Study: First Impressions Most Important

Ad viewers are most likely to convert the first time they see an online ad, according to a study slated to be released Tuesday by AtlasDMT, the technology arm of Seattle-based aQuantive . The finding suggests frequency capping should be employed when a CPM advertiser’s goal is to drive an immediate conversion.

The company studied 38 different advertisers whose campaigns ran in the second half of 2003. The campaigns were CPM, or cost per thousand impressions, buys as opposed to cost per click. The study calculated click-based conversion, which included buying, registering or signing up to be contacted, at each frequency level.

The first time a user saw an ad was when he or she was most likely to convert, though the first three impressions all had at least 100 percent lift on average, the study said. The study also noted that though the trend was toward higher conversion rates at lower frequency levels, looking at individual advertisers was more meaningful. The first impression was not always the highest, depending on a number of factors.

“Unless you’re controlling frequency, you may be wasting probably a third of your ad impressions on users who have already seen too many ad impressions,” said Young-Bean Song, director of analytics for Atlas DMT and co-author of the study with John Chandler-Pepelnjak.

The study also recommends that advertisers use third party systems to provide reporting on their frequency distribution to help them figure out how many impressions are being wasted in their campaigns. Ad serving companies such as Atlas DMT and its competitor DoubleClick collect such data on the campaigns they serve.

Also, marketers can perform their own frequency analyses, the study said.

“Identify the waste, put frequency caps in place and then monitor to see how they are working,” Song said, to capitalize on the “first impression” phenomenon.

According to Atlas DMT, brokerage firm Ameritrade experienced 15 percent improvement in lead generation by implementing frequency capping in line with Atlas’ suggestions in the fourth quarter of 2003. Media placement firm mOne worked Atlas to develop the analysis and model for Ameritrade.

The first impression theory is something of a truism, according to Rex Briggs, managing partner of Marketing Evolution.

“For online, it has been understood by sophisticated marketers for about four years,” Briggs said, citing a four-year-old study by I/PRO and DoubleClick with similar results.

“Atlas’ analysis is more sophisticated because they analyzed conversion rates rather than just one conversion. It is much more robust. It’s timely because many marketers online are more sophisticated and are thinking about things like flighting [managing timing and frequency of ads] and frequency patterns,” Briggs said. Briggs said his company has seen similar patterns in its research on the branding side.

Frequency capping is also becoming a best practice. Briggs said it’s a good idea “if you’re marketing on a CPM basis,” since it will save money for those paying by the number of impressions. “If it’s cost per click, it doesn’t matter.”

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