Yes, says recent research financed by Kimberly-Clark and Colgate-Palmolive.
The research suggests that advertisers should spend 10 to 15 percent of their advertising budgets on online advertising.
“This research proves that the Internet has great potential as a marketing tool for our brands,” said Jack Haber, vice president-E-Business for Colgate Palmolive. “…(A)s a lead marketer we have to harness the Internet’s potential to connect with our customers…”
The research was released Feb. 11 by the Interactive Advertising Bureau (IAB), which said its study methodology was supported by the Advertising Research Foundation.
The three key findings of the research, as reported in the Media Daily News, were:
Using a static budget, optimal results are achieved when online advertising is 10-15 percent of the marketing mix.
Adding online advertising expands reach and coverage.
Increasing online allocation produces better overall results by increasing the advertising budget’s return on investment.
Additional research by MSN, Unilever and McDonalds – completed last year – agreed with the Kimberly-Clark and Colgate Palmolive data, Media Daily News reported.
Further, J.D. Powers has released research showing that new car buyers are relying more and more on online research and advertising before making a purchase. Additionally, the National Board of Realtors said last year that the Internet has surpassed print as the best advertising medium to buy and sell homes.
This type of information is critical because it will be used by advertising agencies to help plan ad budgets.
Says Greg Stuart, president and CEO of the IAB: “From a cost-effectiveness standpoint …(this research) demonstrates that online advertising is the deal of the century for major brand marketers …”
Newspapers can win in this type of planning because online newspapers almost always “own the Internet” in their markets.
At TownNews.com, we’ve seen information that indicates advertisers are happy with online advertising in local online newspapers.
TownNews.com has conducted over 100 SWATs (Special Web Advertising Teams) at newspapers across the country.
On behalf of newspaper clients, TownNews.com SWAT efforts have sold more than $3 million in advertising sales, for an average of almost $31,000, based on 12-month contracts.
The retention rate on these ads after six months is almost 90 percent and well over 80 percent after a full year.
I believe that retention is a true test of advertising effectiveness. If advertisers are getting a “hit” from their investment, they will continue to advertise.
Local online advertising is successful because newspaper Internet editions are the dominant Web products in their trade areas.
We have anecdotal evidence that online newspapers have larger electronic audiences than local radio stations. This enables newspapers to sell more easily against radio stations.
Online newspapers’ circulation – as measured by electronic tracking – grows substantially each year.
The combination of national research, high local ad retention rates and increasing online circulation should increase publishers’ confidence that they can sell online advertising.
All types of online advertising – classifieds, classified verticals (auto, real estate and employment), display ads and banner advertising have good futures at community newspapers.
(Marc Wilson is ceo/general manager of TownNews.com He can be reached at marcus@townnews.com.)