 
Rex Briggs is one of the Online Advertising world’s most important figures. Though relatively unknown to a surprisingly large many in the space, Briggs’ Online Advertising effectiveness research has formed the basis for many of the industry’s most in-depth Online Advertising effectiveness studies, including the recent MSN/IAB/ARF study, which aims to demonstrate that large-scale brands can substantially improve their overall advertising ROI by distributing a larger portion of their budgets to Online Advertising.
After working for years - as founding Principal of marketing effectiveness research firm, Marketing Evolution
- on the question of whether Online Advertising is an effective branding medium, Briggs recently turned his research efforts to what we think are some far more interesting questions: How powerful is Online Advertising vis-à-vis the traditional media, specifically TV, Radio, and Print. And, just what should the role of Online Advertising be in the overall brand advertising mix?
In this exclusive interview with avant|marketer, Briggs discusses how Online Advertising stacks up against the traditional media in terms of impact and cost effectiveness.
avant|marketer: Much has been said about how much of a company’s overall advertising budget should be spent online. However, once a determination has been made to allocate a certain percentage of the overall budget to Online Advertising, the question of where to spend that budget is equally critical. Within Online Advertising itself, how should marketing budgets be allocated, based on your research?
Rex Briggs: This is a hard question to generalize about. But, I think the basic analysis that has to be used is to always calculate back to ROI, rather than looking at raw performance. For instance, in my research, I’ve certainly found that the Large Rectangle ads work better than Banners. But since Banners do work, the advertiser needs to force themselves to ask how much better the performance of the Rectangle is versus the Banner, set against price. If the Rectangle performs 25% better, but is three times more expensive, then it’s not worth it. Research data has a place in this analysis. Advertisers can use [aggregated research] data to figure out what the likely effectiveness of their placements will be. Cost, however, differs from placement to placement, so the advertiser has to set their particular campaign costs against these effectiveness benchmarks. This way a particular advertiser can estimate their probable ROI from a particular online channel. But, since campaign and technology costs differ, it’s probably not useful to try and say which channels produce the best ROI, for advertisers in general.
avant|marketer: Much of the research coming out of the Online Advertising industry having to do with advertising formats and technologies focuses very heavily on bottom-line effectiveness, but doesn’t factor in the element of cost, and therefore, cost effectiveness. Likewise, it would seem that many of the large-scale advertisers are oblivious to cost-effectiveness in many of their buys. Is there a problem here?
Rex Briggs: I think there needs to be a course in business schools called “Media Math”. Often there is a lot of discussion amongst advertisers about calculating GRPs and so forth, but in many cases there isn’t a lot of calculating on cost and allowables in the way that a direct marketer would calculate a buy. So, I think there is a missing discipline in a lot of media buying that includes that analysis.
However, to be fair, there are lots of companies that buy new formats regardless of the costs, because they are experimenting to determine what the effectiveness will be. And, this can be justified too. The bottom line is that a company has to know what they’re doing, why they’re doing it, and what they are willing to pay to do it.
Many of the Internet companies that were criticized for advertising on the Super Bowl two years back were also doing something like this - they were experimenting to see what return they could achieve. In a way, they can’t be faulted for this. Companies that are on the leading edge have to experiment to stay there, and this involves taking risks and being innovative. Sometimes those risks pay off, sometimes they don’t. It’s true that many of these kinds of buys can’t be justified from a strict cost efficiency standpoint, before hand. They are experiments. And the value of experimentation is harder to quantify.
avant|marketer: TV versus Online. This is a perpetual question, it seems. Based on all of the research you’ve done, how does Online Advertising stack up against Television Advertising?
Rex Briggs: Of course, Television is credited with being very powerful for branding. And there is no doubt that it is capable of building Brand Awareness, Message Association, and so forth. At the same time, this doesn’t really separate TV from Online as much as many people think. In our research, we’ve proven that Online can do all of these things, too.
I think the real advantage that TV has over the Internet for branding right now is what TV is capable of in terms of allowing the advertiser to quickly achieve reach. In one week, Television is capable of reaching 65% to 85% of most target audiences. To reach 65% to 85% of a target audience online takes about a month. But, if you compare this to Magazines, this is still quite fast. With Magazines you would be looking at more like two months. Additionally, Online Advertising now can achieve higher reach levels with most target audiences than Magazine Advertising.
avant|marketer: But, in all fairness, when most people think of the Television versus Online question, they aren’t thinking about whether Television can deliver reach more time-efficiently, they’re questioning whether Online Advertising could ever really be an efficient branding medium compared to TV, considering that TV messaging is seemingly far richer and more impactful. Because of its inherent traits, won’t TV always be the far better medium of the two, for branding?
Rex Briggs: No. In fact, this is where I think most people are completely wrong. Usually, I don’t put things quite so bluntly, but in this case I think it’s warranted. Yes, TV has moving pictures, has sounds, plays for thirty seconds, and has the ability to tell a story. So, yes, the TV ad unit itself is more powerful than a Banner - no question about it. But, when you factor in how a consumer actually watches TV, and you factor in the cost per reach, you have two leveling factors that change the equation dramatically, in favor of Online.
People today are multi-tasking more than ever before while watching TV. More and more, they’re leaving the room during commercials, channel surfing, doing their email while watching their favorite show, and so on. There is no doubt in my mind that if you could strap people to their chairs, toothpick their eyes open, and force them to watch TV commercials, then there would be nothing out there that could touch TV, but unfortunately, we can’t do this. This means that TV is not nearly as effective as, in theory, it could be.
And then there’s cost... TV Advertising is quite expensive relative to Online Advertising, and, in some cases, even relative to Print.
avant|marketer: Finally - to go to the heart of the matter - how does TV compare to Online in terms of cost-efficiency for branding on the major branding metrics: Brand Awareness, Purchase Intent, etc.?
Rex Briggs: There is good data on this. Our recent, MSN/IAB/ARF Cross Media Research Study looked at the performance of two real-world campaigns and measured the Online component versus TV on just these metrics. Morgan Stanley also did some recent research that addressed this. For me, all of this research shows that there is some converging validity around the conclusion that Online Advertising can be more cost-efficient for branding than TV. Now, of course, if everyone jacked up their prices threefold, this cost-efficiency would disappear immediately.
What we found in our research, specifically, was that Online Advertising was impacting all three key Branding metrics: Awareness, Brand Image, Purchase Intent. And, that it was more cost-efficient than TV on all three of these metrics. But, there were a few cases in which - at least for the packaged goods brands we studied - that Print was more cost-efficient than TV or Online. Generally, according to our research, Online Advertising can be cost effective at between approximately $5 and $20 CPM, depending on the specific placement.
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