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.

lives – they access online at work (nearly But what’s interesting is this growth is not Advertisers are 27 hours per user per month), on mobile 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 a 2008 version of the study. As consum- certainly been a remarkable rise in the Additionally, more and more advertising ers have integrated the Internet into their number of consumers online and the dollars are finding their way online. In the lives, advertisers are increasingly inter- amount of time they’re spending there. 2011 Advertising Outlook published by ested in ways to better reach consumers, The Cambridge Group (a Nielsen com- Since 2003, the number of Americans deliver messages, and build ongoing pany), a survey of over 300 advertising with Internet access has grown 34 percent relationships through this medium. In decision-makers from a variety of indus- from 186.7 million to 249.3 million, ac- other words, these advertisers are looking tries indicates that digital budgets have cording to Nielsen. This growth has not 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 perform against brand marketers’ goals. Standard Brand their media mix, they are looking for two Many brand marketers run online things: confidence that their online in- campaigns with the objective to drive Effect questions: vestments are helping them achieve their in-store rather than online conversions. • Ad Recall: “Do you recall seeing brand goals, and metrics that give them Nielsen is able to measure whether online an ad online for product X in the the ability to demonstrate success across ad campaigns influence offline purchase last 7 days?” their campaigns. behavior through Nielsen Sales Effect, • Brand Awareness: “Have you which connects online exposure to off- heard of brand X?” line sales using the Nielsen Homescan Is CTR a good measure consumer purchase panel. • Message Association: “Which brand do you most associate It’s clear from those findings that online of brand impact? with the message X?” advertising can have a substantial impact 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 • Brand Favorability: “What is e-commerce marketers used to develop with the best CTR would not deliver the your opinion of brand X?” strategies for optimizing online sales. best overall uplift in sales. Moreover, 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- But are brand metrics with flat purchase intent showed no through rate for a given ad campaign also significant change in sales. fails to predict the rate of success in ac- correlated with sales? complishing these attitudinal objectives. Overall, it is clear that traditional direct (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 Despite some claims that “no one pays Nielsen research also shows that online How do online ads attention to online ads,” Nielsen research 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. that the first step to influencing consum- ads working?” To answer this question, The “lower funnel metrics” – Brand Favor- ers through advertising is ensuring that Nielsen analyzed results from over 500 ability and Purchase Intent —are far more they notice and remember the ad itself. online ad campaigns measured by Nielsen 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 More generally, stronger performing Varying results across 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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Ad campaign User exposed Exposure info Control and 1 tagged 2 to ad running 3 encrypted by Nielsen 4 exposed groups anywhere online and passed through polled by Nielsen Facebook platform on Facebook

Source: Nielsen

Facebook’s large and highly engaged About This White Paper How Nielsen Online user base enables samples to be built Brand Effect Works rapidly, meaning shorter turnaround time The data and insights in this white paper for results. Because polling occurs after are compiled from a range of Nielsen 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 identifi able 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, online intelligence, mobile measurement, a sample of respondents exposed to the Studies are compared against a normative trade shows and related properties. ad being measured, as well as a control Nielsen database to determine overall Nielsen has a presence in approximately sample that is demographically matched 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.