In today’s economically challenging times, advertisers and their agencies appear to be moving their online display ad dollars from CPM campaigns that require payment based on the number of people exposed to the campaign to “payfor-performance” programs (“CPC” or “CPA”) that require payment when the consumer performs some desired action such as clicking on an ad.

Data from Competitive Media Reporting shows that total online display advertising spending (CPM and CPC/CPA) increased by 8% Y/Y during the first half of 2008, while the Internet Advertising Bureau reported a 15% increase.

In contrast, Nielsen, whose data only includes CPM spending, reported a 6% decline in display advertising over the same time period. Clearly, these data imply that online ad dollars are being moved from CPM to CPC/CPA programs.

SUMMARY OF FINDINGS
As measured by comScore, click rates on online display ads have fallen dramatically in recent years to levels under 0.1%. Additional research conducted by comScore and the media agency Starcom USA has shown that there is no correlation between display ad clicks and brand metrics, and show no connection between measured attitude towards a brand and the number of times an ad for that brand was clicked.

This research suggests that when digital campaigns have a branding objective, optimizing for high click rates does not necessarily improve campaign performance.

Does a low level of clicks indicate that online display advertising has no impact on consumer behavior? The results of research conducted by comScore and presented in this paper show that this is not the case.

By examining 139 online display ad campaigns conducted across a variety of vertical industries, including Retail & Apparel, Travel, CPG & Restaurant, Finance, Automotive, Consumer Electronics & Software and Media & Entertainment, comScore has confirmed substantial effects. It’s clear that display advertising, despite a lack of clicks, can have a significant positive impact on:

• Visitation to the advertiser’s Web site (lift of at least 46% over a four week period)
• The likelihood of consumers conducting a search query using the advertiser’s branded terms (a lift of at least 38% over a four week period)
• Consumers’ likelihood of buying the advertised brand online (an average 27% lift in online sales)
• Consumers’ likelihood of buying at the advertiser’s retail store (an average lift of 17%)

In the Retail category, it is also clear that while the lift in sales from a display ad is lower than the lift from a search ad, the reach of a display campaign is typically far higher than that of a search campaign. When the sales lift is weighted by reach, display campaigns generally outperform search campaigns. However, the combination of a display and search campaign delivers substantial synergy, with the sales lift from the combined strategy being greater than the sum of the individual components.

comScore’s research has been conducted without relying on the use of cookies to track computers over time. Cookie deletion today has risen to a level where the use of cookies can no longer be considered an accurate method of tracking and analyzing consumer response to online advertising. By not relying on cookies and instead tracking computers that have comScore’s monitoring software installed, comScore research shows that online advertising can have a substantial latency effect on consumers’ online behavior while also having the ability to drive increased traffic into retail stores, resulting in meaningful increases in offline sales.

Visit How Online Advertising Works: Whither The Click? Download Page

You can download How Online Advertising Works: Whither The Click? in PDF format.

ABOUT COMSCORE
comScore, Inc. (NASDAQ: SCOR) is a global leader in measuring the digital world. This capability is based on a massive, global cross-section of more than 2 million consumers who have given comScore permission to confidentially capture their browsing and transaction behavior, including online and offline purchasing.

comScore panelists also participate in survey research that captures and integrates their attitudes and intentions. Through its proprietary technology, comScore measures what matters across a broad spectrum of behavior and attitudes.

comScore analysts apply this deep knowledge of customers and competitors to help clients design powerful marketing strategies and tactics that deliver superior ROI. comScore services are used by nearly 900 clients, including global leaders such as AOL, Microsoft, Yahoo!, BBC, Carat, Cyworld, Deutsche Bank, France Telecom, Best Buy, The Newspaper Association of America, Financial Times, ESPN, Fox Sports, Nestlé, Starcom, Universal McCann, the United States Postal Service, Verizon, ViaMichelin, Merck and Expedia.

For more information, please visit www.comscore.com, call 866.276.6972

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