Overlap Matters

Traditional wisdom says that cross-site duplication of online advertising is bad for business. And indeed duplication has traditionally been seen as redundant – a sign of media waste. A report from your third-party ad server would highlight which sites overlapped with which other sites on your buy, and by how much. That way, you could act immediately to pare back the buy and minimize the overlap. But as more digital media research emerges, the industry is learning that overlap is actually a positive thing. As it turns out, customers who see your ads on multiple sites are your best converters.

In other words, your target audience – the people who register on your site, fill out your lead forms and ultimately become your customers – have, for the most part, been reached across multiple sites.

Because overlap boosts the odds of a purchase occurring, we know that a conversion is not simply the result of the last ad clicked. This means that the area of overlap represents a landscape filled with rich resources for marketers. Every engagement a user experiences contributes to the conversion event. And every touch point you share with your consumers contains information that you can use to make better media decisions.

METHODOLOGY

The Atlas Institute analyzed 16 advertisers who tracked their media campaigns with Atlas for the first quarter of 2007. Users were classified as either “exclusive” to indicate they were reached by a single publisher or “overlapped” to indicate they saw ads on two or more publishers. Overlap for users who converted was categorized on the same basis. Primary conversions considered for this study were sales, lead or registration confirmations. The analysis spanned more than 300 million cookies, 5 billion ads served and 1.7 million conversions. As with all research done by the Atlas Institute, the analysis eliminates the bias of cookie deletion by using only stable, long-lived cookies.

OVERLAP RESULTS

On average, 30 percent of users saw ads from multiple publishers, while 53 percent of users saw ads from multiple placements (Figure 1). Within a campaign, overlap among the sites ranged from 8 percent to as high as 60 percent. Placement overlap showed similar variety, ranging from 35 percent to 72 percent overlap per campaign. In addition, increased overlap dramatically drives up frequency. On average, the impressions consumed by site-overlapped cookies were 4.4 times higher than those reached on a single publisher site.

CONVERSION OVERLAP RESULTS

Duplication amongst converters is even more extreme than for impressions. On average, 66.7 percent of users who triggered a primary action tag saw ads from multiple sites (see Figure 2). At the placement level, 86 percent of conversions came from the overlapped group.

Figure 3 illustrates the variability of overlap across the 16 campaigns. Higher-volume campaigns experienced significantly higher conversion overlap than smaller ones. And users reached on multiple publishers accounted for a higher share of conversions – on average representing only a third of the total users reached but two-thirds of conversions. A user reached across multiple publishers was twice as likely to convert as one reached on only a single publisher.

What This Means for Advertisers

It’s critical to understand the drivers of overlap. Not surprisingly, large buys show much greater overlap than small buys. Additionally, buys that advertise heavily on networks or large portals show much higher overlap than those that do not. The degree to which overlap impacts conversions will differ greatly from advertiser to advertiser, since there’s no consistent correlation between reach and conversion overlap. With that in mind, here are our recommendations for using these findings.

Measure the overlap in every campaign. Overlap varies wildly across campaigns. Spend levels, the composition of publishers, placement choice and the usage of ad networks all have a dramatic effect on the amount of user duplication experienced. Overlap should be viewed and weighed within the context of achieving the overall campaign goals.

Maximize overlap for branding. Brand advertisers prefer to surround their target demographic with their messaging and increase brand awareness by maximizing overlap. Identify buys that have high reach on your target demographic and then seek publishers that have high overlap with those buys. The ability to identify the exact amount of duplicated reach and conversions during campaigns provides a powerful negotiating tool with ad networks and traditional publishers.

Manage overlap’s impact on frequency. The Atlas Institute’s Optimal Frequency study proved that increased frequency correlates with diminishing returns for direct response campaigns.[1] Since overlap drives up frequency without the advertiser being aware of it, dropping buys with high overlap and reallocating the dollars to publishers with superior exclusive reach is an easy first step to increasing efficiency. Look for publishers that do a good job exclusively reaching converters.

Keep buys that deliver targeted reach. The ubiquity of overlap among converters highlights the shortcomings of current reporting standards, which attribute 100 percent of the conversion to the last impression or click. Making smart media-planning and creative-design decisions requires an in-depth understanding of a user’s behavior throughout the purchase cycle. Some buys do a great job of reaching your target audience but aren’t credited for conversions because they’re not the last ad seen.

Understanding how your buys are reaching converters may provide important justification for more expensive media buys like rich media, web video and sponsorships.

ENDNOTE

  1. Chandler-Pepelnjak and Song, “Optimal Frequency: The Impact of User Frequency on Conversion Rates,” The Atlas Institute.