Monday, March 13, 2006
IAB AND COMSCORE RELEASE NEW RESEARCH ON THE EFFECTIVENESS OF ONLINE LOCAL, DIRECTORY AND CLASSIFIEDS ADVERTISING

Compelling ROI Proves Interactive as a Powerful Medium to Drive Online and Offline Sales

Chicago, IL (March 13, 2006) The Interactive Advertising Bureau (IAB) and comScore Networks, Inc. today announced results of a new study showing a positive return on investment (ROI) and significant conversions both online and offline for companies that participate in online local, directory and classified advertising. The research also shows that these advertising vehicles have a considerable impact on brand image. The IAB Classifieds, Directories and Local Search Committee commissioned comScore to conduct this Return on Investment in Online Local and Classifieds Advertising project which studies the sales and brand impact of text based listings for categories including: Automotive, Careers, Construction and Contractors, Financial Services, Hospitality, Professional Services, Real Estate and Retail.

The research, sponsored by CareerBuilder.com, Cars.com, Fathom Online, Verizon Superpages.com, and Volkswagen North America will be presented for the first time at the IAB Leadership Forum: Performance Marketing Optimization in Chicago on March 13, 2006.

Millions of consumers turn to the Internet each month for help in finding a new job, a new car, or to research any number of local services, said Erin Hunter, Senior Vice President of comScores Media and Entertainment Division. This study provides empirical evidence proving the effectiveness of online local and classifieds advertising. It is abundantly clear that small and large advertisers have a compelling opportunity to leverage the Internet as a powerful medium that drives conversion for local services.

Analysis conducted for Ford Rental Car and Verizon Superpages.com shows that online local, directory and classifieds deliver an impressive Return on Investment (ROI).

Ford Rental Car

The methodology for the Ford Rental Car research involved tracking an opt-in consumer panel that searched using online directories for car rentals, clicked on Ford Rental Car and completed their rental online. A survey was then sent to those consumers who were exposed to the listing, but did not complete the rental online to determine their offline conversion.

Advertiser

Return on Investment*

Percentage of Conversion Occurring Offline

Percentage of Conversion Occurring Online

Ford

7.8

40%

60%

*ROI is defined as the ratio of generated revenue to advertising expense

We have always viewed online local and classifieds advertising as an excellent way to reach potential customers, said Colleen Kelley, Fleet Internet Strategy, Ford Motor Company. The ROI validation provided by this study will help Ford increase their marketing budget allocations to these online vehicles.

Verizon Superpages.com

For Verizon Superpages.com, comScore measured different categories including: Automotive, Hospitality, Professional Services, Retail, Real Estate and Trade. The methodology involved tracking an opt-in consumer panel that searched within a specific category, viewed the listings page and clicked on the details contained therein. Those consumers who converted online were measured. Consumers who clicked on the listing page, but did not convert online received a subsequent survey to determine their offline conversion.

 

Publisher

Advertiser

Return on Investment *

Percentage of Conversion occurring offline**

Percentage of Conversion occurring online**

Superpages.com

Aggregate

$10.71

73.0%

27.0%

Superpages.com

Retailers

$18.85

17.4%

7.5%

Superpages.com

Real Estate

$13.60

7.9%

4.9%

Superpages.com

Trade Services

$0.31

2.5%

3.9%

Superpages.com

Hospitality

$22.54

13.3%

8.0%

Superpages.com

Automotive (general)

$1.93

15.5%

9.5%

Superpages.com

Professional Services

$1.21

9.0%

4.1%

* ROI is defined as the ratio of generated revenue to advertising expense

** Online and Offline conversion calculated in the aggregate

The research for CareerBuilder.com and Cars.com demonstrated a favorable cost per acquisition analysis.

CareerBuilder.com

The methodology for CareerBuilder.com involved tracking an opt-in consumer panel who searched for jobs at two specific companies (a Big 4 accounting firm and an international bank) and applied either online or offline. Job applicants were then surveyed to find out whether they were selected for an interview and if they ultimately received a job offer.

 

Cost of Listings Fee

Cost per job offer Accounting Firm

Cost per job offer - Bank

Conversions online (aggregate of both categories)

Conversions offline (aggregate of both categories

$389

$283

$30

69%

31%

* Differences driven by number of listings, job appeal, and brand equity

Cars.com

The methodology for Cars.com involved analyzing an opt-in panel that visited the site and looked at the listings over a one year period of time. This panel was then matched against the Polk automotive database to determine the percentage of consumers who purchased a car. comScore found that the cost per sale for the average auto dealership using Cars.com listings was substantially lower than the industry average across all media.*

 

 

Cars.com listings

Industry Average

Cost per Sale

$68

$493

* North American Dealer Association 2005 Data.

This latest IAB study provides undisputed evidence that marketers must include online classifieds listings as an integral part of any marketing campaign to promote local services and products and generate on and offline sales with very efficient ROI. said, Tim Lambert, Chair, IAB Classifieds, Directories and Local Search Committee. Online classifieds enable consumers to engage products and services at a variety of levels information only, contact, location, email etc.

Methodology Details

Population: U.S. Internet users viewing online local and classifieds listings.

Test and Control Design: Test consumers were exposed to online local and classifieds listings. Control consumers were category-involved, but did not see an online listing.

Time Period: Seven months ending September 2005.

Measurement of Online Behavior: Passively observed via the comScore opt-in panel.

Measurement of Offline Behavior: Surveys among the comScore opt-in panel.

Publishers: Superpages.com, CareerBuilder.com, and Cars.com.

Marketers: Car dealerships, Ford Rental Car, a Big 4 accounting firm, a major international bank, and six local categories of businesses (real estate, shopping, automotive, professional services, trade services and hospitality)

About comScore Networks

comScore Networks provides unparalleled insight into consumer behavior and attitudes. This capability is based on a massive, global cross-section of more than 2 million consumers who have given comScore explicit permission to confidentially capture their browsing and transaction behavior, including online and offline purchasing. comScore panelists also participate in survey research that captures and integrates their attitudes and intentions. Through its proprietary technology, comScore measures what matters across a broad spectrum of behavior and attitudes. comScore consultants apply this deep knowledge of customers and competitors to help clients design powerful marketing strategies and tactics that deliver superior ROI. comScore services are used by global leaders such as AOL, Microsoft, Yahoo!, Verizon, Best Buy, The Newspaper Association of America, Tribune Interactive, ESPN, Fox Sports, Nestl, MBNA, Universal McCann, the United States Postal Service, Merck and Orbitz. For more information, please visit www.comscore.com.

About the IAB

Founded in 1996, the Interactive Advertising Bureau (www.iab.net) represents over 225 leading interactive companies that actively engage in, and support the sale of interactive advertising. IAB members are responsible for selling over 86% of online advertising in the United States. On behalf of its members, the IAB evaluates and recommends standards and practices; fields interactive effectiveness research, and educates the advertising industry about interactive advertising.

IAB Media Contact:
Lynn Trono
212 380 4707
l[email protected]
Andrew Lipsman
comScore Networks, Inc.
(312) 775-6510
[email protected]