- 35% of Unilever’s advertising spending in the U.S. is in digital (up 40% versus year) (source: Deloitte)
- 33% of Procter & Gamble’s U.S advertising budget goes to digital media (source: Deloitte)
Trends indicate leading brand companies are moving ad spending to digital, but the question many still ask is: Does digital advertising really work for brand advertisers?
To answer this question definitively, the IAB through Peter Minnium, Head of Digital Initiatives, asked BarnRaisers to help them research this area and create the infographic featured at the bottom of this blog post.
So, if your company is asking, now you have an answer that has been researched, has proof-positive and an interesting visual.
Here are 8 studies that prove digital advertising works for brands.
- DRIVES SALES AND ROI: Nielsen completed more than 800 studies over the past seven years, collaborating with more than 300 CPG brands and 80 companies to measure the correlation between online advertising and offline consumer purchases.
- ENHANCES THE EFFECTIVENESS OF NON-DIGITAL CHANNELS:An econometrics study [PDF] conducted by BrandScience and Microsoft shows that online advertising not only delivers excellent ROI efficiency itself, but it also makes other media spend work harder.When the researchers compared the difference in ROI performance between studies that have an online element and those that do not, the results were striking – adding online to the media mix has a positive impact on the campaign ROI for all media, from a delta of +4% for radio to +51% for outdoor and a whopping +70% for television
- EFFECTIVE ACROSS THE ENTIRE CUSTOMER JOURNEY: Automakers are sophisticated users of digital media, so McKinsey analyzed 24 customer touch-points for more than 9,000 new car buyers to better understand which points of engagement drive customers’ premium perceptions and purchase decisions.Not only did they find that digital is key to driving premium perception (second only to live experiences), they discovered that digital channels dominate the path-to-purchase (in this case, McKinsey’s automotive “consumer decision journey” [CDJ] framework).With traditional media, brands were constrained in their ability to influence prospects across the entire journey and to do so in a granular, discrete manner. Not so with digital media.
- DRIVES WORD OF MOUTH AT SCALE: According to Nielsen, 92% of consumers believe recommendations from friends and family (“word of mouth”) over all forms of advertising, and there is little doubt that digital advertising turbo-charges this effective persuasion channel.ShareThis has a unique view of the word of mouth phenomenon; its ubiquitous sharing tools allow it to touch the lives of 95% of U.S. internet users across more than 2 million publisher sites and 120+ social media channels.In its quantitative study, “Return on a Share, Quantifying the Monetary Value of Social Sharing,” it found:
- Recommendations have more impact on a consumer’s purchase decision than both brand and price – 57% of decisions are based on this.
- Online shares are almost as valuable as in-person recommendations – a consumer is 9.5% more likely to buy a product with an excellent shared recommendation compared with 10.6% more likely via an excellent in-person recommendation. In contrast, a negative recommendation can reduce purchase intent by 11% for an online share and 11.2% for an in-person one.
- The specific value of a share can be determined by measuring how much more a consumer will pay for a product if they have had an excellent online recommendation (via sharing). ShareThis calculated a delta of +$3,708 for a family size car, +$24.91 for tablets, and +$0.92 for household goods, for example.
- DRIVES INTERACTION AND LIFTS BRANDS: It is well known that the quality of ad creative is the most important determinant of ad effectiveness. A seminal comScore ARS study showed that creative quality drives more than half of the sales changes for brands analyzed, four times higher than the impact of the specific media plan. Digital creative adds the dimension of interaction to sight, sound, and motion – and greater interaction has been shown to drive brand effectiveness. For example, IAB, comScore, and Vibrant Media partnered to study the effectiveness of mobile advertising for Oreo, Hellman’s, and Microsoft Windows Phone. Standard banners were compared to the IAB Rising Stars, which include interaction.Results across the three ad campaigns show that consumers are twice as likely to interact with a Mobile Rising Star ad as a standard mobile ad and have higher brand lift after interacting with a Mobile Rising Star ad (83% more likely to have an improved impression of the brand, 74% to recall the brand, 22% to recall the message, and 12% to recommend the brand).
- IS MORE EFFICIENT THAN TRADITIONAL MEDIA: While it is dangerous to generalize about media costs given the wide array of choices within each medium, digital advertising can generally be seen to be among the most efficient means of reaching an audience. Further, on a cost-per-conversion basis, the IAB estimates digital to be five to six times more efficient than direct mail.
- IS ESSENTIAL TO REACHING AN AUDIENCE: In 2013, time spent with digital media among U.S. adults surpassed time spent with TV, and this gap will likely continue to widen.U.S. adults are estimated to spend 4 hours, 28 minutes per day in front of their TV. Combining online and mobile devices, however, U.S. adults are expected to spend 5 hours, 46 minutes with digital media daily this year, increasing digital’s lead over television to well over one hour per day.In 2013, time spent with digital media among U.S. adults surpassed time spent with TV, and this gap will likely continue to widen.U.S. adults are estimated to spend 4 hours, 28 minutes per day in front of their TV. Combining online and mobile devices, however, U.S. adults are expected to spend 5 hours, 46 minutes with digital media daily this year, increasing digital’s lead over television to well over one hour per day.
- IS EVEN MORE EFFECTIVE THAN WE KNOW: It is highly likely that the tools used to measure return on investment for media today undervalue digital media. A consortium consisting mainly of leading CPG companies undertook a study together with Nielsen to better understand media attribution. Consortium members, which include Procter & Gamble, Unilever, Nestlé, Kraft Foods, Mondelez, Kimberly-Clark, and Kellogg, found marketing-mix models undervalued digital ads.For example, the ROI from Facebook ads were underestimated by as much as 48% and Google search ads by as much as 39%.
We appreciate the IAB getting to a definitive answer on this subject. And their use of our infographic below.
Do these studies convince you of the effectiveness of digital advertising for brands?