More NewsStudy: Online Branding Measurable, Underappreciated

Study: Online Branding Measurable, Underappreciated

According to a new Jupiter study, marketers underestimate the value of online branding campaigns -- a fact that's due to the industry's lack of a good model for calculating ROI.

The capacity for online advertising to brand could be measurable — a fact that many marketers overlook, according to a new study from Alley-based Internet research firm Jupiter Media Metrix.

Indeed, based on a survey of advertising and marketing executives earlier this year, Jupiter says that online ads’ quantifiable return on investment can often be 25 to 35 percent more than most marketers believe — suggesting that media planners grossly undervalue Internet media.

However, while Jupiter says that marketers might be underestimating online ads’ ROI, how to calculate that specific figure is tricky, since there is little consensus on how to do so. The analyst firm, which also runs a Nielsen-like online sampling panel through its Media Metrix unit, says that tracking visitors to Web sites via their ad click-throughs significantly understates brand impact.

Similarly, marketers aiming to calculate online branding ads’ effectiveness using site traffic as a yardstick often go awry, according to Jupiter — mistakenly interpreting an upswing in a Web site’s traffic as being caused by advertising. Instead, Jupiter analyst Rudy Grahn said that seasonality (46 percent) or across-the-board increases in Internet adoption (37 percent) are each twice as likely to be responsible for sudden upswings in traffic.

As a substitute, Grahn recommended a Media Metrix-like solution, suggesting that marketers would be better served by correlating behavioral data — such as individual user clickstreams, repeated surfing patterns, and aggregate user behavior — with the flights of specific ads.

“Marketers will learn that they must begin quantifying online branding by measuring the user’s actual experience, instead of gauging only their attitudes,” he said.

The problem is that there aren’t yet practices and privacy standards for determining such a correlation — a situation that many online media sellers (like DoubleClick and Real Media) and publisher trade associations (like the Interactive Advertising Bureau) are aiming to rectify.

However, only about 15 percent of media buyers are working to do the same, according to Jupiter. The majority of online advertisers continue to focus on direct response metrics — like click-through rates (60 percent) and cost-per-conversion (75 percent) — rather than experimenting with brand-response.

Grahn suggested that the Internet has discouraged traditional branding practices through what he described as “the fractured reach of Internet media.” For instance, Yahoo’s massive reach comes from more than 400 different Internet domains, with a huge variety of audiences. As a result, the situation makes it difficult for marketers to calculate how a single message delivered across many domains fared in generating sales, he said.

But once the ad industry figures out better ways to correlate online behavior, the results could benefit traditional media as well, Grahn said.

“What is learned in online branding may not ultimately set completely new rules for marketers; but it will offer lessons wise marketers will heed,” he said . “What marketers learn about building targeting models from observed behavior rather than pre-campaign demographic or psychographic data must be factored into offline campaign planning, as well.”

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