Has the influence of online advertising on actual purchasing behaviour, and the decline of TV as an advertising medium, been over-stated by marketing industry?
In yet more startling findings, the MOP Awareness Survey conducted by THINK Global Research asks big questions of those who believe that online advertising is – in and of itself – a new dawn for advertisers, or that good old TV ads have done their day.
The survey dug down to discover how often consumers are currently utilising various media channels, which advertising channels they perceived as being the most impactful, and perhaps most importantly, which channels have the most influence on consumers’ real life purchase decisions.
Seeking to link purchasing preferences with actual behaviour, the survey also asked the public how often consumers had made a purchase directly after clicking an ad they came across on a website or social media site.
Magnum Opus Partners say the findings require careful analysis by all those who recommend media purchases for advertisers, because the results are notably different to what many people are being led to believe.
CHANNEL USAGE SNAPSHOT
According to the people, TV (however delivered) is still by far their most utilised medium, clocking up 16 hours a week compared to 9 hours a week on social media, 7 hours a week on radio, and just 2 hours a week reading magazines and 2 hours spent on online shopping.
Needless to say, two hours a week online shopping is a new phenomenon that needs to be taken seriously. But it’s probably less than many have been suggesting.
But the real shock comes when people are asked which channel they considered impacted on them most and then which channel they found most influential.
The questions were phrased very carefully to discover both things.
Advertising is presented to you in many ways. Thinking about all the different ways you experience advertising, which of the following advertising types do you find impacts on you most?
Based on the list below, which channel would influence you the most to purchase a product or service?
TV BY FAR STILL THE MOST IMPACTFUL AND INFLUENTIAL
With the sole exception of Gen Z, who marginally preferred social media, for getting their information, (please see later), TV was considered by far the most impactful ad medium, quoted by 62% of the survey as having the most impactful advertising.
This contrasted with just 33% for social media, and a paltry 18% for an online ad on a website, and even less for the new darling of advertising commentary, just 16% for a video ad on a website.
Consumers said that TV was also considered the most influential medium for them, with 25% quoting it as having influenced their decision to purchase something, as opposed to 15% for social media, and just 5% for an online ad on a website and 2% for a video ad on a website.
(Note these were multiple response questions which means the totals do not equal 100%.)
SO WHAT DOES THE DETAIL OF THE SURVEY REVEAL?
Magnum Opus Partners Director of Creative Strategy, Stephen Yolland, was emphatic:
“First of all, we must emphasise again that these are findings from a rigorous independently-conducted survey, and not just opinion.
If the survey had come up with reversed results, we would have faithfully reported those.
But this survey shows categorically that, at least as far as Australia is concerned - and we doubt it is wildly different in similar markets overseas because Aussies are known as “new adopters” of technology - that TV still remains by far the most important medium available to advertisers, and “online” has been over-sold as an effective ad medium to drive actual sales. Certainly so far, at least.
So if an advertiser is diverting a large percentage of their funds into online the may end up disappointed in the actual result.
Our survey previously revealed that brands were now having difficulty “cutting through” on TV, and we speculated that this was because ads weren’t getting a long enough run on TV, that the push for TV creativity has slowed somewhat, and also as a result of a large switch of media investment into online – what we called “Robbing Peter to pay Paul”.
We invite debate, of course, but to our eyes the core message of this part of the MOP Awareness Survey is nevertheless clear and indisputable.
Essentially, the decline of TV as an ad medium has been greatly exaggerated. And rumours of the new dawn of online advertising suggest it is certainly a growing medium, but the wilder claims for it are somewhat inflated.”
CONSUMERS CLICKING ON ONLINE ADS? NOT SO MUCH.
The survey also drilled down to understand more about real consumers’ behaviour. It asked “How often would you click on an advertisement displayed on a website?”
It was revealed that a massive 2/3rds of the survey reported “Never” or “Not Often”, and only 11% reported “Often” or “Very Often”.
Yolland commented further:
“No one would suggest that online advertising is useless, that would just be silly. But it is clearly not the ‘cure all’ that some people have assumed it must be, just because it’s new and shiny.
Anecdotally, when we encouraged consumers to say why they are cautious about buying online, they reported some nervousness about the medium, and this might explain why the changes in buying patterns that flow from online use are still relatively small. (See later.)
Of course, even a very small percentage of a massive total market is still huge, but nothing like what is going on in the rest of the economy.
This has profound implications not only for where advertisers place their money, but also for real world business strategies way beyond just decisions on where to place advertising dollars, such as the decisions surrounding the future of investment in “bricks and mortar” retailing for example.”
FOR 2/3rds OF CONSUMERS, ADS ON WEBSITES DON’T DRIVE ACTUAL PURCHASING, AT LEAST SO FAR
Websites certainly don’t seem to be exciting all that much real-world purchasing activity yet.
“We need to be totally clear that we’re talking about websites as an advertising medium. Obviously the online economy is robust and growing healthily. It’s how people are getting to the moment when they actually buy something that the survey looks at.”
Asked “Have you ever made a purchase directly from an online advertisement that you have seen and clicked on while browsing a website (excluding social media websites)?” the public said that more than 2/3rds of them had not made a purchase this way.
And of those that had, their purchase history was a total of four times.
When the survey sought to understand why people weren’t clicking and buying on online ads, answers like these came back:
• “I like to research my options … not much of an impulse buyer.”
• “It ended up being more expensive than I thought.”
• “I don’t look at advertising on websites often.”
• “I don’t trust online advertising and am worried about where links can lead.”
And when the question was asked of social media sites like Facebook, YouTube, Instagram and LinkedIn, only 27% said they had made a purchase, and 73% said no. And of those that had, they had also done so less often.
RESULTS VERY CONSISTENT
What makes the survey results more compelling is that it doesn’t seem to matter whether you’re male or female, or where you live in Australia, the figures track very similarly. Men and women seem equally impacted and influenced by TV, for example, and equally unlikely to click on online ads and buy things.
And the situation looks unlikely to change anytime soon. Whilst there is more likelihood of people to consume social media the younger they are, Australians spent virtually the same amount of time online shopping regardless of their age.
The youngest consumers spent three hours a week, and the oldest two.
And for those that actually buy online after clicking through on an online advertisement, the frequency was startlingly similar regardless of age. The average was 3-4 times – hardly a revolution in buying patterns.
GEN Z SOMEWHAT DIFFERENT, BUT FOR HOW LONG?
Only in “Gen Z” was social media considered more impactful than TV (79% to 53%) and most likely to influence a purchase, by 49% to 17%.
“This makes sense” said Yolland “but we suspect it might not be the sign of a huge demographic or psychographic shift in buying patterns coming down the line. It might be just that Gen Z simply has better things to do than watching TV, especially if it’s with their folks.
They’re in their rooms face-timing friends, they’re studying, or they’re out of home: a lot of online activity now happens on smart phones out of home, of course. They were much more enthusiastic about cinema previews than anyone else, for example, as cinema is a key part of their social activity.
Ask us to speculate, and we wouldn’t be surprised to see these results duplicated in five years or so, when a new generation of younger people will mimic the current Gen Z results, but by then we will also see today’s Gen Z exhibiting more typical media habits as their lifestyle choices have changed.
On the other hand of course, we can also speculate that if, later in life, they carried on preferring online over media then that would really would be a dramatic shift. But there’s no current evidence that they will. We’re really getting into the area of guessing here.
In simple terms, we need to keep surveying, and watch the results.”
BOTTOM LINE? DON’T TURN YOUR BROADACRE ADVERTISING OFF TO FUND ONLINE ADVERTISING
Yolland said the results of the survey made one thing plain:
“This was a very large survey, conducted with scrupulous care, using carefully-crafted questions to avoid ambiguity and to produce meaningful, usable data.
And the wash up is undeniable – bottom line, it would be a very brave marketer who switched their ad spend massively away from mainstream media into online and expected either their brand salience to survive or very much by the way of immediate sales to be the result.
Essentially, this survey punctures the recent groupthink that online is “where it’s at”, certainly as far as the general consumer ad dollar goes. Online cannot be ignored - of course - it is definitely a useful additional advertising medium and it is increasingly important as a way in which we understand our world. We can speculate that it may produce different results in B2B advertising, which could usefully be measured separately. And without any doubt it represents, taken as a whole, an important new market.
But anyone denuding their main media expenditure to fund online advertising, and especially at expense of their TV advertising, certainly in terms of broadacre consumers, is being – frankly – unwise.”
Stephen Yolland pointed to advertiser Trivago (with whom Magnum Opus Partners have no relationship) as illustrating the research’s findings.
“Media choice – where to place your investment as an advertiser - is all about horses for courses. Trivago’s brand has been built through enjoyable, simple, high-rotation ads on TV. Yet their entire business is online.
One of the great arguments in favour of online advertising is that you can A/B test different messages and maximise on what works, and that’s true. But that doesn’t mean you can’t do the very same – and very successfully – on TV, too, as Trivago have proven.
He also noted that recent cutbacks in online advertising from some of the largest advertisers in the world has apparently not affected growth, and he urged advertisers to look at these examples and others to understand which mediums they should be using to drive “real world sales” and to support their brand.
“In short, TV advertising is not dead. Quite the contrary. And the Magnum Awareness Survey now proves it.” said Yolland.
Supplementary background data sources, background reading:
P&G and Unilever cut back online ad spend
The MOP Awareness Survey conducted by THINK Global Research was performed nationally in early June 2017 with an ABS representative sample of 1,500 participants representing the voice of Australia. One more set of findings will be released in coming weeks after further data analysis.
For further comment call Stephen Yolland on 0419 290 708 or email email@example.com.
MOP AWARENESS SURVEY
Fractured media market leaving consumers cold says large consumer study conducted by MOP and TH?NK Global Research. Note: ABC Radio interview on the findings at the foot of the page.
• Australians largely unable to name ads or brands they really like, or dislike.
• Findings markedly different from previous surveys.
• The huge growth in media expenditure generally, and the advent of online
advertising, seem to have “muddied the waters”.
Independent agency Magnum Opus Partners (MOP) have a long history of polling the public to find out what advertising they like and dislike, with their well-respected MOP Awareness Study, conducted by Think Global Research.
So imagine if you poll 1,500 people that reflect the general Australian population today and ask them which ads they’ve seen that really made an impact on them: ads that they really liked, or disliked, by just letting them nominate any ad from amongst the thousands they see every week.
And then the majority of those Aussies come back and tell you they can’t think of a single one.
Pretty depressing for the ad industry, right? And advertisers, yes?
So what’s going on with that result?
Startling findings from Magnum Opus Partners Awareness Survey
Surveying 1500 Australians nationwide of all ages, the MOP Awareness Survey – professionally conducted by well-known market research agency TH?NK Global Research – was expected to throw up a range of ads that the public found easy to recall.
In previous surveys there have usually been clear winners – in the past, for example, iconic ads like “Not Happy, Jan” for Yellow Pages, and “Which Bank” for the Commonwealth Bank stood out from the crowd.
But this year, a massive 857 people – 57% of the sample – couldn’t indicate even a single ad that they could remember feeling positive about.
Not only that, but an even bigger percentage – 66% – couldn’t think of one ad they actually disliked, whereas previously the survey had found ads that seemed to drive everyone nuts. While a few market segments – gambling ads, for example, “screaming retail”, and insurance and banking – seem to be polarising, no one advertiser seemed to be saying anything much that stirs people up very negatively.
So is nothing apparently cutting through a media morass?
Commenting on the survey, Agency Director of Strategy Stephen Yolland commented:
“It’s been awhile, so we were very interested to see what’s changed. And it’s very obvious from the results that consumers today seem increasingly underwhelmed by the advertising on offer.
Almost nothing seems to be both cutting through and impressing people. There are successful exceptions, but certainly very little is being spontaneously remembered. Which means we all seem to be spending an awful lot of money just to leave people ‘cold’, and as ad agencies if we’re going to be responsible with our clients’ money then we need to look at that.”
“We all know that advertising works in different ways, and just because an ad or a brand doesn’t come up in an unprompted survey like this as being liked and remembered doesn’t mean it isn’t doing any good. It can perform better when people are prompted to recall it, or it can work well when seen or heard in conjunction with other mediums, such as radio, billboards, online, catalogues, or other reminders.
But to have almost nothing producing a “watercooler effect” that is strong enough to be picked up in a survey like this does suggest that both the creativity and the entertainment value of the work we do has declined somewhat, and also possiblythat there is now so MUCH advertising in the market that many ads seem to be being effectively “tuned out” by consumers.
Switch into "online" weakening brand awareness?
We also suspect that the big switch of media dollars into online* has resulted in a fall in product and brand awareness from the days when the vast majority of media money was spent on TV. Nearly two billion Australian advertising dollars now go into online. That’s a huge switch in advertiser behaviour. Where that growth in online expenditure has replaced expenditure in other mediums, as opposed to supplementing it, there may well have been a fall in both ad and brand standout.
Online ads might be useful - indeed they are, just as with any medium - but we think these findings suggest that they are pretty much useless in terms of creating brand positivity, as they are nearly always transactional in nature.
And frankly, it is very hard to convey emotion in a banner ad or create an emotional connection with it, when all’s said and done.”
Key brand findings
Interestingly, three supermarket brands did score well, with Woolworths, Aldi and Coles level-pegging at the top of the list of remembered and liked advertising.
1st. No Brand/No Ad
2nd=. Woolworths, Aldi, Coles
Of those advertisers that did register, Yolland singled out Aldi for praise.
“They’re obviously a “challenger” brand to the giant duopoly of Coles and Woolworths, and both their TV advertising in the last couple of years** and their choice of products show a commitment to surprising and pleasing the public. And despite not always having the prime positions in retail centres, they have obviously carved out a place for themselves in the Australian psyche with their quirky advertising and an interesting consumer promise.
In October last year, Aldi’s “share of voice” was reported as being 11.95% between April 2015 and March 2016, behind Woolworths (50.82%) and Coles (24.27%). That they are achieving a similar level of awareness and likeability would seem to suggest that the content of their advertising is cutting through better than their bigger rivals.***
In our view, Coles and Woolies have performed creditably, but it’s the arrival of Aldi as a genuine contender brand that we find most newsworthy.”
For further comment call Stephen Yolland on 0419 290 708 or email firstname.lastname@example.org
*Total online advertising spend continues to grow, with first quarter expenditure at $1.86 billion, up 7.2 per cent year on year. This represents a seasonal decline of 5.8 per cent on fourth quarter expenditure, although classified increased by 7.1 per cent compared to Q4 and had the strongest year on year growth of 15.9 per cent. All categories grew year on year with search up 6 per cent and display 4.5 per cent.
**Aldi increase ad spend including in main media as Coles and Woolies cut back
***Aldi “Share of Voice” less than Coles and Woolies
The MOP Awareness Survey conducted by TH?NK Global Research was performed nationally in early June 2017 with an ABS repressive sample of 1500 participants representing the voice of Australia. At least two further sets of findings will be released in coming weeks after more data analysis has been completed.