MediaPost Publications - Advertising.com: Behavioral Targeting Increases Conversions - 10/26/2005
by Wendy Davis, Wednesday, Oct 26, 2005 6:00 AM EST

SERVING ADS TO CONSUMERS WHO already have demonstrated an interest in the product or services offered by the marketer is a more efficient use of online ad dollars than serving ads to the public at large, according to a study released Tuesday by America Online's Advertising.com.

For the study, Advertising.com evaluated the performance of three online ad campaigns--in the financial services, automotive, and education spaces--conducted between July and September. For all three campaigns, Advertising.com served identical banner ads to Web users at large, as well as to users who had visited a site relevant to the marketers' business in the last 30 days. For example, for the car campaign, Advertising.com targeted people who had visited a car research site within 30 days, and then compared how that group responded to ads with how consumers at large responded.
The company found that conversion rates were higher for the group that had been targeted based on Web surfing than for those served ads on a more random basis. The car campaign saw a 323 percent increase in conversion rate, defined as completing a registration form. The finance campaign saw a 90 percent increase in conversions, defined as opening an online bank account; and the education campaign saw a 105 percent increase in conversions, measured as those who filled out a registration form.

At the same time, in a counter-intuitive finding, the study also revealed that click-through rates were lower for the targeted group than the more random ad viewers. Click-throughs for the car campaign fell by 64 percent for the targeted consumers; for the education campaign, the rate fell by 22 percent; and for the finance campaign, the drop-off was 56 percent.

The lower click-through rate came as a surprise to researchers, who had expected that users who were tagged as potential customers would want to click and convert at a higher rate than the more random users.

One theory that might explain the lower click-throughs is that some Web users are simply more curious about ads than others, said Eric Eller, director of behavioral marketing at Advertising.com. Eller suggested that targeting might also filter out the more generally inquisitive types who click on ads without any intention of purchasing. "When you target a group," proposed Eller, "you're losing the clicks coming from the generally curious."

Webisodes return, now as advertising!

"The Wyndales are a typical American sitcom family. Dad is a dolt, and his college-age rock musician son writes all about his pop's antics on his blog.

But don't look for the animated gang on television. The Wyndales are starring in an Internet series, with weekly webisodes that are meant to entertain - and sell health insurance.

Remember webisodes? Now they're back, this time as advertising vehicles, courtesy of a robust online ad market and growing broadband audience.
EHealthInsurance's Am I Covered? (amicovered.com) made its debut last week. Today, Jeep's We Are The Mudds (wearethemudds.com) series premieres, joining other recent webisodes from Unilever's I Can't Believe It's Not Butter (tasteyoulove.com) and Target (oddsagainst7even.com.) "

Watch This Car Disappear

"Pontiac introduced its limited edition Solstice on 'The Apprentice.' When the episode ended, viewers were pointed to Yahoo! for additional information about the vehicle. Pontiac's goal was to sell 1,000 cars in 10 days.

Mark-Hans Richter, Pontiac's director of marketing, was dumbstruck by the results. 'A 10-day program was over in 41 minutes for the first 1,000 Solstices. We thought about 10 days was reasonable for a car no one's driven before.' Not only did Pontiac make its target before the show even aired on the West Coast, but 4,000 additional cars sold in advance of the launch -- Pontiac's entire first-year production.

'That's $125 million worth of steel that has been moved in about four hours,' pointed out Jim Moloshok, Yahoo!'s just-departed SVP of entertainment. 'This shows that online can move big-ticket items. Maybe a CPM-plus-CPA model could be considered by automakers. What percentage would GM be willing to give back as a sales commission?' he mused, adding, 'Some people went to Pontiac's site, so we can't take all the credit.'

'Going into this you don't know what to expect because you don't have a lot of control,' Richter told me. 'You're yielding control for potentially more risk, and more reward.'

Students: Search Engines More Credible Than TV Ads - 10/12/2005
by Wendy Davis, Wednesday, Oct 12, 2005 6:00 AM EST

"COLLEGE STUDENTS RELY ON SEARCH engines more than any other media--including magazines, newspapers, and television ads--according to a new study by Yahoo! Search Marketing.
For the study, Yahoo! and Hall & Partners surveyed 486 college students in August, and Greenberg Brand Strategy conducted in-depth interviews with 12 students. Researchers asked students to rate various information sources--including search, family and friends, and traditional media--on a five-point scale.

The findings, presented Tuesday in New York, included the conclusion that 81 percent of college students rated search engines as the best source of information; friends and family were rated best by 64 percent of students, while just 34 percent said traditional media was their best source of information. (The numbers add up to more than 100 because an information source was considered 'best' if students placed it in the top two boxes on a five-point scale.) "

The Power of Default Values (Jakob Nielsen's Alertbox):

"How gullible are Web users? Sadly, the answer seems to be 'very.'
Professor Thorsten Joachims and colleagues at Cornell University conducted a study of search engines. Among other things, their study examined the links users followed on the SERP (search engine results page). They found that 42% of users clicked the top search hit, and 8% of users clicked the second hit. So far, no news. Many previous studies, including my own, have shown that the top few entries in search listings get the preponderance of clicks and that the number one hit gets vastly more clicks than anything else.
What is interesting is the researchers second test, wherein they secretly fed the search results through a script before displaying them to users. This script swapped the order of the top two search hits. In other words, what was originally the number two entry in the search engine's prioritization ended up on top, and the top entry was relegated to second place.
In this swapped condition, users still clicked on the top entry 34% of the time and on the second hit 12% of the time. "

One in 10 Blog Readers Say They Tap RSS for Content

"A recent study published by Internet media and market researcher Nielsen//NetRatings found that nearly one in five U.S. Internet users now visit blogging and blog-related Web sites, and that 11 percent of those who say they visit blogs also say they use Really Simple Syndication to sort through the increasing number of choices available.

In a June survey for the August study, 'Understanding the Blogosphere,' nearly five percent of people who read blogs said they use feed aggregation software, and more than six percent said they use a feed-aggregating Web site. Nearly 40 percent had heard of RSS, but either don't use it, or don't know what it does, and 50 percent had never even heard of RSS.

But the percentage of people using RSS could actually be much higher.

An August Nielsen//Netratings survey of 2,129 U.S. Internet users found that 83 percent of survey respondents who were identified by clickstream data as RSS users were unaware they were using the syndication technology. Nielsen//NetRatings attributes this to sites such as My Yahoo!, where users can customize content without knowing anything about the RSS feeds that make it possible. The survey also found that RSS users are significantly more engaged"