Net Ad Industry Pushes For Bigger Slice of Media Pie
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NEW YORK -- Continuing their efforts to win a greater role in the advertising mix, major players in online ad sales announced early results from a new study that showed how McDonald's increased awareness by devoting more money to the Internet.
In conjunction with its annual meeting in New York City on Monday, the Internet Advertising Bureau (IAB) released the preliminary findings from its "cross-media optimization study," with the aim of examining the effect on brand awareness that occurs from major brands increasing their online marketing spending.
McDonald's, the first of the participating brands to release its figures, bumping up online spending -- from 1 percent of the total media budget to 13 percent, for a two-week campaign to promote McDonald's new grilled chicken flatbread sandwich.
The findings indicated that while McDonald's traditional TV and radio campaign increased brand awareness by 187 percent during the two-week ad blitz, the extra 12 percent devoted to online yielded a lift of 232 percent.
"When online plays a larger role, all parts [of a media campaign] work better," said Rex Briggs, head of research firm Marketing Evolution, which the IAB had commissioned to conduct the study, along with online researcher Dynamic Logic.
McDonald's said it found the Internet an effective tool for reaching its target 18-to 49-year-old target market, since TV doesn't reach 27 percent of that segment, but 76 percent use the Internet for more than an hour a day. Online advertising, when combined with TV and radio, increased positive brand perception by 9 percent, according to the findings.
Additionally, with online playing a larger role, Briggs said the campaign made an extra 5.6 million members of the target audience aware of the new sandwich.
"The changing media landscape has forced us to seek out new and unique ways to reach our customers," said Neil Perry, McDonald's senior director of Internet marketing. "This study confirmed for us that the Internet can provide us with an excellent way of reaching out to important customer segments, particularly the 18-24 year-old demo."
The study comes on the heels of the IAB's earlier study of a cross-media plan run on Microsoft's MSN portal by Unilever for Dove Nutrium soap. That study, released in February, found that an increase in online media in a media plan also increased the campaign's return on investment, thanks in large part to the low cost of Web media.
The McDonald's and Unilever case studies are the first two of a yearlong series of cross-media studies intended to sell marketers, including offline ad agencies, on the effectiveness of Internet advertising. Currently, online advertising is a blip in most traditional companies' ad budgets, making up just 1 to 3 percent of the total spent.
While IAB Chief Executive and President Greg Stuart said during Monday's meeting that traditional advertisers like McDonald's are increasing their spending on interactive media, he added that companies needed to hear more about online advertising's successes.
"There is no more important research project for the IAB and the industry at large than the cross media optimization study," he said.
Yahoo! Chief Sales Officer Wenda Harris Millard agreed, saying the Internet ad industry is still overcoming the high expectations it set for itself during the go-go days of the late 90s. Instead of claiming the Internet will change the world, "what this is really about is selling chicken sandwiches," she said.
"As an industry, it's our collective responsibility to educate," she added.