Make online ads work harder
A new study reveals there has been a 40% decline in people paying attention to ads on major portal sites compared with last year. But that doesn’t mean that surfers are ignoring online ads altogether.
Well-known, busy websites might seem like the obvious location to place a brand online but new research shows that big may not always be better. The number of people overlooking ads while surfing is increasing, and they may even ignore marketing on some of the best-known websites out there.
Consumer responsiveness to adverts on large websites, such as MSN, Tiscali and Yahoo!, has shown a marked reduction since early 2009. This is because brands are placing too much stock in the advertising reach of generic portal sites, according to Addvantage Media’s annual Online Advertising Report for 2010, which polled 2,232 British consumers with YouGov.
The research found that 88% of consumers rarely or never pay attention to adverts displayed on these big portal sites, while only one in ten claims to pay attention to adverts displayed all or some of the time. This is a reduction of 40% since last year’s edition of the study, in which 37% of respondents claimed to pay attention to these types of adverts.
Addvantage Media managing partner Edward Tijdink says he was expecting a decline in the number of people who pay attention to ads on large portals but admits he is surprised by the 40% reduction.
He says: “What we’re seeing is a ‘growing up’ of the internet audience. Think of your own internet experience; perhaps you started off surfing the generic portals, then moved on to investigate special interest sites. The more the internet has grown up, the more you’d expect people to do that. However, 40% is a lot.”
Tijdink adds: “That is one part of the story. The other part could be there is just too much generic advertising spread and concentrated across those portals – people are getting tired of it.”
This year’s research reveals that targeted advertisements on niche websites are likely to receive a 32% better response rate than standard adverts on major portal sites such as MSN. This figure increases to an average 42% better response rate among 18- to 34-year-olds.
These findings are in line with the increasing popularity of niche websites dedicated to specialist interests. The research finds that almost half (46%) of consumers look to find information they are interested in from niche websites, compared to 38% who visit big websites such as MSN, Tiscali and Yahoo! and 21% who visit a social network.
Young professionals are the most likely to visit niche websites, with 58% of 25- to 34-year-olds saying they use these kinds of sites to get information. Perhaps surprisingly, given the portals’ focus on youngsters, only one in four (28%) of this age group named big portal sites such as MSN as an online information source – down 28% since last year’s report.
This decrease indicates a shift in preference that is mirrored throughout all age groups, but is most significant within the 18 to 24-year-old demographic, where there has been a 40% decline in the number of respondents choosing to gain information from big websites such as MSN, Tiscali and Yahoo! since last year’s report (42% in 2009 and 25% in 2010).
Harvey Sarjant, managing partner at Addvantage Media and member of the Internet Advertising Sales House (IASH) steering committee, believes the research findings provide important information for brands looking to increase the effectiveness and return of their online advertising.
He says: “There is a common and misplaced assumption that you only have to buy advertising space on three networks to cover all the market.
“The fact is that while about 20% of UK sites – the major portals – may have exposure to a wide market, to reach a genuinely responsive market segment, brands need to be aligning themselves with relevant, niche-interest sites.
“It’s plain that the majority of surfers are paying very little attention to ads on the major portals, and this is becoming even more the case year after year.”
It seems that the reason niche advertisers are cleaning up with consumers is that they appear to be more associated with the ad content than the big players are. The most common reason that respondents gave for clicking on adverts displayed on niche websites (except monetary value of the product being advertised – 31%) is the belief that the website is endorsing the product being advertised (12%).
Almost half (49%) of those who prefer to use niche websites feel that specialist websites have more engaging content than larger sites like MSN, while 45% agree that niche websites dedicated to specialist interests host better quality content to read and watch than larger portal sites.
Tijdink adds: “We hear a lot about ‘absolute reach’ instead of ‘relevant reach’ and I think that’s where the problem lies. With budgets being cut, perhaps it seems the safest option to put a big portal on the media schedule.”
Those believing that niche websites host better content increases to 59% for 25- to 34-year-olds, and to 51% with affluent ABC1 consumers. Of respondents who prefer specialist sites, almost two-thirds (65%) stated that this is because they trust those niche websites to give them accurate and relevant information on topics that they are interested in.
Tijdink says: “The socio-economic divide is interesting. ABC1 users seem to prefer niche websites whereas C2DE users go to social networks – probably because of their age, or to portals if they are over 55.”
Sarjant concludes: “The research clearly shows that niche sites have more active, engaged and supportive users who are therefore more likely to interact with relevant advertising.
“The smarter brands realise this and recognise that campaigns can’t just be based on a criteria of placing ads on high traffic sites. To elicit genuine interest and a propensity to purchase, ads need to be intelligently matched with niche content.”
Ciaron McConaghy, head of analytics (EMEA) at Microsoft Advertising
This research is based on perceived rather than actual behaviour. Portals, ad networks and specialist niche sites all contribute to online campaigns at every stage of a consumer’s online journey to purchase, but the key is to look at the complete picture rather than measuring each channel in isolation.
Different sites have different roles in the conversion process, and the effectiveness of one channel should not be evaluated solely on whether it is the last exposure to that ad.
The Atlas Institute has shown that when it comes to paid search conversions, customers exposed to display ads beforehand are 22% more likely to purchase. Display ads reinforce brand awareness to the point that about 60% of all paid search clicks by consumers are a single brand keyword.
This is about not simply asking converters which ad they remember seeing but analysing every single impression, click and interaction that happened over a much wider period (often up to 90 days).
The benefit of portals is that they offer a combination of both niche and broad content, and targeting capabilities mean the advertising on these portals is becoming more relevant to the consumer.
Kieron Matthews, marketing director at the Internet Advertising Bureau UK (IAB)
I can watch something on TV, surf the web and listen to my wife brief me on the weekend’s activities all at the same time, so why then does my wife give me grief for not paying attention to her? I don’t acknowledge the conversations, say: “Yes, Amanda” or even nod. But come Saturday, I know what we‘re up to.
The same is true of display advertising, which is often measured and bought based on a demonstration of attention – invariably the click. Just because a visitor doesn’t click doesn’t mean they haven’t been engaged by that ad at some point. In fact, a recent IAB study shows that, of those visiting a website after seeing display advertising, roughly one in four will visit straight away, while the remainder will visit within the next three to four weeks.
Of course, exposure from other media channels also plays a part, but the data suggests that display advertising has a latent effect and could be credited with generating more traffic than first thought. Have I got your attention, advertisers?
Mattias Miksche, Chief executive of Stardoll
This report concurs absolutely with our own experience, and indicates a pressing need for advertisers to look closer at their online media strategy in 2010.
As our network serves a highly focused demographic on a massive scale (80 million+ users under the age of 20), we’re seeing increasing levels of investment from marketers aiming to create brand communities to build relationships with their customers for the next 50 years and beyond.
Niche websites deliver a better return on investment because they are more trusted and more relevant to many consumers. This translates into average response and engagement rates several times higher than those found on large generic websites.
The media buying model of the past 15 years is looking increasingly out of touch with today’s consumer behaviour, where the real-time web means a consumer can bypass search engines and portals entirely, and find what they are looking for through trusted recommendations from people they know.