New Study Links Online Ads, In-Store Sales

Redmond, Wash. – Online advertising can lift offline sales by as much as 12.5 percent, according to studies conducted by MSN and four consumer packaged goods giants.

The studies found that people who saw online ads for specific products bought from 7 percent to 12.5 percent more of the products touted than the people who saw unrelated ads. Each of the studies involved 2,000 people in locations across the United States.

Marketing Evolution conducted the research, which was commissioned by MSN, Procter & Gamble, Nestle SA, Kraft Foods and Johnson & Johnson, between November 2003 and January 2004. It was released at MSN’s annual get-together of clients, partners and industry figures, the Strategic Account Summit, at Microsoft’s Redmond, Wash. headquarters.

Researchers were able to measure offline purchases because all the participants had grocery store loyalty cards, such as Safeway or Lucky cards, that recorded their transactions, according to Rex Briggs, managing partner of Marketing Evolution.

The report also concluded that online advertising’s effect on sales, when online spending was at least 5 percent of the budget, outdid the average of other media studied by as much as 30 percent. This was done by comparing the cost to acquire customers via Internet ads to the companies’ records of acquisition costs via other channels.

“The study is significant because of the quality of the advertisers involved — world class players like Nestle, Johnson & Johnson and Kraft thinking about this subject is novel,” said Bob Barocci of the Advertising Research Foundation, speaking on a panel at the MSN gathering. “Also, this methodology hasn’t been used before. Finally, it’s a sign that online is coming of age.”

In the branding part of the studies, participants who saw an ad — for example, a Halloween ad for a Jello layer cake — were then asked if they agreed or disagreed with statements such as, “Jello is fun to eat.” The participants ranked their feelings on a 1 to 10 scale. Those who saw the ads had increases in brand image attributes (the “fun to eat” image) of 5 to 7 points. Intent to buy also went up from 3 to 7 points.

Other recent research has come to similar conclusions. A study of Yahoo ads by Dynamic Logic in early March concluded that online advertising provides a 24 percent lift in message association and significant increases to other brand metrics.