Beyond Clicks and Impressions: Examining the Relationship Between Online Advertising and Brand Building

Beyond Clicks and Impressions: Examining the
Relationship Between Online Advertising and
Brand Building

   Executive Summary
   Advertisers increasingly think of online as a place to build their brands, but need greater
   confidence that their online investments are helping them achieve their brand goals. This
   paper explores both the role of online ads in brand building, as well as the best metrics for
   measuring the success of Internet ads against marketers’ goals. Leveraging Nielsen’s advertising
   effectiveness solutions to examine this relationship, the following conclusions will be discussed
   in this paper:
   1. Click-through rate is not the right metric to measure brand impact – virtually no relationship
      exists between clicks and brand metrics or offline sales.
   2. There is emerging evidence that brand metrics in response to online campaigns are correlated
      with offline sales impact.
   3. Online ads can succeed in driving brand impact, though success is not guaranteed and
      advertisers must embrace new online branding metrics to separate themselves from the
      competition.



Advertisers are                              lives – they access online at work (nearly
                                             27 hours per user per month), on mobile
                                                                                            But what’s interesting is this growth is not
                                                                                            only from e-commerce advertisers looking
increasingly building                        (43 percent of US adults now own smart-        to generate web traffic or drive sales.
                                             phones), and even concurrently with other      The Cambridge Group report also shows
brands online                                media (20% of U.S. adults watch TV while       that in 2011 54 percent of those surveyed
There’s an old adage that advertisers        using either a PC or mobile device on a        believe online ads are highly effective at
follow consumers’ eyeballs, and over         daily basis, according to the Media Behav-     “enhancing brand/product image,” com-
the course of the last 10 years, there has   ior Institute USA TouchPoints study.)          pared to just 38 percent of respondents in
certainly been a remarkable rise in the                                                     a 2008 version of the study. As consum-
                                             Additionally, more and more advertising
number of consumers online and the                                                          ers have integrated the Internet into their
                                             dollars are finding their way online. In the
amount of time they’re spending there.                                                      lives, advertisers are increasingly inter-
                                             2011 Advertising Outlook published by
                                                                                            ested in ways to better reach consumers,
Since 2003, the number of Americans          The Cambridge Group (a Nielsen com-
                                                                                            deliver messages, and build ongoing
with Internet access has grown 34 percent    pany), a survey of over 300 advertising
                                                                                            relationships through this medium. In
from 186.7 million to 249.3 million, ac-     decision-makers from a variety of indus-
                                                                                            other words, these advertisers are looking
cording to Nielsen. This growth has not      tries indicates that digital budgets have
                                                                                            to truly build their brands online.
come in a vacuum – online has increas-       increased more than any other type of
ingly become integrated into consumers’      media in 2011.
With more and more advertisers look-                        measure how well online campaigns
ing to include online brand building in
their media mix, they are looking for two
                                                            perform against brand marketers’ goals.                   Standard Brand
things: confidence that their online in-
                                                            Many brand marketers run online
                                                            campaigns with the objective to drive
                                                                                                                      Effect questions:
vestments are helping them achieve their
brand goals, and metrics that give them
                                                            in-store rather than online conversions.                  • Ad Recall: “Do you recall seeing
the ability to demonstrate success across
                                                            Nielsen is able to measure whether online                   an ad online for product X in the
their campaigns.
                                                            ad campaigns influence offline purchase                     last 7 days?”
                                                            behavior through Nielsen Sales Effect,
                                                            which connects online exposure to off-
                                                                                                                      • Brand Awareness: “Have you
                                                            line sales using the Nielsen Homescan
                                                                                                                        heard of brand X?”
Is CTR a good measure                                       consumer purchase panel.                                  • Message Association: “Which
                                                                                                                        brand do you most associate
of brand impact?                                            It’s clear from those findings that online
                                                            advertising can have a substantial impact
                                                                                                                        with the message X?”
Online’s early history as a direct-response                 on offline purchase behavior. However,                    • Purchase Consideration: “Will
sales channel gave way to traditional                       as shown in Figure 1, CTR itself does not                   you purchase brand X in the next
metrics such as click-through rates (CTR),                  predict changes in in-store sales due to                    month?”
impressions and conversions, which                          the ad campaign. Picking the campaigns
e-commerce marketers used to develop                        with the best CTR would not deliver the
                                                                                                                      • Brand Favorability: “What is
strategies for optimizing online sales.                     best overall uplift in sales. Moreover,
                                                                                                                        your opinion of brand X?”
However, the broadening of advertisers’                     evaluating a campaign solely on the
objectives to include brand building has                    number of clicks greatly underestimates
led to questions about whether these                        the number of potential consumers
metrics can be used to accurately                           influenced by the campaign.




      Figure 1: Correlation of Sales Lift and Click-Through Rate
     Sales Lift




                                                                          Click-Through Rate


       The random scatter of the points indicates a lack of relationship between sales lift and click-through rate.

      Source: Nielsen




2                 Copyright © 2011 The Nielsen Company.
Other brand campaigns are designed to                   noticeable ads increasing both the likeli-      While based on a small number of cases,
impart information upon consumers,                      hood of recall and the likelihood of a click.   looking at campaigns measured by both
make them more aware of a new product                   But there is no measure of branding –           Nielsen Online Brand Effect and Nielsen
or service, or change feelings or inten-                whether the message resonated with con-         Sales Effect, there was strong alignment
tions about a brand or product. Using the               sumers or if it was successful in changing      between increased purchase consider-
Nielsen Online Brand Effect methodology,                consumer awareness, opinions or intent          ation following an online campaign and a
(See Page 5) Nielsen examined how well                  – that has any relationship to CTR.             boost in offline product sales. Campaigns
exposure to online ad campaigns influ-                                                                  in which consumers reported increased
ences these brand objectives.                                                                           purchase intent after viewing an ad also
                                                                                                        showed a boost in product sales. Cases
Interestingly, research shows that click-
through rate for a given ad campaign also               But are brand metrics                           with flat purchase intent showed no
                                                                                                        significant change in sales.
fails to predict the rate of success in ac-             correlated with sales?                          Overall, it is clear that traditional direct
complishing these attitudinal objectives.
(See Figure 2.)                                         Digging further into Nielsen research,          response metrics such as click-through
                                                        there is evidence that attitudinal              rate fail to indicate whether online cam-
As expected, there is a small positive re-              measures, such as Purchase Intent,              paigns will impact consumer attitudes or
lationship between consumers clicking on                are important predictors of offline             offline sales. As a result, advertisers need
an ad and their ability to remember that                sales and thus, are a powerful way for          better brand metrics that can serve as
ad (Ad Recall). However, the connection                 advertisersto gauge the success of their        an indication of the sales impact of their
is still weak and likely due to more                    brand campaigns online.                         online ads.




      Figure 2: Correlations with Click-Through Rate



                                    Ad Recall Delta



                            Brand Awareness Delta



                         Message Association Delta



                     Purchase Consideration Delta



                           Brand Favorability Delta


                                                       -1.0                -0.5           0.0             0.5               1.0


      No strong correlations emerge between CTR and any of the Brand Effect metrics.


       Source: Nielsen




                                                                                                        Copyright © 2011 The Nielsen Company.       3
How do online ads                                     Despite some claims that “no one pays
                                                      attention to online ads,” Nielsen research
                                                                                                    Nielsen research also shows that online
                                                                                                    ads often increase overall awareness for
impact consumer                                       shows that the average increase between       the advertised brand. This is an especially
                                                      the control and exposed groups is highest     important factor in driving new product
attitudes?                                            for Ad Recall, an indication that consum-     success – clearly, consumers must become
One of the key questions weighing on                  ers do remember exposure to an online ad      aware of a new product before they can
advertisers’ minds is, “Are my online brand           campaign. It should come as no surprise       buy it.
ads working?” To answer this question,                that the first step to influencing consum-
                                                                                                    The “lower funnel metrics” – Brand Favor-
Nielsen analyzed results from over 500                ers through advertising is ensuring that
                                                                                                    ability and Purchase Intent —are far more
online ad campaigns measured by Nielsen               they notice and remember the ad itself.
                                                                                                    difficult to influence than Awareness,
Online Brand Effect over the last year and            The next question brand advertisers want      Recall and Association, given that these
a half.                                               to answer is whether online ad campaigns      metrics require a change in consumer
In short, the answer is yes. Brand ads do             can actually change the opinions and          opinion or behavior.
on average succeed in moving the needle               intentions of consumers. Following Ad
for most measured Brand Effect metrics,               Recall, Message Association showed the
as shown in Figure 3.                                 next highest average change, indicating
                                                      that online ads can also succeed in con-
                                                      veying a brand’s intended message.




      Figure 3: Average Online Brand Effect Results


                           6%



                                                                           4%

                                                     3%



                                                                                                                      1%




                                                                                                   -1%

                                                  Brand                 Message               Purchase                Brand
                        Ad Recall                Awareness             Association          Consideration          Favorability


      Well-executed online advertising can drive branding metrics.



      Source: Nielsen




4
Varying results across                                More generally, stronger performing
                                                      web ads drive noticeably greater posi-
                                                                                                              Using brand metrics to
campaigns                                             tive impact on all five branding metrics                separate from the pack
                                                      compared to average or weak ads. Just
While our analysis indicates mostly posi-             as TV ads perform better based on the                   Just as TV ad effectiveness research has
tive results across the different Brand Ef-           quality of the creative and programming                 taught advertisers which levers to pull
fect metrics on average, perhaps an even              context, online ads are similarly impacted              in optimizing their TV campaigns, over
more important conclusion is that there               by factors such as creative, publisher                  time, online ad effectiveness research can
is a lot of variance in the performance               content and type of ad unit. In fact, online            be similarly leveraged to help marketers
of online ad campaigns we’ve measured,                advertising potentially offers a greater                understand those factors that drive the
as shown in Figure 4. We find some                    range of possibilities than TV in terms of              most successful web campaigns.
campaigns are very successful across all              format (display vs. video), dimension/size,             Those who embrace these new metrics
metrics, some campaigns succeed only on               or publisher. In many cases, understanding              and collect trustworthy data on ef-
certain dimensions, and others underper-              online ad impact and what makes a strong                fectiveness across media platforms will
form across the board.                                vs. weak ad is even more complex than                   be substantially better positioned than
                                                      understanding TV ad impact.                             others, and likely to separate themselves
                                                                                                              from the competition.




      Figure 4: Average Online Brand Effect Results

            15%



           10%



             5%



             0%



            -5%



          -10%             Ad Recall         Brand Awareness         Message Association         Purchase Consideration        Brand Favorability

                                                          Weak Ads          Average Ads        Strong Ads


      Average Nielsen Online Brand Effect results for strong, average, and weak performing ads. Results are
      calculated as the average percentage point difference between the exposed vs. control groups on each metric.


      Source: Nielsen




                                               Copyright © 2011 The Nielsen Company. All rights reserved. Nielsen and the Nielsen logo are
                                               trademarks or registered trademarks of CZT/ACN Trademarks, L.L.C. Other product and service
                                               names are trademarks or registered trademarks of their respective companies. 9/2011            .           5
Nielsen Online Brand Effect Methodology
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              1 Adtagged
                     campaign
                                          2 User exposed
                                            to ad running                3 Exposure info
                                                                           encrypted by Nielsen                    4 Control and
                                                                                                                     exposed groups
                                                 anywhere online             and passed through                        polled by Nielsen
                                                                             Facebook platform                         on Facebook



               Source: Nielsen




How Nielsen Online                                     Facebook’s large and highly engaged
                                                       user base enables samples to be built
                                                                                                              About This White Paper

Brand Effect Works                                     rapidly, meaning shorter turnaround time               The data and insights in this white paper
                                                                                                              are compiled from a range of Nielsen
                                                       for results. Because polling occurs after
Nielsen Online Brand Effect measures on-               exposure and within the normal Facebook                resources. For more information,
line advertising effectiveness using simple,           user experience, no interruptive pop-up or             contact your Nielsen representative.
strategic standardized poll questions that             click-away surveys are required. Finally,
are an integrated part of the Facebook                 reduced sample bias through shorter, stra-             About Nielsen
experience. (Note: Nielsen reports data                tegic polls, truer measurement of impact               Nielsen Holdings N.V. (NYSE: NLSN) is
only in aggregate to clients and receives              through 24-hour latency, and validated                 a global information and measurement
no personally identifiable information                 demos of Facebook’s expansive user base                company with leading market positions
from Facebook).                                        ensure a more accurate read of online ad               in marketing and consumer information,
Brand Effect questions are asked both of               effectiveness.                                         television and other media measurement,
a sample of respondents exposed to the                                                                        online intelligence, mobile measurement,
                                                       Studies are compared against a normative
ad being measured, as well as a control                                                                       trade shows and related properties.
                                                       Nielsen database to determine overall
sample that is demographically matched                                                                        Nielsen has a presence in approximately
                                                       effectiveness and awareness results.
to the exposed group but did not see the                                                                      100 countries, with headquarters in New
ad. The difference in exposed vs. control                                                                     York, USA and Diemen, the Netherlands.
scores is reported for each measure.                                                                          For more information, please visit
                                                                                                              www.nielsen.com.




6        Copyright © 2011 The Nielsen Company.
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