Making Integrated Campaigns Work: How a Search Marketing Mindset Can Drive the ROI of Display Advertising

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1 Making Integrated Campaigns Work: How a Search Marketing Mindset Can Drive the ROI of Display Advertising Eli Goodman comscore, Inc. Keith Wilson The Search Agency, Inc.

2 Our Presenters Eli Goodman Search Evangelist comscore, Inc. Keith Wilson Director of Display Media The Search Agency, Inc. 2

3 Agenda Introduction Applying Search Intelligence to Display Advertising Search & Display Advertising - Quantifying the full ROI beyond Direct Response 3

4 The Search Agency The Search Agency provides an integrated suite of pre-click online advertising services and post-click conversion path optimization services. 4

5 Agenda Introduction Applying Search Intelligence to Display Advertising Search & Display Advertising - Quantifying the full ROI beyond Direct Response 5

6 Case Study Example: Online Dating Client: Lavalife Online Subscription-based Dating Service Goal: Driving registrations at targeted CPA History: Increasing spend on paid search and contextual text based ads Could not yield additional volume at target CPA Solution: Test display ads to increase efficiency of content campaign and drive volume 6

7 How to approach display advertising? Measurability TV / Print Display Paid Search Display advertising is evolving Greater emphasis on direct response metrics Pricing is evolving to bid based model Approach display media management like paid search Budget accountability Applying direct response best practices Driving ROI for each incremental ad dollar spent 7

8 Results: 170% increase in conversions in 3 weeks 500% Client Results 400% 400% 300% 200% 170% 100% 0% -100% Click-Through Rate -50% 16% Conversions Cost per Click Brand Search Queries -12% CPA 8

9 Applying search intelligence to display advertising 1. Data Integration 2. Advanced Targeting 3. Account Structure 4. Budget Management 5. Creative Testing 6. Conversion Path Optimization 7. Campaign Optimization Data Integration Advanced Targeting Account Structure Budget Management Creative Testing Conversion Path Optimization Campaign Optimization 9

10 Data Integration: Integrate campaigns and backend conversion data Create single view of key metrics for efficient analysis Leverage ad serving/optimization technology to guide efficiency of ad spend Example: Subscription Model Free registrations Large sample size Allows technology to learn faster Paid subscriptions Smaller sample size Enables bid optimization based on revenue Data Integration Advanced Targeting Account Structure Budget Management Creative Testing Conversion Path Optimization Campaign Optimization 10

11 Advanced Targeting: Leverage high intent to purchase targeting During initial tests, diversify across multiple targeting techniques Website ads (.gif banners, etc.) 7.6% Great ROI Middle of Pack ROI Poor ROI 49.7% 42.7% Pop-up, Pop-unders 12.0% 26.5% 61.4% Rich Media Ads 22.0% 54.3% 23.6% Affiliate marketing 23.4% 48.6% 27.9% Text-Link ads 29.7% 51.5% 18.8% Behavioral targeted ads 36.7% 50.5% 12.8% Contextually targeted ads 40.5% 50.0% 5.5% 0% 20% 40% 60% 80% 100% Source: MarketingSherpa, February 2008 Data Integration Advanced Targeting Account Structure Budget Management Creative Testing Conversion Path Optimization Campaign Optimization 11

12 Case Study Example: Contextual targeting Identified high-performing keywords from paid search Focus on brand terms and core category terms Identified placements relevant to online dating Including competitor sites Used media planning tools to identify/exclude relevant audiences Demographics Behaviors 12

13 Account Structure: Organize campaigns into meaningful segments Group campaigns by demo, geo, and behavioral segments Structured campaigns enable efficiency Provides greater flexibility to optimize campaigns by price, creative or targeting Visibility to lower level of data allows optimization of poor and exceptional targets Data Integration Advanced Targeting Account Structure Budget Management Creative Testing Conversion Path Optimization Campaign Optimization 13

14 Case Study Example: Organize by relevant segments Grouping by geo allows targeted ad copy Measuring ROI across key consumer segments enables more efficient media planning 14

15 Budget Management: Determine best use of budget Evaluate pricing structures to mitigate advertiser risk High Risk CPM (Cost per 1000 Impressions) Medium Risk Dynamic CPM (Bid-based CPM) CPC (Cost per Click) Low Risk CPA (Cost per Action) Bid-based pricing enables setting a maximum allowable price that achieves ROI goals Affiliate channels deliver incremental conversions at fixed acquisition goal metric Data Integration Advanced Targeting Account Structure Budget Management Creative Testing Conversion Path Optimization Campaign Optimization 15

16 Case Study Example: Max CPC bidding to drive efficiency Able to use bid optimization platform Dynamically adjust bids to allowable levels based on historical performance Set daily spending caps to avoid over saturation Enabled cross-channel optimization One system, one budget Allocate incremental dollars most efficiently 16

17 Creative Testing: Test, test, test Iterative process where goal is to continually improve your ROI Increased efficiency drives increased volume Develop a testing methodology that isolates creative elements: A/B testing Multivariate testing Data Integration Advanced Targeting Account Structure Budget Management Creative Testing Conversion Path Optimization Campaign Optimization 17

18 Case Study Example: Tested 3 concepts per ad size Followed best practices to improve efficiency: Animation creates attention Clear value proposition inspires action Call to action language demonstrates intent of ad Relevance reduces banner blindness 18

19 Conversion Path Optimization: Determine success and friction elements affecting conversion Analyze conversion beyond the initial landing page Increase consumer motivation by incorporating banner and paid search copy Test and identify bounce rate and conversion contributors Reduce friction factors to increase progression Reinforce credibility with qualifiers Keep content short and to the point Show a clear progression path for a multiple page process Data Integration Advanced Targeting Account Structure Budget Management Creative Testing Conversion Path Optimization Campaign Optimization 19

20 Case Study Example: Optimized conversion experience Landing page emphasized key messages from ads Reduce friction by providing a path Minimal bounce points keeps the user on task Reinforcement cues build consumer confidence 20

21 Campaign Optimization: Apply targets/filters to deliver ROI Campaign structure enables detailed data analysis Isolate targeting criteria affecting performance Remove underachieving inventory, content channels or sites Lock in additional inventory at allowable pricing Duplicate successful campaigns across multiple networks Data Integration Advanced Targeting Account Structure Budget Management Creative Testing Conversion Path Optimization Campaign Optimization 21

22 Many solutions with good reach 22

23 Key Points To drive ROI, adopt a search mindset to display advertising Display budgets can be justified using same direct response tactics of paid search Disciplined methodology and commitment to ongoing testing will increase effectiveness of display efforts Data Integration Advanced Targeting Account Structure Budget Management Creative Testing Conversion Path Optimization Campaign Optimization 23

24 Agenda Introduction Applying Search Intelligence to Display Advertising Search & Display Advertising - Quantifying the full ROI beyond Direct Response 24

25 Powerful Platform Global Panel of 2MM Users, Largest of Its Kind The Only Global Measurement of Audience and e-commerce 360 View of Consumer Behavior Web Visiting and Viewing Demographics Life Stages Online Transactions Streaming Video Search Behavior 32 Media Metrix Reported Countries 172 Countries with Sample Presence Media Exposure 25 25

26 Growth in online advertising slowed in 2008 Total Online Advertising $ Billions and % Chg vs. YA % +24% +27% % +18% +13% +11% Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Source: PricewaterhouseCoopers and the Internet Advertising Bureau (IAB) 26

27 Search spending continued to grow strongly through Q Total Search Advertising $ Billions and % Change vs. YA $8.00 $ % $ % $ % $ % $ % $5.06 $0.00 H1 06 H2 06 H1 07 H2 07 H

28 Growth in online display advertising slowed in 2008 and shifted dramatically to pay-for-performance Total Online Display Advertising (CPM + CPC) $ Billions and % Chg vs. YA 3 $2.70 $2.82 $ % +16% +17% $ % $ % $ % $ % 2 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Source: CMR Data include static and rich display but do not include paid search or video ads 28

29 The Right Metrics are Critical: Clicks Understate Campaign ROI 29

30 Decline in online ad click-through rates 2.50% 2.50% 2.00% In 2008, comscore measured click rates as less than 0.1% 1.50% 1.00% 1.12% % 0.41% 0.20% 0.00% Rich Media Non-Rich Media Sources: Doubleclick, emarketer, Eyeblaster, ABI Research estimates 30

31 Clickers follow the 80/20 rule 100% 6% 10% 18% 16% 31% 50% Heavy Moderate 68% 51% 30% Light Non 0% 20% % Internet Pop % of Clickers % of Clicks Source: comscore Natural Born Clickers study for Tacoda & Starcom, Total US Online Population, July 2007 Clickers are predominantly younger (25-44) with lower income (under $40K) 31

32 Clicks on display ads are a misleading metric and don t reflect brand-building effects Only use for direct response ad campaigns (or search) Clicks don t measure all of a campaign s sales impact nor the cumulative (latent) impact of ads Clicks don t tell you anything about brand building effects 32

33 The Role of Search in Consumer Buying comscore study with Google The Three Components of how Search Drives Buying Direct Online Effects 16% Latent Online Effects 21% Latent Offline Effects 63% Only measuring direct online effects understates ROI by a factor of 6X Source: Google/comScore The Role of Search in Consumer Buying Press Release, March 21, 2006; based on holiday-related purchases completed online and offline across 11 product categories for 60 days post-search 33

34 The Impact of Display and Search Advertising 34

35 Measuring the Holistic Impact of Online Ad Campaigns 200+ studies conducted to assess the impact of paid search and online ads on online and offline sales Real world analysis: comscore panelists divided into two matched groups (exposed and non-exposed to advertising) Search only Display ads only Search and display ads together Neither Passively measured behavior and / or surveys Linked to in-store buying through CRM databases, retailer loyalty cards (we have 125 Million card dataset accessible), credit card data, IRI scanner panel 35

36 Display Ads Lift Site Visitation Across All Verticals Advertiser Site Reach Weeks 1-4 after first exposure Average, N= % 6.6% % Lift: 46% Lift: 2.1% Automotive, N=38 Finance, N=16 CPG & Restaurant, N=10 0.9% 1.9% 1.3% 2.3% 0.6% 1.1% % Lift: 114% Lift: 1.0% % Lift: 86% Lift: 1.1% % Lift: 77% Lift: 0.5% Retail & Apparel, N=21 9.1% 13.8% % Lift: 52% Lift: 4.7% Media & Entertainment, N=24 7.0% 10.0% % Lift: 42% Lift: 2.9% Electronics & Software, N=14 Travel, N=9 5.8% 7.2% 4.8% 5.8% % Lift: 25% Lift: 1.5% % Lift: 21% Lift: 1.0% Control Test 36

37 Display ads don t just increase site visiting: trademark searches also continue to see a lift over the 4 weeks past exposure to an ad Results from comscore Campaign Effectiveness Studies % Making a TM/Brand Search 0.9% 0.5% 0.5% 0.7% 0.6% 0.2% 0.3% 0.4% % Lif t: 52.3% % Lif t: 46.0% % Lif t: 40.3% % Lif t: 38.1% Week of first exposure Weeks 1-2 after first exposure Weeks 1-3 after first exposure Weeks 1-4 after first exposure Control Test 37

38 Clear synergies between search and display in driving online sales % Making A Purchase on the Advertiser Site (Retail Only) 5.1% 1.0% 1.5% 1.1% 2.4% 1.9% Display Only Search Only Search & Display % Lift: +42% % Lift: +121% % Lift: +173% Online $$ per 000 Exposed (Retail Only) $6,107 $2,724 $994 $1,263 $1,548 $2,723 Display Only Search Only Search & Display % Lift: +27% % Lift: +76% % Lift: +124% Control Test 38

39 Online is important but you can t ignore offline buying either Higher offline sales lifts are found for search advertising vs. display but when combined the synergy provides even more lift Lift generated by online advertising is significant and would not be captured by a CPC or cookie-based model Incremental Impact on Offline Sales per (000) Exposed 39

40 Higher reach of display ads often lifts sales more than does search The overall number of unique people reached by display ads is typically much higher than search As a result, even though the sales lift among those exposed to a search ad is higher, the total dollar sales gained from display ads is often larger than search due to the smaller lift acting on a larger base Incremental Impact on Offline Sales per (000) Exposed 81% 119% % of Total Exposed Group 82% 11% 8% 16% Search & Display Search Only Display Only Search and Display Search Only Display Only 40

41 Key Points Online Advertising spend is still growing, but not nearly as fast as it has in the past When considering the full impact of both Search & Display ROI, you must take into account the soft dollar metrics Both Search & Display see most of their value in latent response, both online and offline Although Search is the ultimate direct response champion, greater frequency of exposure to Display ads can drive greater sales through volume of impressions 41

42 Thank You. Eli Goodman Keith Wilson

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