The effectiveness of online ads
A study to be published in Marketing Science has found that the combination of matching online ad content to a web page’s content and ensuring that the ad is highly visible (including video or pop-up graphics) may not be the best way of achieving results.
The study was conducted by Catherine Tucker of MIT Sloan’s School of Business in conjunction with Avi Goldfarb, associate professor of marketing at the Rotman School of Management at the University of Toronto. Gathering data from nearly 3000 web advertising campaigns across a wide variety of product categories, the pair found that high-visibility ads were associated with better consumer recall, while content-linked ads led to higher consumer purchase plans. But although consumers still had good recall when the strategies were used together, their purchase intentions were worse than if the ad had not been particularly visible at all.
“Usually more is better. If targeting works and visible ads work you’d think visible, targeted ads would work even better – but they don’t. Our results show that privacy matters in something of a subtle way in online advertising. Sometimes privacy violations are fine, sometimes they’re not”, said Goldfarb.
The effect was strongest in more private product categories – such as financial products – and among consumers who declined to offer information about their incomes. The results may explain the unexpected success of Google AdSense which uses unobtrusive text-based ads that are tied to a webpages content.
At $6 billion U.S. in revenue a year, Google Adsense generates more than half of the total online display market, worth about $11.2 billion.