Online Brand Marketing: Just the Facts

Apr 11, 2013

The controversy concerning online brand marketing has returned to the pages of the digital marketing trades once again, as industry insiders and pundits are weighing in on the latest iterations of the old debates regarding banners, clicks, emerging formats like "native ads", and the viability of brand marketing online in general. It's time to take a break to consider the most current data.

Online Marketing Builds Brands

We now have 16 years of research that proves that online works for brands. Back in 1996 Millward Brown and a company called Hotwired found that "banners are not unlike television and radio commercials in their ability to stimulate awareness of and affinity for a brand". Since then Millward Brown and other advertising research companies like comScore and Dynamic Logic have conducted numerous studies all supporting the branding power of online media.

Banners Can Work But Bigger is Still Better

Two of the toughest obstacles to brand advertising online are viewability and noticeability. Around this time last year comScore released data showing that 31% of banner impressions were not viewable. Fortunately the IAB, ANA and the 4A's have been working aggressively to make viewable rather than served impressions the industry standard. However the fact that ads are viewable does not mean that consumers will notice them. About a decade ago, back in April 2001, Nigel Hollis presented research at the ESOMAR Conference in Mexico City that showed that bigger ad units generate higher recognition levels. In fact, he and his colleagues at Millward Brown found that larger units generate twice the recognition levels of smaller banners and that streaming ads generate recognition levels almost four times that of the smaller units. Since then nothing has changed. At IAB Connect in Mexico City in August, Hollis presented additional data from Dynamic Logic that showed that billboard units (970 x 250) generate uplifts in brand awareness of over 16%, while wallpaper ads, half page units (300 x 600), mid page units (300 x 250), skyscrapers (160 x 600) and banners (468 x 60) generate lifts of between only 1% and 6%.

Clicks Do Not Correlate With Purchase Intent

Dynamic Logic reports that between 2009 and 2012, the average uplift in purchase intent in response to online ad exposure was 1.3%. Yet, in 2010, DoubleClick reported the average click through rate to be 0.09%. Meanwhile Ted McConnell from the Advertising Research Foundation conducted an experiment last year in which he found that the average click through rate for a blank banner was 0.08%. Moreover comScore and Pretarget published the results of a study last year that found the Pearson correlation between click through rate and conversion to be 0.01 (a 0 result would mean there is absolutely no correlation, while 1.0 would signify the strongest possible correlation). These findings confirm the results of previous studies, including a 2009 study from Dynamic Logic and Google. The inevitable conclusion is that online advertising builds brands whether or not users click on them.

Video is More Effective, In-stream, Even More So

Leonie Gates-Sumner from Millward Brown presented data last year showing that video generates an increase in purchase intent at first exposure nearly twice that of rich media units and six times that of standard units (image and flash). In addition, research from Dynamic Logic suggests that in-stream video is better at generating brand awareness than non-in-stream video.

Synergy is Essential as All Media Duplicate Reach

There have been many claims over the past 16 years that digital media would one day usurp previously existing media. In fact research suggests that consumers have not given up their old media habits but rather have simply added more time for new and emerging media. Most recently Millward Brown found virtually zero unduplicated reach across TV, online and Facebook for the audience of a major FMCG brand. What this means for brand marketers is that cross-media synergy is no longer an option. Brands must be publicized across all media, and creative executions must work together to create strong brand association networks in the minds of consumers.

The Jury is Still Out on Native Ads

Native ads are relatively new and there is precious little data on their effectiveness. However a few prominent individuals from the publishing side of the equation have expressed strong views about the new medium. The criticism appears to be either that consumers will lose their trust in the news media or that they will simply ignore the ads. Both of these assertions are highly dubious especially since neither has thus far been supported by any data. However 16 years of online marketing data would suggest that native ads, being of the large format variety, could indeed be effective. Moreover Nielsen and Sharethrough recently released the results of a study that found that native video ads were better at increasing brand lift than pre-roll ads. It would seem that condemning native ads at this point would be another example of throwing the baby out with the bath water.

Brand marketing is currently undergoing what may turn out to be the most radical paradigm shift in its history. It is unlikely that one column will settle the contentious issues that this transformation is bringing to the fore. Hopefully, however, by reminding us all of the data, this piece will help add substance to the discussion.