DM CONFIDENTIAL — Click-through rates, shmick-through rates – who cares about click-through rates?
Display ads are good for leading to direct actions, but they’re also important for building brands. This is nothing new, of course, but a recent panel study conducted by comScore and dunnhumbyUSA unveils even more support for this notion.
The study focused on the effectiveness of online advertising in building retail sales of consumer packaged goods (CPG) brands, “revealing that the Internet can be as effective an advertising medium as television advertising,” according to a comScore press release.
During 12 weeks, the two firms found that online ad campaigns with an average reach of 40 percent of their target audience led to a 9 percent increase in retail sales of the brands advertised.
TV advertising grew sales by 8 percent during 12 months in comparison, according to Information Resources Inc.
comScore and dunnhumbyUSA also note that 80 percent of online ad campaigns showed “statistically significant lift,” compared to 36 percent of TV ads.
“These early results confirm the ability of online advertising to successfully build retail sales of CPG brands on par with the impact of television advertising,” said Gian Fulgoni, executive chairman of comScore.
“It is likely that the more precise targeting ability of the Internet – especially in terms of accurately reaching the desired demographic segment — is a key reason for its effectiveness. That is meaningful in and of itself, but when you take into account the fact that online advertising is generally less costly than television, these results take on even greater significance.”
“The results should remind marketers that the click is not the only metric of success,” noted eMarketer in its discussion of the study’s results.
Mark Walsh at MediaPost notes that “CPG companies have traditionally lagged behind other sectors such as financial services and automotive. Last year, the CPG and food products category accounted for only 6%, or $1.5 billion, of the $23.4 billion spent on online advertising last year — up from 4%, or $925 million, in 2007.”
While there is pressure to focus more on clicks, it is easy to push against that tide by pointing to this and other studies that focus on the importance of online ads for building brands for later action and favorable impressions.