Who says digital advertising is dead end? Online advertising can be as effective as television advertising in lifting retail sales of CPG brands, according to a new study from comScore and dunnhumbyUSA. Better yet, it's much less costly than television advertising.
The study, based on a 200,000 panel of consumers who were members of grocery store loyalty programs, indicated that online advertising lifts retail sales of CPG products by an average of 9%, compared to an average lift of about 8% from TV campaigns (measured by Information Resources, Inc. and published in their seminal research paper How Advertising Works).
The comScore dunnhumbyUSA research was conducted by examining the retail purchasing behavior of members of the comScore panel of 2 million internet users who have given comScore explicit permission to monitor their online behavior.
The panelists' retail buying behavior was measured through point-of-sale UPC scanners when the panelists presented their membership cards at the checkout lanes of participating supermarket stores.
By comparing the retail purchasing of comScore panelists who were exposed to online advertising campaigns for a variety of CPG brands with the purchase behavior of groups of "control" panelists who were not exposed to such campaigns, comScore was able to isolate the impact of the advertising campaigns in lifting retail sales of the advertised brands. The groups of control panelists were selected to be demographically and behaviorally similar to the exposed panelists prior to the start of the campaigns.
Advertising campaigns for brands in a variety of CPG product categories, including cereal, cookie mixes, pizza, juice drinks, snack bars, pasta, tea, deodorants and toothpaste, were examined. The advertising campaigns featured static and rich media display ads. Over the course of a three-month period, comScore observed that these types of ad campaigns were able to lift sales of the advertised brands in retail supermarkets by an average of 9%. Approximately 80 percent of the online ad campaigns analyzed resulted in statistically significant sales increases for the advertised brands.
The comScore dunnhumbyUSA results were compared to studies of the effectiveness of TV advertising conducted by IRI using their patented BehaviorScan system. This system is capable of varying the television advertising seen by IRI panelists who have agreed to show identification cards when they check out of participating retail stores. By eliminating TV advertising among one group of panelists and allowing it to flow through to others, IRI can isolate and measure the effectiveness of TV advertising in lifting retail sales. Across all tests conducted, the average sales lift that can be attributed to the impact of TV advertising was approximately 8% over a one-year period.
"These early results confirm the ability of online advertising to successfully build retail sales of CPG brands on par with the impact of television advertising," Gian Fulgoni, executive chairman of comScore, said. "It is likely that the more precise targeting ability of the internet — especially in terms of accurately reaching the desired demographic segment — is a key reason for its effectiveness."
He added that, because online advertising is generally less expensive than television, the results take on even greater significance.