Strength in Integration: Advertising Innovation

Strength in Integration: Advertising Innovation

The online world is host to a thriving network of free content spanning nearly every profession, fad and interest imaginable. Blogging has become a profession - present company not excluded – and sites offering free services are everywhere. The driving force behind the majority of these sites is ad revenue – the holy grail of the online world. Many forms of advertising have surfaced since the advent of the internet.  The forms differ on several dimensions, including the extent of the advertisement’s integration with the editorial content, the stage in the customer’s purchase funnel, the extent of specific targeting and whether the contact is firm, or customer initiated. So the question is, which online ads are most effective in motivating consumers to buy? A recent study conducted by researchers, Evert de Haan, Thorsten Wiesel and Koen Pauwels, from the Marketing Science Institute (MSI) suggested that customer-initiated content integrated advertising is the single most effective tool for convincing consumers to make a purchase online. The study titled Which Advertising Forms Make a Difference in Online Path to Purhcase? Evaluates a wide range of new and traditional advertising methods from e-mail, television, radio, product placement, editorials and public relations to paid search, portals, price comparison, referrals and retargeting. The conclusions pointed to a customer-initiated contacts (CICs) as being 26.7 more effective than firm-initiated contacts (FICs), and further, content integrated advertising nine times more effective than content-separate advertising. However, the most astounding victor was the combination of content-integrated advertising that was initiated by the customer, these were the most effective in attracting viewers to the next ‘stages in the funnel.’ The researchers found that just a 1% marketing budget increase in CICs meant, on average, a .133% increase in revenue compared to 0.027% average gains for content separate CICs and next to zero gains for FICs.

The work of de Haan, Wiesel and Pauwels is not alone in its praise for customer-initiated CICs. CICs are a trend that is catching on fast. Techcrunch guest writer and VC at GRP Partners, Mark Suster foretold a future of integrated advertising. He stresses that in today’s day, advertising must be integrated in order to be effective. Contemporary consumers are well trained in ad avoidance, and no one will admit to appreciating ads. Suster points to the success of product placement, – the CICs of the television and movie realm - while consumer’s will never admit to being sold by it, but ‘marketers know better,’ celebrity endorsement is a $50billion dollar industry. The VC argues, that quite simply, ads that are effective are in-line and ‘in the stream’ of what a consumer is after in the first place. Finding new ways to integrate commercial messages into the information consumers voluntarily search for is set to have a positive effect on brand awareness and perception, and hopefully, the aforementioned researchers anticipate, help to reduce the overall declining efficacy of advertising.