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Impacts and ROI of Internet Local, Classifieds, and Directory Advertising Research and Analysis from comScore Networks, Inc. March 13 th , 2006
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Page 1: Iab Comscoreexecpreso

Impacts and ROI of Internet Local, Classifieds, and Directory Advertising

Research and Analysis from comScore Networks, Inc.March 13th , 2006

Page 2: Iab Comscoreexecpreso

Agenda

Overall Study Objectives

Methodology Review

Summary of Results Addressable Market and Opportunity Ad Effectiveness Summary

• Conversion

• Return on Investment

• Other Advertising Impacts

Value of Consumer Target

Key Conclusions and Implications

Page 3: Iab Comscoreexecpreso

Study Objectives

Measure the effectiveness of classifieds, directory, and local advertising on the Internet: Across a variety of representative industries Incorporating all aspects of ROI including impressions linked to

offline value and branding Considering metrics related to sales, awareness, and branding

Using a high quality methodology that: Reflects real market conditions Provides a non-artificial test environment to the extent

possible Offers adequate sample for statistical significance

Page 4: Iab Comscoreexecpreso

Why Case Studies?

Each publisher has a unique business model Cost-per-lead Flat listing fees Dramatically different industries

“Marketer” has a different meaning across each publisher Cars.com focus is on “dealerships” collectively Verizon Superpages.com focus is on small

businesses organized by category CareerBuilder.com focus is on employers of

“Top 4 Accounting Firm” and “Leading International Bank”

Yahoo! Local focused on “Ford Rental”

No comparisons to other mediums Cost prohibitive Difficult to collect

Page 5: Iab Comscoreexecpreso

Participating Publishers and Marketers

Page 6: Iab Comscoreexecpreso

Agenda

Overall Study Objectives

Methodology Review

Summary of Results Addressable Market and Opportunity Ad Effectiveness Summary – Case Studies

• Conversion

• Return on Investment

• Other Advertising Impacts

Value of Consumer Target

Key Conclusions and Implications

Page 7: Iab Comscoreexecpreso

Step 1: Study Details By Publisher

10 publisher and marketer combinations testedPublisher MarketersCars.com Car Dealerships Around the CountryCareerBuilder.com Big 4 Accounting Firm and a Major International BankYahoo! Local Ford Rent-a-CarVerizon Superpages.com Hospitality, Real Estate, Retail, Prof. Services, Autos,

Retail

Population: Total U.S. Passive Data Collection: January 2005 through September 2005 Survey Field Dates: June through September 2005 POLK Data Match: April 2004 to June 2005 Sample Sizes:

~ 200 survey completes per cell on average (ranging from 138 to 256) ~ 1,000 to 60,000 passive ad exposures per cell~ 165,000 records matched to POLK automotive database

Page 8: Iab Comscoreexecpreso

Step 2: Passively Track Exposure

Example of Listing Exposure at

Page 9: Iab Comscoreexecpreso

Step 3: Create Test and Control Cells

Survey Test – Control Design For comScoreQ2 conducted 355 Internet surveys in the US from August 31, 2005

through September 19, 2005.

Definition Sample Size

Test GroupRespondents ages 18 and up who have used CareerBuilder.com to search for a job in the past 6 months.

217

Control Group

Respondents ages 18 and up who were aware of CareerBuilder.com, but who used other sites to search for a job in the past 6 months.

138

Page 10: Iab Comscoreexecpreso

HI

NM

CA

WA

ID

WY

CO

ND

SD

NENV

UTKS

OK

MN

WI

IL

MI

OHIN

FL

GA

AR

MS AL

SC

NY

TN

KYMO

IA

VA

TX

AZ

MT

LA

PA

ME

WV

OR

NC

NH

MD

CT

NJ

RI

MA

DE

VT

Full Coverage of new and used vehicle salesPartial Coverage of new car sales. No used car sales information.

AK

Step 4: Automotive database match

POLK covers ~ 70% of new and used car sales in the U.S.

Page 11: Iab Comscoreexecpreso

Step 5: Targeted surveys for offline details

SurveySection Screener Awareness

& Usage Perceptions Demographics

- Eligibility

- Age

- Gender

- Brand awareness

-Unaided

-Aided

- Ad recall

- Usage

- Action (s) taken

- Likelihood to re-use

- Likelihood to recommend

- Attribute ratings

- Overall impression

- Impact of advertiser

- Frequency of local search

- Tenure of local search

- Education

- Annual household income

- Zip location

SURVEY FLOW FOR ALL STUDIESm

etr

ics

Page 12: Iab Comscoreexecpreso

Step 6: Passive Data “Funnel” Analysis:

Funnel to conversion for Ford rent-a-car

Searched Keywords

yp.yahoo.com

Saw Ford Rental

Listing & Clicked

Thru to DealerLocator Page

Clicked Thru to

Search for Availabilit

y

Online Clicked Thru to

Rent CarOffline

Phone or Visited

Dealer to Rent Car

RentedCar

Page 13: Iab Comscoreexecpreso

Agenda

Overall Study ObjectivesMethodology ReviewSummary of Results Addressable Market and Opportunity Ad Effectiveness Summary

• Conversion• Return on Investment• Other Advertising Impacts

Value of Consumer Target

Key Conclusions and Implications

Page 14: Iab Comscoreexecpreso

Monthly Market Penetration and Size

The majority of the Internet population is now using directories

Even unique life events (like car buying or job seeking) are common

0

25,000

50,000

75,000

100,000

125,000

150,000

Directories/Resources

Automotive Careers

Un

iqu

e V

isit

ors

(M

M)

Source: comScore MediaMetrix; Total US Internet February 2006

72% Reach

29% Reach 27% Reach

Page 15: Iab Comscoreexecpreso

Cumulative Reach by Category

Over a 6 month period, the cumulative reach continues to grow

Offering marketers a huge opportunity to touch consumers74%

83%87% 89% 90% 92%

53% 56%61%

53%58%

62% 65%

48%41%

29%

45%

32%

5-Aug 5-Sep 5-Oct 5-Nov 5-Dec 6-Jan

Directories / Resources Careers Automotive

Source: comScore Marketing Solutions; Total US Internet January 2006

Page 16: Iab Comscoreexecpreso

Five Month Retention By Category

Retention remains strong even over long periods of time Once engaged, it’s clear consumers value these category

resources 85% 83% 81% 81%

50%45%

39%46%

52% 49% 46% 47%

87%

55%58%

5-Sep 5-Oct 5-Nov 5-Dec 5-Jan

Directories / Resources Careers Automotive

Source: comScore Marketing Solutions; Total US Internet January 2006

Page 17: Iab Comscoreexecpreso

Agenda

Overall Study ObjectivesMethodology ReviewSummary of Results Addressable Market and Opportunity Ad Effectiveness Summary – Case Studies

• Conversion• Return on Investment• Other Advertising Impacts

Value of Consumer Target

Key Conclusions and Implications

Page 18: Iab Comscoreexecpreso

Case Study: Yahoo! Local and Ford Rental

Business Model Pay-per-listing model Objective to drive converting consumers to Ford Rental site

Conversion Funnel Search for Car Rentals 100% Clicked on Ford Listing 40% Availability Check 31% Requested Rental 5% Converted Online 3%

ROI Calculation: Total revenue over total cost Projected consumers exposed to a listing Conversion both online and offline Calculate total dollars in rentals for Ford Divided cost of Yahoo! Local Listing

Page 19: Iab Comscoreexecpreso

Source: comScore Marketing Solutions; Total US Internet October 2005

3.2%3.8%

Total Conversion is 7%

Nearly 40% ofConversionOccurs offline

Case Study: Yahoo! Local and Ford RentalConversion Results

ROI calculations must include offline conversions

Online Offline

Page 20: Iab Comscoreexecpreso

Case Study: Yahoo! Local and Ford RentalConversion Results

What prevents consumers from converting online? Availability and selection of rental cars This is a potential revenue loss of ~$1.3 Million* per month

Online

* Monthly UV’s exposed to Ford x drop of rate during availability check x average revenue per car rental

Page 21: Iab Comscoreexecpreso

Case Study: Yahoo! Local and Ford Rental Cars ROI Conclusion

The average price of a rental car transaction is $130 according comScore eCommerce data

Ford ROI is strong even at much lower average transaction sizes

Source: comScore Marketing Solutions; Total US Internet October 2005

8.7X ROI7.8X ROI

6.5X ROI

$100 $117 $130

$$ Per Rental

Page 22: Iab Comscoreexecpreso

Case Study: CareerBuilder.com, Accounting Firm and International Bank

Business Model Pay-per-listing model Objective to connect employers with qualified job seekers

Conversion Funnel Accounting Firm Bank Saw Job Listing 100% 100% Applied online and offline 35% 36% Interviewed 13% 20% Received Job Offer 2% 14%

ROI Calculation: Cost Per Job Offer Job seekers viewing listing pages Conversion to application, interview, and finally job offer Total cost of job listings Costs divided by offers made = Cost Per Job Offer

Page 23: Iab Comscoreexecpreso

Case Study: CareerBuilder.com Cost Per Job Offer Made ROI Calculation

Cost per job offer made based on listing fees of $389 Differences driven by number of listings, job appeal, and

brand equity

Source: comScore Marketing Solutions; Total US Internet October 2005Accounting Firm International Bank

$283

$30

Median permanent placement fee via staffing firm/recruiter: $8,592

Source: Staffing Analysts Industry, Inc. - 2005

Average length of time to fill a position: 30 Days

Source: The EDGE Report – August 2005

Page 24: Iab Comscoreexecpreso

Case Study: Verizon Superpages.com

Business Model Pay-per-listing model Objective to connect consumers with a local service provider

Conversion Funnel Retail Category Example Viewed listings page 100% Clicked listings detail page 25% Took an online action 8% Took an offline action 17%

ROI Calculation: Total revenue over total cost Projected number of listings viewers Number of leads converting online and offline Calculate total revenue generated Divided total cost of listings

Page 25: Iab Comscoreexecpreso

Site Reach By Listings Category:Based on Search Activity

41.7%

29.2%

16.6%

6.8% 4.0% 1.8%

Hospitality ProfessionalServices

Retail/ Shopping Automotive Real Estate Constructionand Contractors

Case Study: Verizon Superpages.comSite Reach By Category

Majority of Listings Views are in Hospitality (41.7%) Higher consideration categories are less frequented

Source: comScore CMS, Total Internet Population, Average Monthly EstimatesBase: ~60,000 Directories Users between January 2005 July 2005

Page 26: Iab Comscoreexecpreso

Case Study: Verizon Superpages.comTotal Conversion By Category

Conversion varies dramatically by category High conversion categories linked to an “immediate need”

Total Conversion By Listings Category:Based on Listing Page Exposure

25.0% 25.0%21.3%

13.3% 12.7%6.4%

Retail Automotive Hospitality ProfessionalServices

Real Estate Construction &Contracters

Source: comScore CMS, Total Internet Population, Average Monthly EstimatesBase: ~60,000 Directories Users between January 2005 July 2005

Page 27: Iab Comscoreexecpreso

Case Study: Verizon Superpages.comROI Summary By Category

Source: comScore Marketing Solutions; Total US Internet October 2005

$0

$5

$10

$15

$20

$25

Hospitality Retail Real Estate Automotive Prof. Services Construction &Contractors

Average ROI is across all categories $10.60 for every $1 spent

$22.54

$18.85

$13.60

$1.93 $1.21$0.31

Page 28: Iab Comscoreexecpreso

Case Study: Cars.com

* 35 States that report all new & used car sales

Business Model Subscription model Objective to connect dealers with

prospective car buyers

Conversion Funnel Viewed dealer listing pages

100% Searched for vehicle Viewed detailed vehicle listings Contacted a dealer

Converted Offline 38%*

ROI Calculation: Cost Per Sale Number of unique visitors viewing dealer listings Percentage converting based on POLK data

match Number of vehicle sales to Mid/Low funnel

visitors Total listing costs divided by total sales =

cost per sale

Page 29: Iab Comscoreexecpreso

Case Study: Cars.com ROI Conclusion

cost-per-sale 7.7 X more cost effective than the industry average**

*Source: NADA 2005

$68

$493*

Cars.com Industry Average

Cost Per Sale

**Dealerships all media channels

Page 30: Iab Comscoreexecpreso

Marketer Site Metrics (Lift)

Marketers often improve their branding among consumers vis-à-vis the favorable environments provided by the publishers

MetricFord Rent-a-Car on Yahoo! Local

International Bank on

CareerBuilder.com

Accounting Firm on CareerBuilder.com

Favorable Overall Impression

7% 10% -1%

Likely to Use Again

12% 10% 4%

Likely to Recommend

15% 11% -1%

Is a Name I Trust 10% 9% -2%

Lift=Metric (Test)-Metric (Control)

Q (Ford Rent-a-Car, Bank, Accounting Firm, Cars.com): What is your overall impression of_________?Q (Ford Rent-a-Car): How likely are you to use _____the next time you rent a car?Q (Bank, Accounting Firm): How likely are you to search the _____job listings the next time you search online for a job?Q (Cars.com): How likely are you to search on Cars.com the next time you search online for a new or used vehicle?Q (Ford Rent-a-Car, Bank, Accounting Firm, Cars.com): How likely are you to recommend_________ to a friend, family member or colleague?Q: Please indicate the extent to which you agree or disagree with the following statements, Attribute rating: I trust this brand.Base=Respondents aware of marketer

Page 31: Iab Comscoreexecpreso

Other Ad Effects (Lift)

Even ad recall, a high hurdle for an online listing, jumps among test consumers in a few select cases

Marketers can impact ad recall if focused on the limited creative element

Most respondents who visit these sites take some desired action – few are “just browsing.”

Other EffectsFord Rent-a-

Car on Yahoo! Local

International Bank on

CareerBuilder.com

Accounting Firm on

CareerBuilder.com

Dealerships on Cars.com

Recall Online Advertising

-1% 5% 11% 17%

Took Action1 91% 76% 91% 55%

Lift=Metric (Test)-Metric (Control)

Q (Ford Rent-a-Car, Bank, Accounting Firm): Where have you seen or heard the following _________advertised or promoted in the past 6 months?Q (Cars.com): Where have you seen or heard the following _________advertised or promoted in the past 12 months?Q (Ford Rent-a-Car, Bank, Accounting Firm, Cars.com): What action did you take, if any, after visiting _________?Base=Respondents aware of /used marketer

Notes 1-Asked of Test Group respondents only;

Page 32: Iab Comscoreexecpreso

Other Ad Effects (Lift)

Most recall Verizon Superpages.com online advertising.Overall, Verizon Superpages.com experiences an 18 point lift across the board.

Other Effects

Real Estate

Professional Services

Automotive

Trade Services

Hospitality

Retail

Recall Online

Advertising14% 19% 16% 9% 19% 23%

Lift=Metric (Test)-Metric (Control)

Q : Where have you seen or heard the following sites advertised or promoted in the past 6 months?Base=Respondents aware of /used Verizon Superpages.com

Page 33: Iab Comscoreexecpreso

Agenda

Overall Study ObjectivesMethodology ReviewSummary of Results Addressable Market and Opportunity Ad Effectiveness Summary

• Conversion• Return on Investment• Other Advertising Impacts

Value of Consumer Target

Key Conclusions and Implications

Page 34: Iab Comscoreexecpreso

Agenda

Overall Study ObjectivesMethodology ReviewSummary of Results Addressable Market and Opportunity Ad Effectiveness Summary

• Conversion• Return on Investment• Other Advertising Impacts

Value of Consumer Target

Key Conclusions and Implications

Page 35: Iab Comscoreexecpreso

Key Conclusions

Online Classifieds and Local Advertising is a highly effective form of advertising The case studies show positive ROI

The majority of the value of online advertising is realized via offline sales Tracking offline conversion is critical to fully understand ROI Secondary branding impacts are often present

User experience is critical to converting consumers Significant attrition occurs in the case Marketers must take care not to neglect the online use

experience

Page 36: Iab Comscoreexecpreso

Key Conclusions (continued)

Marketers must recognize the size and scope of the online local marketplace All forms of local advertising reach a significant portion of

consumers The channel “flow” may be reversing – online pushing to

offline?

The local space attracts highly valuable consumers More likely to convert – online AND offline Higher income More likely to spend time online than average (which means

they are spending less time in offline channels)

Page 37: Iab Comscoreexecpreso

Key Implications

Classified and local search listings must offer consumers multiple ways to complete sale 40% of Ford’s car rentals were completed offline…by phone,

email or dealer address provided in listing

Classified and local search listings are not just about moving product today, but about impacting brand image Ford and an international bank saw 15% and 11% increases

respectively in “likelihood to refer brand to a friend” Ford and an international bank saw 10% and 9% increases in

“trustworthiness of brand”

Classified and local search listings must sell not just list Ads must provide product/service benefits and availability

Page 38: Iab Comscoreexecpreso

Thank you

IAB Research

Doron Wesly

Director, Industry Research

+1 (212) 380-4714

[email protected]

comScore Networks

Erin Hunter

Senior Vice President

+1(650) 244-5408

[email protected]


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