As Big Brands Embrace Digital, Digital's Branding Power Wanes

  |  January 17, 2008   |  Comments

Branding effectiveness of online advertising has declined over the past two years by nearly every measure, according to Dynamic Logic data.

Much has been written about the eagerness of large brands to advertise online. Yet even as they increase their digital budgets, the Unilevers and Fords of the world are struggling to get their messages across.

That's because the branding effectiveness of online advertising has declined over the past two years by nearly every measure, according to data provided to ClickZ by Dynamic Logic. Explanations for the decline include the rise of ad clutter, the desensitization of Internet users to display ads and other causes.

But the trend is clear.

For instance, consumers exposed to online ad campaigns between Q4 2004 and Q3 2005 exhibited "brand message association" that was 4.3 percent higher on average than a control group, according to the marketing research company. By 2006 that message association lift had fallen to 3.5 percent, and by last year it was down to 2.5 percent. The same downward trend has accompanied a more generalized metric: "brand awareness." In 2005 online ads drove a 3 percent lift in brand awareness over a control group, but that boost fell to 2.2 percent over the course of the following two years.

Ken Mallon, Dynamic Logic's VP Product Development and Custom Solutions, said one factor in the sagging brand impact of digital ads might simply be competition among large brands for share of mind.

"A few years ago there were less big brands online than there are now," he said. "If you were a Pepsi or GM you were more likely to get noticed. Now everybody's online. Every brand you can think of has a reasonable spend online."

The data come from Dynamic Logic's MarketNorms brand impact database, which combines findings of the many brand impact studies the company conducts on behalf of marketers.

While all brand impact measures tracked by Dynamic Logic have declined over time, some have fared better than others. For instance, the boost in "purchase intent" provided by online campaigns has lost relatively little mojo, dropping from 1.6 percent in 2005 to 1.3 percent in 2007, according to MarketNorms. The average lift in "brand favorability" meanwhile actually rose for a year, from 1.8 percent in 2005 to 1.9 percent in 2006, before sliding to 1.4 percent last year. The award for the most drastically sagging lift goes to "online ad awareness," a metric that offered online marketers a 7.3 percent leg-up over a control group in 2005. In 2006 that metric fell over a full percentage point to 6.4 percent, before dropping again to a mere 4.8 percent lift last year.

The question for marketers is what, if anything, to do about the declines.

One clear option is to pressure publishers to reduce the number of ads per page. Another is to place more emphasis on non-traditional ad formats and venues, such as "virals" -- now officially a noun -- and social marketing campaigns.

"The bar is higher and higher in terms of what consumers will pay attention to. The big challenge for brands is being invited in," said Sarah Fay, CEO of Carat and Isobar USA. "A straight advertising message doesn't cut it anymore. We're at a point where we're trying to meld the message with some form of content."

Fay believes viral media and social marketing campaigns "can really kick up brand attributes," but of course that only works with consumers who choose to engage with them.

From the point of view of marketing research companies like Dynamic Logic, measuring brand lift for original branded content and social marketing campaigns has baked in challenges. But Mallon said the company is working on it.

"We definitely work with all the different new things that are coming out," he said. That includes establishing relationships with the new breed of widget ad networks and tracking original branded content. "The tricky part is getting your control group. How do you intercept people before they get exposed to it? But we have ways."

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ABOUT THE AUTHOR

Zachary Rodgers

Until March 2012, Zach Rodgers was managing editor of ClickZ's award-winning coverage of news and trends in digital marketing. He reported on the rise of web companies, data markets, ad technologies, and government Internet policy, among other subjects. 

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