Digital Brand Advertising to Pass DR in 2012

Since its inception, and even in recessionary times, Internet advertising has grown every year but one. Primarily, this growth has been driven by direct-response advertising. Brand advertising has stubbornly resisted the medium’s allure. Into 2012, however, digital brand advertising appears poised to take the lead, with marketers responding to our State of the Industry Survey predicting that brand advertising will represent nearly 60 percent of their digital spend in the coming year.

Our survey, of more than 450 brand marketers, media agencies and media sellers, sponsored by Vizu, was conducted in November and December of last year. Some highlights:

• Brand advertising is also growing more quickly than direct response: 64 percent of marketers plan to increase their online brand-advertising budgets in 2012, with 22 percent saying they will increase spending by more than 20 percent

• Additionally, 60 percent of marketers responding indicated that they are allocating dollars away from direct-response to brand-advertising initiatives, indicating online brand advertising is finally coming into its own

• Some channels will grow faster than others; 69 percent of brand marketers are increasing spending in mobile, 63 percent in social, and 57 percent in video

The outlook for online brand advertising could be further improved if brand marketers had access to better metrics. When marketers were asked what would lead them to increase spending on online brand advertising:

• Nearly 7 in 10 (68 percent) said, “Improved clarity around the actual return on brand advertising investment.”
• A majority also cited the “Ability to verify my brand advertising created the desired result (56 percent) and “Ability to use the same metrics to evaluate brand advertising effectiveness online as are used offline” (53 percent)
• When asked specifically about which metric they would most prefer to use, eight in 10 of both agency and brand respondents chose: “Brand Lift generated as a result of the advertising.” For brands, sales are the next most important success metric for online ad campaigns. For agencies, it’s interaction rates with the advertising, highlighting a potential disconnect between marketers and their agencies.

Other opportunities to improve the outlook for online brand advertising include:

• Alignment among brands, agencies and media sellers around the primary marketing objective of the campaign
• In-market optimization against appropriate brand metrics (e.g., brand lift) to create the best possible results
• Real-time performance reporting against market- and client-specific benchmarks in order to provide greater context for results
• Focus on a few relevant metrics, and a reduction of the overall amount of data reported with campaigns
• Third-party verification of audience reached and the impact of the advertising on that audience
• Brands taking more direct ownership of their digital media investment and ecosystem

Naturally, it’s not all roses. Media sellers’ claims that they can reach the “niche/custom audiences advertisers are targeting” are being met with skepticism. Only 6 percent of brands and 16 percent of agencies surveyed said they “strongly believe” media sellers’ claims that they can reach the custom or niche audiences that brands seek.