with insights from: Dynamic Logic Nielsen Online comScore Microsoft/Atlas Google Compete

If you believe what you read…

“Demand for display ads has ebbed, particularly as the rate at which consumers click on display ads bottoms out at a fraction of a percentage point.”

5/8/09

“Online display advertising sucks.”

3/10/09

“The demise of a popular but unsustainable business model [online display advertising] now seems inevitable.”

3/19/09

What are we doing here?

“Online display-ad spending will fall in 2009, probably sharply. It will probably fall again in 2010.”

- Henry Blodget

10/20/2008

It’s all so…“The need for innovation became more urgent in November, after Internet advertising saw its first ever quarterly dip… Faced with tight budgets and a difficult economic outlook, many marketers are opting to stick with traditional advertising outlets …because of the Internet’s abysmal click through rate.”

February 26

2001

Sector Shift ’03 – ‘08: Financial services becomes #1, retail declines, auto gains

Source: Nielsen Online

20%

18%

3%

7%

13%

3%

2%

4%

4%

3%

5%

16%

2%

13%

12%

2%

5%

13%

3%

2%

5%

5%

4%

7%

23%

6%

0% 5% 10% 15% 20% 25%

Retail Goods and Services

Web Media

Business to Business

Travel

Telecommunications

Hardware & Electronics

Software

Public Services

Entertainment

Health

Consumer Goods

Financial Services

Automotive 2003 2008

% of Total Online Impressions 2003 vs. 2008

Ad impressions for Automotive increase steadily year-over-year and display seasonality

Total Ad Impressions for Automotive Industry 2003 - 2008

Source: Nielsen Online

Fi-Serve impressions rise dramatically during the period banks begin to falter

Source: Impressions from Nielsen Online vs. S & P Banking Index

Did all those loan ads work too well?

2008 Online Advertisers: The year of Phones and Loans

Top 10 Advertisers 2008: Ad Impressions by Brand During 2008

Source: Nielsen Online

Financial services down YOY for ‘09 – but they are still spending; insurance enters the scene

Top 10: Impressions by Brand 1-2/08 Top 10: Impressions by Brand 1-2/09

Brand Impressions

LowerMyBills.com 1,968,822,000 ConsumerInfo.com 869,059,000 Citibank, N.A. 630,858,000 TrueCredit 357,224,000 LendingTree.com 203,927,000 Travelers Insurance 166,594,000 Countrywide 149,095,000 Allstate 118,959,000 Citi Credit Cards 99,322,000 MBNA Bank 63,704,000

Brand Impressions

LendingTree.com 7,102,587,000GetSmart 3,146,130,000LowerMyBills.com 2,079,711,000ConsumerInfo.com 1,546,808,000Citibank, N.A. 1,163,221,000Orchard Bank 785,641,000WAMU 718,657,000Countrywide 571,346,000GMAC Mortgage 333,794,000Household Bank 275,064,000

Drop off the list in 2009

Insurance enters list in 2009

Source: Nielsen Online

Source: Nielsen Online

Change in Share of Impressions by Industry Jan/Feb 2008 vs. Jan/Feb 2009

Health, B2B & Telecommunications grow strongly in ‘09

10

Source: comScore Ad Metrix, February 2009

Clutter down over 11% 2008 – 2009; must account for some of the volume drop

Great!

Overall trends in ad effectiveness deltas (% impacted) remain stable since ‘06

Source: Dynamic Logic MarketNorms, Last 3 Years, Q4/2008, N=2,380, n=3,889,602;

Source: Dynamic Logic MarketNorms, Last 3 Years, Q4/2008, N=2,380, n=3,889,602; Financial Services Norms, Last 3 Years, Q4/2008, N=277, n=567,275

Trends in Purchase Intent remain stable; Fi-Serve dips in Q4 ’06 and then stabilizes

Ken Mallon SVP Custom Solutions & Ad Effectiveness Consulting, Dynamic Logic

What really matters for brand impact?

It’s the creative: Large variation in performance between best/worst performers

Per

cen

t Im

pac

ted

Source: Dynamic Logic MarketNorms, Last 3 Years, Q4/2008, N=2,380, n=3,889,602

Creative Best Practices Principles

1.Show brand prominently on all frames of the ad

2.Each frame of ad should be able to stand on its own

3.“Reveal” ads are almost always ineffective In the online environment, viewers tune out quickly

You have less than 3 seconds to communicate your message

In reviewing thousands of online creative, reveal ads have consistently worked poorly*There are a few exceptions:

Video ads are much more likely to succeed in this but still risky

Ads with high entertainment or comedic value can be effective

4.Keep the messaging very simple

Creative Best Practices Principles

5.Don’t make people work for the message

6.If your goal is persuasion rather than awareness, be careful not to annoy the site visitor

7.Integrate online creative concepts with offline Use creative elements that are consistent with offline ads

8.Avoid “border” ads – ad sizes that frame the content of a webpage They train site visitors to focus on the center of the page and tune

out ads

Rectangle ad sizes do not frame content and are therefore, more noticeable

Jon Gibs VP Media Analytics, Nielsen Online

Why should online display be bought based on impressions?

Online advertising is broken.

We need to fix it.

Why have we not achieved our goals?

To this point our focus has been on…

This has led to…

How do we fix it?The problem is…

The solution is…

We must recognize that Counting is not the same as Accountability

>Online Driving: CPG Purchase, Ratings, Box Office ,Telco

We must build for Engagement and then guarantee against it

23

Video Total

Campaign Duration {hrs}

% of Total Campaign Duration

Avg. Exposure

Duration per Person {sec}

Average Frequency

Time Per Impression

TOTAL 12,983 100% 9.9 0.2 0.1Site A 2,856 22% 7.4 2.5 0.6Site B 4,934 38% 10.6 4.9 2.7Site C 4,025 31% 8.9 2.8 1.8

Site D - 0%

-

-

- Site E 1,169 9% 11.3 4.6 2.3

Site F - 0%

-

-

-

Time based advertising measures.

Lynn Bolger EVP Advertising Solutions, comScore

Does display have impact on online & offline sales – without a click?

68%

32%

Most people do not click on Display Ads

Clickers

Non-Clickers

Source: comScore, Total US Online Population, July 2007

comScore Tacoda Study: Natural Born Clickers

Clickers follow the 80/20 ruleSource: comScore, Total US Online Population, July 2007

Clickers are predominantly younger (25 - 44) with lower income (under $40K)

Decline in online ad click-through rates

2.50%

0.41%

1.12%

0.20%

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

Rich Media Non-Rich Media

2002

2006

Sources: Doubleclick, eMarketer, Eyeblaster, IAB Research estimates

In 2008, comScore measured click rates as less than 0.1%

Display Ads drive visits to advertiser sites

2.1%

3.1%

3.9%4.5%

3.5%

4.8%

5.8%

6.6%

Week of f irst exposure

Weeks 1-2 af ter f irst exposure

Weeks 1-3 af ter f irst exposure

Weeks 1-4 af ter f irst exposure

Advertiser Site Reach

Control Test

% Lif t: 65.0% % Lif t: 53.8% % Lif t: 49.1% % Lif t: 45.7%

Source: comScore ‘How Online Advertising Works: Whither the Click?’ White Paper, 2008

• Impact is greatest in first week following exposure, but continues over four weeks

29

How Display and Search impact offline retail sales

Higher offline sales lifts are found for search advertising vs. display but when combined the synergy provides even more lift

Source: Norms from the comScore Ad Effectiveness Database, N = 137 Tests

119%

82%

16%

Search andDisplay

Search Only Display Only

Incremental Impact on Offline Sales per (000) Exposed

Advertisers: Are you hitting your target?

Area of improvement

Likely Waste

Source: comScore Campaign Metrix

John Chandler-Pepeljak

Director, Microsoft/Atlas

How do you appropriately attribute conversions?

The Long Road to Conversion

60

90

30

21

14

7

2

1

16.7

18.5

13.8

12.3

10.7

8.4

5.5

2.2

Cu

mu

lativ

e F

req

uen

cy

The Digital Purchase Funnel

Last-Ad ROI and the Purchase Funnel

Social Media, Portals, Video, News,

Entertainment, Sports, Music, Technology, Travel,

etc…

A few Publishers Benefit While the Majority Suffer

Week 1

Week 2

Week 3

Week 4

Week 5+

Search EnginesAffiliates

Aw

aren

ess

Aw

aren

ess

Inte

rest

Inte

rest

Des

ireD

esire

Act

ion

Act

ion

Re

pea

tR

ep

eat

Search & Display combined lift over Search only

Portals Networks Content sites

54% 56%

47%

35%

10% 7%

68%

52%

97%

AOL MSN Yahoo! 24/7 Ad.com ValueClick

CBS Digital

Trip Advisor

weather.com

Impact is especially pronounced on content sites and portals

Source: Microsoft Atlas Publisher/Advertiser data 2008

Short windows = Shortsighted ROI

$Sale

SearchIn-StreamVideo

SocialMedia

Portal

75% of View Conversion Windows are Less than 14 Days

Month 1 Month 2 Month 3

94% more data beyond the last ad.

Ari Paparo Group Head, Advertising Products, Google

How do size and rich media impact performance?

Source: DoubleClick DART for Advertisers, U.S. advertisers, DoubleClick Rich Media in-page and expanding formats only, January–July 2008

Creative Size

0.00%

0.05%

0.10%

0.15%

0.20%

0.25%

Half P

age

Ad (300

x600

)

Large

Recta

ngle (3

36x2

80)

Med

ium

Rec

tangle

(300

x250

)

Wid

e Sky

scra

per (1

60x6

00)

Skysc

raper

(120

x600

)

Recta

ngle (1

80x1

50)

Leader

board (7

28x9

0)

Full Ban

ner (4

68x6

0)

Half B

anner

(234

x60)

Cli

ck-T

hro

ug

h R

ate

020000400006000080000100000120000140000160000180000200000

Are

a (i

n P

ixel

s)

CTR % Area (in Pixels)

Larger creative sizes get more clicks

Source: DoubleClick DART for Advertisers, U.S. advertisers, DoubleClick Rich Media in-page and expanding formats only, April–July 2008

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

4.00%

4.50%

5.00%

Creative Size

Inte

rac

tio

n R

ate

0

20000

40000

60000

80000

100000

120000

140000

160000

180000

200000

Are

a (

in P

ixe

ls)

Interaction Rate %

Area (in Pixels)

Larger creative sizes get more interactions

Half P

age

Ad (300

x600

)

Large

Recta

ngle (3

36x2

80)

Med

ium

Rec

tangle

(300

x250

)

Wid

e Sky

scra

per (1

60x6

00)

Skysc

raper

(120

x600

)

Recta

ngle (1

80x1

50)

Leader

board (7

28x9

0)

Full Ban

ner (4

68x6

0)

Rich Media example: Volvo Twitter ad

Features:• 960x250 expanding unit

• Twitter feed• 360 degree view of the car Volvo XC60s

• Video game highlighting the "City Safety”

Features:• 960x250 expanding unit

• Twitter feed• 360 degree view of the car Volvo XC60s

• Video game highlighting the "City Safety”

Technology:• Produced with DoubleClick Rich Media

Technology:• Produced with DoubleClick Rich Media

Rich Media example: McDonald’s Tandem

Features:• New tandem

mast format 960x250

• McDonald’s first rich media buy on YouTube

Features:• New tandem

mast format 960x250

• McDonald’s first rich media buy on YouTube

Kyle Johnson Director of Media Products, Compete

Seen anything innovative lately?

Display is alive and kicking Nonstop innovation breathes new life into the medium

Ad innovations shape new behaviors Brand advertisers can opt for appealing trade-offs

Viewthrough0.1% 0.3%

KPI conversion24% 12%

Time ∆ on page+ 1:38 + 0:08

Time on Toyota.com7:49 14:34

New possibilities push for new measures of success

A single metric or ratio can miss what’s important

Highly interactive units canbuild awareness / educateandadvance publisher goals

Viewthrough0.1% 0.3%

KPI conversion24% 12%

Time ∆ on page+ 1:38 + 0:08

Time on Toyota.com7:49 14:34

So what is it…

What do we know?

It’s a recession, ad spend online will recover Desperate times call for “innovative” measures

Let’s finally focus on the creative Let’s finally measure appropriately Let’s pay attention to media 101:

Clutter Test!

Question authority – or at least the business media

What crisis? It’s an OPPORTUNITY

Go to:

dpaconference.com

Download the whitepaper

Get the bigger picture…

Contact: kathryn@primaryimpact.com