••• advertising research
Higher isn’t always better
Study examines role of positioning in Google paid search
Globally, the top two media for advertising are television and the Internet, and when it comes to the latter, advertisers spend more of their budget on paid search than anything else. Businesses know the position of an ad on a search results page can have a significant impact on click-through rates. But just what that impact is has never been clear.
Advertisers usually assume that the higher an ad appears on a page, the more clicks it will get, and, ultimately, the more sales will be made. But research from Stanford Graduate School of Business professor Sridhar Narayanan shows that especially for well-known advertisers, a higher position doesn’t always pay. Narayanan and Santa Clara University professor Kirthi Kalyanam found that less well-known brands benefit most from a high position because it gives them a chance to catch the consumer’s eye. (Their paper is titled “Position effects in search advertising: a regression discontinuity approach.”)
This is especially true when consumers search for a product or service for which that smaller advertiser is less well-known. “If it’s Amazon.com versus a small retailer, the Amazon ad is likely to catch our attention at any position because we recognize the brand,” says Narayanan. “Whereas a small advertiser with weaker experience with consumers benefits much more from being in a higher position.” They also found that though an ad’s position on a page can affect click-through rates, certain positions don’t have much effect at all. “It’s way smaller than correlational estimates would suggest,” says Narayanan. “Sometimes a third or a fourth as small.”
The researchers gained access to data that allowed them rare insight into the effects of position in paid search advertising on Google. “Position is the main variable firms have available to them with search advertising,” says Narayanan. “Up until now, though, we haven’t had a good way of measuring the true causal impact of that placement.”
One reason is that the placement of search ads – which appear when a user searches by specific keywords or phrases – is determined by more than just the amount of money spent. Google also decides upon an ad’s placement using its own “quality score,” primarily determined by the advertiser’s expected click-through rate and an ad’s relevancy to consumers. “If Google expects more people to click on a particular company’s ad, [that ad] gets a higher quality score,” says Narayanan. That makes it impossible to tell whether an ad is getting lots of clicks because of higher brand recognition or a higher position on the page – or if consumers plugging in particular search terms would buy any product listed at the top of a page.
Narayanan and Kalyanam wanted to find the answer. They used Google search advertising data from four companies that had once been competitors, all large consumer product retailers. (The researchers were not allowed to release the company names or details about the category.) The largest firm, a 50-year-old nationwide chain, had acquired the other three, but for a period after the acquisition they still operated independently, with separate advertising strategies. Narayanan and Kalyanam analyzed each company’s search advertising data – information that competitors never see about one another – including bidding history, ad positions, click-through rates, sales numbers and Google quality scores. Using an analytical tool known as regression discontinuity, Narayanan and Kalyanam conducted something very similar to a randomized experiment in order to determine the true impact of an ad’s position on its performance.
When these four competitors were advertising on Google, the top ad positions were just below the search box and the first ad on the right side of the page. The data showed that consumers click more often on the ad just below the search box than they click on the top ad on the right side of the page. Both positions received about 20 percent more clicks than the positions right beneath them. Still, says Narayanan, this doesn’t mean that higher is always better. There was actually no increase in clicks for ads that moved from third to second position. “This is important because these advertisers were paying much more for position two than three, yet they were getting no increase in clicks,” he says.
Ads in the third position in the right column got 10.7 percent more clicks than those in the fourth position. That third position is unique, says Narayanan, because it is located immediately to the right of the first organic link (not a paid ad) and tends to draw the user’s eye. The other significant position is the ad just below the point where a consumer begins scrolling down to see more links. Right-side ads that appear after scrolling are in positions five through eight; within those positions, Narayanan and his colleague found that moving from position six to five netted a 16.7 percent increase in clicks, and moving from position seven to six increased clicks by 19.5 percent. There was no increase, however, in moving up from position eight to seven.
The most significant finding, says Narayanan, is that higher isn’t always better. “When consumers already have lots of experience with a brand and its products,” he says, “being at a higher position in search results really doesn’t make much of a difference.”
••• asian-american research
Asian-American shoppers make health a priority
A preference for branded over private-label
Most Asian-Americans believe beauty starts from the inside out – a sentiment reflected by grocery baskets that overindex with fresh meats, vegetables and fruits. But Asian-Americans take a holistic approach to beauty and spend more than average in the health and beauty department, too, according to a Nielsen report.
The report, Asian-Americans: Culturally Connected and Forging the Future, shows that Asian-Americans spend 70 percent more than the average share of the U.S. population on skin care preparation products, 25 percent more on fragrances, 15 percent more on hair care, 12 percent more on personal soap and bath and 7 percent more on cosmetics.
Personal care maintenance and the desire to live healthy lifestyles are also imperative to Asian-American shoppers. They spend 22 percent more on oral hygiene, 28 percent more on sanitary protection and 6 percent more on vitamins than average. With a median age of 35, Asian-Americans are younger than non-Hispanic whites (42), so they also spend more than average on family-planning (39 percent more) and baby care (31 percent more) products.
Millennial Asian-American women (aged 18-34) who are heads of their households know what they want and demand the best quality. In fact, an extreme affinity for branded products makes them less likely than non-Asian-American Millennial woman to choose private-label brands. When asked about brand and private label preferences, Asian-American women are more likely to agree with the following statements:
- Name-brand products are worth the extra price.
- Private labels have non-appealing packaging, which deters me from buying.
- Private labels are not suitable where quality matters.
- I don’t know enough about private labels to try them.
- I don’t feel comfortable serving private label products to guests.
Millennial Asian-American women not only care deeply about their own appearances, they also shop for the men in their households. They purchase men’s toiletries 9 percent more frequently than non-Asian-American female heads of households and spend 20 percent more on average.
Marketers looking to reach Asian-Americans should consider offering cosmetic consultations and free product samples to increase trust and a willingness to try new items.
Other findings in the report include: Asian-American buying power equaled $770 billion in 2014 and is expected to reach $1 trillion by 2018. Asian-Americans are 31 percent more likely than average to buy organic foods and are 23 percent more likely to evaluate the nutrition of products. Eighty-eight percent of Asian Americans own credit cards, compared with 66 percent of the general population. Asian-Americans are leaders when it comes to technology, mobile and social media usage and they watch and download more movies than any other ethnic segment.
••• education research
Community colleges on par with four-year colleges
Web-based programs lag
Americans are about as likely to rate the quality of education that community colleges offer as “excellent” or “good” (66 percent) as they are to rate four-year colleges this positively (70 percent), reports Gallup’s Justin McCarthy. Americans are about half as likely to rate the quality of Internet-based college programs – those offering online-only courses – as excellent or good (36 percent).
These results are based on a June 2-7 Gallup poll. Gallup first asked this question in 2013. Americans’ opinions of each form of higher education are essentially the same as in that initial poll, with two- and four-year educational institutions rated similarly on quality and Internet-based programs lagging behind.
Community colleges are front and center in a national debate on the affordability of higher education, with President Obama proposing that the U.S. make community college tuition free. While advocates of higher-education access cheer the greater admission rates at community colleges, these two-year institutions face different challenges, such as lower graduation rates and the task of transitioning students into four-year schools and, ultimately, the workforce. However, Americans view the quality of community colleges similarly to that of four-year schools.
Americans with advanced education rate four-year colleges and universities more highly than community colleges, by nine percentage points, but all other education groups view community colleges and four-year schools similarly.
Adults younger than 30 hold four-year colleges in a bit higher regard than they do community colleges, by 12 points, whereas older Americans’ views of the quality of both are similar.
Roughly a quarter of Americans with postgraduate education (27 percent) believe the quality of online learning is excellent or good, less than the 40 percent of college-only graduates who say the same. Across age groups, there is relatively little difference in ratings of online education.
Though it may be harder to gain acceptance into and afford four-year colleges and universities, Americans view the quality of education they provide as no better than that of community colleges. However, the public does not rate the quality of online education as positively as that of either two- or four-year colleges.
Gallup has found that although a third of Americans say online programs do a better job of providing broader curriculum choices and good value for their cost, many Americans believe they lack in some key areas, including reliable testing and grading, high-quality instruction and their value to potential employers. Online education is not an either/or proposition, as brick-and-mortar colleges routinely incorporate online coursework in their offerings. But in terms of college programs that are solely Internet-based, it seems unlikely that they are going to overtake traditional colleges anytime soon in public perceptions of quality.
Results for this Gallup poll are based on telephone interviews conducted June 2-7, 2015, with a random sample of 1,527 adults, aged 18 and older, living in all 50 U.S. states and the District of Columbia. For results based on the total sample of national adults, the margin of sampling error is ±3 percentage points at the 95 percent confidence level. All reported margins of sampling error include computed design effects for weighting. Each sample of national adults includes a minimum quota of 50 percent cellphone respondents and 50 percent landline respondents, with additional minimum quotas by time zone within region. Landline and cellular telephone numbers are selected using random-digit-dial methods.
••• restaurant research
Diners want tech on the menu
A taste for smartphone-based tools
In only a few short years, digital amenities like online ordering and mobile payment have gone from futuristic novelties to modern necessities for restaurant consumers, and new research from Chicago research firm Technomic confirms that people expect more from a brand’s technology offerings than ever before.
The Chicago-based market research firm reported in a white paper that several smartphone-enabled conveniences have become very important to restaurant consumers, especially Millennials. While digital pioneers like the national pizza chains are recognized for well-integrated technology, overall relatively few consumers strongly agree that a restaurant they recently visited used technology to improve their experience, indicating a big opportunity across the industry.
“Technology-friendly service in restaurants has become important to consumers broadly, and to Millennials and Generation Z customers, it’s essential,” says Colleen Rothman, manager of consumer insights for Technomic. “Consumers will continue to look to pizza chains and fast-casual brands for the latest and greatest digital platforms but they also will expect all restaurants to integrate many technologies that have become a fact of daily life everywhere. Mobile apps for loyalty points and rewards, free Wi-Fi and mobile ordering and payment will grow more important in the years ahead.”
Based on results from over 100,000 consumers polled by Technomic’s Consumer Brand Metrics program, nearly two-in-five called loyalty and rewards programs important or very important to their decision to visit a restaurant. The percentage was even greater for Millennial customers, 50 percent of whom called digital-loyalty offerings important for limited-service restaurants and 53 percent for full-service restaurants.
Millennials also attached greater importance than the overall population to free Wi-Fi, online or mobile ordering and mobile payment, regardless of restaurant industry segment.
Consumer Brand Metrics also surveyed people about their most recent occasion to one of 134 restaurant brands and sought their ratings for three technology-related attributes: the integration of technology into the ordering process, the ability to pay for an order using technology and whether a restaurant’s use of technology improved the guest experience. Composite scores of the three attributes found fast-casual restaurants boasted the best segment average, with 34 percent of consumers rating them highly, compared with 32 percent for quick-service and 30 percent for full-service.
The fast-casual and quick-service sectors also outperformed the full-service segment on their average ratings for integration of technology into the ordering process. Several fast-casual brands are leading the charge into the adoption of touchscreen ordering kiosks. In full service, interactive menus and gaming platforms on tablets helped drive strong consumer ratings.
However, each industry segment has opportunities for growth in one crucial metric. Only 13 percent of quick-service, fast-casual and full-service consumers strongly agreed, “This restaurant’s use of technology improves my experience.” Access the white paper (registration required) at: www.technomic.com/resources/white_papers/the_tech_tide.
••• millennials research
Study examines how to keep Millennial workers happy
Mentor me but let me be me
Millennials (Generation Y – aged 15-35) will hold 15-16 jobs over their careers. This “turnover generation” is costing businesses billions. The average cost of turnover is a whopping 21 percent of every employee’s annual salary, with Microsoft’s turnover cost alone estimated at $681 million.
A recent survey-based study aims to keep Millennials happy and reduce turnover by uncovering important aspects of keeping them in the workplace. The study is the first in a series performed by the pricing survey company Atenga Inc. in collaboration with generational expert and film director, Josh Tickell.
The first study reveals that while Millennials share many of the same values in terms of significant life choices to their Baby Boomer counterparts, Millennials are lacking support at work in the areas of mentorship, purpose and self-expression.
Millennial respondents, 67 percent more than Baby Boomer respondents, reported that having a great mentor at work is important. “Formal mentorship programs have sprung up in a number of Fortune 500 companies as part of their onboarding process, so it’s no surprise that Millennials want mentoring as part of their job,” says Tickell, a study co-author. A workplace in which the generation with experience and knowledge fails to provide mentoring will be rocky place to work for young hires. This can cause turnover.
The study found that companies must work harder to make their Millennial employees’ work purpose-driven. Respondents from the Baby Boomer generation said they were 67 percent more interested in making more money than doing good. However, Millennial respondents weighed making more money on par with “doing good.” Millennials entering the workforce are significantly more purpose-driven than members of their parents’ generation. If work has a greater social purpose, they are more likely to stay.
In nine separate categories of items that could express individuality, Millennials showed they value self-expression up to eight times more than Baby Boomers. Companies with strict anti-tattoo policies, strict dress codes and strict policies against “personalizing” one’s area of work are a no-no for keeping young people at their jobs. Today’s workplace (like Millennials themselves) is about customization, individuality and choice.
A short video captures the highlights of the study on YouTube at www.youtube.com/watch?v=qP037e3IZwU. The full study is available as a free downloadable PDF at www.atenga.com.
••• digital marketing
Big data’s still a big problem for marketers
Behavior-based research still the preferred MR tool
A study based on input from more than 400 U.S. marketers spanning brands, media companies and agencies shows marketers still struggling to effectively use big data. Getting Digital Right 2015, by Boston agency Millward Brown Digital, uncovered other key findings in the world of digital marketing.
Despite the industry importance placed on big data, only 14 percent of marketers expressed confidence in their organization’s ability to use the data available to them. Most surprisingly, this represented a 25 point drop from the Getting Digital Right 2014 study, where 39 percent of respondents expressed confidence in their company’s ability to use big data effectively.
Consumer behavior-based research is still the preferred research tool, with 67 percent penetration among marketers. With nearly 70 percent of marketers expecting their behavioral insights needs to continue to grow over the next three years, the study showed that behavioral research will continue to be marketers’ focus. Audience measurement followed just behind, with 61 percent of marketers utilizing that type of research to gain a better understanding of how and where to reach their targets.
Mobile, social and digital investments remain dependent on demonstrated ROI: 80 percent of marketers would increase media allocation for mobile and digital marketing channels, and 74 percent would increase on social, if ROI tracking for those channels improved. Further, 50 percent indicate that demonstrating ROI is a top criterion for determining media budget allocations and many feel ROI tracking needs significant improvement. In addition, mobile and social channels continue to see increased adoption, growing 4 percent and 2 percent in usage, re-spectively, since 2014.
When it comes to designing an ideal media allocation, only 50 percent of agency and media marketers and only 25 percent of brand marketers are confident in their current media mix. Over 50 percent of marketers ranked the ability to reach target audiences as a key factor in determining media budget allocation. Further, given the previously-mentioned need for further consumer behavior research and audience measurement, it’s perhaps not surprising that marketers are actively trying to find the optimal media mix.
“To an extent, marketers are still catching up to the speed at which digital has evolved. They continue to ex-plore how to truly understand a dynamic consumer, how to create a best-in-class marketing research program, what an optimal media allocation looks like, and how to better measure and enhance total marketing ROI,” says Stephen DiMarco, president, Millward Brown Digital. “As far as digital has come over the past few years, this study shows that we still have quite a ways to go.” Download the study at www.millwardbrowndigital.com/getting-digital-right-2015 (registration required).