Transcript Optimizing the Internet in Local Markets

Television Bureau of Advertising
Optimizing the Internet in
Local Markets
Updated June 2009
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Broadcast Television and the Internet both
offer unique advertising opportunities.
Both TV and the Internet play critical roles in
the purchase funnel.
This presentation will help demystify
and quantify both roles in the local
advertising marketplace.
Deconstructing the Internet





Content - News, information and entertainment.
Communications - Email and instant messenger.
Commerce - Shopping online.
Community - User-generated content and
communication.
Search - Prioritized results based on specific criteria
from user-generated requests.
3
Internet Activity Is Varied by Format
Internet Activity Index
April 2009
Share of Time Spent Online
Content
41.3%
Communications
26.4%
Commerce
13.3%
Community
13.7%
Search
Source: IAI Internet Activity Index, online-publishers.org
5.3%
4
Spending Reflects the Diversity of the
Internet as an Ad Medium
U.S. Online Ad Spending by Format – 2008 Annual Revenue in Millions
Banner Ads,
$4,877
Classifieds,
$3,174
Referrals, $1,683
Sponsorships,
$387
E-mail, $405
Rich Media,
$1,642
Digital Video,
$734
Search, $10,546
Source: 2008 IAB/PricewaterhouseCoopers data, IAB.net press release 3/30/09
5
Search and Digital Video are Top Formats
for Growth
Internet Ad Revenues by Ad Format
2008
($Millions)
% Market
Share 2008)
2007
($Millions)
% Market
Share 2007
Keyword Search
10,546
45%
8,805
42%
Banner Ads
4,877
21%
4,456
21%
Classifieds
3,174
14%
3,321
16%
Rich Media
1,642
7%
1,656
8%
Referrals/Lead Generation
1,683
7%
1,584
7%
Sponsorship
387
2%
636
3%
E-mail
405
2%
424
2%
Digital Video
734
3%
324
2%
Type of Advertising
TOTALS
23,400
Source: Interactive Advertising Bureau, Press Releases, 3/30/09
100%
21,200
100%
6
Majority of Advertising is Based on
Transactional or Direct Marketing Models
Top 25 Internet Advertisers
Scotttrade Inc.
Tree.com Inc.
TD Ameritrade Holding Corp.
Bank of America Corp.
FMR Corp.
E-Trade Financial Corp.
General Motors Corp.
Experian Group LTD
Verizon Communications Inc.
Walt Disney Co.
Apollo Group
News Corp.
Capital One Financial Corp.
Expedia Inc.
Netflix Inc.
Time Warner Inc.
United Online Inc.
AT&T Inc.
Target Corp.
Comcast Corp.
ING Groep Nv
Privacy Matters
Housevalues Inc.
Ford Motor Co.
Hewlett-Packard Co.
Source: TNS Media Intelligence Full Year 2008
Advertising Dollars (000) Full Year 2008
$597,352
522,024
269,298
223,222
212,743
207,091
187,727
151,129
143,266
108,731
107,124
100,763
83,566
79,352
78,103
76,848
74,341
69,552
68,955
63,065
61,670
61,445
60,545
57,946
57,830
7
Internet Allocation for Top 20 Ad Categories
Ad Categories
Full Year 2008
Total Ad $*
(000)
Retail
11,078,803.4
Automotive, Access. & Equip.
10,813,553.0
Media & Advertising
9,236,055.7
Financial
9,004,310.3
Communications
7,950,531.4
Medicines & Prop. Remedies
7,485,780.0
Direct Response Companies
7,358,353.2
Services & Amusements
7,149,321.9
Government, Politics & Organ.
5,480,433.6
Insurance & Real Estate
5,247,333.8
Restaurants
5,237,012.3
Public Trans., Hotels & Resorts
4,596,455.8
Automotive Dealers & Services
3,884,115.3
Cosmetics & Beauty Aids
2,733,854.7
Department Stores
2,656,002.6
Dairy, Produce, Meat, Bakery Goods 1,971,536.1
Personal Hygiene & Health
1,872,509.2
Discount Dept. & Variety Stores
1,862,580.3
Prepared Foods
1,792,090.0
Beverages
1,648,788.4
Internet Ad $
(000)
% of Ad $ in Internet
597,758.6
544,070.1
1,424,895.0
2,944,045.3
469,693.8
211,793.9
54,321.5
573,645.2
202,149.6
333,608.0
68,074.8
463,640.8
121,843.9
42,748.7
53,543.4
27,600.9
42,049.6
92,419.6
30,554.7
26,576.7
5.4
5.0
15.4
32.7
5.9
2.8
0.7
8.0
3.7
6.4
1.3
10.1
3.1
1.6
2.0
1.4
2.2
5.0
1.7
1.6
* 14 Measured Media
Source: TNS Media Intelligence 2009
8
Web ROI Models


National portal advertising is primarily direct
marketing, based on cost-per-click or cost-peracquisition web ad models such as Search.
Most local websites are content driven, based on a
cost-per-thousand or flat rate model. However, they
are increasingly supporting local search and
directory formats.
9
Media Influence Through Funnel:
Automotive
Awareness
Consideration
Preference
Purchase
Source: TVB/Yankelovich “How Media Works,” April 2009
TV
Newspaper
Magazine
Internet
44%
6%
6%
19%
TV
Newspaper
Magazine
Internet
TV
Newspaper
Magazine
Internet
TV
Newspaper
Magazine
Internet
40%
7%
3%
17%
35%
4%
4%
12%
22%
1%
3%
12%
10
Automotive
Advertising Impact at Various Stages of the
Consumer Purchase Funnel
100%
90%
20%
19%
25%
26%
80%
33%
41%
39%
45%
41%
49%
47%
70%
59%
60%
50%
40%
80%
81%
75%
74%
30%
67%
59%
61%
55%
59%
51%
53%
41%
20%
10%
0%
Awareness
Interest
Consider
Purchase
Media Influence (Any)-All Cat.
Media Influence (Any)-Automotive
Source: TVB/Yankelovich “How Media Works,” April 2009
Want to
Purchase
Visit
Store/Website
Make
Purchase
No Media Influence-All Cat.
No Media Influence-Automotive
11
Automotive
Media Impact at Various Stages of the
Consumer Purchase Funnel
100%
90%
19%
80%
6%
70%
60%
50%
26%
41%
6%
6%
19%
45%
7%
5%
3%
4%
17%
4%
4%
12%
11%
3%
30%
44%
Television
Awareness
Internet
3%
4%
11%
3%
12%
40%
35%
34%
Consider Purchase
Want to Purchase
10%
0%
59%
3%
40%
20%
49%
Interest
Newspaper
Magazine
Radio
Email
Outdoor
30%
Visit Store/Website
Other
22%
Make Purchase
No Media Influence
Media cited by less than 3% of respondents were incorporated into the total for “other.”
Source: TVB/Yankelovich “How Media Works,” April 2009
12
The Automotive Purchase Funnel
The research has shown that the auto purchase
process begins within six months from the eventual
acquisition and consists of three stages:



“Needs Phase” (6 – 4 months prior to purchase)
Intenders are assessing the options that are available for basic
consumer needs and desires — size, space and styling.
“Features Phase” (3 – 2 months prior to purchase)
Intenders have narrowed their choices and are now comparing
options within a single segment focusing on product features.
“Price Phase” (final month prior to purchase)
Cost becomes paramount as the intender visits dealerships (usually
for the first time) and makes final comparisons that lead to purchase.
Source: Time Inc. Automotive Purchase Process ©
13
Purchase Funnel Reality
In the real world, there are many factors which
drive consumer behavior, independent of the
stages in the funnel:
 Big Sale
 Special prices / financing
 Launch of new products or models
Source: Wordpress.com
14
In Fact, Consumers Are Always in the
Purchase Funnel Cycle



There are always consumers in the purchase funnel
at varying stages in their purchase decisions.
Advertisers who maintain a broadcast schedule
reach consumers who are learning about a brand or
narrowing down choices for future purchases.
Broadcast ads are also reaching consumers postpurchase to re-enforce proof of performance and
promote related items.
15
Purchases Are Relatively Constant
Throughout the Year
U.S. Car & Light Truck Sales by Month 2008
Total Car & Truck
Sales 2008
Index to
12-Month Average
January
1,045,102
105
February
1,176,254
118
March
1,357,281
136
April
1,248,549
125
May
1,397,410
140
June
1,189,577
119
July
1,136,539
114
August
1,249,976
125
September
965,160
97
October
838,592
84
November
747,544
75
December
894,967
89
1,103,912
100
12-MONTH AVG. 2008
Source: Automotive News Data Center
16
The Majority of Consumers in the Purchase
Funnel are Outside the Price Phase

In 2008, 13 million* cars and light trucks were sold in the U.S.

1,103,912 were sold per month on average.

If you consider a typical 3-year cycle for auto purchases, 39 million
vehicles are sold within that time . . .
1,103,912 sold per month
39 million sales within a 3-year cycle in the funnel
= 3.1% of consumers in the “price phase” each month
If you advertise only to the bottom of the funnel (price phase
consumers) you may reach only 3.1% of potential customers
*Source: Automotive News 13,247,431 U.S. Car & Light Truck registrations
17
TV and Internet Relative Reach
TVB’s Media Comparisons Study 2008 shows that despite
the strength of the Internet, Television reaches more adults:
Demographic
Adults
Adults
Adults
Adults
18+
18-49
25-54
35-64
Source: TVB, Nielsen Media Research Custom Survey 2008
% Reached Yesterday
Television
Internet
90.2
89.3
90.0
90.7
65.6
73.8
72.1
69.5
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The Value Proposition of Local TV &
Local TV Station Websites



Broadcast TV and the Internet are complementary ad
environments in providing news, entertainment and
video content.
Awareness about products and services seen on TV send
consumers to websites to learn more detail and find local
retail outlets.
Advertisers using television advertising to drive
awareness of a new campaign can measure response
or purchase intent through the Internet.
19
Adults Turn to Local Television Station
Websites for Local News and Event
Information (%)
18+
18-34
18-49
25-54
Local Broadcast TV Station Site
33.4 39.5 39.3 39.0
Local Newspaper Site
25.7
29.3
28.9
28.3
Local Radio Station Site
7.3
6.2
6.4
7.0
Some Other Type of Local Website
4.6
6.4
5.8
5.1
Some Other Type of Non-Local Site
5.5
7.2
6.4
6.3
28.2
16.4
17.6
17.8
None/Don’t Use Websites
Source: TVB, Nielsen Media Research Custom Survey 2008
20
TV-Web Usage Complement Each Other
by Daypart
80%
70%
60%
50%
40%
30%
20%
10%
Late
Fringe
Late
Night
Morning
Daytime
Daytime
Early
Fringe
Early
Fringe
Prime
Time
Morning
Daytime
Daytime
Late
Late
Morning
DaytimeI II
DaytimeII IIII Early
EarlyFringe
FringeI II Early
EarlyFringe
FringeII IIII Prime
PrimeTime
Time
LateFringe
Fringe
LateNight
Night
Morning
Daytime
I
Daytime
II
Early
Fringe
I
Early
Fringe
II
Prime
Time
Late
Fringe
Late
Night
Morning
Daytime I
Daytime II
Early Fringe I Early Fringe II
Prime Time
Late Fringe
Late
Night
Internet
Television
Newspapers
Radio
Internet
Source: Online Publishers Association
Television
Newspapers
Radio
21
Local Television Websites Provide Top
Drivers for Local Consumers
Top 10 Local Content
Severe Weather Alerts
65%
57%
Maps and Driving Directions
Sales Promotions for Local Merchants
56%
53%
Things to do on the Weekend
Local Search
53%
Local Search Engine
Top 10 Things to do for Fun in Local Area
Local Shopping Service
Local Forecast w/ Graphs and Maps
Forecast w/ Meterologist
Source: Frank N. Magid Associates, Inc. Hearst-Argyle News Study 2007
52%
51%
51%
48%
47%
22
TVB Suggested Strategy




Television has the largest ad impact of any media at
all stages of the Automotive purchase funnel, from
Awareness through Purchasing, according to the
Yankelovich Study findings.
Internet advertising has the second highest media
impact in the Automotive purchase funnel and is a
complementary ad environment to Broadcast TV.
Newspaper is declining. Be aware of local online
opportunities – local broadcast websites included –
for reaching “price phase” consumers with search,
directories and classifieds.
Consider marketing dollars independent of your
advertising budgets to maintain share of voice.
23