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Impacts and ROI of Internet Local, Classifieds, and Directory Advertising
Research and Analysis from comScore Networks, Inc.March 13th , 2006
Agenda
Overall Study Objectives
Methodology Review
Summary of Results Addressable Market and Opportunity Ad Effectiveness Summary
• Conversion
• Return on Investment
• Other Advertising Impacts
Value of Consumer Target
Key Conclusions and Implications
Study Objectives
Measure the effectiveness of classifieds, directory, and local advertising on the Internet: Across a variety of representative industries Incorporating all aspects of ROI including impressions linked to
offline value and branding Considering metrics related to sales, awareness, and branding
Using a high quality methodology that: Reflects real market conditions Provides a non-artificial test environment to the extent
possible Offers adequate sample for statistical significance
Why Case Studies?
Each publisher has a unique business model Cost-per-lead Flat listing fees Dramatically different industries
“Marketer” has a different meaning across each publisher Cars.com focus is on “dealerships” collectively Verizon Superpages.com focus is on small
businesses organized by category CareerBuilder.com focus is on employers of
“Top 4 Accounting Firm” and “Leading International Bank”
Yahoo! Local focused on “Ford Rental”
No comparisons to other mediums Cost prohibitive Difficult to collect
Participating Publishers and Marketers
Agenda
Overall Study Objectives
Methodology Review
Summary of Results Addressable Market and Opportunity Ad Effectiveness Summary – Case Studies
• Conversion
• Return on Investment
• Other Advertising Impacts
Value of Consumer Target
Key Conclusions and Implications
Step 1: Study Details By Publisher
10 publisher and marketer combinations testedPublisher MarketersCars.com Car Dealerships Around the CountryCareerBuilder.com Big 4 Accounting Firm and a Major International BankYahoo! Local Ford Rent-a-CarVerizon Superpages.com Hospitality, Real Estate, Retail, Prof. Services, Autos,
Retail
Population: Total U.S. Passive Data Collection: January 2005 through September 2005 Survey Field Dates: June through September 2005 POLK Data Match: April 2004 to June 2005 Sample Sizes:
~ 200 survey completes per cell on average (ranging from 138 to 256) ~ 1,000 to 60,000 passive ad exposures per cell~ 165,000 records matched to POLK automotive database
Step 2: Passively Track Exposure
Example of Listing Exposure at
Step 3: Create Test and Control Cells
Survey Test – Control Design For comScoreQ2 conducted 355 Internet surveys in the US from August 31, 2005
through September 19, 2005.
Definition Sample Size
Test GroupRespondents ages 18 and up who have used CareerBuilder.com to search for a job in the past 6 months.
217
Control Group
Respondents ages 18 and up who were aware of CareerBuilder.com, but who used other sites to search for a job in the past 6 months.
138
HI
NM
CA
WA
ID
WY
CO
ND
SD
NENV
UTKS
OK
MN
WI
IL
MI
OHIN
FL
GA
AR
MS AL
SC
NY
TN
KYMO
IA
VA
TX
AZ
MT
LA
PA
ME
WV
OR
NC
NH
MD
CT
NJ
RI
MA
DE
VT
Full Coverage of new and used vehicle salesPartial Coverage of new car sales. No used car sales information.
AK
Step 4: Automotive database match
POLK covers ~ 70% of new and used car sales in the U.S.
Step 5: Targeted surveys for offline details
SurveySection Screener Awareness
& Usage Perceptions Demographics
- Eligibility
- Age
- Gender
- Brand awareness
-Unaided
-Aided
- Ad recall
- Usage
- Action (s) taken
- Likelihood to re-use
- Likelihood to recommend
- Attribute ratings
- Overall impression
- Impact of advertiser
- Frequency of local search
- Tenure of local search
- Education
- Annual household income
- Zip location
SURVEY FLOW FOR ALL STUDIESm
etr
ics
Step 6: Passive Data “Funnel” Analysis:
Funnel to conversion for Ford rent-a-car
Searched Keywords
yp.yahoo.com
Saw Ford Rental
Listing & Clicked
Thru to DealerLocator Page
Clicked Thru to
Search for Availabilit
y
Online Clicked Thru to
Rent CarOffline
Phone or Visited
Dealer to Rent Car
RentedCar
Agenda
Overall Study ObjectivesMethodology ReviewSummary of Results Addressable Market and Opportunity Ad Effectiveness Summary
• Conversion• Return on Investment• Other Advertising Impacts
Value of Consumer Target
Key Conclusions and Implications
Monthly Market Penetration and Size
The majority of the Internet population is now using directories
Even unique life events (like car buying or job seeking) are common
0
25,000
50,000
75,000
100,000
125,000
150,000
Directories/Resources
Automotive Careers
Un
iqu
e V
isit
ors
(M
M)
Source: comScore MediaMetrix; Total US Internet February 2006
72% Reach
29% Reach 27% Reach
Cumulative Reach by Category
Over a 6 month period, the cumulative reach continues to grow
Offering marketers a huge opportunity to touch consumers74%
83%87% 89% 90% 92%
53% 56%61%
53%58%
62% 65%
48%41%
29%
45%
32%
5-Aug 5-Sep 5-Oct 5-Nov 5-Dec 6-Jan
Directories / Resources Careers Automotive
Source: comScore Marketing Solutions; Total US Internet January 2006
Five Month Retention By Category
Retention remains strong even over long periods of time Once engaged, it’s clear consumers value these category
resources 85% 83% 81% 81%
50%45%
39%46%
52% 49% 46% 47%
87%
55%58%
5-Sep 5-Oct 5-Nov 5-Dec 5-Jan
Directories / Resources Careers Automotive
Source: comScore Marketing Solutions; Total US Internet January 2006
Agenda
Overall Study ObjectivesMethodology ReviewSummary of Results Addressable Market and Opportunity Ad Effectiveness Summary – Case Studies
• Conversion• Return on Investment• Other Advertising Impacts
Value of Consumer Target
Key Conclusions and Implications
Case Study: Yahoo! Local and Ford Rental
Business Model Pay-per-listing model Objective to drive converting consumers to Ford Rental site
Conversion Funnel Search for Car Rentals 100% Clicked on Ford Listing 40% Availability Check 31% Requested Rental 5% Converted Online 3%
ROI Calculation: Total revenue over total cost Projected consumers exposed to a listing Conversion both online and offline Calculate total dollars in rentals for Ford Divided cost of Yahoo! Local Listing
Source: comScore Marketing Solutions; Total US Internet October 2005
3.2%3.8%
Total Conversion is 7%
Nearly 40% ofConversionOccurs offline
Case Study: Yahoo! Local and Ford RentalConversion Results
ROI calculations must include offline conversions
Online Offline
Case Study: Yahoo! Local and Ford RentalConversion Results
What prevents consumers from converting online? Availability and selection of rental cars This is a potential revenue loss of ~$1.3 Million* per month
Online
* Monthly UV’s exposed to Ford x drop of rate during availability check x average revenue per car rental
Case Study: Yahoo! Local and Ford Rental Cars ROI Conclusion
The average price of a rental car transaction is $130 according comScore eCommerce data
Ford ROI is strong even at much lower average transaction sizes
Source: comScore Marketing Solutions; Total US Internet October 2005
8.7X ROI7.8X ROI
6.5X ROI
$100 $117 $130
$$ Per Rental
Case Study: CareerBuilder.com, Accounting Firm and International Bank
Business Model Pay-per-listing model Objective to connect employers with qualified job seekers
Conversion Funnel Accounting Firm Bank Saw Job Listing 100% 100% Applied online and offline 35% 36% Interviewed 13% 20% Received Job Offer 2% 14%
ROI Calculation: Cost Per Job Offer Job seekers viewing listing pages Conversion to application, interview, and finally job offer Total cost of job listings Costs divided by offers made = Cost Per Job Offer
Case Study: CareerBuilder.com Cost Per Job Offer Made ROI Calculation
Cost per job offer made based on listing fees of $389 Differences driven by number of listings, job appeal, and
brand equity
Source: comScore Marketing Solutions; Total US Internet October 2005Accounting Firm International Bank
$283
$30
Median permanent placement fee via staffing firm/recruiter: $8,592
Source: Staffing Analysts Industry, Inc. - 2005
Average length of time to fill a position: 30 Days
Source: The EDGE Report – August 2005
Case Study: Verizon Superpages.com
Business Model Pay-per-listing model Objective to connect consumers with a local service provider
Conversion Funnel Retail Category Example Viewed listings page 100% Clicked listings detail page 25% Took an online action 8% Took an offline action 17%
ROI Calculation: Total revenue over total cost Projected number of listings viewers Number of leads converting online and offline Calculate total revenue generated Divided total cost of listings
Site Reach By Listings Category:Based on Search Activity
41.7%
29.2%
16.6%
6.8% 4.0% 1.8%
Hospitality ProfessionalServices
Retail/ Shopping Automotive Real Estate Constructionand Contractors
Case Study: Verizon Superpages.comSite Reach By Category
Majority of Listings Views are in Hospitality (41.7%) Higher consideration categories are less frequented
Source: comScore CMS, Total Internet Population, Average Monthly EstimatesBase: ~60,000 Directories Users between January 2005 July 2005
Case Study: Verizon Superpages.comTotal Conversion By Category
Conversion varies dramatically by category High conversion categories linked to an “immediate need”
Total Conversion By Listings Category:Based on Listing Page Exposure
25.0% 25.0%21.3%
13.3% 12.7%6.4%
Retail Automotive Hospitality ProfessionalServices
Real Estate Construction &Contracters
Source: comScore CMS, Total Internet Population, Average Monthly EstimatesBase: ~60,000 Directories Users between January 2005 July 2005
Case Study: Verizon Superpages.comROI Summary By Category
Source: comScore Marketing Solutions; Total US Internet October 2005
$0
$5
$10
$15
$20
$25
Hospitality Retail Real Estate Automotive Prof. Services Construction &Contractors
Average ROI is across all categories $10.60 for every $1 spent
$22.54
$18.85
$13.60
$1.93 $1.21$0.31
Case Study: Cars.com
* 35 States that report all new & used car sales
Business Model Subscription model Objective to connect dealers with
prospective car buyers
Conversion Funnel Viewed dealer listing pages
100% Searched for vehicle Viewed detailed vehicle listings Contacted a dealer
Converted Offline 38%*
ROI Calculation: Cost Per Sale Number of unique visitors viewing dealer listings Percentage converting based on POLK data
match Number of vehicle sales to Mid/Low funnel
visitors Total listing costs divided by total sales =
cost per sale
Case Study: Cars.com ROI Conclusion
cost-per-sale 7.7 X more cost effective than the industry average**
*Source: NADA 2005
$68
$493*
Cars.com Industry Average
Cost Per Sale
**Dealerships all media channels
Marketer Site Metrics (Lift)
Marketers often improve their branding among consumers vis-à-vis the favorable environments provided by the publishers
MetricFord Rent-a-Car on Yahoo! Local
International Bank on
CareerBuilder.com
Accounting Firm on CareerBuilder.com
Favorable Overall Impression
7% 10% -1%
Likely to Use Again
12% 10% 4%
Likely to Recommend
15% 11% -1%
Is a Name I Trust 10% 9% -2%
Lift=Metric (Test)-Metric (Control)
Q (Ford Rent-a-Car, Bank, Accounting Firm, Cars.com): What is your overall impression of_________?Q (Ford Rent-a-Car): How likely are you to use _____the next time you rent a car?Q (Bank, Accounting Firm): How likely are you to search the _____job listings the next time you search online for a job?Q (Cars.com): How likely are you to search on Cars.com the next time you search online for a new or used vehicle?Q (Ford Rent-a-Car, Bank, Accounting Firm, Cars.com): How likely are you to recommend_________ to a friend, family member or colleague?Q: Please indicate the extent to which you agree or disagree with the following statements, Attribute rating: I trust this brand.Base=Respondents aware of marketer
Other Ad Effects (Lift)
Even ad recall, a high hurdle for an online listing, jumps among test consumers in a few select cases
Marketers can impact ad recall if focused on the limited creative element
Most respondents who visit these sites take some desired action – few are “just browsing.”
Other EffectsFord Rent-a-
Car on Yahoo! Local
International Bank on
CareerBuilder.com
Accounting Firm on
CareerBuilder.com
Dealerships on Cars.com
Recall Online Advertising
-1% 5% 11% 17%
Took Action1 91% 76% 91% 55%
Lift=Metric (Test)-Metric (Control)
Q (Ford Rent-a-Car, Bank, Accounting Firm): Where have you seen or heard the following _________advertised or promoted in the past 6 months?Q (Cars.com): Where have you seen or heard the following _________advertised or promoted in the past 12 months?Q (Ford Rent-a-Car, Bank, Accounting Firm, Cars.com): What action did you take, if any, after visiting _________?Base=Respondents aware of /used marketer
Notes 1-Asked of Test Group respondents only;
Other Ad Effects (Lift)
Most recall Verizon Superpages.com online advertising.Overall, Verizon Superpages.com experiences an 18 point lift across the board.
Other Effects
Real Estate
Professional Services
Automotive
Trade Services
Hospitality
Retail
Recall Online
Advertising14% 19% 16% 9% 19% 23%
Lift=Metric (Test)-Metric (Control)
Q : Where have you seen or heard the following sites advertised or promoted in the past 6 months?Base=Respondents aware of /used Verizon Superpages.com
Agenda
Overall Study ObjectivesMethodology ReviewSummary of Results Addressable Market and Opportunity Ad Effectiveness Summary
• Conversion• Return on Investment• Other Advertising Impacts
Value of Consumer Target
Key Conclusions and Implications
Agenda
Overall Study ObjectivesMethodology ReviewSummary of Results Addressable Market and Opportunity Ad Effectiveness Summary
• Conversion• Return on Investment• Other Advertising Impacts
Value of Consumer Target
Key Conclusions and Implications
Key Conclusions
Online Classifieds and Local Advertising is a highly effective form of advertising The case studies show positive ROI
The majority of the value of online advertising is realized via offline sales Tracking offline conversion is critical to fully understand ROI Secondary branding impacts are often present
User experience is critical to converting consumers Significant attrition occurs in the case Marketers must take care not to neglect the online use
experience
Key Conclusions (continued)
Marketers must recognize the size and scope of the online local marketplace All forms of local advertising reach a significant portion of
consumers The channel “flow” may be reversing – online pushing to
offline?
The local space attracts highly valuable consumers More likely to convert – online AND offline Higher income More likely to spend time online than average (which means
they are spending less time in offline channels)
Key Implications
Classified and local search listings must offer consumers multiple ways to complete sale 40% of Ford’s car rentals were completed offline…by phone,
email or dealer address provided in listing
Classified and local search listings are not just about moving product today, but about impacting brand image Ford and an international bank saw 15% and 11% increases
respectively in “likelihood to refer brand to a friend” Ford and an international bank saw 10% and 9% increases in
“trustworthiness of brand”
Classified and local search listings must sell not just list Ads must provide product/service benefits and availability
Thank you
IAB Research
Doron Wesly
Director, Industry Research
+1 (212) 380-4714
comScore Networks
Erin Hunter
Senior Vice President
+1(650) 244-5408