I participated in a webinar yesterday that shared findings from Nielsen's second annual Online Advertising Performance Outlook report. The study surveyed marketers and media sellers for their sentiments on the current state of online brand advertising and how they anticipated it to change over the next year.
Since both media buyers and sellers were polled, the report provides perspective from both sides of the online advertising market equation. Where brands, agencies, and publishers agreed and disagreed was also interesting, as this is an evolving marketplace and there are still disconnects about how to measure and evaluate the impact of online brand ads.
Some of the highlights:
- Brands will increase their online brand ad spend in 2013. 61% of brand respondents said they planned on increasing their budgets, while only 11% planned to oversee a decrease. A quarter planned on keeping their budgets steady.
- Social, mobile, and video will capture the lion's share of the increase. 70%, 69% and 64%, respectively, of brands reported that they planned on increasing budget in these channels. Contrast with only 19% and 11% looking to increase their spend on traditional display and television, respectively.
- Converged media campaigns are becoming the norm. 66% of advertisers coordinate social media campaigns with other online advertising campaigns, and 51% do so as well with offline campaigns. Much of this is a response to the multi-platform nature of consumers' media consumption, the "second screen" phenomenon, etc. From July 2011 to July 2012, mobile app time consumption more than doubled, from 58.8 billion minutes to 129.4 billion minutes, for example.
- "Drowning in data." Half of media buyers and a third of sellers are overwhelmed with reporting data and want a few metrics with which to track the performance of a campaign.
- Brand lift and sales lift are metrics brands pay attention to. 78% of advertisers would like to see campaign performance associated with sales lift, while 55% said brand lift is meaningful enough to be worth tracking.
- Brands still care about clickthrough. Although of dubious value for branding-focused campaigns, 88% of polled advertisers, possibly demonstrating a legacy attachment to metrics created for direct response advertising, said that clickthrough was still an important metric for online branding initiatives.
- Collaboration is key. A full 98% of advertisers felt that frequent communication and sharing of data while ads are in-market were important elements in a campaign's success.
The poll seems to point to rather clear conclusions about how advertisers perceive where the online ad market is going with respect to branding initiatives.
First, most seem to understand well that the media consumption landscape is changing and they are eager to follow their audience into new media and across platforms. The move by TV watchers to use a second screen (38%) to shop (22%), interact with social media (38%), and look up related information (15%) is not lost on advertisers, a majority of whom are integrating their campaigns across online and even offline channels.
Second, expectations around measuring performance continue to evolve. While most brands would like campaign performance tied to sales lift, there is growing understanding that other leading indicators, like brand lift and engagement, might provide valuable insight into a campaign's value. There's still work to be done in establishing the impact of early-funnel metrics like engagement to sales, and weaning brand advertisers off click-through as a meaningful metric for their campaigns.
Finally, advertisers strongly believe that coordination between advertiser, agency, and publisher should continue after campaign flight, and that frequent communication and sharing of data is critical to a campaign's success.