Live from Ad:Tech: Online Marketing Drives Offline Sales

(Direct Newsline)—Being able to prove the efficacy of online advertising and its ability to create additional offline sales is a hurdle the marketing industry is looking to clear.

“Why do marketers advertise online? Over 30% of them explicitly say they want to influence offline sales,” said Rebecca Lieb, executive editor, ClickZ Network, New York, at AD:TECH Chicago, which ended yesterday.

“One of the problems that brick-and-mortar [stores] are having is they don’t really know how to measure the impact of online advertising and [how it] translates into offline sales. When they do think they are measuring it, we have found that they’re really not measuring it very well. They are using unreliable or inaccurate methods,” Lieb said.

The Internet ranks third in terms of overall media consumption behind television and radio, and it is twice as important in terms of overall time spent than magazines and newspapers combined, according to Steve Warshaw, VP-business development for ACNielsen, New York. But the consumer packaged goods (CPG) industry has not taken advantage of the medium.

“When you take a look at the overall spending level … we see for the various industries, finance and technology are over 15%, automotive is close to 10% and CPG is under 2%,” Warshaw said. “There is a real difference between how much online spending is going on from that industry versus how much time consumers are [spending online].”

Consumer Direct Online is a collaborative effort between ACNielsen Homescan and Yahoo!, which has “the goal of making marketing dollars work harder,” he said. “Not just the online dollars, but to take some of the offline money and move it to online by showing it’s a more effective way to spend the media money.”

ACNielsen Homescan is a panel of 62,000 households that tracks everything consumers buy with a UPC code on it, regardless of where they purchased it. ACNielsen measures what is being purchased while Yahoo! provides the reach and the ad impressions.

“What we’re doing with Consumer Direct Online is combining the media capability that Yahoo! has with our capability to match up both sides of the equation. We [do the] targeting on the front end of the media and we do measurement on the back end of the media,” Warshaw said.

The point is to target the people who are going to buy certain products and not waste advertising dollars by targeting those people who will never buy the product regardless of how great the advertising promotion is, Warshaw said.

“Schedule the reach and frequency so you can maximize the impact, control how often people see the ads and, most importantly, … measure offline sales changes down to the household level and be able to show what the ROI on the campaigns are. That’s the concept behind Consumer Direct Online,” Warshaw said. “Eventually what we hope to do is bring accountability to the medium—to show that online space is an established way of advertising a product in the CPG industry.”

Stephen Kim is the director of advertising sales research for Microsoft Corp., Redmond, WA, and he has been involved with studies involving brands such as Kraft Jell-O, Nestlé Coffee-mate and Ford F150 trucks.

“We have been creating experimental designs where we look at test and control groups of folks who were exposed to the online advertising of Jell-O, Coffee-mate and the Ford F150 and control groups who never saw those campaigns and we were looking at the sales between the two,” said Kim.

The study ran for three months ending in January and there was a lift in sales in all three cases, according to Kim. The Jell-O brand saw a lift of approximately 7.5% in volume sales, Coffee-mate’s sales increased 10%, and 6% of the overall sales of the new Ford F150 truck could be attributed to online ad exposures, he said.

“What exactly is it about these campaigns that made them so successful? It’s not all about the medium. It’s still about creative. It’s still about smart execution and the strategy behind the campaign. [But] we can conclusively say now that there is an offline sales impact for online advertising,” Kim said.