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The Online Display
Advertising Ecosystem
Understand the true value of display advertising, and how
best to optimize it.
February 2013 ° Mediative.com
2
About Mediative
Mediative is a digital marketing company providing performance services and access
to media platforms.
Organizations who want to significantly enhance their digital presence and influence
buyers turn to us to help generate revenue by quickly moving their targets from
awareness to purchase.
Location and research-based data fuels our insight, which we leverage across our
consultative performance services, online properties, and location based marketing
platforms in the dynamic digital world.
With precise and unmatched knowledge of how “shoppers and clients buy”, we take
a consultative and holistic approach, based on our people’s passion for insight and
results, to provide the outcomes you need now, and for the future. Mediative has
over 150 employees across four Canadian offices: Montreal, Toronto, Kelowna and
Vancouver. Mediative is a Yellow Pages Group company. For more information, visit
www.mediative.com
About the RBC Financial Group Chair of Ecommerce
of HEC Montreal
The RBC Financial Group Chair of Ecommerce has the mission to develop and spread
cutting-edge expertise and knowledge about Canadian consumers’adoption and use
of new technologies. Louis Chaussé and Sylvain Sénécal (ss@hec.ca) contributed to
the white paper. For additional information, consult www.chairerbc.com
3
Objectives
This paper aims to describe the various aspects and best practices of online display
advertising to better understand the real value of this type of promotion, and to improve
its performance, both in terms of branding and response rates. Mediative worked with
the RBC Financial Group Chair of Ecommerce - HEC Montreal to conduct a review of the
academic and managerial literature on the subject.This exercise has enabled us to arrive
at a description of an online display advertising ecosystem which is presented in the
following pages.
highlights
•	 Online display advertising should be used together with paid search (PPC) for
maximum advertising impact, since the combined effect greatly exceeds the effect
of each one in isolation;
•	 Advertising that is not fully exploited is not necessarily ineffective;
•	 Reaction to the form of presentation directly affects the internet user’s attitude
towards the advertising itself;
•	 Flash banners stimulate users by shortening the time to process those decisions
where several factors need to be considered;
•	 Online sponsorship is most effective when the sponsored content is in line with the
products or services provided by the brand sponsor;
•	 Display advertising must be approached differently on mobile platforms;
•	 Adexchange,real-timebiddinganddatabaseaudiencetargetingarenewtechnologies
revolutionizing the world of digital marketing, forcing marketers to change their
methods of digital advertising.
Executive Summary
4
Table of Contents
executive summary........................................................................ 03
Introduction : a definition.................................................... 05
online advertising blindness............................................... 08
Research Methodologies in Online Advertising......10
formats...................................................................................................11
performance measures...............................................................15
Types of creatives............................................................................19
context...................................................................................................25
exposure to advertising............................................................27
trends.....................................................................................................29
5
Displayadvertising,atermcommonlyusedinthemarketing
world, was the first type of advertising to appear on the
Internet. It made its appearance in the form of banners,
drawing heavily on the printed advertising already seen
for a long time in newspapers and magazines. In the mid
1990s, with the democratization of the Internet, banners
began to be appear at the periphery of the main content of
web pages.Incidentally,the first banner to be placed online
was an advertisement for AT & T published on HotWired on
25 October 1994 (see Figure 1). 1
Online display advertising has evolved over the years,
particularly in offering new formats (e.g., pop-ups, rich
media) and contexts (e.g., online games), and adapting
to new platforms (e.g., mobile devices). Multiple versions
of display advertising have allowed it to remain popular
despite its age (almost 20 years) and the propagation of
competitivechannelsandmedia.Infact,displayadvertising
remains the second choice for placing advertising online
after PPC (pay-per-click or paid search), dominated by
services such as Google AdWords. Moreover, according to
eMarketer forecasts (see Table 1 and Graph 1), this ranking
will remain the same over the next four years.
a definition
Introduction
Methodology:Estimates based on analysis of data from the Internet Advertising Bureau of Canada (IAB Canada), estimates from other research firms, and trends in consumer usage of the
Internet.
Note:Canadian projections of online ad spending from eMarketer refer to data from IAB Canada for which the last full year measured was 2010;mobiles are excluded; converted at U.S. $ 1 =
CAN $ 0.99;numbers in % may not equal 100% due to rounding.
Figure 1: The very first banner in 1994
6
a definition
Introduction
Graph 1: Online advertising expenditure in Canada, by format, 2010-2016 ($US millions)
Table 1 : Online advertising expenditure in Canada, by format, 2010-2016 ($US millions and % of Total)
2012 2013 2014 2015 2016
PPC $1 261,20 40.60% $1 427,70 40.50% $1 567,80 40.50% $1 722.70 40.50% $1 844.20 40.50%
display
advertising*
$910.40 29.30% $1 014.80 28.80% $1 100.70 28.40% $1 200.10 28.20% $1 284.10 28.20%
Classified
ads and
directories
$776.80 25.00% $866.80 24.60% $930.20 24.00% $995.80 23.40% $1 033.70 22.70%
video $142.90 4.60% $197.30 5.60% $259.70 6.70% $319.20 7.50% $373.40 8.20%
email** $12.70 0.40% $13.40 0.40% $13.60 0.40% $13.60 0.30% $13.70 0.30%
other $3.10 0.10% $3.50 0.10% $3.90 0.10% $4.30 0.10% $4.60 0.10%
total $3 107.10 $3 523.50 $3 875.80 $4 255.60 $4 553.50
Source:eMarketer, April 2012.
* banners, direct response / lead generation, rich media, sponsorship;**integrated advertising only.
Source:eMarketer, April 2012.
PPC
Classified Ads / Directories
Email**
Display Advertising*
Video
Other
7
A study by comScore, however,
shows that combined use of PPC
and display advertising is far more
effective than either of these forms
of advertising used individually. As
Graph 2 indicates, companies would
benefit if their expenditure on display
advertising were equal to that of
search type advertising, which is not
currently the case, according to data
from eMarketer. In addition, this figure
shows that online ads have an impact
on offline sales.
The fact that display advertising is in
the shadow cast by PPC shows that
even if it has been an alternative for
advertising placement for several
years, online display advertising is
still questioned, and its role and
usefulness are misunderstood.
Its value is questioned due to the
existing methods for measuring its
performance. For example, click-
through rates, a unit widely used
to measure online advertising
campaigns, are often quite low,
creating doubts in the minds of
advertisers as to whether their
investment is really worth it.
To contribute to the definition of an
online advertising ecosystem, we
conducted a review of the academic
and management literature covering
thirty studies on the subject. This
whitepaper shares the best practices
which can enhance the performance
of online display strategies.
a definition
Introduction
Graph 2: Percentage increase compared to a control group that was not exposed to advertising3
3
comScore, Harvard Business Review, April 2008.
@mediative
Online display advertising and PPC combined perform better than when used separately.At Mediative,
we have known this for a long time and offer both! http://mediative.com/services/pay-per-click
Visits to the
advertised brand’s
website
Sales made to online
customers
Sales made to offline
customers
Consumers exposed to
display advertising only
Consumers exposed to
search advertising only
Consumers exposed
both types of
advertising over the
same period
% Increase over Control Group
8
One of the main reasons for questioning online display advertising effectiveness is the existence of a phenomenon called
banner blindness that occurs especially when the chosen advertising format is located at the periphery of the main content
and not predominantly on the page.As its name suggests,display banner blindness is simply the belief that people neither
see nor look at advertising.This section aims to explain this belief, and above all put it into perspective.
Online Display Advertising Blindness
There are two types of advertising
avoidance.29
The first is physical
avoidance such as “zapping” the TV, or
in interactive media closing a pop-up
type window, or clicking on “skip this
ad” to go to main content of a video
or a website. In general, one engages
in physical avoidance of advertising
when it is mostly or entirely above the
main content (TV or video advertising,
pop-up ads and interstitials, etc.).
These ad formats can be qualified
as intrusive since they expose their
content without the consumer having
expressed any interest in seeing them.
The second form of advertising
avoidance occurs when consumers
unconsciously avoid looking at ads
within their field of vision.This form of
so-called cognitive avoidance applies
chiefly to media and advertising
formats where advertising is
integrated into the main content and
takesuponlyaminorpartofthedisplay
space. It thus competes with the main
content and other ads if there are any.
Advertising media to which cognitive
avoidance applies are advertisements
in newspapers or online formats such
as banners, skyscrapers, floating ads,
etc. These ad formats are considered
to be voluntary since if people are
open to,and fully look at the content,it
is by choice, desire or interest. Banner
blindness refers primarily to the latter
type of advertising avoidance.
The findings of several studies tell us
more about how this phenomenon
takes place. One study2
argues that
consumer interaction with online
advertising involves hierarchical
stages moving through pre-attention,
attention and the decision to click.
The phenomenon of advertising
avoidance occurs during pre-attention
processing of the advertisement since
it takes place at the moment that the
individual is unconsciously deciding
whether to pay attention to it. In
fact, another study by Janiszewski
showed that peripheral vision
enables the recognition of objects
which are outside the field of vision
occupying attention. Thus, users learn
to recognize commercials without
needing to focus directly on them, and
this enables them to avoid looking
at them. This shows that web users
have learned over time to develop
strategies to avoid paying attention to
advertisements.
The phenomenon is further
understood thanks to an important
study conducted by researchers
Drèze and Hussherr4
in which they
have used eye tracking devices to
observe and record the trajectory of
respondents’ eyes when watching
objects. Respondents navigating
pages containing advertising banners
were subjected to this technique
and the results are very revealing.
The study shows that only 50% of
banners are looked at, and that the
subjects are not always aware of the
advertising they are watching, despite
efforts of announcers and advertisers
to produce ads that stand out from
the main content and other ads on the
page. However, banner blindness does
not necessarily signify that the portion
of advertising that is not looked at is
necessarily wasted. Indeed, several
instances of research have shown
that consumers do not need to fully
process a message to be influenced by
it. For example, unexpected exposure
to advertising can enhance the
appreciation of consumers towards
it and the advertised brand, even if
they are not aware they have seen the
advertising and brand before.
Advertising Avoidance and Processing Levels: Their Effects on
Performance Measurement
9
These various studies question the foundations of the
online advertising industry. Indeed, in this industry
performance and the cost of advertising is measured
by click-through rates. However, if users avoid watching
advertising, do not look at it directly, or do not click on
it, it is a misconception to believe that advertising is
ineffective since it is capable of being partially processed.
For this reason, advertisers should reappraise the way
they measure performance of online advertising, as click-
through rate does not measure the full effectiveness of
an advertisement. One should rather turn to attitudinal
measures and those based on memory to measure the full
performance of an online campaign.
On the other hand, click-through rate as a measure
of performance is not completely useless. It is still an
excellent indicator when it comes to measuring direct
response to advertising. Both measurement systems
should be used together according to the objective of
the advertising whether it be obtaining a direct response
(click-through rate),as in a promotion or call to action or,on
the other hand, building a brand (attitudinal measures).6
Withtheaboveinmind,amodel(seeFigure2)wasdeveloped
to relate advertising processes to performance measures.
Thus, we can see that the level of advertising activity
is influenced by the medium and other characteristics
of the advertising. When the level of advertising is low
and there is no interaction with it (clicks, enlargement,
participation in an activity, etc.), click-through rate is not
a valid performance measure. In this case, it is better to
measure attitude towards, and recollection of the ad and
the advertised brand because it does not mean that the
consumer has not processed (whether partially or fully) the
advertisement.
Conversely, when processing of the advertisement is
high and the consumer proceeds to the ultimate moment
of interaction (click), measures of interactivity such as
click-through rate can be considered. Choices made at
the advertising design stage must, therefore, match
the level of processing that meets objectives, whether
the advertising seeks to build up a brand over the long
term or obtain immediate responses (buy online, order,
subscribe, etc.)
Online Display Advertising Blindness
Figure 2: Model of the relationship between the advertising process
and performance measures
Advertising Avoidance and Processing Levels: Their Effects on
Performance Measurement
Source :Adapted from Chatterjee, Patrali (2001),“Beyond CPMs and Clickthroughs:Consumer Interaction
with Web Advertising ” Internet Marketing Research:Theory and Practice, ed. Ook Lee, Hershey, PA:Idea Group
Publishing, 209-216.
Ad Format
Ad Processing
Type of Exposure
Minimum
Processing
Guaranteed
Traditional Exposure
Measurement
(Attitude and Recall)
Maximum
Processing
Interactive
Measurement (CTR)
Ad Characteristics
•	 Creative
•	 Message
•	 Position
Interactive
Technologies
10
Three main research methods have been used in the articles identified for the development of this whitepaper:laboratory
experimentation, database analysis, and field studies.
Laboratory experimentation consists of exposing respondents to stimuli related to the phenomenon investigated (here
display advertising) and to observe and analyze their reactions using methods such as eye tracking,or collecting feedback
using questionnaires before and/or after the experiment.
Database analysis requires dealing with networks which disseminate the advertising and that record the behavior of the
advertisements in databases. Afterwards, the researchers conduct statistical tests to draw conclusions from the data
provided.
Finally, field studies involve collecting opinions and user reactions using a questionnaire following a scenario relevant to
the phenomenon under study.
These three methods are also sometimes combined for the purposes of a given study to validate the results, leading to
insights of greater value.
Research Methodologies in Online Advertising
11
When the time comes to develop an online advertising scheme, a multitude of choices is available. Banners, sponsorships
or pop-ups? Animated or static? Rich media or Flash animation? And more. Each of these elements has an influence on
how the message is processed and its potential for processing by the user and, consequently, its performance.
Formats
Strengths and
Weaknesses of
Advertising Formats
When the time comes to design online
advertising, the right format must
be chosen. This choice is crucial to
the success of the campaign. As
demonstrated by a Burns9
study,
attitude towards the format directly
influences attitudes towards the
advertisement itself. This is why
it is necessary to be aware of the
perception of the targeted audience
towards different advertising formats.
For example, the results of a survey
conducted by BBM Analytics in 2008
of Canadian consumers (see Graph 3)
show that the most popular form of
online advertising is video with audio.
This does not mean, however, that it is
the only format to adopt, and that the
survey represents the perceptions of
every target audience.
Each format has its strengths and
weaknesses and can be used to meet
a precise communication objective.
This section provides a summary of
popular formats to enable informed
decisions to be made about the format
of online advertisements.
It is difficult to establish a standard
for the ideal size of an advertisement
since the impact of size differs from
one format to another. It also depends
on the desired objective. Certainly,
a large sized advertisement will be
more easily recognized. On the other
hand, if this large advertisement is a
pop-up rather than a banner, attitude
towards the advertised brand will
be less favorable.7
The real question
is, what is the intrusive effect of the
format related to size? For example,
a pop-up advertisement (an intrusive
format since it is presented to the
user without prior request), has
good potential for being processed
by the user. It has been proven that
advertising in this format is the most
recognized. However, when the size
is too big, the pop-up becomes more
aggressive, and attitudes toward
the advertisement may be adversely
affected.
In short,the size of a display ad should
beinverselyrelatedtoitsintrusiveness,
since it has been proven8
that a highly
visible ad, whether due to its size or
the intrusiveness of its format, results
in increased intentions to purchase.
Anything that would spoil this positive
effect by damaging attitudes towards
the ad should be avoided.
Graph 3: Online advertising formats favored by consumers
in Canada
Source:BBM Analytics, OmniVu, October 2008.
Graphic ad with sound only
Video ad without sound
Graphic ad with animation
and sound
Graphic ad without either
animation or sound
Graphic ad with animation
only
Video ad with sound
The Effect of an
Advertisement’s Size
on its Performance
12
Formats
Banners
Banners are rectangular or square advertisements found
surrounding the content of web pages, online games and
mobile applications. The international association IAB
(Internet Advertising Bureau), which is dedicated to the
optimization and promotion of online advertising, has
declared three standard banner formats: vertical format
(skyscraper), rectangular (leaderboard) and square (big
box) horizontal format (see all the formats on next page).
The Burns study reports that there is no significant
difference in the effectiveness of the IAB standards for
brand recall and unaided recall of advertising.9
However,
aided recall of advertising is higher for vertical ads
(rectangle and square). For these reasons, horizontal and
vertical banners are discussed interchangeably.
Since they are not very intrusive, banners usually benefit
from a favorable attitude on the part of users. However,
they have more difficulty getting noticed (50% of them
are not looked at) and click-through rates are therefore
lower than for pop-ups, for example. Although less
processed consciously, they are able to influence the
attitude of Internet users at the pre-attentive processing
stage around the advertisement. Thus, the banner is
an advertising format to be favored when the goal is
branding and increased brand awareness.
Flash Banners
Banners can be static or animated. Flash is one of the technologies used to insert animation into a banner. An eye-
tracking study was conducted to determine the effect of exposure to this type of banner, and researchers found
it aroused the subjects by shortening the time required to process decisions where several factors come into
consideration. Needless to say, situations where buyers face these kind of decisions are very common, especially
when purchasing complex products. This study also confirmed that ads placed at the top of the page are worth more
than those at the bottom.
Source:Day,Shyi & Wang (2006)“The Effect of Flash Banners on Multiattribute Decision Making:Distractor or Source of Arousal?”Psychology & Marketing,
Vol.Vol. 23, No. 5, pp. 369–382.
Standards formats for advertising banners
Source:Wikipedia, Standard web banner ad sizes,January 2010.
13
Formats
Pop-ups
The pop-up is an advertisement that opens in a new
browser window on top of the one being accessed by
the user. The intrusiveness of this format is very high,
which often negatively affects attitudes towards the
advertisement and, shortly after exposure, the advertised
brand.7
However, this form of advertising is processed
more than banners, which provides a better click-through
rate10
and stronger intentions to purchase.11
The pop-up is a good format to use when trying to obtain
direct responses to advertisements. On the other hand,
care must be taken not to undermine consumer attitudes
towards the brand. This can be avoided by targeting
strategic locations to display the pop-up. For example, in
placeswherepeoplearemorelikelytobeintheinformation
research phase or in a procurement process relevant to
brands and products. Website product pages and product
review sites by consumers are good examples.
Online Sponsorships
Online sponsorship refers to a brand endorsing or
presenting the contents of a web portal, such as an online
game,a page or website.The key element to consider when
developing online sponsorship is the relevance of the
brand to the sponsored content. One study showed that
recollection of the sponsor, attitude toward the sponsor,
and purchase intentions for sponsored products are
higher when the sponsor and the sponsored content have
a relevant connection between them.12
It is also important
to sponsor sites that are perceived to be credible and
that users intend to revisit, because these two elements
influence attitudes toward the sponsor. In other words,
even if the web content is strongly linked with a brand and
products, if it is not appreciated by users the brand will
suffer. It is therefore necessary to link with quality content
so that the favorable attitude towards the content reflects
positively on the brand.
Rich Media
According to IAB, rich media advertising is a format
with which users can interact, including video, audio,
animations using Flash, Java, Javascript, DHTML, etc.13
Its main strength is entertainment. The subject of
entertainment will be discussed later (p.24). In general,
rich media will be most effective for branding objectives
with consumers looking for entertainment or browsing
aimlessly for fun. Conversely, it would be less relevant
to use such a format where people are more likely to be
looking for specific information relating to a purchase,
because the entertainment could get in the way of their
task.
Rising Star
The rising star format was recently introduced into IAB’s
portfolio of advertising formats, which include rich media
interactive options. This format imposes the ad between
the header of the website and its content.
As per a study published by IAB and Moat, the rising
star has resulted in significantly higher engagement
with consumers. In point of fact, this study examined
4 million ad banner impressions against five of the six
rising star formats (Portrait, Slider, Sidekick, Billboard
and Filmstrip) versus two standard banner types (Big Box
and Leaderboard). The results indicated that users were
spending 50% more time interacting with rising star ads
(5.8 seconds) than with standard banners (3.9 seconds).27
At Mediative, we conducted our own
research on the impact of display
advertising on influencing customer
buyingbehavior.Thispaperisavailable
for free download at Mediative.com:
http://pages.mediative.com/Walmart-
Display-Advertising-At-Retail.html
14
Formats
Table 2: Formats summarized
Banners
•	 Given their non-aggressive placements, banners typically result in favorable responses from users (versus, for instance,
the more antagonistic pop-ups).
•	 Banners are more difficult to be noticed by the user and have lower click-through rates compared to more in-your-face
formats (such as pop-ups or rich media). In actuality, it is estimated that almost 50% of banners are never even seen
(Drèze & Hussherr, 2003).
•	 Banners do influence users’subconscious attitudes to the brand simply via their placement within the user’s line of sight
(Shapiro et al., 1997; Janiszewski 1990a;1990b;1993). For instance, when a user arrives on a fresh webpage, s/he will
unconsciously regard the banners on the page via his or her periphery before paying attention to the content of the
advertisement.
•	 As such, banners are an advertising format to prioritize for campaigns designed to generate brand awareness. Contrarily,
they should be used sparingly in campaigns that seek to generate a direct response from the consumer.
pop-ups
•	 Pop-ups are inherently highly intrusive, thus resulting in a negative attitude from consumers towards the
advertisement in question and,even the advertised brand within a short span of time after exposure (Chatterjee,
2008).
•	 Given their high-level of intrusion on the user experience, pop-ups are seen more than standard banners, thus
resulting in a better click-through rate (Cho et al., 2001) and higher levels of purchase intent (Diao et Sundar,
2004).
•	 Pop-ups are good to implement in an advertising campaign that demands a direct response.
sponsor-
ships
•	 Online sponsorships are made when a brand endorses or presents content on a web portal, such as an online
game, a webpage or a branded content website. Branded content works as advertiser recall, attitude towards
the advertiser and intention to make purchases of products/services from the advertiser are augmented when
the sponsored content has a pertinent link with the advertiser’s offering.
•	 The credibility of the site and the intention of the visitor influences their attitude toward the brand of the sponsor.
rich media
•	 Rich media formats that are animated with video perform better than rich media formats without video or Flash
animation.
•	 Rich media formats that integrate video perform strongly for brand awareness, favorability towards the brand,
and purchase intentions.
•	 Rich media without video outperforms Flash animation. Moreover, it permits a better advertising message
association than rich media with video. (Spalding and al. 2009)
Rising
star
•	 The rising star format that integrates interactive rich media elements imposes the ad between the header of the
website and its content.
•	 The rising star format has demonstrated a significantly higher return with consumer engagement (IAB and
Moat, 2012).
15
attitudinal measures
Understanding the impact of online advertising on user attitudes is very useful for studying their behavior:as shown in the
Theory of Reasoned Action,14
attitude is strongly related to behavior prediction.
Table 3 presents various attitudinal elements that can be measured using surveys (online or not),focus groups or interviews
conducted with a sample of consumers who have been exposed to ads. This can be done through a pre-test before the
launch of a campaign and / or at the end of the campaign to track and consider future improvements that can be made.
These measures can be taken immediately after exposure to advertising and / or after a certain period to measure the
impact of advertising over time. Obviously, the more the advertising succeeds in creating an enduring positive attitude the
better.
The purpose of this section is to list the different methods used in various studies to measure the performance of online
advertising.
Performance Measures
Table 3: Attitudinal Measures
Attitude
towards the
website
Involves measuring attitude toward the website where the ad is displayed. This measure is useful for websites
that generate advertising income and that have the satisfaction and loyalty of their visitors at heart, or for
companies that advertise on their own site.
Attitude
towards
the Ad
Involves measuring attitude toward the advertisement. To achieve its communication objectives, the ad must,
among other things, be appreciated so that its message is received favorably by the consumer.
Attitude
towards
the format
of the AD
It has been shown that attitude towards the ad format directly influences attitude towards the advertisement.
Thus, if a consumer does not like the format of an advertisement he/she could develop a bad attitude towards it
even if the message could have been of interest.It is relevant to know what type of ad formats are appreciated by
the target audience so that they develop a positive attitude towards the advertising.
Attitude
towards the
product /
service
Involves measuring attitude towards the product / service featured in the ad. When advertising proposes a
product or service, its ultimate goal is to create a positive attitude towards it.
Attitude
towards the
brand
Involves measuring attitude toward the brand featured in the advertisement.The totality of all advertising efforts
must ultimately contribute to making attitude towards the brand more favorable.
16
Measures Based on Memory
As in the case of attitudinal measures, those based on
recollection can also be measured using surveys, focus
groups or interviews with a sample of consumers who
have been exposed to advertisements.This can be done by
pre-test before launch of a campaign and / or afterwards.
Measures can be taken immediately after exposure to the
advertising and / or after a certain time.
Brand Consideration
Brand consideration is taken into account in brand
awareness. Also called a consideration set, it refers to
those brands which are considered by a consumer, in a
certain category of products and services, when thinking
aboutmakingapurchase.Brandconsiderationmeansthat
consumers consider that it corresponds to their needs and
merits their interest. Specifically, it is measured by asking
consumers which brands they would consider buying for a
given product. For example:“If you were to buy a car soon,
what brands and models would you look at first?”
Recall of a Brand and Advertising
The following all contribute to different levels of brand
awareness. They are divided into two groups (recall and
recognition) and can be used to measure the effectiveness
of the advertising itself, but also its effect on the brand.
A recall is a recollection of the brand or advertising by
thinking about it and using memory alone. Recognition is
the act of remembering the brand or advertising on seeing
it again and being aware of having seen it before.The extent
of the recall and recognition is usually established by
asking respondents who have just browsed the site if they
remember seeing advertisements. If yes, they are asked
if they remember the advertised brands. An affirmative
answer signifies recall. When respondents remember
neither the advertising nor the brand, they are presented
again with the advertisement and brand and asked if they
recognize them. A positive response signifies recognition.
Performance Measures
Table 4: Types of recall
Recall (unassisted) recall (assisted)
…of the advertisement …of the advertisement (or assisted recall of the advertisement)
…of the brand …of the brand
17
click-through rates
The measures described previously are attitudinal in
nature and are mainly used to measure the effectiveness
of an advertisement (i.e. when individuals have shown a
low level of interaction with the advertising). Moreover,
these attitudinal measures are also used in high-level
interactivity situations to assess brand awareness and
brand attitude of individuals who were in direct contact
with it.
The click-through rate (CTR), however, enables
measurement of behavior and consists of the number
of clicks made for the total number of times an ad was
shown (impressions). Although use of this measure alone
has been questioned, it is still a dependable indicator
when measuring direct response to an advertisement (the
number of visits to the website resulting directly from the
ad, for example) or even to gauge interest in a promotional
incentive announced in an advertisement. Table 5 below
provides benchmarks for CTR.
purchase intentions
The intent to purchase measurement consists simply of
asking individuals if they intend to purchase the displayed
product or brand after they have been presented with the
advertisement.
Performance Measures
Table 5: Performance Metrics Benchmark for Canada, 2011-2012
Source :MediaMind, 2012.
18
Performance Measures
Table 6: Performance Measures Summarized
Definitions Methods of measurement
Attitudinal
Assists in understanding the impact of online
ads on user attitudes. Understanding consumer
attitudes help predict their behavior. See Table 2 to
see the set of attitudinal measures.
Survey, focus group or interviews.
Based on recall
Used to gauge whether individuals remember,
consider and/or recognize a brand or ads thanks to
advertising efforts.
Survey, focus group or interviews.
Click-through rates
The number of clicks on an ad divided by the
number times it has been displayed (impressions).
This metric has been challenged as explained in
the white paper; however it is still the most valid
metric when it comes to measuring direct response
(Chatterjee, 2001).
Use of web data.Through web analytics software or
directly from the distributor of the ads.
Purchase intention
Consists of asking individuals, after being exposed
to the ad, if they intend to buy the product or the
service in the future.
Survey, focus group or interviews.
19
Type of Creatives
The effect of animation in
advertisements has also been
investigated in a study by Yun,15
this time using an experimental
method. The results of this laboratory
experiment indicate that the use
of animation attracts more user
attention, helping the advertisement
stand out from others in a crowded
advertising environment. As can
be seen in Graph 4, the higher the
degree of animation, the more the
advertisement attracts attention.
Consequently, this degree of attention
paid to the advertisement positively
influences its memorability, since the
study shows that it has an impact
on the ad’s recognition rate. Also,
the degree of attention affects the
intensity of the cognitive response to
the advertisement, which in turn also
affects its memorability.
In addition, researchers show in
this study that a moderate, rather
than high degree of animation has
greater impact on the recognition
rate of the advertisement, as can be
seen in Graph 5. The results show
that when the degree of animation
is high, the recognition rate will be
reduced due to an increase in the
emotional response. In the same
vein, a moderate level of animation is
best for creating a favorable attitude
towards the ad, as shown in Graph 6.
On the other hand, although a high
level of animation is liable to capture
attention, one must be careful,
since it can be seen that it also
engenders a negative user attitude
towards the advertisement, both at
the cognitive and emotional level.
Graph 5: Percentage recognition rate for an ad related
to its degree of animation
Graph 4: Attention rate for an ad related to its degree
of animation (seconds)
Graph 6: Degree of positive attitude towards an ad related
to its degree of animation (scale of 0-5)
Static High degree of
animation
Static High degree of
animation
Static High degree of
animation
20
Types of Creatives
In short, for advertising to be effective, it is better to opt for a moderate level of animation so that it be more easily
remembered and recognized.A high level of animation,while capturing more attention of the user,can degrade a favorable
attitude towards the advertisement. For more information on types of animation and the different technologies used to
implement them, see the section ‘Comparison between different types of animations’ on page 23.
Table 7: Types of Creatives - What you need to remember
Size
•	 It is difficult to establish a rule for the ideal size of an ad since the impact of size differs from one format to
another.
•	 A large ad will be recognized more easily. On the other hand, if the large ad is a pop-up rather than a banner,
attitude towards the announced brand will be less favorable (Chatterjee, 2008).
•	 The size of a display ad should be inversely related to its intrusiveness since it has been proven that a highly
visible ad due to either its size or intrusive format will result in greater purchase intentions (Goldfarb & Tucker,
2011). This positive effect should not be spoiled by harming attitude towards the ad by using a format that is
both large and intrusive.
Animation
•	 High degree of animation:attracts user attention
•	 Moderate degree of animation: the ad is more easily recognized; the ad benefits from a favorable attitude (Yun
Yoo & Kim, 2005).
@mediative
At Mediative,our mission is to maximize the impact of your brand online,whether through online
display,content marketing or custom web design.Learn more about our creative services.http://
mediative.com/digital-media/creative-services
21
In a study by Lohtia et al.,16
conducted using a database
of 8,725 advertising banners,content and design elements
were separated into two groups. Classified into emotional
and cognitive elements, the content and design elements
obtaining the best performance (measured by CTR) were
identified.
One of the main findings of this study is that the content
and design of a banner does not have the same impact
when advertising to businesses (B2B) compared to
consumers (B2C). Apart from the use of color (see Graph
7), which is moderately beneficial in both contexts (B2B
and B2C), other factors affect banner click-through rates
differently.
Also, the presence of incentives (see Graph 8) significantly
reduces the click-through rate for B2B advertising while
it has very little impact on B2C advertising. This may be
because B2B purchases require incentives more specific
to customer needs than those used in large-scale
promotions.
The use of interactivity (see Graph 9) in a banner has a
negative affect on CTR in both contexts, though more so in
the case of B2B advertising.
In addition, the use of emotional appeal (Graph 10), and
animation (Graph 11), increases the click-through rate
for B2C banners while decreasing it for B2B banners. The
CTR for B2B banners is always higher than B2C banners
(see Graph 8, 9, 10 and 11). Finally, the table to the right
summarizes the content and design elements that need
to be included in advertisements in each context. It is
understood that B2B advertising should focus more on the
delivery of a clear,direct and simple message compared to
B2C advertising which can be more entertaining.
Although two of the three elements beneficial to CTR
are design elements, the study conducted by Drèze
and Hussherr, which did not differentiate between B2B
and B2C contexts, suggests that advertising content is
important: the researchers found that the message itself
is more important than the method used to communicate
it. This study used brand recognition as a measure rather
than CTR.
B2B vs. B2C: Choice of Content and Design According to Context
Types of Creatives
cognitVe affectiVe
Content
Presence of
incentives
Presence emotional
appeal
Design
Presence of
interactivity
Presence of animation
Presence of colors
B2b b2c
Moderate use of color
Moderate use of color
Animation
Emotional appeal
Graph 7: The effect of color on click-through rates
Few colors Many colors
22
Graph 8: The effect of incentive on click-
through rates
Graph 10: The effect of emotional appeal
on click-through rates
Graph 11: The effect of animation on click-
through rates
Graph 9: The effect of interactivity on click-
through rates
B2B vs. B2C: Choice of Content and Design According to Context
Type of Creatives
Without
animation
With
animation
Without
interactivity
With
interactivity
Without
incentives
With
incentives
Without
emotional
appeal
With
emotional appeal
23
Comparison Between Different Types of Animation
Type of Creatives
Graph 12: The effect of 4 types of animation on 5
measures
Figure 3: Contribution of the 5 indicators
Source:Dynamic Logic.
Aided brand awareness
Awareness of the online ad
Association of the message
Preference for the brand
Purchase intention
Source:Spalding L., Cole S. & Fayer A. (2009),“How Rich-Media Video
Technology Boosts Branding Goals:Different Online Advertising Formats
Drive Different Brand-Performance Metrics”Journal of Advertising Research,
September, pp.285-292
Rich Media
with video
GIF & JPEGFlashRich Media
without video
Aided brand awareness
Awareness of the online ad
Message association
Preference for the brand
Purchase intentions
When it comes to animation in an ad, there are
several technologies and animated elements that
can be used. One study evaluated the effect of four
different types of animation on five performance
indicators (see Figure 3):
•	 Rich media with video.
•	 Rich media without video.
•	 Advertising with animation in Flash format.
•	 Advertising without animation in GIF or JPEG
format.
The study exploits a database of 4,000 online
campaigns to produce a Delta Score showing
variation in advertising performance according to
five indicators. The results (summarized in Graph
12) show that:
•	 for aided brand awareness, rich media with
video produces the best score.
•	 for awareness of the online advertisement,the
best result is also obtained using rich media
with video.
•	 the best score for message association is
produced by GIF / JPEG, with Flash in second
place.
•	 brand preference is higher with video, followed
by GIF / JPEG.
•	 purchase intentions are highest using by rich
media with video tracking, followed by rich
media without video, GIF / JPEG and Flash.
In summary, rich media with video animation is the
most effective among the five measures together,
especially for aided brand awareness and measures
at the bottom of the funnel. Rich media without
video is quite good on all the metrics. GIF / JPEG
manages very well to convey a message clearly,
since it is not blurred by too much animation, and
also because advertisers have more experience
communicating in this format which has been longer
in use. Finally, Flash is not so bad, but easily ranks
last generally. So for the same result (animation
without sound) it is better to opt for rich media which
is more effective except for message association.
Inshort,itisimportanttobeclearaboutthecampaign
objective in terms of these five measures to be able
to the choose the appropriate type of animation.
24
Types of Creatives
The Effect of Entertainment on Advertising Performance
Another aspect of advertising design, relating both to
content and design, is the value that entertainment may
have for the user. An experimental study was conducted
to measure the effect of advertising using different levels
of entertainment (high vs. low), and taking into account
several user characteristics such as their need to quickly
close a purchase, whether or not they are browsing with a
specific goal in mind, and how versatile they are in using
the Internet.17
In this study the stimuli used were a game ad to show
an advertisement with a high level of entertainment
and a banner to represent a low level of entertainment.
The researchers found that if the user is browsing with
a specific purpose in mind the entertainment-based
advertising has less effect on brand attitude and
purchase intentions. In other words, users looking for
information will hardly, if at all, be attracted by the ad’s
entertainment aspect. Conversely, for users looking for
entertainment, advertising featuring entertainment can
influence brand attitude and purchase intentions.
The same study examined the effect of entertainment
on individuals who needed to make a purchase quickly. It
turns out that when the need to make a quick purchase is
low and the entertainment aspect of the ad is high, brand
attitude is even more positive.
In short, these results tell us that advertising with high
entertainment content, such as a game ad or one loaded
withrichmedia,isnotappropriateforreachinguserswhose
goal is research. Pages visited, time spent on pages, and
use of search tools are clues for differentiating between
consumers who are goal oriented and those that are not.
25
Context
Content,format and design are crucial in planning a digital advertising campaign.However,the context in which a campaign
is to be disseminated also plays an important role: the dissemination context influences how the consumer is exposed to
the advertising and therefore how he/she will process it.The aim of this section is to present the results of several studies
that have tested the effectiveness of certain online display advertising performance variables in different dissemination
contexts.
Match Between Website Content
and Advertising
Findings on the relevance of the relationship between a
website and its advertising have proved that an ad that is
shown on a relevant site leads to a higher level of brand
recall and a higher intention to click.18
Research by Goldfarb
and Tucker8
has shown that advertisements with content
that was relevant to the website were three times more
efficient in terms of purchase intentions compared to ads
without a relevant relationship with the website.However,it
is better that the ad not be intrusive in size or format.Since
the advertisement is already related to the page content,
the person browsing is not really intruded upon, other than
the interruption in his/her browsing path.
Contrast Between the
Advertisement and the
Dissemination Environment
One might think that an advertisement that stands out from
its surroundings, compared to other advertisements and
content,will be more effective.However,a study conducted
onmorethan800respondentsshowedthattherelationship
between a banner’s distinctiveness and its effectiveness is
very low.4
What is more, this relationship is contrary to the
popular belief that an advertisement offering a high degree
of distinctiveness will be more effective. This study shows
that, according to a set of efficiency measures (unaided
recall of the ad, brand recognition, aided recall of the ad,
and brand awareness), advertising that stands out within
its environment only affects aided recall of the advertising,
which is not a very strong indicator of performance.
Consumer Familiarity with the
Website
A study by McCoy19
demonstrates that a consumer’s
familiarity with a website where ads are published affects
the perceived quality of the site and the intention to visit it
again. A site is said to be familiar when it is known to the
web user, who also has some mastery navigating through
it and finding information. In this situation, a familiar site
is perceived to be of higher quality than an unfamiliar
site with advertisements. Hence the negative influence of
advertising is greater on unfamiliar sites.
The results of the study also support the notion that a
site that is perceived to be of high quality has a positive
influence on the intention to revisit it. Consequently, a
familiar site, whether it contains advertising or not, is more
likely to be reused by its visitors than an unfamiliar site
with advertisements.
However, the perceived quality of a familiar site with
advertising is no different to that of an unfamiliar site
without advertising. Also, a surprising finding of this study,
is that sites chiefly without advertising, whether familiar
or not, are not perceived to be of higher quality than sites
with advertising. This is all the more surprising when, as
stated, the study tested pop-up type advertisements,
a format usually less welcome due to its intrusiveness.
These findings indicate the importance of following the
best practices in terms of website structure and ease of
navigation.
26
Context
Table 8: The dissemination context summarized
Relevance
•	 There is a relevant relationship between the ad and the place where it is displayed when the two share a common
theme. For example, a sports clothing retailer on a TV sports channel site is considered to be a relevant match.
An ad which appears on a relevant site (context) leads to stronger brand recall and intention to click on the ad
(Yaveroglu & Donthu, 2008).
•	 Advertisements with content that was relevant to the website were three times more efficient in terms of
purchase intentions compared to ads without a relevant relationship with the website (Goldfarb & Tucker,2011).
•	 Advertisements that are not too intrusive due to their size and their format perform better, as these ads do not
roadblock the user during his/her web navigation (Goldfard & Tucker, 2011). (Goldfarb & Tucker, 2011).
contrast
•	 Contrast is the content’s ability to stand out from the page (ad or main page) through its variation in color, size
etc.The effect of contrast on banner effectiveness is very weak.Also,this relationship is the opposite to popular
belief that a high-contrasting ad will be more effective. This is to say that ads that don’t stand out from their
background are slightly more effective for branding (Drèze & Hussherr, 2003).
Familiarity
•	 A familiar site,whether or not it contains ads,has more chance of being revisited by its users than an unfamiliar
site without ads.
•	 A familiar site which includes ads is not perceived to be different in quality to an unfamiliar site without ads.
When designing a site, it is better to follow the best practices in terms of navigation and ease-of-use and to
advertise on websites following these best practices.
27
Exposure to Advertising
Optimal performance of a campaign is not a matter of chance - it takes strategic thinking and knowledge of user reactions
to different exposure and dissemination strategies. In this section, we have brought together the chief results of studies
covering the subject.
The Effects of Repetition
It is generally believed that the more you repeat a message,
the more likely it will be understood by the recipient.
Logically, the more one is exposed to a message after short
intervals, the less likely it will be forgotten, go unnoticed,
or simply escape us. In the context of online advertising,
this idea is not mistaken, in fact there are several levels
of memorization for a brand and message. A study by
Drèze and Hussherr4
indicates that the effectiveness of
advertising generally increases with the frequency of
exposure. Repetition improves unprompted recognition
of the ad, brand recall and brand awareness. Repeated
ads have a better effect on attitudes towards the ad, the
advertised product and the website that disseminates
them when they match the interests of the user, and if they
are interactive.20
Nevertheless, limiting the frequency of an advertisement
with a frequency cap maximizes its impact. A frequency
cap controls a given user’s frequency of exposure to an ad
by means of cookies. In the digital marketing industry, the
standard is not to display an ad more than nine times to
avoid saturation that can diminish its return on investment.
Repeated or Alternated
Creatives?
There are two main strategies for repeat advertising. The
first one is to disseminate the same creative, while the
second is to disseminate different creatives in alternation.
A study by Yaveroglu and Donthu (2008) tested both
strategies for the effectiveness of banners in different
contexts. It was demonstrated that in competitive
advertising environments it is better to opt for the repeated
display of a single creative to obtain better brand recall and
greater intention to click. Conversely, in non-competitive
environments it is best to alternate different creatives
to obtain the same results for brand recall and click
intentions. Consequently, it pays to establish whether the
ads will be shown in competition with high levels of content
before deciding on a strategy.
Multiple Exposure to Advertising
AstudybyManchanda21
focusedonhowmultipleexposures
that a consumer has to an advertisement across various
touch points impacts his/her likelihood of purchase. As
concluded by Manchanda, multiple exposures increases
the probability of purchase. More specifically, this study
demonstrated that an individual’s purchase intent rises
with multiple exposures to a specific ad in one given week.
Nevertheless, this study highlighted that for purchase
intent to mount, it is paramount that the same creative
be delivered within that time period – especially because,
as the study uncovered, exposure to a greater number of
creatives actually diminished the probability of purchase.
Researchers have thus concluded that the repetition of
the same message has a better chance of purchase intent
success on a site with a higher volume of content and
banners.Furthermore,a single creative message is best for
campaigns that are to be delivered across multiple website
placements. In conclusion, a single creative/advertising
message is better for increasing a consumer’s likelihood
of purchase, whether the ad is delivered across multiple
touch points or delivered multiple times on one site.
In summary, exposure and repetition play a role in the
effectiveness of an advertising campaign, especially
on brand recall, intention to click and the likelihood of
purchase. However, a consumer who is not in information
search mode is very unlikely to click on an ad. Hence,
exposure and repetition have more impact on branding
than on direct actions such as an immediate purchase
online.
28
Exposure to Advertising
Table 9: Exposure to advertising - summary
In gEneral
•	 The effectiveness of an ad usually increases with the number of impressions. While repetition increases
unaided recognition of the ad, brand recall and brand awareness, it has not be proved that it increases aided
recall of the ad (Drèze & Hussherr, 2003).
•	 Once an advertisement goes online and is aligned with user interests, repetition is an important variable that has a
strong impact on the user’s attitude towards the ad, the advertised product and the website where the advertisement is
published (Campbell & Wright 2008).
Repeated creative
•	 Repetition produces better brand recall and greater intention to click in competitive advertising environments
(Yaveroglu & Donthu, 2008).
Alternative
creatives
•	 Alternating creatives produces better brand recall and greater intention to click in non-competitive advertising
environments (Yaveroglu & Donthu, 2008).
Multiple
exposures
•	 Exposure of the same ad message in multiple locations, and several times over, increases the probability of
purchase (Manchanda et al., 2006).
29
real time bidding
Real-time bidding (RTB) is a data-driven programmatic
buying model allowing advertisers or their agencies to
bid on digital media (display, video, mobile, social, etc.) in
real-time, at the impression level.26
In other words, it is
a new online display solution that is revolutionizing the
advertising industry, enabling advertisers to bid, in real-
time,on available digital advertising inventory to maximize
results in the fastest turnaround times. In addition,
RTB allows major advertisers to determine their prices
according to the relevance of a publisher to their campaign,
and small advertisers to purchase prints when the current
bid fits their budget. Traditional online advertising, on the
other hand, requires setting a price for a certain number
of impressions before the campaign, even if some of these
impressions are less effective at different times of the day.
RTB involves three parties: an advertiser (or media buyer),
a publisher and an advertising auction platform. Online
publishers put their available advertising inventory up for
auction in the form of impressions in real time. Advertisers
or media buyers use the auction advertising network to
bid on impressions in real time. RTB allows advertisers to
evaluate in real time the value of an ad impression and to
decide whether to bid or not on it, according to its value for
their campaign.
We predict that the traditional online media buyer role
will divide into two specialties: programmatic buyers and
custom buyers, who will pursue two different objectives
(see Table 10). 28
@mediative
Auctionsinrealtimearethefutureofonlinedisplay.LearnmoreaboutMediative’sadvertisingauction
platform http://mediative.com/digital-media/real-time-bidding
Table 10: Media Buyer Roles
Programmatic
buyer
Programmatic buyers will focus on platform-based, real-time buying across available channels (primarily display today,
with increasing availability of video and mobile inventory to follow). This group will run direct response and broad-based
(such as audience targeted) brand campaigns. Backgrounds in analytics, search, ad network, and/or ad operations will be
highly valued in these buyers.
Custom buyer
Custom buyers will focus on developing unique, client - or campaign-specific brand experiences with publishers that
feature deep integration, custom content, and non-traditional elements. Traditional media planning and buying skills —
negotiating prowess and strong buyer/seller relationships — will drive the best and most successful outcomes for clients.
Brand marketing backgrounds will be valued in this group.
Source: Forrester Research, 2012.
Trends
New digital marketing technologies such as ad exchanges, real-time bidding and audience targeting using databases are
revolutionizing the digital marketing world.25
The emergence of these new technologies is forcing us to change our digital
advertising methods. Marketers must adapt to new models of media planning, purchasing, and optimization, since the
older models are losing their effectiveness and relevance when it comes to advertising campaigns based on audiences,
databases and automated management.
30
Trends
Figure 4: The online media purchasing process
Sources: eMarketer (2012) Guide to the Digital Marketing Ecosystem
Publisher — the owner of the website on which the ad will
appear.
Supply-Side Platform (SSP) — a technology platform
publishers use to organize and monetize site ad inventory
for sale via RTB. Publishers might use an SSP to create
their own private ad exchange.
Ad Exchange — a brokerage where inventory sources
(publishers, SSPs, ad networks, exchanges) sell impres-
sions and media buyers purchase them.
Ad Network — an inventory source organized by audi-
ence, content or contextual theme or inventory type (e.g.,
video, mobile). Allows for both buying and selling of ad
inventory.
Demand-Side Platform (DSP) — a technology platform
used by media buyers to manage impression-level
display ad buys across other inventory providers (e.g.,
exchanges, ad networks, SSPs). Agency trading desks are
white-labeled DSPs used to manage agency ad buys.
Media Buyer — any buyer of display ad inventory: brands,
agencies and ad networks buying on behalf of clients.
UPFRONT BUY
the main paths media buyers use to
reserve upfront inventory in bulk.
REAL-TIME BIDDING
the paths an ad might travel when
buying unreserved, real-time bid
(RTB) impressions.
DSP/ATD
DEMAND-SIDE
PLATFORM
MEDIA
BUYERPUBLISHER SSP
SUPPLY-SIDE
PLATFORM
A
D
EXCHAN
G
E A
D
NETWOR
K
31
Tracking Behavioral Data
The web abounds in available data that, when properly
sorted and processed, enables us to know many things
about consumers. While browsing, users leave traces
(cookies, clickstream, etc.), and over time it is possible to
know their main interests by observing the contents they
look at. In this way, it becomes easier to present them with
advertising on products and services that may meet their
needs or preferences.
The Role of Behavioral Data
Cookies are small pieces of data stored in a web browser
containing information about the user’s behavior and
online activity without identifying the user personally.
This data plays an integral role in the latest display
advertising technologies, which make use of the data
to track and record each user’s intentions, enabling
advertisers to conduct effective campaigns and target
their consumers with precision. Potential efficiency
is greatly increased since the user is interested in the
advertised offers that are presented. This practice can be
very useful since it enables the advertising to be matched
with the interests of the consumers visiting the site.
Tracking behavioral data can thus be used to increase
the match between the interests of consumers and
advertising. This type of targeting can also measure what
is commonly called the post-view conversions,i.e.the user
was exposed to a banner ad on a site without clicking on it,
but subsequently visited the advertised site.
Regulation of Behavioral Targeting
Some web users, however, are concerned by this practice,
because recording online behavior violates their privacy.
Indeed,in a report published by Forrester Research,63% of
US.Internet users are concerned about the security of their
personal data when they click on online advertisements,
23% of them do not wish their recorded data to be
transferred to advertisers, and 19% simply do not want
their mobile and web data to be recorded. Moreover,
several laws have been put in place to protect consumers.
This targeting tactic is so effective that when European
laws were tightened up, researchers conducted a study
and found that advertisements disseminated previous
to this law were significantly more successful than those
after it.30
In Canada, tools have also been developed to
assist consumers remove their data from sites using data
tracking.
There is, therefore, no doubt that matching the content
of ads to consumer interests increases advertising
effectiveness. This matching can be achieved by two
methods, either by targeting pages that contain content
liked by the user or by analyzing content browsed by a
user to determine his/her interests, and then present
matching advertisements while he/she is browsing.
This last method is legislated, and caution is advised for
publishers, advertisers and distribution networks. For
more information on these laws, it is advisable to consult
the website of the Privacy Commissioner of Canada.31
Trends
@mediative
Mediative’s Data Advertising solutions ensure that your ads are delivered to the right audience,
wherever they may be on the web.http://mediative.com/digital-media/data-advertising
32
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Online display eco system

  • 1. The Online Display Advertising Ecosystem Understand the true value of display advertising, and how best to optimize it. February 2013 ° Mediative.com
  • 2. 2 About Mediative Mediative is a digital marketing company providing performance services and access to media platforms. Organizations who want to significantly enhance their digital presence and influence buyers turn to us to help generate revenue by quickly moving their targets from awareness to purchase. Location and research-based data fuels our insight, which we leverage across our consultative performance services, online properties, and location based marketing platforms in the dynamic digital world. With precise and unmatched knowledge of how “shoppers and clients buy”, we take a consultative and holistic approach, based on our people’s passion for insight and results, to provide the outcomes you need now, and for the future. Mediative has over 150 employees across four Canadian offices: Montreal, Toronto, Kelowna and Vancouver. Mediative is a Yellow Pages Group company. For more information, visit www.mediative.com About the RBC Financial Group Chair of Ecommerce of HEC Montreal The RBC Financial Group Chair of Ecommerce has the mission to develop and spread cutting-edge expertise and knowledge about Canadian consumers’adoption and use of new technologies. Louis Chaussé and Sylvain Sénécal (ss@hec.ca) contributed to the white paper. For additional information, consult www.chairerbc.com
  • 3. 3 Objectives This paper aims to describe the various aspects and best practices of online display advertising to better understand the real value of this type of promotion, and to improve its performance, both in terms of branding and response rates. Mediative worked with the RBC Financial Group Chair of Ecommerce - HEC Montreal to conduct a review of the academic and managerial literature on the subject.This exercise has enabled us to arrive at a description of an online display advertising ecosystem which is presented in the following pages. highlights • Online display advertising should be used together with paid search (PPC) for maximum advertising impact, since the combined effect greatly exceeds the effect of each one in isolation; • Advertising that is not fully exploited is not necessarily ineffective; • Reaction to the form of presentation directly affects the internet user’s attitude towards the advertising itself; • Flash banners stimulate users by shortening the time to process those decisions where several factors need to be considered; • Online sponsorship is most effective when the sponsored content is in line with the products or services provided by the brand sponsor; • Display advertising must be approached differently on mobile platforms; • Adexchange,real-timebiddinganddatabaseaudiencetargetingarenewtechnologies revolutionizing the world of digital marketing, forcing marketers to change their methods of digital advertising. Executive Summary
  • 4. 4 Table of Contents executive summary........................................................................ 03 Introduction : a definition.................................................... 05 online advertising blindness............................................... 08 Research Methodologies in Online Advertising......10 formats...................................................................................................11 performance measures...............................................................15 Types of creatives............................................................................19 context...................................................................................................25 exposure to advertising............................................................27 trends.....................................................................................................29
  • 5. 5 Displayadvertising,atermcommonlyusedinthemarketing world, was the first type of advertising to appear on the Internet. It made its appearance in the form of banners, drawing heavily on the printed advertising already seen for a long time in newspapers and magazines. In the mid 1990s, with the democratization of the Internet, banners began to be appear at the periphery of the main content of web pages.Incidentally,the first banner to be placed online was an advertisement for AT & T published on HotWired on 25 October 1994 (see Figure 1). 1 Online display advertising has evolved over the years, particularly in offering new formats (e.g., pop-ups, rich media) and contexts (e.g., online games), and adapting to new platforms (e.g., mobile devices). Multiple versions of display advertising have allowed it to remain popular despite its age (almost 20 years) and the propagation of competitivechannelsandmedia.Infact,displayadvertising remains the second choice for placing advertising online after PPC (pay-per-click or paid search), dominated by services such as Google AdWords. Moreover, according to eMarketer forecasts (see Table 1 and Graph 1), this ranking will remain the same over the next four years. a definition Introduction Methodology:Estimates based on analysis of data from the Internet Advertising Bureau of Canada (IAB Canada), estimates from other research firms, and trends in consumer usage of the Internet. Note:Canadian projections of online ad spending from eMarketer refer to data from IAB Canada for which the last full year measured was 2010;mobiles are excluded; converted at U.S. $ 1 = CAN $ 0.99;numbers in % may not equal 100% due to rounding. Figure 1: The very first banner in 1994
  • 6. 6 a definition Introduction Graph 1: Online advertising expenditure in Canada, by format, 2010-2016 ($US millions) Table 1 : Online advertising expenditure in Canada, by format, 2010-2016 ($US millions and % of Total) 2012 2013 2014 2015 2016 PPC $1 261,20 40.60% $1 427,70 40.50% $1 567,80 40.50% $1 722.70 40.50% $1 844.20 40.50% display advertising* $910.40 29.30% $1 014.80 28.80% $1 100.70 28.40% $1 200.10 28.20% $1 284.10 28.20% Classified ads and directories $776.80 25.00% $866.80 24.60% $930.20 24.00% $995.80 23.40% $1 033.70 22.70% video $142.90 4.60% $197.30 5.60% $259.70 6.70% $319.20 7.50% $373.40 8.20% email** $12.70 0.40% $13.40 0.40% $13.60 0.40% $13.60 0.30% $13.70 0.30% other $3.10 0.10% $3.50 0.10% $3.90 0.10% $4.30 0.10% $4.60 0.10% total $3 107.10 $3 523.50 $3 875.80 $4 255.60 $4 553.50 Source:eMarketer, April 2012. * banners, direct response / lead generation, rich media, sponsorship;**integrated advertising only. Source:eMarketer, April 2012. PPC Classified Ads / Directories Email** Display Advertising* Video Other
  • 7. 7 A study by comScore, however, shows that combined use of PPC and display advertising is far more effective than either of these forms of advertising used individually. As Graph 2 indicates, companies would benefit if their expenditure on display advertising were equal to that of search type advertising, which is not currently the case, according to data from eMarketer. In addition, this figure shows that online ads have an impact on offline sales. The fact that display advertising is in the shadow cast by PPC shows that even if it has been an alternative for advertising placement for several years, online display advertising is still questioned, and its role and usefulness are misunderstood. Its value is questioned due to the existing methods for measuring its performance. For example, click- through rates, a unit widely used to measure online advertising campaigns, are often quite low, creating doubts in the minds of advertisers as to whether their investment is really worth it. To contribute to the definition of an online advertising ecosystem, we conducted a review of the academic and management literature covering thirty studies on the subject. This whitepaper shares the best practices which can enhance the performance of online display strategies. a definition Introduction Graph 2: Percentage increase compared to a control group that was not exposed to advertising3 3 comScore, Harvard Business Review, April 2008. @mediative Online display advertising and PPC combined perform better than when used separately.At Mediative, we have known this for a long time and offer both! http://mediative.com/services/pay-per-click Visits to the advertised brand’s website Sales made to online customers Sales made to offline customers Consumers exposed to display advertising only Consumers exposed to search advertising only Consumers exposed both types of advertising over the same period % Increase over Control Group
  • 8. 8 One of the main reasons for questioning online display advertising effectiveness is the existence of a phenomenon called banner blindness that occurs especially when the chosen advertising format is located at the periphery of the main content and not predominantly on the page.As its name suggests,display banner blindness is simply the belief that people neither see nor look at advertising.This section aims to explain this belief, and above all put it into perspective. Online Display Advertising Blindness There are two types of advertising avoidance.29 The first is physical avoidance such as “zapping” the TV, or in interactive media closing a pop-up type window, or clicking on “skip this ad” to go to main content of a video or a website. In general, one engages in physical avoidance of advertising when it is mostly or entirely above the main content (TV or video advertising, pop-up ads and interstitials, etc.). These ad formats can be qualified as intrusive since they expose their content without the consumer having expressed any interest in seeing them. The second form of advertising avoidance occurs when consumers unconsciously avoid looking at ads within their field of vision.This form of so-called cognitive avoidance applies chiefly to media and advertising formats where advertising is integrated into the main content and takesuponlyaminorpartofthedisplay space. It thus competes with the main content and other ads if there are any. Advertising media to which cognitive avoidance applies are advertisements in newspapers or online formats such as banners, skyscrapers, floating ads, etc. These ad formats are considered to be voluntary since if people are open to,and fully look at the content,it is by choice, desire or interest. Banner blindness refers primarily to the latter type of advertising avoidance. The findings of several studies tell us more about how this phenomenon takes place. One study2 argues that consumer interaction with online advertising involves hierarchical stages moving through pre-attention, attention and the decision to click. The phenomenon of advertising avoidance occurs during pre-attention processing of the advertisement since it takes place at the moment that the individual is unconsciously deciding whether to pay attention to it. In fact, another study by Janiszewski showed that peripheral vision enables the recognition of objects which are outside the field of vision occupying attention. Thus, users learn to recognize commercials without needing to focus directly on them, and this enables them to avoid looking at them. This shows that web users have learned over time to develop strategies to avoid paying attention to advertisements. The phenomenon is further understood thanks to an important study conducted by researchers Drèze and Hussherr4 in which they have used eye tracking devices to observe and record the trajectory of respondents’ eyes when watching objects. Respondents navigating pages containing advertising banners were subjected to this technique and the results are very revealing. The study shows that only 50% of banners are looked at, and that the subjects are not always aware of the advertising they are watching, despite efforts of announcers and advertisers to produce ads that stand out from the main content and other ads on the page. However, banner blindness does not necessarily signify that the portion of advertising that is not looked at is necessarily wasted. Indeed, several instances of research have shown that consumers do not need to fully process a message to be influenced by it. For example, unexpected exposure to advertising can enhance the appreciation of consumers towards it and the advertised brand, even if they are not aware they have seen the advertising and brand before. Advertising Avoidance and Processing Levels: Their Effects on Performance Measurement
  • 9. 9 These various studies question the foundations of the online advertising industry. Indeed, in this industry performance and the cost of advertising is measured by click-through rates. However, if users avoid watching advertising, do not look at it directly, or do not click on it, it is a misconception to believe that advertising is ineffective since it is capable of being partially processed. For this reason, advertisers should reappraise the way they measure performance of online advertising, as click- through rate does not measure the full effectiveness of an advertisement. One should rather turn to attitudinal measures and those based on memory to measure the full performance of an online campaign. On the other hand, click-through rate as a measure of performance is not completely useless. It is still an excellent indicator when it comes to measuring direct response to advertising. Both measurement systems should be used together according to the objective of the advertising whether it be obtaining a direct response (click-through rate),as in a promotion or call to action or,on the other hand, building a brand (attitudinal measures).6 Withtheaboveinmind,amodel(seeFigure2)wasdeveloped to relate advertising processes to performance measures. Thus, we can see that the level of advertising activity is influenced by the medium and other characteristics of the advertising. When the level of advertising is low and there is no interaction with it (clicks, enlargement, participation in an activity, etc.), click-through rate is not a valid performance measure. In this case, it is better to measure attitude towards, and recollection of the ad and the advertised brand because it does not mean that the consumer has not processed (whether partially or fully) the advertisement. Conversely, when processing of the advertisement is high and the consumer proceeds to the ultimate moment of interaction (click), measures of interactivity such as click-through rate can be considered. Choices made at the advertising design stage must, therefore, match the level of processing that meets objectives, whether the advertising seeks to build up a brand over the long term or obtain immediate responses (buy online, order, subscribe, etc.) Online Display Advertising Blindness Figure 2: Model of the relationship between the advertising process and performance measures Advertising Avoidance and Processing Levels: Their Effects on Performance Measurement Source :Adapted from Chatterjee, Patrali (2001),“Beyond CPMs and Clickthroughs:Consumer Interaction with Web Advertising ” Internet Marketing Research:Theory and Practice, ed. Ook Lee, Hershey, PA:Idea Group Publishing, 209-216. Ad Format Ad Processing Type of Exposure Minimum Processing Guaranteed Traditional Exposure Measurement (Attitude and Recall) Maximum Processing Interactive Measurement (CTR) Ad Characteristics • Creative • Message • Position Interactive Technologies
  • 10. 10 Three main research methods have been used in the articles identified for the development of this whitepaper:laboratory experimentation, database analysis, and field studies. Laboratory experimentation consists of exposing respondents to stimuli related to the phenomenon investigated (here display advertising) and to observe and analyze their reactions using methods such as eye tracking,or collecting feedback using questionnaires before and/or after the experiment. Database analysis requires dealing with networks which disseminate the advertising and that record the behavior of the advertisements in databases. Afterwards, the researchers conduct statistical tests to draw conclusions from the data provided. Finally, field studies involve collecting opinions and user reactions using a questionnaire following a scenario relevant to the phenomenon under study. These three methods are also sometimes combined for the purposes of a given study to validate the results, leading to insights of greater value. Research Methodologies in Online Advertising
  • 11. 11 When the time comes to develop an online advertising scheme, a multitude of choices is available. Banners, sponsorships or pop-ups? Animated or static? Rich media or Flash animation? And more. Each of these elements has an influence on how the message is processed and its potential for processing by the user and, consequently, its performance. Formats Strengths and Weaknesses of Advertising Formats When the time comes to design online advertising, the right format must be chosen. This choice is crucial to the success of the campaign. As demonstrated by a Burns9 study, attitude towards the format directly influences attitudes towards the advertisement itself. This is why it is necessary to be aware of the perception of the targeted audience towards different advertising formats. For example, the results of a survey conducted by BBM Analytics in 2008 of Canadian consumers (see Graph 3) show that the most popular form of online advertising is video with audio. This does not mean, however, that it is the only format to adopt, and that the survey represents the perceptions of every target audience. Each format has its strengths and weaknesses and can be used to meet a precise communication objective. This section provides a summary of popular formats to enable informed decisions to be made about the format of online advertisements. It is difficult to establish a standard for the ideal size of an advertisement since the impact of size differs from one format to another. It also depends on the desired objective. Certainly, a large sized advertisement will be more easily recognized. On the other hand, if this large advertisement is a pop-up rather than a banner, attitude towards the advertised brand will be less favorable.7 The real question is, what is the intrusive effect of the format related to size? For example, a pop-up advertisement (an intrusive format since it is presented to the user without prior request), has good potential for being processed by the user. It has been proven that advertising in this format is the most recognized. However, when the size is too big, the pop-up becomes more aggressive, and attitudes toward the advertisement may be adversely affected. In short,the size of a display ad should beinverselyrelatedtoitsintrusiveness, since it has been proven8 that a highly visible ad, whether due to its size or the intrusiveness of its format, results in increased intentions to purchase. Anything that would spoil this positive effect by damaging attitudes towards the ad should be avoided. Graph 3: Online advertising formats favored by consumers in Canada Source:BBM Analytics, OmniVu, October 2008. Graphic ad with sound only Video ad without sound Graphic ad with animation and sound Graphic ad without either animation or sound Graphic ad with animation only Video ad with sound The Effect of an Advertisement’s Size on its Performance
  • 12. 12 Formats Banners Banners are rectangular or square advertisements found surrounding the content of web pages, online games and mobile applications. The international association IAB (Internet Advertising Bureau), which is dedicated to the optimization and promotion of online advertising, has declared three standard banner formats: vertical format (skyscraper), rectangular (leaderboard) and square (big box) horizontal format (see all the formats on next page). The Burns study reports that there is no significant difference in the effectiveness of the IAB standards for brand recall and unaided recall of advertising.9 However, aided recall of advertising is higher for vertical ads (rectangle and square). For these reasons, horizontal and vertical banners are discussed interchangeably. Since they are not very intrusive, banners usually benefit from a favorable attitude on the part of users. However, they have more difficulty getting noticed (50% of them are not looked at) and click-through rates are therefore lower than for pop-ups, for example. Although less processed consciously, they are able to influence the attitude of Internet users at the pre-attentive processing stage around the advertisement. Thus, the banner is an advertising format to be favored when the goal is branding and increased brand awareness. Flash Banners Banners can be static or animated. Flash is one of the technologies used to insert animation into a banner. An eye- tracking study was conducted to determine the effect of exposure to this type of banner, and researchers found it aroused the subjects by shortening the time required to process decisions where several factors come into consideration. Needless to say, situations where buyers face these kind of decisions are very common, especially when purchasing complex products. This study also confirmed that ads placed at the top of the page are worth more than those at the bottom. Source:Day,Shyi & Wang (2006)“The Effect of Flash Banners on Multiattribute Decision Making:Distractor or Source of Arousal?”Psychology & Marketing, Vol.Vol. 23, No. 5, pp. 369–382. Standards formats for advertising banners Source:Wikipedia, Standard web banner ad sizes,January 2010.
  • 13. 13 Formats Pop-ups The pop-up is an advertisement that opens in a new browser window on top of the one being accessed by the user. The intrusiveness of this format is very high, which often negatively affects attitudes towards the advertisement and, shortly after exposure, the advertised brand.7 However, this form of advertising is processed more than banners, which provides a better click-through rate10 and stronger intentions to purchase.11 The pop-up is a good format to use when trying to obtain direct responses to advertisements. On the other hand, care must be taken not to undermine consumer attitudes towards the brand. This can be avoided by targeting strategic locations to display the pop-up. For example, in placeswherepeoplearemorelikelytobeintheinformation research phase or in a procurement process relevant to brands and products. Website product pages and product review sites by consumers are good examples. Online Sponsorships Online sponsorship refers to a brand endorsing or presenting the contents of a web portal, such as an online game,a page or website.The key element to consider when developing online sponsorship is the relevance of the brand to the sponsored content. One study showed that recollection of the sponsor, attitude toward the sponsor, and purchase intentions for sponsored products are higher when the sponsor and the sponsored content have a relevant connection between them.12 It is also important to sponsor sites that are perceived to be credible and that users intend to revisit, because these two elements influence attitudes toward the sponsor. In other words, even if the web content is strongly linked with a brand and products, if it is not appreciated by users the brand will suffer. It is therefore necessary to link with quality content so that the favorable attitude towards the content reflects positively on the brand. Rich Media According to IAB, rich media advertising is a format with which users can interact, including video, audio, animations using Flash, Java, Javascript, DHTML, etc.13 Its main strength is entertainment. The subject of entertainment will be discussed later (p.24). In general, rich media will be most effective for branding objectives with consumers looking for entertainment or browsing aimlessly for fun. Conversely, it would be less relevant to use such a format where people are more likely to be looking for specific information relating to a purchase, because the entertainment could get in the way of their task. Rising Star The rising star format was recently introduced into IAB’s portfolio of advertising formats, which include rich media interactive options. This format imposes the ad between the header of the website and its content. As per a study published by IAB and Moat, the rising star has resulted in significantly higher engagement with consumers. In point of fact, this study examined 4 million ad banner impressions against five of the six rising star formats (Portrait, Slider, Sidekick, Billboard and Filmstrip) versus two standard banner types (Big Box and Leaderboard). The results indicated that users were spending 50% more time interacting with rising star ads (5.8 seconds) than with standard banners (3.9 seconds).27 At Mediative, we conducted our own research on the impact of display advertising on influencing customer buyingbehavior.Thispaperisavailable for free download at Mediative.com: http://pages.mediative.com/Walmart- Display-Advertising-At-Retail.html
  • 14. 14 Formats Table 2: Formats summarized Banners • Given their non-aggressive placements, banners typically result in favorable responses from users (versus, for instance, the more antagonistic pop-ups). • Banners are more difficult to be noticed by the user and have lower click-through rates compared to more in-your-face formats (such as pop-ups or rich media). In actuality, it is estimated that almost 50% of banners are never even seen (Drèze & Hussherr, 2003). • Banners do influence users’subconscious attitudes to the brand simply via their placement within the user’s line of sight (Shapiro et al., 1997; Janiszewski 1990a;1990b;1993). For instance, when a user arrives on a fresh webpage, s/he will unconsciously regard the banners on the page via his or her periphery before paying attention to the content of the advertisement. • As such, banners are an advertising format to prioritize for campaigns designed to generate brand awareness. Contrarily, they should be used sparingly in campaigns that seek to generate a direct response from the consumer. pop-ups • Pop-ups are inherently highly intrusive, thus resulting in a negative attitude from consumers towards the advertisement in question and,even the advertised brand within a short span of time after exposure (Chatterjee, 2008). • Given their high-level of intrusion on the user experience, pop-ups are seen more than standard banners, thus resulting in a better click-through rate (Cho et al., 2001) and higher levels of purchase intent (Diao et Sundar, 2004). • Pop-ups are good to implement in an advertising campaign that demands a direct response. sponsor- ships • Online sponsorships are made when a brand endorses or presents content on a web portal, such as an online game, a webpage or a branded content website. Branded content works as advertiser recall, attitude towards the advertiser and intention to make purchases of products/services from the advertiser are augmented when the sponsored content has a pertinent link with the advertiser’s offering. • The credibility of the site and the intention of the visitor influences their attitude toward the brand of the sponsor. rich media • Rich media formats that are animated with video perform better than rich media formats without video or Flash animation. • Rich media formats that integrate video perform strongly for brand awareness, favorability towards the brand, and purchase intentions. • Rich media without video outperforms Flash animation. Moreover, it permits a better advertising message association than rich media with video. (Spalding and al. 2009) Rising star • The rising star format that integrates interactive rich media elements imposes the ad between the header of the website and its content. • The rising star format has demonstrated a significantly higher return with consumer engagement (IAB and Moat, 2012).
  • 15. 15 attitudinal measures Understanding the impact of online advertising on user attitudes is very useful for studying their behavior:as shown in the Theory of Reasoned Action,14 attitude is strongly related to behavior prediction. Table 3 presents various attitudinal elements that can be measured using surveys (online or not),focus groups or interviews conducted with a sample of consumers who have been exposed to ads. This can be done through a pre-test before the launch of a campaign and / or at the end of the campaign to track and consider future improvements that can be made. These measures can be taken immediately after exposure to advertising and / or after a certain period to measure the impact of advertising over time. Obviously, the more the advertising succeeds in creating an enduring positive attitude the better. The purpose of this section is to list the different methods used in various studies to measure the performance of online advertising. Performance Measures Table 3: Attitudinal Measures Attitude towards the website Involves measuring attitude toward the website where the ad is displayed. This measure is useful for websites that generate advertising income and that have the satisfaction and loyalty of their visitors at heart, or for companies that advertise on their own site. Attitude towards the Ad Involves measuring attitude toward the advertisement. To achieve its communication objectives, the ad must, among other things, be appreciated so that its message is received favorably by the consumer. Attitude towards the format of the AD It has been shown that attitude towards the ad format directly influences attitude towards the advertisement. Thus, if a consumer does not like the format of an advertisement he/she could develop a bad attitude towards it even if the message could have been of interest.It is relevant to know what type of ad formats are appreciated by the target audience so that they develop a positive attitude towards the advertising. Attitude towards the product / service Involves measuring attitude towards the product / service featured in the ad. When advertising proposes a product or service, its ultimate goal is to create a positive attitude towards it. Attitude towards the brand Involves measuring attitude toward the brand featured in the advertisement.The totality of all advertising efforts must ultimately contribute to making attitude towards the brand more favorable.
  • 16. 16 Measures Based on Memory As in the case of attitudinal measures, those based on recollection can also be measured using surveys, focus groups or interviews with a sample of consumers who have been exposed to advertisements.This can be done by pre-test before launch of a campaign and / or afterwards. Measures can be taken immediately after exposure to the advertising and / or after a certain time. Brand Consideration Brand consideration is taken into account in brand awareness. Also called a consideration set, it refers to those brands which are considered by a consumer, in a certain category of products and services, when thinking aboutmakingapurchase.Brandconsiderationmeansthat consumers consider that it corresponds to their needs and merits their interest. Specifically, it is measured by asking consumers which brands they would consider buying for a given product. For example:“If you were to buy a car soon, what brands and models would you look at first?” Recall of a Brand and Advertising The following all contribute to different levels of brand awareness. They are divided into two groups (recall and recognition) and can be used to measure the effectiveness of the advertising itself, but also its effect on the brand. A recall is a recollection of the brand or advertising by thinking about it and using memory alone. Recognition is the act of remembering the brand or advertising on seeing it again and being aware of having seen it before.The extent of the recall and recognition is usually established by asking respondents who have just browsed the site if they remember seeing advertisements. If yes, they are asked if they remember the advertised brands. An affirmative answer signifies recall. When respondents remember neither the advertising nor the brand, they are presented again with the advertisement and brand and asked if they recognize them. A positive response signifies recognition. Performance Measures Table 4: Types of recall Recall (unassisted) recall (assisted) …of the advertisement …of the advertisement (or assisted recall of the advertisement) …of the brand …of the brand
  • 17. 17 click-through rates The measures described previously are attitudinal in nature and are mainly used to measure the effectiveness of an advertisement (i.e. when individuals have shown a low level of interaction with the advertising). Moreover, these attitudinal measures are also used in high-level interactivity situations to assess brand awareness and brand attitude of individuals who were in direct contact with it. The click-through rate (CTR), however, enables measurement of behavior and consists of the number of clicks made for the total number of times an ad was shown (impressions). Although use of this measure alone has been questioned, it is still a dependable indicator when measuring direct response to an advertisement (the number of visits to the website resulting directly from the ad, for example) or even to gauge interest in a promotional incentive announced in an advertisement. Table 5 below provides benchmarks for CTR. purchase intentions The intent to purchase measurement consists simply of asking individuals if they intend to purchase the displayed product or brand after they have been presented with the advertisement. Performance Measures Table 5: Performance Metrics Benchmark for Canada, 2011-2012 Source :MediaMind, 2012.
  • 18. 18 Performance Measures Table 6: Performance Measures Summarized Definitions Methods of measurement Attitudinal Assists in understanding the impact of online ads on user attitudes. Understanding consumer attitudes help predict their behavior. See Table 2 to see the set of attitudinal measures. Survey, focus group or interviews. Based on recall Used to gauge whether individuals remember, consider and/or recognize a brand or ads thanks to advertising efforts. Survey, focus group or interviews. Click-through rates The number of clicks on an ad divided by the number times it has been displayed (impressions). This metric has been challenged as explained in the white paper; however it is still the most valid metric when it comes to measuring direct response (Chatterjee, 2001). Use of web data.Through web analytics software or directly from the distributor of the ads. Purchase intention Consists of asking individuals, after being exposed to the ad, if they intend to buy the product or the service in the future. Survey, focus group or interviews.
  • 19. 19 Type of Creatives The effect of animation in advertisements has also been investigated in a study by Yun,15 this time using an experimental method. The results of this laboratory experiment indicate that the use of animation attracts more user attention, helping the advertisement stand out from others in a crowded advertising environment. As can be seen in Graph 4, the higher the degree of animation, the more the advertisement attracts attention. Consequently, this degree of attention paid to the advertisement positively influences its memorability, since the study shows that it has an impact on the ad’s recognition rate. Also, the degree of attention affects the intensity of the cognitive response to the advertisement, which in turn also affects its memorability. In addition, researchers show in this study that a moderate, rather than high degree of animation has greater impact on the recognition rate of the advertisement, as can be seen in Graph 5. The results show that when the degree of animation is high, the recognition rate will be reduced due to an increase in the emotional response. In the same vein, a moderate level of animation is best for creating a favorable attitude towards the ad, as shown in Graph 6. On the other hand, although a high level of animation is liable to capture attention, one must be careful, since it can be seen that it also engenders a negative user attitude towards the advertisement, both at the cognitive and emotional level. Graph 5: Percentage recognition rate for an ad related to its degree of animation Graph 4: Attention rate for an ad related to its degree of animation (seconds) Graph 6: Degree of positive attitude towards an ad related to its degree of animation (scale of 0-5) Static High degree of animation Static High degree of animation Static High degree of animation
  • 20. 20 Types of Creatives In short, for advertising to be effective, it is better to opt for a moderate level of animation so that it be more easily remembered and recognized.A high level of animation,while capturing more attention of the user,can degrade a favorable attitude towards the advertisement. For more information on types of animation and the different technologies used to implement them, see the section ‘Comparison between different types of animations’ on page 23. Table 7: Types of Creatives - What you need to remember Size • It is difficult to establish a rule for the ideal size of an ad since the impact of size differs from one format to another. • A large ad will be recognized more easily. On the other hand, if the large ad is a pop-up rather than a banner, attitude towards the announced brand will be less favorable (Chatterjee, 2008). • The size of a display ad should be inversely related to its intrusiveness since it has been proven that a highly visible ad due to either its size or intrusive format will result in greater purchase intentions (Goldfarb & Tucker, 2011). This positive effect should not be spoiled by harming attitude towards the ad by using a format that is both large and intrusive. Animation • High degree of animation:attracts user attention • Moderate degree of animation: the ad is more easily recognized; the ad benefits from a favorable attitude (Yun Yoo & Kim, 2005). @mediative At Mediative,our mission is to maximize the impact of your brand online,whether through online display,content marketing or custom web design.Learn more about our creative services.http:// mediative.com/digital-media/creative-services
  • 21. 21 In a study by Lohtia et al.,16 conducted using a database of 8,725 advertising banners,content and design elements were separated into two groups. Classified into emotional and cognitive elements, the content and design elements obtaining the best performance (measured by CTR) were identified. One of the main findings of this study is that the content and design of a banner does not have the same impact when advertising to businesses (B2B) compared to consumers (B2C). Apart from the use of color (see Graph 7), which is moderately beneficial in both contexts (B2B and B2C), other factors affect banner click-through rates differently. Also, the presence of incentives (see Graph 8) significantly reduces the click-through rate for B2B advertising while it has very little impact on B2C advertising. This may be because B2B purchases require incentives more specific to customer needs than those used in large-scale promotions. The use of interactivity (see Graph 9) in a banner has a negative affect on CTR in both contexts, though more so in the case of B2B advertising. In addition, the use of emotional appeal (Graph 10), and animation (Graph 11), increases the click-through rate for B2C banners while decreasing it for B2B banners. The CTR for B2B banners is always higher than B2C banners (see Graph 8, 9, 10 and 11). Finally, the table to the right summarizes the content and design elements that need to be included in advertisements in each context. It is understood that B2B advertising should focus more on the delivery of a clear,direct and simple message compared to B2C advertising which can be more entertaining. Although two of the three elements beneficial to CTR are design elements, the study conducted by Drèze and Hussherr, which did not differentiate between B2B and B2C contexts, suggests that advertising content is important: the researchers found that the message itself is more important than the method used to communicate it. This study used brand recognition as a measure rather than CTR. B2B vs. B2C: Choice of Content and Design According to Context Types of Creatives cognitVe affectiVe Content Presence of incentives Presence emotional appeal Design Presence of interactivity Presence of animation Presence of colors B2b b2c Moderate use of color Moderate use of color Animation Emotional appeal Graph 7: The effect of color on click-through rates Few colors Many colors
  • 22. 22 Graph 8: The effect of incentive on click- through rates Graph 10: The effect of emotional appeal on click-through rates Graph 11: The effect of animation on click- through rates Graph 9: The effect of interactivity on click- through rates B2B vs. B2C: Choice of Content and Design According to Context Type of Creatives Without animation With animation Without interactivity With interactivity Without incentives With incentives Without emotional appeal With emotional appeal
  • 23. 23 Comparison Between Different Types of Animation Type of Creatives Graph 12: The effect of 4 types of animation on 5 measures Figure 3: Contribution of the 5 indicators Source:Dynamic Logic. Aided brand awareness Awareness of the online ad Association of the message Preference for the brand Purchase intention Source:Spalding L., Cole S. & Fayer A. (2009),“How Rich-Media Video Technology Boosts Branding Goals:Different Online Advertising Formats Drive Different Brand-Performance Metrics”Journal of Advertising Research, September, pp.285-292 Rich Media with video GIF & JPEGFlashRich Media without video Aided brand awareness Awareness of the online ad Message association Preference for the brand Purchase intentions When it comes to animation in an ad, there are several technologies and animated elements that can be used. One study evaluated the effect of four different types of animation on five performance indicators (see Figure 3): • Rich media with video. • Rich media without video. • Advertising with animation in Flash format. • Advertising without animation in GIF or JPEG format. The study exploits a database of 4,000 online campaigns to produce a Delta Score showing variation in advertising performance according to five indicators. The results (summarized in Graph 12) show that: • for aided brand awareness, rich media with video produces the best score. • for awareness of the online advertisement,the best result is also obtained using rich media with video. • the best score for message association is produced by GIF / JPEG, with Flash in second place. • brand preference is higher with video, followed by GIF / JPEG. • purchase intentions are highest using by rich media with video tracking, followed by rich media without video, GIF / JPEG and Flash. In summary, rich media with video animation is the most effective among the five measures together, especially for aided brand awareness and measures at the bottom of the funnel. Rich media without video is quite good on all the metrics. GIF / JPEG manages very well to convey a message clearly, since it is not blurred by too much animation, and also because advertisers have more experience communicating in this format which has been longer in use. Finally, Flash is not so bad, but easily ranks last generally. So for the same result (animation without sound) it is better to opt for rich media which is more effective except for message association. Inshort,itisimportanttobeclearaboutthecampaign objective in terms of these five measures to be able to the choose the appropriate type of animation.
  • 24. 24 Types of Creatives The Effect of Entertainment on Advertising Performance Another aspect of advertising design, relating both to content and design, is the value that entertainment may have for the user. An experimental study was conducted to measure the effect of advertising using different levels of entertainment (high vs. low), and taking into account several user characteristics such as their need to quickly close a purchase, whether or not they are browsing with a specific goal in mind, and how versatile they are in using the Internet.17 In this study the stimuli used were a game ad to show an advertisement with a high level of entertainment and a banner to represent a low level of entertainment. The researchers found that if the user is browsing with a specific purpose in mind the entertainment-based advertising has less effect on brand attitude and purchase intentions. In other words, users looking for information will hardly, if at all, be attracted by the ad’s entertainment aspect. Conversely, for users looking for entertainment, advertising featuring entertainment can influence brand attitude and purchase intentions. The same study examined the effect of entertainment on individuals who needed to make a purchase quickly. It turns out that when the need to make a quick purchase is low and the entertainment aspect of the ad is high, brand attitude is even more positive. In short, these results tell us that advertising with high entertainment content, such as a game ad or one loaded withrichmedia,isnotappropriateforreachinguserswhose goal is research. Pages visited, time spent on pages, and use of search tools are clues for differentiating between consumers who are goal oriented and those that are not.
  • 25. 25 Context Content,format and design are crucial in planning a digital advertising campaign.However,the context in which a campaign is to be disseminated also plays an important role: the dissemination context influences how the consumer is exposed to the advertising and therefore how he/she will process it.The aim of this section is to present the results of several studies that have tested the effectiveness of certain online display advertising performance variables in different dissemination contexts. Match Between Website Content and Advertising Findings on the relevance of the relationship between a website and its advertising have proved that an ad that is shown on a relevant site leads to a higher level of brand recall and a higher intention to click.18 Research by Goldfarb and Tucker8 has shown that advertisements with content that was relevant to the website were three times more efficient in terms of purchase intentions compared to ads without a relevant relationship with the website.However,it is better that the ad not be intrusive in size or format.Since the advertisement is already related to the page content, the person browsing is not really intruded upon, other than the interruption in his/her browsing path. Contrast Between the Advertisement and the Dissemination Environment One might think that an advertisement that stands out from its surroundings, compared to other advertisements and content,will be more effective.However,a study conducted onmorethan800respondentsshowedthattherelationship between a banner’s distinctiveness and its effectiveness is very low.4 What is more, this relationship is contrary to the popular belief that an advertisement offering a high degree of distinctiveness will be more effective. This study shows that, according to a set of efficiency measures (unaided recall of the ad, brand recognition, aided recall of the ad, and brand awareness), advertising that stands out within its environment only affects aided recall of the advertising, which is not a very strong indicator of performance. Consumer Familiarity with the Website A study by McCoy19 demonstrates that a consumer’s familiarity with a website where ads are published affects the perceived quality of the site and the intention to visit it again. A site is said to be familiar when it is known to the web user, who also has some mastery navigating through it and finding information. In this situation, a familiar site is perceived to be of higher quality than an unfamiliar site with advertisements. Hence the negative influence of advertising is greater on unfamiliar sites. The results of the study also support the notion that a site that is perceived to be of high quality has a positive influence on the intention to revisit it. Consequently, a familiar site, whether it contains advertising or not, is more likely to be reused by its visitors than an unfamiliar site with advertisements. However, the perceived quality of a familiar site with advertising is no different to that of an unfamiliar site without advertising. Also, a surprising finding of this study, is that sites chiefly without advertising, whether familiar or not, are not perceived to be of higher quality than sites with advertising. This is all the more surprising when, as stated, the study tested pop-up type advertisements, a format usually less welcome due to its intrusiveness. These findings indicate the importance of following the best practices in terms of website structure and ease of navigation.
  • 26. 26 Context Table 8: The dissemination context summarized Relevance • There is a relevant relationship between the ad and the place where it is displayed when the two share a common theme. For example, a sports clothing retailer on a TV sports channel site is considered to be a relevant match. An ad which appears on a relevant site (context) leads to stronger brand recall and intention to click on the ad (Yaveroglu & Donthu, 2008). • Advertisements with content that was relevant to the website were three times more efficient in terms of purchase intentions compared to ads without a relevant relationship with the website (Goldfarb & Tucker,2011). • Advertisements that are not too intrusive due to their size and their format perform better, as these ads do not roadblock the user during his/her web navigation (Goldfard & Tucker, 2011). (Goldfarb & Tucker, 2011). contrast • Contrast is the content’s ability to stand out from the page (ad or main page) through its variation in color, size etc.The effect of contrast on banner effectiveness is very weak.Also,this relationship is the opposite to popular belief that a high-contrasting ad will be more effective. This is to say that ads that don’t stand out from their background are slightly more effective for branding (Drèze & Hussherr, 2003). Familiarity • A familiar site,whether or not it contains ads,has more chance of being revisited by its users than an unfamiliar site without ads. • A familiar site which includes ads is not perceived to be different in quality to an unfamiliar site without ads. When designing a site, it is better to follow the best practices in terms of navigation and ease-of-use and to advertise on websites following these best practices.
  • 27. 27 Exposure to Advertising Optimal performance of a campaign is not a matter of chance - it takes strategic thinking and knowledge of user reactions to different exposure and dissemination strategies. In this section, we have brought together the chief results of studies covering the subject. The Effects of Repetition It is generally believed that the more you repeat a message, the more likely it will be understood by the recipient. Logically, the more one is exposed to a message after short intervals, the less likely it will be forgotten, go unnoticed, or simply escape us. In the context of online advertising, this idea is not mistaken, in fact there are several levels of memorization for a brand and message. A study by Drèze and Hussherr4 indicates that the effectiveness of advertising generally increases with the frequency of exposure. Repetition improves unprompted recognition of the ad, brand recall and brand awareness. Repeated ads have a better effect on attitudes towards the ad, the advertised product and the website that disseminates them when they match the interests of the user, and if they are interactive.20 Nevertheless, limiting the frequency of an advertisement with a frequency cap maximizes its impact. A frequency cap controls a given user’s frequency of exposure to an ad by means of cookies. In the digital marketing industry, the standard is not to display an ad more than nine times to avoid saturation that can diminish its return on investment. Repeated or Alternated Creatives? There are two main strategies for repeat advertising. The first one is to disseminate the same creative, while the second is to disseminate different creatives in alternation. A study by Yaveroglu and Donthu (2008) tested both strategies for the effectiveness of banners in different contexts. It was demonstrated that in competitive advertising environments it is better to opt for the repeated display of a single creative to obtain better brand recall and greater intention to click. Conversely, in non-competitive environments it is best to alternate different creatives to obtain the same results for brand recall and click intentions. Consequently, it pays to establish whether the ads will be shown in competition with high levels of content before deciding on a strategy. Multiple Exposure to Advertising AstudybyManchanda21 focusedonhowmultipleexposures that a consumer has to an advertisement across various touch points impacts his/her likelihood of purchase. As concluded by Manchanda, multiple exposures increases the probability of purchase. More specifically, this study demonstrated that an individual’s purchase intent rises with multiple exposures to a specific ad in one given week. Nevertheless, this study highlighted that for purchase intent to mount, it is paramount that the same creative be delivered within that time period – especially because, as the study uncovered, exposure to a greater number of creatives actually diminished the probability of purchase. Researchers have thus concluded that the repetition of the same message has a better chance of purchase intent success on a site with a higher volume of content and banners.Furthermore,a single creative message is best for campaigns that are to be delivered across multiple website placements. In conclusion, a single creative/advertising message is better for increasing a consumer’s likelihood of purchase, whether the ad is delivered across multiple touch points or delivered multiple times on one site. In summary, exposure and repetition play a role in the effectiveness of an advertising campaign, especially on brand recall, intention to click and the likelihood of purchase. However, a consumer who is not in information search mode is very unlikely to click on an ad. Hence, exposure and repetition have more impact on branding than on direct actions such as an immediate purchase online.
  • 28. 28 Exposure to Advertising Table 9: Exposure to advertising - summary In gEneral • The effectiveness of an ad usually increases with the number of impressions. While repetition increases unaided recognition of the ad, brand recall and brand awareness, it has not be proved that it increases aided recall of the ad (Drèze & Hussherr, 2003). • Once an advertisement goes online and is aligned with user interests, repetition is an important variable that has a strong impact on the user’s attitude towards the ad, the advertised product and the website where the advertisement is published (Campbell & Wright 2008). Repeated creative • Repetition produces better brand recall and greater intention to click in competitive advertising environments (Yaveroglu & Donthu, 2008). Alternative creatives • Alternating creatives produces better brand recall and greater intention to click in non-competitive advertising environments (Yaveroglu & Donthu, 2008). Multiple exposures • Exposure of the same ad message in multiple locations, and several times over, increases the probability of purchase (Manchanda et al., 2006).
  • 29. 29 real time bidding Real-time bidding (RTB) is a data-driven programmatic buying model allowing advertisers or their agencies to bid on digital media (display, video, mobile, social, etc.) in real-time, at the impression level.26 In other words, it is a new online display solution that is revolutionizing the advertising industry, enabling advertisers to bid, in real- time,on available digital advertising inventory to maximize results in the fastest turnaround times. In addition, RTB allows major advertisers to determine their prices according to the relevance of a publisher to their campaign, and small advertisers to purchase prints when the current bid fits their budget. Traditional online advertising, on the other hand, requires setting a price for a certain number of impressions before the campaign, even if some of these impressions are less effective at different times of the day. RTB involves three parties: an advertiser (or media buyer), a publisher and an advertising auction platform. Online publishers put their available advertising inventory up for auction in the form of impressions in real time. Advertisers or media buyers use the auction advertising network to bid on impressions in real time. RTB allows advertisers to evaluate in real time the value of an ad impression and to decide whether to bid or not on it, according to its value for their campaign. We predict that the traditional online media buyer role will divide into two specialties: programmatic buyers and custom buyers, who will pursue two different objectives (see Table 10). 28 @mediative Auctionsinrealtimearethefutureofonlinedisplay.LearnmoreaboutMediative’sadvertisingauction platform http://mediative.com/digital-media/real-time-bidding Table 10: Media Buyer Roles Programmatic buyer Programmatic buyers will focus on platform-based, real-time buying across available channels (primarily display today, with increasing availability of video and mobile inventory to follow). This group will run direct response and broad-based (such as audience targeted) brand campaigns. Backgrounds in analytics, search, ad network, and/or ad operations will be highly valued in these buyers. Custom buyer Custom buyers will focus on developing unique, client - or campaign-specific brand experiences with publishers that feature deep integration, custom content, and non-traditional elements. Traditional media planning and buying skills — negotiating prowess and strong buyer/seller relationships — will drive the best and most successful outcomes for clients. Brand marketing backgrounds will be valued in this group. Source: Forrester Research, 2012. Trends New digital marketing technologies such as ad exchanges, real-time bidding and audience targeting using databases are revolutionizing the digital marketing world.25 The emergence of these new technologies is forcing us to change our digital advertising methods. Marketers must adapt to new models of media planning, purchasing, and optimization, since the older models are losing their effectiveness and relevance when it comes to advertising campaigns based on audiences, databases and automated management.
  • 30. 30 Trends Figure 4: The online media purchasing process Sources: eMarketer (2012) Guide to the Digital Marketing Ecosystem Publisher — the owner of the website on which the ad will appear. Supply-Side Platform (SSP) — a technology platform publishers use to organize and monetize site ad inventory for sale via RTB. Publishers might use an SSP to create their own private ad exchange. Ad Exchange — a brokerage where inventory sources (publishers, SSPs, ad networks, exchanges) sell impres- sions and media buyers purchase them. Ad Network — an inventory source organized by audi- ence, content or contextual theme or inventory type (e.g., video, mobile). Allows for both buying and selling of ad inventory. Demand-Side Platform (DSP) — a technology platform used by media buyers to manage impression-level display ad buys across other inventory providers (e.g., exchanges, ad networks, SSPs). Agency trading desks are white-labeled DSPs used to manage agency ad buys. Media Buyer — any buyer of display ad inventory: brands, agencies and ad networks buying on behalf of clients. UPFRONT BUY the main paths media buyers use to reserve upfront inventory in bulk. REAL-TIME BIDDING the paths an ad might travel when buying unreserved, real-time bid (RTB) impressions. DSP/ATD DEMAND-SIDE PLATFORM MEDIA BUYERPUBLISHER SSP SUPPLY-SIDE PLATFORM A D EXCHAN G E A D NETWOR K
  • 31. 31 Tracking Behavioral Data The web abounds in available data that, when properly sorted and processed, enables us to know many things about consumers. While browsing, users leave traces (cookies, clickstream, etc.), and over time it is possible to know their main interests by observing the contents they look at. In this way, it becomes easier to present them with advertising on products and services that may meet their needs or preferences. The Role of Behavioral Data Cookies are small pieces of data stored in a web browser containing information about the user’s behavior and online activity without identifying the user personally. This data plays an integral role in the latest display advertising technologies, which make use of the data to track and record each user’s intentions, enabling advertisers to conduct effective campaigns and target their consumers with precision. Potential efficiency is greatly increased since the user is interested in the advertised offers that are presented. This practice can be very useful since it enables the advertising to be matched with the interests of the consumers visiting the site. Tracking behavioral data can thus be used to increase the match between the interests of consumers and advertising. This type of targeting can also measure what is commonly called the post-view conversions,i.e.the user was exposed to a banner ad on a site without clicking on it, but subsequently visited the advertised site. Regulation of Behavioral Targeting Some web users, however, are concerned by this practice, because recording online behavior violates their privacy. Indeed,in a report published by Forrester Research,63% of US.Internet users are concerned about the security of their personal data when they click on online advertisements, 23% of them do not wish their recorded data to be transferred to advertisers, and 19% simply do not want their mobile and web data to be recorded. Moreover, several laws have been put in place to protect consumers. This targeting tactic is so effective that when European laws were tightened up, researchers conducted a study and found that advertisements disseminated previous to this law were significantly more successful than those after it.30 In Canada, tools have also been developed to assist consumers remove their data from sites using data tracking. There is, therefore, no doubt that matching the content of ads to consumer interests increases advertising effectiveness. This matching can be achieved by two methods, either by targeting pages that contain content liked by the user or by analyzing content browsed by a user to determine his/her interests, and then present matching advertisements while he/she is browsing. This last method is legislated, and caution is advised for publishers, advertisers and distribution networks. For more information on these laws, it is advisable to consult the website of the Privacy Commissioner of Canada.31 Trends @mediative Mediative’s Data Advertising solutions ensure that your ads are delivered to the right audience, wherever they may be on the web.http://mediative.com/digital-media/data-advertising
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  • 33. 33 Digital Marketing Questions? Ask one of Mediative’s Digital Marketing Strategists info@mediative.com Mediative.com February 2013 1.800.277.9997 Info@Mediative.com Subscribe to Mediative’s newsletter to receive more insights and studies. Download our latest whitepapers > From the Creation to the Evolution of Location Based Marketing > In a Customer State of Mind > The Effectiveness of Display Advertising on a Desktop vs. a Tablet Device > The Impact of Display Advertising At-Retail on Influencing Customer Buying Behavior Featuring Walmart