IDC Consumer Attitudes About Internet Advertising and the Implications for Performance Marketing

Consumer Attitudes About Internet Advertising and the Implications for Performance Marketing Caroline Dangson Research Analyst Social Media IDC

Is Advertising Failing on the Internet? No, advertising will remain important business model but must evolve Consumers expect content to be free online Consumers hate paying for content more than they do advertising Advertisers must rethink how they conduct advertising online Publishers must employ a mix of models

Consumers Actually Like Ads Q. How much do you like advertising in general, no matter where you see it? Source: IDC, U.S. Consumer Online Attitudes Survey Results, Part I: Advertising Tolerance , Doc #213481, n=3,000

Not All Mediums The Same Q. How much do you like advertising in each of the following media? Source: IDC, U.S. Consumer Online Attitudes Survey Results, Part I: Advertising Tolerance , Doc #213481, n=3,000 Consumers like ads on more passive, sit back mediums

Not All Formats The Same Q. How much do you like each of the following kinds of online advertising? Source: IDC, U.S. Consumer Online Attitudes Survey Results, Part I: Advertising Tolerance , Doc #213481, n=3,000

Consumers Are More Easily Annoyed By Online Ads Find ads online more annoying than useful More annoyed by ads on social networks than elsewhere on the Internet Annoyed by ads that disrupt the experience – read magazines vs. use Internet vs. connect on SNS

Consumers Less Receptive to Online Ads – Advertisers Shifting More $ Here Budgets increasing for social media (they were $0) Brand advertisers want to be in all the action on SNS – but pages offer little premium inventory Social media is much cheaper than traditional advertising, but measuring quantifiable success is not as easy and consumers not reacting as favorably 25% NEDMA direct marketers who run social media campaigns have a strategy for calculating ROI Possibilities are almost paralyzing – where to begin, what data to collect, how to analyze the data

All Eyes on Social Networking Services (SNS) Source: IDC U.S. Consumer Online Behavior Survey Results 2008, n=3092, U.S. Consumer Online Attitudes Survey, IDC 2008 . n=3000 SNS users spend an average of 30 more minutes online each day than non SNS users More than half of SNS users age 13 to 24 use SNS at least once a day or more 38% are spending more than one hour each session Percentage of Online Americans Regularly Using SNS Today

Boomers Joining: SNS Is Not Just A Teen Hangout Oct. 2007 - 43% June 2008 - 53% Dec. 2007 - 74% Source: IDC U.S. Consumer Online Attitudes Survey 2008, U.S. Consumer Online Behavior Survey Results 2008, U.S. Consumer Online Behavior Survey Results 2007 Growth of Online Americans Regularly Using SNS Since 2007

Traffic is Huge, But Advertising Spend is Not 3 out of 5 U.S. online consumers age 13 and older regularly use $1.3 B in 2008 to $2.6 B in 2012 in U.S. Concerns about brand safety Poor quality inventory IDC survey shows that ads on SNS are not as effective as advertising online at large Sources: IDC U.S. Consumer Online Behavior Survey Results 2008, n=3092 U.S. Internet Advertising 2008–2012 Forecast and Analysis: Defying Economic Crisis (IDC #212149, May 2008)

Perception of Advertising on SNS Dislike 18% Like Neutral SNS users more tolerant of advertising in general 73% prefer free online content with advertising over paying for content without advertising Source: U.S. Consumer Online Attitudes Survey, IDC 2008. n=3000

Little Ad Relevancy on SNS Only 1 out of 4 consumers find ads on SNS useful 51% find SNS ads annoying – still this is less than mobile (66%) and video ads (67%) Creating ads for SNS that are relevant, less annoying to users is your biggest challenge Q: How useful (relevant to you, informative) do you think advertising is on SNS? (n=1619) Source: U.S. Consumer Online Attitudes Survey, IDC 2008. n=3000

SNS Users Click on Ads – Just Not As Frequently On SNS 20% 17% Q: How often do you think you click on an advertisement online? on SNS? (n=1619 SNS Users) Source: U.S. Consumer Online Attitudes Survey, IDC 2008. N=3000. Percentage of users who clicked on an ad at least once in the past year. 79% 57% 0% 20% 40% 60% 80% 100% All online ads Ads on SNS

SNS Users Are More Active Click to Purchase Than Non-Users More SNS users than nonusers report clicking to purchase SNS users are more active online purchasers But getting them to click on SNS ad is more difficult Q: In the past 12 months, have you ever purchased a product or service as a result of clicking on an online ad? Source: U.S. Consumer Online Attitudes Survey, IDC 2008. n=3000 26% 74% 20% 80% 0% 20% 40% 60% 80% 100% YES (click to purchase) NO (click to purchase) Users Nonusers

But SNS Users Are Not As Active Click to Purchase on SNS (95% confidence interval, 3% margin of error) 23% 11% 0% 5% 10% 15% 20% 25% Web In General SNS Source: U.S. Consumer Online Attitudes Survey, IDC 2008. n=3000 Q: In the past 12 months, have you ever purchased a product or service as a result of clicking on an online ad? General Web vs. SNS site

Consumers Are on SNS To Connect To keep in touch with friends To communicate with friends To share media with friends Virtual social event

Behavioral Targeting Promises Increased Relevancy, But Consumers Against It Q: Would you consider allowing Web sites to collect personal info about you in return for ads that fit your purchase intents? Source: U.S. Consumer Online Attitudes Survey, IDC 2008. n=3000

SNS is a Goldmine of Rich Personal Data, But Consumers Want Privacy Q: Under which circumstances would you consider letting Web sites collect personal information about you? Check all that apply. ( N=1239, those who would allow it without reservation and those under certain circumstances ) Source: U.S. Consumer Online Attitudes Survey, IDC 2008. n=3000 23% 34% 41% 61% 66% 67% 0% 20% 40% 60% 80% 100% Informs me with a pop-up window Service sends me email notification Notified in Terms of Service Service allows me opt out Service collects info. only if I opt-in I choose how much info. to give away

Some Consumers Open to Sharing Info About Themselves, But Not Others Q: What kind of personal information would you allow Web sites to collect about you provided it could not be connected to you as an individual? (N=1239) 50% who had some or no reservations will share as long as info not connected to their personal identity Most respondents will not share info on who they know Enable your customers to speak for you – tap into word of mouth Source: U.S. Consumer Online Attitudes Survey, IDC 2008. n=3000 13% 8% 46% 48% 55% 0% 20% 40% 60% 80% 100% None of the above Info on who I know Online purchasing behavior Demographic info Internet surfing behavior

Facebook Revolts Nearly 2.7 million members of this group alone Ambiguous language about what data Facebook owns Consumers starting to realize the value of their profile data for Facebook’s business

But the Reality… Millions are adding multiple applications that require them to share personal information with third parties

Participate By Giving Consumers Something They Want To Share Create avatar Play a game Easy to share with contacts Earn points to upgrade creature Remember that sponsorship is the most liked, least annoying online format

Offer Coupons 47% online participated in online contests or sweepstakes 31% used online coupons Source: IDC U. S. Consumer Online Behavior Survey Results 2008, n=3092 Q: In the past 12 months, when you were using the Internet for personal reasons (i. e., not for work or school), in which of the following ways have you used the Internet? Please check all that apply.

Case Study: @DellOutlet Spring 2007 216,000+ followers who opt-in for updates (leads) Followers RT @DellOutlet Tweets Special discounts – coupons with code Follower feedback 1-2 general tweets/week Lots of conversation Uses applications to target geographies and connect with outlet specials to increase demand ROI = $1 million in direct sales

Customers Using Social Media To Talk about Your Brand Frustrated with product or service Use social media to speak out Comments get to bloggers - influence social network Seeking to control the message Spending money on customer support, but still losing customers

Organization Learns to Participate in the Conversation and Shape It Connect Collaborate Share Comment Listen Engage Empower Support

Customers Want To Be Heard on Twitter Social media empowers consumers Today you must show that you are listening Turn a complaint into a message of appreciation

Essential Guidance You Do Not Control the Message on Social Media, But You Can Steer It

Essential Guidance Understand the context and sub-context of interactions on each social media site and speak the local language

The Future of Business Is Relationships Takes time, patience and multiple interactions to garner trust Source: P Kinski/Peter Spaczynski, June 2006, Flickr

Essential Guidance You Must Be Social

Contact me for more information [email_address] http://twitter.com/CarolineDangson www.linkedin.com/in/carolinedangson IDC Digital Marketplace Program http://tinyurl.com/DigitalMarketplace My IDC Research http://tinyurl.com/CarolineDangson

IDC Consumer Attitudes About Internet Advertising and the Implications for Performance Marketing

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