Display advertising figures are reaching new heights, exceeding £1 billion in the UK, according to a research published yesterday by IAB UK. The top categories advertising in display are Finance and Consumer Goods, accounting for 15% share each. The research also found that banners and other embedded ad formats hold 73% share of display. In the US things are also looking good for online display advertising, with over 25% growth in 2011 to $12.4 billion, and expected growth to $15.4 billion in 2012, according to emarketer.
Looking beyond the numbers though, banner ads are still perceived by some marketers to be the online equivalent of billboard signs, making a momentary impression only. Furthermore, some brand advertisers still think of banners as a visual medium for carrying a branding message that is meant to trigger an emotion or awareness rather than an ROI instrument that achieves a tangible result. Looking at banners in such a way misses out on the key advantages of online display advertising. Today’s display ads can be purely performance-based advertising tools, measurable on any parameter we define, branding metrics included. Instead of regarding Display ads as a CPM only channel, marketers today can leverage the immense technological competency of measuring banner campaigns to gauge the performance of branding messages.
Direct response marketers already know this for a fact and have been using display ads with the same performance parameters and measurements common in email and search engine advertising. This means that beyond the CPM model, a banner, exactly like a contextual ad (Adwords, Adsense and the likes) can be bought, measured and paid for based on the same performance, or conversion, models - CPC, CPA, CPL, CPE.
One reason for brands’ lower use of performance advertising is lack of supporting data. Advertisers are used to paying for banner impressions, regardless of the specific goal of each campaign they run. The dichotomy of “Banners = CPM” whereas “Search = CPC/CPA” is no longer true, but it takes time until the market realizes a change has occurred. Many of the success stories in display advertising are still in the realm of direct response marketing, which brand advertisers consider to be a different discipline altogether.
Another reason is that branding is generally looked at as a softer, less-measurable parameter. This is somewhat true – it is challenging to measure whether an ad message triggered a certain emotion towards the brand or started a chain of thoughts that led to a product purchase. In the offline world, the way to measure the success of branding campaigns is either to ask a small sample of consumers in a non-natural environment – such as in surveys, focus groups, etc. – or to indirectly connect a change in product sales with a preceding branding campaign.
These challenges in connecting display advertising to branding parameters were partly answered in a Comscore research that found a median 21% increase of in-store sales following exposure to online display campaigns. This study suggests CPM models, or even CPC models, may not be the most effective way to measure branding effects of online advertising and that brand marketers should look further into the funnel for measuring the success of campaigns.
Looking further into the funnel requires technology. Using technology, branding goals such as brand awareness, brand recall, perceived brand values or purchase intent, could be broken down and defined as measureable units that are then tracked and optimized. Afterwards, measuring the performance of a banner with a branding message on metrics of engagement could be directly tied to achieving the desired goals.
How can this be done? Well, how about measuring things like –
- How many people played your video? How many watched it till the end? How many watched it more than once?
- How many people played the game on your landing page? How many times?
- How many people shared or forwarded your game/video/page to a friend? To how many friends?
Brand marketers can pay according to such performance metrics and directly link them to branding goals, instead of settling for a general and non-representing CPM figure. Once advertisers use engagement metrics to measure the brand effect of their display campaigns, it will not make sense to rely on CPM models alone. Display ads backed with the right technology are the way to move from leaving a momentary impression to making a lasting impression.