Top Tactics to Boost Online Ad Response Rates
The online ad market is not looking well these days --- it is declining faster than expected and marketers aren't likely to increase their spending next year. There was only a 0.6% growth in Q3 online ad revenue for the top four Web companies, down from 12.7% last year. Many advertisers have not even set their online ad budgets for next year, and some are already cutting their Q4 budgets across the board. On the positive side, ads are moving from traditional media, such as print and radio, to performance-based display ads, ad exchanges and search advertising (as well as quality and vertical ad networks.)
So how can a marketer best utilize what is left of his/her online advertising budget in this situation? Let's start by looking the preferred online ad formats so you can make sure you're able to reach your target audience in the format to which they're most likely to be attentive.
According to an iPerceptions survey (covered by eMarketer, ClickZ and MediaPost), current ad formats aren't very effective as "the world is suffering from banner blindness, people don't click on banner ads anymore, (and) video ads are not popular with most consumers." That said, text ads are most likely to draw users' clicks, with 25% likely to click a link. The only other format that comes close is the right side banner with 20% likely to click it. Other ad formats don't perform nearly as well. Only 12% are likely to click on a top-banner, 11% for video ads, 7% for interactive units and 4% for interstitials.
40% of users who were likely to click on any type of online ad made less than $50K per year, and only 15% made over $150K. Video ads drew even more respondents with lower incomes: 49% of those likely to click on video ads made less than $50K per year and only 13% made over $150K. 33% of weekly visitors and 29% of daily visitors to a Web site are likely to click on text ads, compared to 15% of monthly visitors and 17% percent of first-time visitors. One final finding --- 31% of those under 25 are likely to click on a video ad, compared to 21% for those aged 25 to 34, and 14% for 35- to 44-year-olds.
Bottom-line: since they can't count on current ad formats so marketers need to "start looking at things like direct content integration and product placement. There's still a place for things like banners and skyscrapers, but it's much more about brand awareness than inducing conversions." An additional issue raised by this study is whether "the click should be the focal point for determining a campaign's success, regardless of the ad unit," or whether marketers should look at cost-per-action (CPA)-based models, as well as "more holistic measurements, including clicks, CPM, and other factors taken together."
To that last point, comScore research shows that online ads do indeed have a significantly greater impact "than a typical 0.1% click through rate would suggest," as clickthroughs don't take into account the impact of online ads through "view-throughs" on future consumer attitude and behavior, as well as overall ROI. The effectiveness of online ad campaigns in meeting "branding objectives such as heightened brand awareness, improved attitudes toward the brand, and increased purchase intent, results ultimately in incremental purchasing."
According to the study, online ads "typically lifts online sales by 27% for two weeks to three months, (and) the lift in offline sales is typically 17%." Exposure to ads also increases site traffic (65% for one week and 46% over a period of four weeks) and online searches for trademark products (52% in the first week and 38% in the first four weeks). Bottom-line: "Not only does online marketing have the benefits of more attractive advertising rates and a faster growing retail channel, but it's clear... that Internet marketing also generates incremental sales in retail stores."
Considering all this data (good and bad), here are three articles that provide practical tips that you can use to improve the performance of your online advertising campaigns. E-commerce Guide offers "Eight Free Tools for Tuning Up Online Ad Campaigns" in order to boost visits and purchases, while Chief Marketer explains what advertisers of all sizes should look for in online ad exchanges and ad networks in order to achieve relevance in your ads and "gain the most efficient and successful audience targeting and reach." The third, from ClickZ, recommends the integration of direct response platforms (data collecting components and back-end analytics) into online banner ads using video.Finally, here's a MarketingSherpa report that demonstrates the design elements you should use to maximize the effectiveness of your online ads:
- Emotional - adding a picture of a person is the single most effective way to communicate brand information - improving response rate by more than 50%
- Utilitarian - adding data entry fields such as email sign up or product search also improves response by more than 50%, while adding a video so you can "pack more information into an ad" improves it by nearly 50%.
- Efficient - adding drivers such as more dynamic XML text to "match relevant messages to more exposed individuals, reducing wasted media" also improves ad response by nearly 50%, similar to adding interactivity to the ad campaign.
Posted by Universal Ad
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