Online advertising falls short on effectiveness

Krystal Peak · October 3, 2011 · Short URL:

Nielsen finds that more impressions aren't always better

Target advertising

Two Nielsen studies, released Monday, are showing that higher clicks don’t directly equate to more dollars online advertising effectiveness has a long way to go.

As more advertising dollars move online, it is clear that some marketing teams are poised for more success in the space than others.

Nielsen found that certain websites with “accurate user data and a high level of user authentication” are better able to make their advertisers happy. The sites that were applauded for their ability to make their advertisers smile were ESPN, Facebook, The New York Times, The Wall Street Journal and Yahoo.
But even if advertisers are targeting the people that are in their product or service sweet spot, Nielsen found that judging the effectiveness of such ads has much left to be desired.

Since many internet advertisements reach millions, if not hundreds of millions, the trick has been to find out the best way to narrow the focus to a target group. In this study, Nielsen focused on a beauty product campaign that was on a site that received 213 million impressions but when you look at the actual number of people that saw the ad, the number dropped to 40 million and then you look at how many of those people are in the target group the product aimed to reach, and the number then drops again to 10.5 million.

In other words, a marketing company could have paid for 200+ impressions when they only reached 10.5 million people in its target group.
Effectiveness is always a concern since advertising is a very specific numbers game that either equates to more sales or it doesn't.

The second Nielsen study focused on whether clicks online equate to more dollars being spent on a given product. Researchers found that there was “virtually no relationship” between clicks and offline sales but online campaigns can impact brand awareness and ad campaign awareness (both good and bad.)

Apparently, there is a small, but positive relationship between a click and a consumer’s ability to remember a particular ad campaign but the correlation is still weaker than Nielson and advertisers were expect (or like).  

While all advertising campaigns that Nielsen deemed “strong” efforts equated to more positive consumer feedback in recall, brand recognition, purchase consideration and favorability, less than 5% of people exposed to those ads had a greater urge or consider purchasing the item.

Since this looked at how users responded to different ad campaigns, Nielsen found that some ad campaigns were “very successful across all metrics, some campaigns succeed only on certain dimensions, and others underperform across the board,” thus their marketwide suggestion is to diversify the platforms used for marketing and continue to track results.

Luckily, one of the greatest benefits of the internet is the ability to quickly adjust campaigns and strategies as more analytics are available but most marketing companies are likely leafing through these numbers lacklusterly.
Nielsen was not immediately available to comment.
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