Online advertising for retail brands delivers the biggest effect in the media mix, driving 40% of brand engagement, compared with press (31%) and TV (19%), according to the latest Internet Advertising Bureau (IAB) cross-media Brand Engagement study.
The fourth study of its kind, conducted by ævolve (formerly Carat Insight), set out to quantify the impact of display internet advertising on brand engagement relative to other communication channels, such as press, radio and TV.
With a sample of over 1000 women aged 30-50, researchers examined responses to the advertising campaigns of five department stores: Debenhams, John Lewis, Marks and Spencer, Woolworths and Next.
The average online ad spend for all five brands in the study was just 2.5% of total media budget, which suggests that internet advertising – which delivered 40% of brand engagement across all communications – is around 16 times more effective than the monetary investment would suggest.
To put this into perspective, in the second half of 2007, the retail sector accounted for just 5% of all internet advertising expenditure, whilst total consumer spending on products, goods and services online for 2007 was £47 billion.
Based on the findings of all four brand engagement studies, the retail sector is in line with the small car sector in terms of the influence online has in driving consumer engagement with brands. Previous IAB studies have shown that for small cars, online drove 40% of total brand engagement, where for haircare it was 8.5% and for fizzy drinks it was 24%.
Guy Phillipson, chief executive of the IAB, said: “Whilst consumers’ online shopping spend continues to grow year-on-year, there still remains a great discrepancy in terms of how much retailers are spending on their internet communications.
“We hope that this latest Brand Engagement study will help retail advertisers fully appreciate the brand-building capabilities of online, and in turn increase the medium’s share of their marketing budgets.”
In April, the IAB revealed that online advertising in the UK grew almost 40% year on year in 2007 to a new high of over £2.8 billion (see UK Online Adspend Grows Almost 40% Year On Year In 2007).
Figures published last month by the Interactive Advertising Bureau Europe revealed that in 2007 the European online advertising market was worth €11.2 billion, up four billion euros from €7.2 billion in 2006 (see Online Advertising In Europe Grows 40% To €11 billion in 2007).
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