U.K. Study Illustrates Effectiveness of Online Marketing for Retailers

An interesting study about the effectiveness of online marketing versus traditional print and TV advertising was recently released “across the pond” in the United Kingdom. The Internet Advertising Bureau, the internet marketing industry’s trade association in the U.K., released a “Brand Engagement” study that shows online advertising for retail brands is the biggest driver for brand awareness in the current medias mix, “driving 40% of brand engagement, compared with press (31%) and TV (19%).”

These numbers highlight the overall effectiveness of relatively low cost internet advertising versus traditional media to raise product and brand awareness, when one considers the return on investment of the much smaller advertising budgets for online marketing. “The average online ad spend for all five brands in the study was just 2.5% of total media budget,” notes the IAB, “which suggests that internet advertising – which delivered 40% of brand engagement across all communications – is around 16 times more effective than the monetary investment would suggest.” The IAB’s research results regarding the effectiveness of online branding in the British retail sector were in line with, or exceeded, similar results in the British automotive, beverage and personal care sectors.

The research from the IAB in the U.K. seems equally applicable in North America, where the increasing sophistication of internet users and ever-improving technology is a driver which is increasing both internet use and the effectiveness of online marketing.

Yet, while study after study reports the increasing effectiveness of online marketing campaigns and internet advertising as marketing tools, as with any newly emerging technology, there is a lag in companies fully adopting the technology’s potential. “Whilst consumers’ online shopping spend continues to grow year-on-year,” notes Guy Phillipson, chief executive of the IAB, “there still remains a great discrepancy in terms of how much retailers are spending on their internet communications. We hope that this latest Brand Engagement study will help retail advertisers fully appreciate the brand-building capabilities of online, and in turn increase the medium’s share of their marketing budgets.”

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