37% increase in conversion through your newsletter by simultaneous offline advertising
In 2010, 93.6% of marketers indicated planning to raise their online media budget for the following 5 years (Detran Media, 2010). However, to what extent is it wise to put a larger share of the budget in online advertising? Is online advertising as effective as we believe it is? Or is there something such as synergy that shows how a notable part of online campaign effectiveness can be explained by offline campaigns?
Research already shows synergetic effects between social media and television. In 2014, Nielsen Company published a research paper regarding synergy between television and Twitter in 2013. In this particular year, 36 million people in the United States sent 990 million tweets about television programmes. So, a controversial television programme can cause commotion on Twitter, but does a comparable synergetic effect also occur between other offline and online channels? We took a shot and researched the effects of offline media on online newsletters.
How can you calculate synergy between offline an online campaigns?
By applying the method of Attribution Modeling, the amount of web visits can be allocated to several used offline and online media. Effectiveness of offline media is expressed in BC1000 (actual reach per 1000) and online media in impressions, which makes these different media accurately comparable. Subsequently, algorithms can calculate the synergy between the web visits and the used media.
Up to 37% increase in web traffic through newsletters
Research into synergetic effects of television, OOH (out of home) and radio shows that these different media positively influence the effectiveness of e-mail newsletters. From this, we specifically learned that up to 37% extra consumers visit a website through newsletters when offline campaigning is ran simultaneously. Radio has the greatest impact with 18%, TV provides on average 15% and OOH campaigning leads to 4% increase in web visits through newsletters.
Suppose you sent a newsletter that leads to 4,735 web visits without the presence of offline advertising on a specific day. If there actually were television, radio and OOH campaigns that day, this would have led to an increase of 1,752 (37%) web visits through this particular newsletter. This proves your newsletter becomes much more effective thanks to simultaneous offline campaigning.
Synergy as a surplus
In general, companies will not adjust their television campaigns to their newsletter distribution, simply because this would allegedly lead to an imbalance between costs and benefits. To clarify this misapprehension, we build further on the above example:
Assume the benefit of 1,752 extra web visits through newsletters has cost you € 10,000 per medium type; television, radio and OOH. To illustrate, one single television commercial during primetime will cost you between € 1,500 and € 4,000 gross, dependant on the broadcasting channel. Using a realistic conversion ratio of 1%, the extra web visits ultimately lead to 17.5 extra orders. The media costs per order amount in € 571.40. Whether this is high or not depends on the order value.
It is slightly farfetched to build on a strategy that merely promises an increase in e-mail traffic due to offline campaigns, but a joint effort can easily be beneficially. For companies with gigantic e-mail databases like Groupon, this collaboration between e-mail and offline campaigns can provide (free) new orders.
Fluctuation in effectiveness between different advertisers
Campaign effectiveness research of over 250 million gross euros shows that there are differences between advertisers that are worth mentioning. Different factors play a role in this, and the advertiser itself is one of these factors. For instance, a company like Groupon daily provides a lot of online deals, yet for an average car manufacturer this is quite unlikely. These companies do not have enough content for sending newsletters on a daily basis.
Not only the advertised product has an impact on the effectiveness, but also the campaign creation is of great influence. You can probably imagine that an ad that lacks a clear logo and message has less effect on you than one that shows the opposite.
Psychological explanation synergy: Mere-exposure effect
What can be an explanation for synergy to occur? One can be found in a psychological theory; the mere-exposure effect. This theory suggests that repetition leads to a more positive attitude towards certain things. The more you see or hear something, the more you will like it. When consumers see or hear a commercial multiple times, it becomes more likely they develop a more positive attitude towards the brand. To illustrate, when a consumer is exposed to a TV or Radio commercial, he is more likely to open the newsletter and visit the website.
Online advertising is not as effective as we thought
Throughout the years, a shift in media expenses into more online advertising can clearly be seen. However, online campaigns seem to be overvalued. Moreover, offline media play an important role in the effectiveness of online advertising. The following question might pop up now: can online campaigns be effective on their own, without the contribution of offline media?
As you have read, an offline campaign can enhance the effectiveness of a newsletter with 37 %. This indicates that offline campaigns reinforce online campaigns. Where the effects of online campaigns already have been visible for years, the measurability of offline campaigns lagged. By expressing offline media effectiveness using econometric models and algorithms, this comes to an end. With this knowledge, we know that the effectiveness of newsletters is not measurable by solely using online tools, because the effectiveness of this channel can partly be accredited to offline campaigns.