"Fall0nylitics 2.1: 17 Things You Probably Don’t Know About Online Advertising (And 1 Thing You Probably Do)" Did you know that 80% of clicks are done by 20% of people—and they’re probably not your target? That the biggest impact of online display ads could be on search? The explosion of data available to digital marketers often creates as much confusion as opportunity. This presentation aims to dispel the confusion so you can focus on seizing the opportunity. Join Marty Kihn, Director of Strategic Analysis at Fallon, (http://www.fallon.com/blog/news/fallon-adds-depth-to-digital/) as he breaks down the most important things for marketers and creatives—and not just digital creatives—to know about online advertising. Using case studies and the results of recent findings in the field, Marty lays out the key counter-intuitive insights we should know to make smarter decisions online. Learn who’s clicking, why landing pages matter, and how much of a difference the creative really makes. In addition, Marty introduces Fallon's own developing campaign optimization and indexing tool. Look for an announcement of this innovative open source solution in the coming months. Whether you are in charge of making digital investment decisions or are involved in optimizing specific campaigns, you'll find information you can use in this presentation. In addition, Marty presents his data sources and is available to talk about additional details and implication of the proprietary case studies. Brainfood is a series of presentations developed by thought leaders at Fallon that started several years ago. Brainfood's wide-ranging topics explore trends, innovations, business issues, and opportunities for marketers and brands. Moreover, Brainfood offers a chance to come together and engage in a stimulating discussion on a variety of interesting topics that affect our business. Check out previous Fallon Brainfood presentations at http://www.slideshare.net/group/we-are-fallon.

1. Fallon Worldwide “Brainfood” POV
“17 Things You May Not Know About Online
Advertising (And 1 Thing You Probably Do)”
January 25, 2011

2. I’m here today to talk about analytics in the context
of creative digital advertising
• Creative agencies (like mine) are founded on the concept of
“creative leverage”—that big ideas can work harder than big
budgets.
• Analytics as a discipline has been driven by the explosion of
data available online.
• To succeed in digital, good ideas are not good enough – they
need to be supported, informed and changed by numbers.
Today I’m going to present 17 surprising facts about online
advertising culled from recent studies and client work – starting
with one thing you probably know . . .

3. Online advertising (OLA) (n.) – “a thing that seems
to be getting less effective and more expensive”
US Online $25B 0.50% Avg. OLA
Ad Spend CTR (%)
($)
$20 0.40
$15 0.30
$10 0.20
$5 0.10
0 0
2000 2002 2004 2006 2008 2010
Source: Fallon analysis; Google Benchmarks; Forrester

4. #1. Digital spend is still too low.
• This is the first of the “17 Things You May Not Know About
Online Advertising” . . .

5. Internet media budgets do not reflect how
consumers actually spend their time.

6. Display ads really do impact brand metrics.
Brand Impact of Online Display
(Control v. Exposed)
Source: Dynamic Logic MarketNorms, 2008, Fixed frequency level of 1. Campaigns using online display advertising of any format.

7. #2. 80% of clicks are done by
20% of people.
CLICKERS

8. Online clickers follow the 80/20 (Pareto) rule.
“Despite only accounting for 6% of the total Internet population,
heavy clickers accounted for 50% of clicks in the month.” ComScore
Source: comScore Inc., custom analysis, total US online population, XPC Persons Panel, July 2007 data period
Note: “Heavy” clickers defined as 4+ clicks on online advertising per month; “Moderate” = 2-3 clicks; “Light” = <1 click per month

9. #3. Clickers are probably NOT your
best customers.

10. “Natural Born Clickers”
• Age: 25-44
• Lower income: $20-40K
• 2x more spend online
• Heavy Internet use:
 5X higher time on site
 8X more pages per visitor vs. online pop
• Non-clickers visit: portals, search, news,
finance
• Heavy clickers visit: gambling, job
Source: comScore Inc., custom analysis, total US online
searching, games … and porn*
population, XPC Persons Panel, July 2007 data period
Note: “Heavy” clickers defined as 4+ clicks on online
advertising per month; “Moderate” = 2-3 clicks; “Light”
= <1 click per month * Just a guess

11. Clickers Are Generally Less Credit Worthy.
Approval Rates
• Financial services client Financial Services Client View-Through Study
case study
• Users who were exposed
but did NOT click were 179%
approved 180% more often Lift
than users who clicked
• “Casino” mentality
• More leisure time =
More time to click
Control Exposed Clicked
Source: Publicis financial services client case study (2007-2008)

12. #4. Your best customers may
be invisible.

13. The Cookie Deletion Dilemma:
Overstated Reach but Understated Frequency.
Based on a comScore study of Yahoo and DoubleClick cookies:
• 30% of Internet users delete their cookies in a month
• These deleters do so an average of 4x per month
• True for 1st party (e.g., NYT sign-in) and 3rd party
(e.g., ad server) cookies
 Up to 2.5x overstatement of “unique visitors”
 Understatement of campaign ROI
 Worse for higher-end and technology brands

14. #5. 80% of OLA’s effectiveness
has nothing to do with the CLICK.

15. It’s been conclusively shown across many industries
that banners impact people who don’t click—like TV.
Client Example: Latency Window Client Example: VT* Incrementality
Conversions Acquired
0.14%
Click-Based
0.0200%
VT Incremental
0.12% 15.7% Lift*
0.0180%
Days 0 -5: 341% lift over baseline
0.0160% 0.10%
Net Yield by Unique User
Conversion Probability (Hazard)
0.0140%
0.0120% 0.08%
0.0100%
VT
Days 5 -10: 124% lift over baseline
0.06% Non-Incremental
0.0080%
Days 10 -15: 94% lift over baseline
0.0060%
0.04%
0.0040%
0.0020%
Red Baseline = conversion probability for days 15 -60 0.02%
0.0000%
5 10 15 20 25 30 35 40 45 50 55 60
Length in Days of Advertising Effect
0.00%
Control Ad Exposed
* VT = View-through, defined as post-impression activity observed among users who were exposed to a display ad but did not click

16. #6. Most of a banner’s effect is
probably on search.

17. Effect of Display Ads on Search by Industry.
Observed Lift for Seachers Exposed to
Banner Ads vs. Control
+206%
+144%
+125%
+69%
Source: comScore, “How Online Advertising Works: Whither the Click?” Jan. 2009, presentation for ARF [meta-study of 200]; Specific Media study of 12 months.
* Publicis client case study (2008-09)

18. #7. Same with TV.

19. Search Reacts to Television Advertising.
TV GRPs vs. Search Clicks for National Brand
Source: Omniture Inc (The Omniture Summit 2009, p8); case study client name suppressed

20. #8. Never do display without search.

21. Paid Search + Display Works Better
Than Either Channel Alone.
Incremental Impact on Offline Sales
per (’000) Exposed
Search & Search Display
Display Only Only
Source: comScore, “How Online Advertising Works: Whither the Click?” Jan. 2009, presentation for ARF

22. #9. Impact is largely determined
by your industry.

23. Display Ads’ Impact on Site Visitation by Industry.
Advertiser Site Reach
(Weeks 1-4 After First Exposure)
Source: comScore, “How Online Advertising Works: Whither the Click?” Jan. 2009, presentation for ARF

24. #10. Rich media may not work
the way you think it does.

25. Rich Media can work for aided awareness, but it may
be distracting/confusing the brand’s message.
Rich Media with Video has the MOST …But is significantly LESS Effective
Impact on Aided Brand Awareness… at Impacting Message Association
Source: Dynamic Logic MarketNorms Study (2008)

26. #11. Banners are often less
important than LANDING PAGES.

27. Most people who click
don’t make it to the landing page.
Banner Click-to-Quote Start Traffic
for Insurance Advertiser
Drivers of Drop-off:
(Click to Quote Start Traffic)
376,426
• Cookie rejection
• Long load times
• Natural defection
-70.1%
(user clicks stop, back,
or close window)
• Connectivity issues (111,886)
• Improper tagging (263,882)
-29.7%
(-99.4% of
LP traffic)
658
Source: DFA reporting Jan. 2009; Fallon analysis

28. Landing Pages Matter: One of these options drove a
20-25% better response rate than the others.
Landing Pages Tested
• Driven to a product-specific
• Driven to the application detail page • Driven to less detail around
more card products
• Result: Performed the best
• Result: Depressed
• Result: Performed the worst • Significantly higher responses more than 20%
among all variations (double-digit) response vs. single-product page
rate
Source: Confidential client analysis

29. #12. Landing pages need to
MIRROR your creative.

30. Landing Pages must register as “not a mistake”
<1 second after loading, or the user will bounce.
• Messaging
expands & adds
Visual brand and info
Consistency elements
• Identical visual
element is the link
• Further down the
funnel
Keyword: iPod • Transactional key word
• Driven to the iPod mall
Contextual
Consistency
• Higher up in the funnel
– less transactional
Keyword: MP3 Player • Key words are made
visual

31. #13. If you want good response,
customize your landing page.

32. Different Targets = Different Landing Pages.
Florida drivers
 Examples of Landing
Pages with images and “Review Your Texas drivers
Quote” – Banner for
content tied to a customer quote abandoners
group
Savings Message Interactive Cross-sell Tabs
– Students “Early Bird (Car, Home, Boat)
Special” – Seniors
Discount for
Military
“Welcome to your
new life” – Movers
Alumni “could
save even more”
Find an Agent
OR get a quote online

33. #14. Load times trump everything.

34. Longer load times may be the single biggest
driver of online response rates
Response Rates vs. Load Times
Response 30
Rate Index*
20
15
10
0
0 5 10 15 20
Total Waiting-to-Load Time
(Click to Quote Start – Paid Search Only, seconds)
* Total responses (#) / Total impressions from online media (paid search and display). Does not include conversion rate or quality.

35. #15. The only way to measure true
impact is to set up a test in advance.

36. Post-View tests can be set up relatively easily
through an ad server like DoubleClick.
Test Group-
Views Ad
Click
Web Audience Brand Banner
View Responses
(no click) and
Conversions
Control Group- View
Views PSA (not Ad) (no click)
- Runs on same sites/placements
Use cookie-level log files (from ad server) to differentiate
between conversions that would have occurred naturally,
versus those influenced by the online media.
Appropriate latency window and attribution percentage
is decided.

37. #16. If you fail to plan campaign
measurement—plan to fail.

38. Best in class digital players start their measurement
process well before assets are built.

39. #17. Creative can be less important
than other factors in digital.

40. OLA and Paid Search often function more like Direct
Mail than above-the-line advertising (e.g., TV).
Impact of Different Elements on Prospect
Response to DM
Creative Elements
- Hooks to provoke immediate
response (sample, etc.)
- Bullets, lists, dashes to catch
skimmers Creative Targeting & List Selection
- Headline / “Johnson Box” above 20% Carefully select and cultivate
letter salutation outlining key benefit customer and prospect lists
Targeting
- Clear call-to-action to drive response 40%
Value of Offer
40%
Value of Offer
The ideal DM offer:
- Fulfills a perceived need
- Conveys strong perceived value
(compared to competitors)
- Is unique
- Is practical
- Has a clear connection with brand
Source: CRM Trends; confidential DM client study (2008)

41. Bonus #18. But great creative +
great product always wins . . .

42. Thanks.
martin.kihn@fallon.com
office: 612.758.2748