunities to engage with their audience online.
The lessons from these findings are to invest in the quality of the ad content, not to get too obssessed with the click thrus but wait for the business to come in via related channels such as brand searches or store walk-ins.
