Contrary to generally held industry beliefs, sponsored text advertising does work for a number of branding objectives, according to a massive study by the Interactive Advertising Bureau (IAB) and Nielsen//NetRatings released Wednesday.
The study was done online with more than 10,500 participants using a controlled experimental design. It measured the brand impact of sponsored and contextual listings in the health, auto, beverage, electronics, retail and finance industries.
On average, respondents were 27 percent more likely to name a specific brand if it was in the top spot on the search results page, according to the study. Contextual listings -- text ads on non-search pages -- caused a 23 percent lift among respondents.
Placement was a key element. Ads in the top position on the search results page increased an aggregate of all the brand metrics by an average of 14 percent across the six industries. The effect fell dramatically as rankings went lower, the study found. For example, ads in the fifth position showed only a minor directional lift.
The IAB/Nielsen survey's results add a new dimension to paid text listings. Sponsored listings and contextual advertising, sold on a cost-per-click basis, are usually not considered to be branding vehicles. By contrast, display ads, sold on a cost-per-impression basis, are considered major elements of online branding.
"The study is proving the thing everyone knows: advertising tends to work both on direct marketing and branding metrics," said Marc Ryan, director of analysis for Nielsen//Net Ratings and author of the study. "We tend to pigeonhole ourselves: 'Search works well on direct marketing, banner ads on branding.' But this shows if you want to measure the value of your campaign in effective ways, you should measure all the metrics, not just the ones you think the medium was designed for."
The IAB and the research sponsors are taking the results on the road as part of a six-city search marketing road show, with stops in San Francisco, Dallas, New York, Detroit and Chicago. The study was sponsored by Ask Jeeves, Google, ING, Lycos Search and Overture and spearheaded by the IAB search engine committee.
Industry players' reactions to the study differed.
"It makes sense. If a consumer is searching for keywords related to a certain brand or product, and they consistently see a certain brand or company appear, they will be more likely to recall the brand," said Melissa Burgess, director of business development at search marketing firm Impaqt. "Companies are purchasing hundreds, thousands of keywords. If a consumer sees them every time, it will make an impression."
A media buyer opined that sponsored text is a viable, but minor, element of online branding.
"While it is certainly true that 'everything communicates,' it is very hard to believe that when compared to rich sight, sound and motion vehicles, text-based advertising is effective at moving brand metrics," said David Cohen, SVP, Interactive Media Director for Universal McCann Interactive.
"I would be very surprised if brand marketers look to sponsored text as a primary staple of their interactive programs," Cohen said. "Rather, I would view sponsored text as a viable component (albeit a small one) of a well-balanced interactive brand campaign."
Joe Germscheid, associate media director, Minneapolis, for Zentropy Partners, had a somewhat different perspective.
"The findings of the study are great, but not all that surprising. We all seem to forget that search advertising is still advertising. And any opportunity for a brand message to be seen will resonate with the target audience and cause some brand impact," Germscheid said in an email message.
"However, until this type of survey is easily replicated for the average marketer/advertiser, we won't be able to justify search in this manner," the media buyer said.
"The companies already doing our brand metric surveys for online ad campaigns such as Dynamic Logic or Insight Express will need to add this to their product in order for advertisers to integrate search into a brand-oriented campaign. Without that, we won't be able to prove that what the IAB found is applicable to our own brands and allocate search adequate brand dollars," Germscheid explained.
"Until the measurement catches up with the marketplace, search may remain a direct-marketer-controlled strategy. It has excelled there because of the ease at which marketers can prove to themselves that search can create ROI for individual efforts. We'll need the same for the branding lift," Germscheid said.
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