IRI-Led Consortium Aims to Tie Digital Ad Spending to Purchases

Initiative Promises Deeper Insights Than Traditional Media-Mix Models

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BATAVIA, Ohio ( -- Data-driven package-goods marketers have seen a lot of studies regarding the offline impact of online ads over the years -- but not enough to get them to make digital media more than a mid-single-digit percentage of their media mixes.

Information Resources Inc. is hoping an ambitious partnership with three other research companies and analytics companies might finally provide the industry the data it needs to wade deeper into the digital stream.

The partnership, which also includes WPP brand-metrics tracker Dynamic Logic, online-audience tracker ComScore and digital-optimization firm X+1, aims to go beyond the online-offline data mash-ups to date by tracking campaign effectiveness and targeting segments across multiple ad networks and channels, including search, email, online coupons and brands' own websites.

Identify, track segments
Marketers that spend 5% or more of their marketing budgets on digital can already get reliable return-on-investment tracking with marketing-mix models, CPG's ROI tool of choice. But the initiative also looks to mine consumer purchase data to identify segments, such as brand switchers or loyalists, most likely to respond to an online campaign's objectives and then track how those segments respond to the push -- something marketing-mix modeling can't readily do.

Connecting online campaigns to offline data isn't new. Yahoo Consumer Direct, through its partnership with Nielsen, has mined offline sales data related to more than 400 CPG campaigns and compiled results from 300 of those earlier this year into a study showing the digital ads produced an average sales lift of $1.4 million, or 28%.

One key difference is that the partnership will work across all ad networks and digital channels, said X+1 Chairman-CEO John Nardone.

Some marketers tap this purchase data through specific vendors, such as Yahoo Consumer Direct, and still others have run one-off custom studies looking at purchase impact -- but that's been more the exception than the rule. The idea here, said Robert Tomei, president of consumer and shopper insights for IRI, is that you can do it much more readily when it's available across the gamut of internet properties and formats and uses a common set of data and analytics.

Industry first
The initiative should help brands cull and analyze their campaign targets from a pool of about 90% to 95% of internet users, said Mr. Tomei, "which is really going to be a unique, first-time ability for the industry and a very powerful one."

Of course, Dynamic Logic's brand favorability and purchase-intent metrics are one alternative many CPG marketers have relied on in lieu of purchase data from online campaigns. But Ken Mallon, senior VP of custom solutions for Dynamic Logic, certainly hopes the availability of sales data won't make marketers stop worrying about the branding metrics.

"We're going to be in a position of saying, 'Here are your sales-lift numbers, and here's why you got there,'" Mr. Mallon said. The database collected will also go a long way toward establishing the statistical links between how ads influence brand perceptions and sales, both long and short-term, he said.

One study for a package-goods brand showed online ads didn't significantly affect Dynamic Logic brand metrics. But the IRI panel data showed the campaign did produce a sales lift -- not because of new buyers but because of additional purchases by existing ones. Further analysis showed the online ads were most effective at driving sales among existing brand buyers and produced recommendations for making ads that worked better to win over non-buyers.

Sans Nielsen
The initiative is an everybody-but-Nielsen alliance going after synergies similar to what Nielsen has tried to create internally through its business units. Ironically, it's built on a consumer panel IRI is merging with Nielsen's through an agreement reached earlier this year.

But while it may be an alternative to marketing-mix modeling, using consumer panel data doesn't really solve the scale problem in analyzing sales impacts from online advertising, said Gregg Ambach, managing director of Analytic Partners, Cincinnati.

"You still need a big enough campaign to move sales," Mr. Ambach said, and you need to reach enough consumers to make analysis of segments statistically feasible. "If you're placing ads on big websites, you've got a pretty good shot," he said.

The ability to measure impact across a wide variety of ad networks should make it easier to evaluate campaign impact, even if measuring the impact from individual, smaller websites will still be challenging.

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CORRECTION: An earlier version of the story incorrectly referred to the name of the partnership, which is unnamed, as CPGConnects. CPGConnect is the name of the service from X+1 that's part of the partnership.

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