Consumer Direct

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>cases

Yahoo Consumer Direct Marries
Purchase Metrics to Banner Ads

>Abstract
As little as two years ago, many advertising pundits were bemoaning the inevitable demise of the banner ad on the Internet. But maybe they were too quick to judge. This case reveals how Yahoo!, in combination with ACNielsen’s Homescan®, has developed a methodology (Consumer Direct) to evaluate the true effectiveness of banner ads, from ad exposure to shopping cart. It also reveals the role Dynamic Logic played in conducting postexposure ad evaluation. www.yahoo.com; www.acnielsen.com; www.dynamiclogic.com >The Scenario

If you are a product manager for a consumer-packaged-goods (CPG) company—for example, you manufacture toilet paper, or soup, or boxed dinners, or bar soap—a large portion of your advertising budget is going into television. “CPG companies have large marketing budgets and, understandably, have been extra careful in their move toward Internet advertising,” shares Ken Mallon, Yahoo’s director, insights products.1 “The thinking is that no one goes online to search out information on paper towels. But that doesn’t mean that Internet ads can’t significantly lift in-store sales.” With Internet consumption on the rise,2 and all other media facing declining consumption as a result,3 new metrics that showcase Internet ads’ targeting efficiency and sales responsiveness were needed. Product managers were facing increasing pressure for strong ROI metrics for media buys, yet they were relying on advertising recall4 or click stream analysis.5 They had few ways to measure the true purchase response from an Internet ad campaign.

>The Partnership
This was the scenario that had Yahoo wondering how to track actual purchases of Yahoo visitors following exposure to a CPG ad. It worked to bring about a marriage between ACNielsen’s Homescan panel (126,000 global households that provide extensive demographic and lifestyle data and allow their purchases to be tracked6 ) and Yahoo’s extensive database of Internet visitors. Yahoo envisioned the marriage providing a series of powerful metrics that CPG companies had yet to experience. Yahoo’s new research service for CPG companies was named Yahoo Consumer Direct Powered by ACNielsen (hereafter referred to as Consumer Direct).

>The Research
Nielsen//NetRatings 2003 data indicate the Internet reaches more than 185 million in the United States with year-to-year growth exceeding 7 percent. One question guided Yahoo’s thinking: How many Homescan households use Yahoo? Neither ACNielsen nor Yahoo had this bit of information. However, based on estimates of Yahoo use among all Internet users, and Internet usage among all households, it was assumed that approximately 29,000 households, or 45 percent of the U.S. Homescan panel would be Yahoo users. More than 40 percent of active Internet users use broadband or high-speed Internet access.7 This sets such households up

Used with permission of
Pamela S. Schindler
©2006.

to be tested for exposure not only to standard media banner ads, but also the “rich media” ads that are increasing on the Internet.8

Business Research Methods, 11e, Cooper/Schindler

1

Yahoo Consumer Direct Marries Purchase Metrics to Banner Ads

The next step was to recruit Homescan panel9 members. Homescan panelists were asked to opt in to a joint Yahoo/Homescan panel in which their Yahoo ad exposure and behavior would be linked to their offline purchase information. To the delight of Yahoo and ACNielsen, 19,000 visitors have opted in to the new panel. “Having ACNielsen know what kind of cereal they bought didn’t seem intrusive to them, but we were unsure how many would feel it too intrusive for us to track the Web sites they visited. Clearly, most of them weren’t too concerned,” observes Mallon.

In order to determine how effective the advertising was, Yahoo needed to construct a comparison control group, a group of households that didn’t see...
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