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The Effectiveness of Online Display: Insights from Japan

June 23, 2011

by Geoffrey Precourt, Warc

Despite being the second largest online advertising market in the world, the on-going digital marketing programs in Japan don't seem to attract much attention in the United States.

"We've been making a concerted long-term effort to study how online display advertising can improve branding," Masao Kakihara, Yahoo Japan Researcher and Project Manager, told a session at the 2011 Advertising Research Foundation's Audience Measurement Conference in New York. "We might not be as advanced as the United States, but we face many of the same problems, especially moving beyond clicks" to a metric that would more accurately reflect engagement.

The effort, which began in 2007, does begin from a different starting point. In America, search maintains a larger but diminishing share of digital spend, with respective 2010 investments of $12 billion and $9.91 billion for search and display. In Japan, the priorities of digital media are reversed: display spending ($3.46 billion) was nearly 40% higher than search ($2.48 billion) in 2010.

That reversal, according to Kakihara, reflects one principal consideration grounded in traditional media. "Television is a much stronger medium than it is in the US," he commented. "Large advertisers in Japan still prefer the power of traditional television advertising campaigns."

And there are two major problems specific to the digital industry. First, the number of advertising exchanges is limited, "largely due to quite limited audience data exchange". Second, "The effectiveness of online advertising still is not well recognized. Advertisers simply do not know how to measure [interactive] advertising in relation to TV campaigns."

The consequence, he added, is that the online marketplace has been developing entirely independently of the rest of the marketing ecosystem - a limitation that has impaired its growth. "Our online marketplace has been growing, but… without fostering the whole market."

And that failing, said Kakihara, led to "continuous industry-wide efforts" in the form of a cross-publisher, longitudinal research program that, he said, purposely brings competitors onto the same team lest the entire online effort fall victim to a get-it-while-you-can 'tragedy of the commons' scenario.

Key participants in the program include Yahoo Japan, Microsoft, Video Research Interaction, AllAbout and Goo.

The overriding goal of the effort, he told the ARF, is to start with the basics: "focusing on simplicity and generalizability for building industry-wide common knowledge." Beyond that, the partnerships seek to:

  • Clarify online display advertising's general effects on audience awareness, behavior and attitude, beyond direct response.
  • Identify the 'norms' of online ad effectiveness for pre-campaign planning and post-campaign evaluation.

Over three waves of research (March 2007-December 2007; August 2008-August 2009; and August 2010-March 2011), 93 campaigns were reviewed by 92,000 respondents. Ad recall, creative effect and, finally, favorability were the focus of the analysis.

According to Kakihara, for ad recall:

  • The recall rate was 30% of exposed consumers.
  • Recall rate increased by cumulative ad exposure.

In terms of the creative effect of the online campaigns:

  • 64% of consumers with ad exposure understood the ad messages.
  • Rich formats increased ad awareness.

Favorability marks indicated:

  • Respondents generally liked what they saw, with a 43.5% mark for ad favorability and a 33.9% score for 'intent for site visitation'.
  • Online advertising helped brand awareness, message association, and favorability.
  • High frequency further increased all branding effects - message association, purchase/usage intent, brand interest, and brand recall.

Across the board, online ad recall averaged 30.3%. Some brand categories - including automotive (25.9%) and cosmetics/pharmaceuticals (27.4%) - had trouble matching that norm, while others (electronics on 35.9%; food on 32.7%; office appliances 32.5%) easily surpassed it.

Kakihara told the ARF audience that the results of the study demonstrated that co-operation among competing firms "is key for building a standardized measurement framework".

Moreover, he insisted that the preliminary findings he presented at the Audience Research session were only the starting point: "Elegant statistics are not enough. Building consensus and common knowledge is more important. Trust-based, continuous collaborative research effort is necessary" for the Japanese digital ecosystem to reach its full potential.

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