Thursday 14 January 2010

Online advertising has a greater impact on sales for users over 40

"Major Findings:
By combining a controlled experiment with panel data on purchases, we find statistically and economically significant impacts of advertising on sales.
We estimate the total effect on revenues to be more than eleven times the retailer’s expenditure on advertising during the study. 93% of the effect was on offline (in store) sales.
Persistence: The effects of the campaigns were persistent over time, meaning that the sales impact could be tracked for a period of time after the campaign ended.
Demographics: there was no significant correlation or differences w/r/t location (by state) or gender.
But there was a significant difference w/r/t to age: customers over the age of 40 were significantly more responsive to the ads in terms of sales. The largest effect came from senior citizens (65+).
Clicks versus non-Clicks: Though clicks are a standard measure of performance in online-advertising, we find that online advertising has substantial effects on those who merely view but do not click the ads.
We find that 78% of the effect in sales comes from those who view ads but do not click them, while only 22% can be attributed to those who click."
Source: Statement by Yahoo Labs in explanation of commissioned research, to All Things Digital, 12th January 2010

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