Why Online Ads Are Worth the Investment

by Digital Europe

Posted on 12-21-2017

Are brands get­ting the results they want from dig­i­tal ads? As dig­i­tal mar­ket­ing con­tin­ues to become a top pri­or­i­ty for com­pa­nies in their efforts to reach cus­tomers wher­ev­er they are, return on invest­ment (ROI) remains an impor­tant met­ric to pay atten­tion to. Just how much rev­enue are those dig­i­tal ads gen­er­at­ing, and is the spend worth the investment?

The good news, revealed in a recent study, is that online ads do have a notable impact on sales. The year-long study involv­ing Unilever, Nes­tle, and the Inter­net Adver­tis­ing Bureau (IAB) fol­lowed nine pop­u­lar house­hold brands—Nescafé, Häa­gen Dazs, Per­sil, PG Tips, Mag­num, Surf, Maille, Trop­i­cana, and Aquafresh—and test­ed their ads across desk­top and mobile sites such as The Guardian, Yahoo!, eBay, Gumtree, Auto­Trad­er, and Mail Online.

Draw­ing on a com­bi­na­tion of Nec­tar loy­al­ty card data, which pro­vides trans­ac­tion data for more than 12 mil­lion Sainsbury’s cus­tomers, and Nielsen Home­s­can data, which mea­sures shop­ping behav­iour at oth­er UK super­mar­kets, researchers chart­ed the pur­chas­ing behav­iour of con­sumers who received the ads and com­pared it to the behav­iour of those who didn’t.

The study found that every £1 spent on dis­play ads gen­er­at­ed an aver­age of £1.94 in sales. In addi­tion to reveal­ing the effect of online dis­play ads on sales, the study showed that online ads had a sig­nif­i­cant impact on offline sales. In fact, accord­ing to IAB’s chief dig­i­tal offi­cer, Tim Elk­ing­ton, the major­i­ty of sales gen­er­at­ed by the online ads occurred in-store.

With this kind of data show­ing a sol­id ROI, it seems clear that mar­keters should be focus­ing more of their brand’s spend on dig­i­tal mar­ket­ing and online ads. The report’s find­ings aren’t a guar­an­tee, but the evi­dence shows at the very least that cus­tomers are indeed respond­ing, and that the ROI poten­tial is there.

Clear­ly, some brands are get­ting results from online ads, which is good news for com­pa­nies inter­est­ed in dip­ping their toes in the water of online adver­tis­ing. What about your brand? Are you find­ing the same ROI? What strate­gies are you employ­ing to dri­ve sales using dig­i­tal marketing?

Topics: Digital Transformation, data analytics, online display ads, return on investments, UK, UK Exclusive, Digital EMEA