Report: Seeing Online Ads Seems to Drive Conversions

People who recently saw an online advertisement have a dramatically higher propensity to purchase or register at the advertiser’s site, according to a recent study, a result which indicates that viewing ads — even without clicking — drives conversions.

The findings come as part of Engage AdKnowledge’s quarterly Online Advertising Report, which was compiled from information on the company’s system. The sites on the company’s system are representative of the Web advertising marketplace, according Nielsen//NetRating statistics cited by Engage AdKnowledge, with a reach of 95.85 percent of the home audience and 98.42 percent of the work audience.

Looking at the time lag between a view and a conversion, as compared to a click and a conversion, the researchers found that those who converted after a view did so after a longer period of time. In fact, 38 percent of those who converted after a view did so eight to 30 days after seeing the ad. By contrast, 61 percent of those who converted after a click did so within 30 minutes of the click.

The data on post-view conversions is the latest information to come out of Engage AdKnowledge that seems to support the branding or awareness value of banner advertising. The company’s first quarter report found that 32 percent of all conversions followed an ad view without a click.

The value of online advertising has been hotly debated — especially now, as the struggling of online ad companies seems to point to a flaw with the medium. The CPM model, especially, is under serious scrutiny, as this tight financing market drives dot-com advertisers to low-risk pay-for-performance deals. Although advertisers have been willing to accept nebulous proof of results from traditional media, the greater accountability possible with online media has spurred online advertisers to demand more hard effectiveness data. That has generally meant cost-per-click or cost-per-acquisition deals, but this latest study gives supporters of the CPM model more ammunition.

“This study shows there is measurable and concrete value to an impression without a click,” said David Zinman, senior vice president, Engage. “That means marketers need to pay attention to the 99 percent of people that don’t click. We think that this realization raises the value of the Internet as an advertising medium.”

The study also found that marketers need to pay special attention to their current customers. Although 75 percent of customers acquired from ads converted only once, the remaining 25 percent — the loyal customers — accounted for nearly 50 percent of conversions. This means these folks are making up a significantly greater percentage of sites’ business.

Additionally, the researchers looked at banner acceptance, and found that banner ads still have the greatest acceptance, by a long shot, although every format saw growth in the number of sites accepting them. Rich media formats also grew across the board, with HTML ads, Java ads, and JavaScript ads most widely accepted. Shockwave ads came in right behind JavaScript, topping the list of ads in proprietary formats.

Average CPM rates — at least rate card rates — came in at $33.64, falling one percent from $34.06 last quarter. Meanwhile, the number of sites and networks seeking advertising grew 35 percent in the third quarter — from 4586 to 6206. Whether this growth in sites accepting ads is effecting actual CPM rates, though, remains to be seen.

The study also took at look at European CPM rates, which increased slightly in the last quarter.

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