1. How Google ads drive CPG sales
Cross-Media Analysis of a CPG Campaign
Market Insights
Google Germany 1 1

2. Background & Methodology

3. Methodology (1/2)
Worldwide unique methodology: Single source panel of GfK with media usage (on- and offline) and CPG purchases (offline).
8,000 households
= 15,000 internet users
Demographics:
gender, age, income etc.
mail address
→ allows database match w/ client
Media usage:
online usage
website visits
ad impressions (display & AW)
ad clicks
offline media usage
derived from media questionnaire
TV, Print, Radio, (outdoor)
Sales:
CPG purchases
→ ongoing, 8,000 households
other vertical purchases
→ quaterly, will be added in Q1/ 2
→ Travel, Finance, Tech, Retail
Methodology is unique
Former studies which also aimed to prove the impact of online ads on sales (e.g. Mars case in Germany, “Celebrations”) were based on data fusions, i.e. sales and media data did not came from a single source but from different sources which were matched by demographic and behavioural data. Data fusion is a proven concept but leaves “room for interaction” concerning the results… 3 3

4. Methodology (2/2) GfK Methodology to calculate (cross-)media effects:
Sales efficiency analysis
GfK Methodology to calculate (cross-)media effects:
Objective: Analyse causal (!) relation between advertising and sales
Logistic regression model
Variables:
purchases (during and 2 weeks after campaign)
ad contacts (probabilities) before purchase
visits on (advertisers) website before purchase
loyalty
price/ price promotions on day of purchase
demographics
f(x)= base+ media+ promotion+ loyalty+ price+ season+ demographics
Cross-tabbing single source data shows correlation of ad contacts and CPG purchases
(Complex) regressions model required to show causal relation between ad contacts and CPG purchases
Regression model was developed by GfK and was used in 50+ media efficiency projects by CPG companies

5. CPG Campaign - Overview
Media Mix:
on air
% gross spend source: Nielsen TV
51%
Outdoor
18%
Display (no Google)*
12%
Print
10%
Cinema* 6%
YouTube (HP video & banner) 2%
Radio* 1%
Google AdWords
0.4%
100%
Non-Google display was eg. aimed to drive traffic to advertiserswebsites (CPC deals etc.)
Spendings: YouTube (151,000 EUR), AdWords (28,000 EUR)
YouTube campaign details (>50M impressions):
YT Homepage video (3 days)
YT Homepage 300x25, 300x250 (3 days)
YT search result pages (17/11 – 28/12)
Invideo/ partner watch (17/11 – 28/12)
Run of site (17/11 – 28/12)
* Cinema, radio and display (no Google) are excluded in the analysis due to different campaign objectives
source: Nielsen 5

6. Key Questions for Google
YouTube:
Can YouTube add significant gross reach to a cross-media campaign?
Can YouTube add incremental net reach to a cross-media campaign?
Does advertising on YouTube drive offline sales?
Is YouTube more efficient than TV?
Does interaction between YouTube and TV campaign add value?
Google AdWords:
Key questions are from Google perspective
Key question of advertiser was to understand the short-term sales response to different media in the cross-media campaign
Does the ROPO effect exist for CPG purchases?
If so, how efficient is SEM compared to classic marketing channels?
Are branded or generic terms more effective? 6

7. Campaign Reach

8. (Gross) Reach
YouTube advertising added significant gross reach: Net reach was 6.8% (4.2M unique users) and average contact frequency per week was 2.9.
reach (% population)
IMPORTANT: Base of reach data is total population for all media (incl. YouTube and AdWords)
Reach of display campaign (no Google ads) was 10.7%
If base is changed to online population reach of YouTube was 9.8% and AdWords 1.8%
frequency (avg. per week)
2,2
2,9
Source: GfK, Evaluation of cross-media campaign, Dec 2008; Web Efficiency Panel - Total population Germany (14+ years old) 8 8

9. Costs per ppts Reach - Index
In the given media mix of the advertiser, reaching 1% of the population on YouTube or AdWords was >70% cheaper than on TV.
Index
Index= [(spending per media channel) / (reach of media type)] / [(TV spending) / (TV reach)] *100
Chart makes unfair comparison as reach of media types was very different and costs are not linear to reach increase => Chart is teaser (!) for efficiency discussion
Next step would be to calculate media planning scenarios (“What happens if x% or y EUR are taken out of channel a and put into channel b”). The advertiser does that as a follow-up of our project with the media agency but won’t share results with us
Source: GfK, Evaluation of cross-media campaign, Dec 2008; Web Efficiency Panel 11 11

10. Incremental Reach YouTube
YouTube added 2.6% incremental reach for the spot. More than ¼ of all users exposed on YouTube had no campaign contact on TV
2.6% incremental reach YouTube
27% of all YouTube contacts had no TV contact
TV-contact(s)
TV-campaign reach:
55.8%
YouTube reach: 9.6%
Incremental reach of print: 3.5% (although overall reach was more than 2x higher than on YouTube)
Incremental reach of display (no Google): 4.1%
Incremental reach came from younger audience segment (20-29 y.)
YouTube contact(s)
Source: GfK, Evaluation of cross-media campaign, Dec 2008; Web Efficiency Panel 12 12

11. Incremental Reach AdWords
AdWords added 0.5% incremental reach for the advertiser. More than ¼ of all users exposed on AdWords had no campaign contact on TV
0.5% incremental reach AdWords
27% of all AdWords contacts had no TV contact
TV-contact(s)
TV-campaign reach:
55.8%
AdWords: 1.8%
Incremental reach of print: 3.5% (although overall reach was more than 2x higher than on YouTube)
Incremental reach of display (no Google): 4.1%
AdWords contact(s)
Source: GfK, Evaluation of cross-media campaign, Dec 2008; Web Efficiency Panel 13 13

12. Sales Impact

13. Total Sales Decomposition
18% of all sales during plus 2 weeks after the campaign were caused by advertising – rest of sales were driven by other factors, such as consumer loyalty.
Objective of the chart to emphasize the fact that the sales impact analysis is causal
Source: GfK, Evaluation of cross-media campaign, Dec 2008; Web Efficiency Panel

14. Sales Uplift per Media Type
YouTube -and especially AdWords- have a significant impact on offline sales for the advertiser. Impact on YouTube is slightly higher than on TV.
sales uplift (%)
Uplift factor= average increase of the quantity of purchases regarding to household with contacts vs. without contact (basis= 1,0 contact)
Source: GfK, Evaluation of cross-media campaign, Dec 2008; Web Efficiency Panel 18 18

15. Sales Uplift - Frequency
Sales impact of YouTube increases with growing contact frequency.
Gap to TV slightly increases with number of campaign contacts.
sales uplift (%)
Distribution of contact classes (excl. no contact)
TV: 1 contact 37% (=37% had one TV contact during the campaign), 2 contacts 22%, 3 contacts 13%, 4 contacts 9%, 5 contacts 6%, 6+contacts 14%
YT: 1 contact 25%, 2 contacts 21%, 3 contacts 11%, 4 contacts 4%, 5 contacts 3%, 6+contacts 37%
Number of contacts
Source: GfK, Evaluation of cross-media campaign, Dec 2008; Web Efficiency Panel 19 19

16. Sales Uplift - Media Interaction
YouTube and TV drive sales independently - but combination of TV plus YouTube is much more powerful.
sales uplift (%)
Base are contacts to the medium in one single week (TV plus YT= consumers who had contact to both in one week)
Comparison of TV vs. TV plus YouTube is not possible as target audiences are very different (reason for dotted line).
Interaction effects between TV and AdWords were not analysed as sample size wasn’t big enough
Media interaction „TV plus YouTube“ is measured for consumers with campaign contact on TV and YouTube in the same week
Source: GfK, Evaluation of cross-media campaign, Dec 2008; Web Efficiency Panel 20 20

17. Sales Uplift - Frequency
Sales impact of AdWords also increases with growing contact frequency – but on a much higher level.
sales uplift (%)
Don’t emphasize the chart too much as sample sizes are small. Client and GfK are happy to share them externally but we should not stress them too much
Number of contacts
Source: GfK, Evaluation of cross-media campaign, Dec 2008; Web Efficiency Panel 21 21

18. (Short-term) Return On Investment
YouTube is more efficient than TV: Short-term ROI is higher and well above industry benchmark for TV. Most efficient channel is Google AdWords.
ROI (gross)*
Print industry benchmark CPG: 0.48
ROI is short-term as it reflects sales during campaign and two weeks after.
Therefore ROI is below 1. Mid- and long-term effects lead to ROI >1
AdWords: Every EUR that the advertiser put into the campaign had a short-term sales impact (causal!) of almost 2 EUR (1,91€)
TV industry benchmark CPG: 0.26
* gross ROI = incremental sales in relation to gross media spend
Source: GfK, Evaluation of cross-media campaign, Dec 2008; Web Efficiency Panel 23 23

19. (Short-term) Return On Investment - AdWords
Generic keywords were more efficient: Generic search generated 2,15 € revenue per Euro spend, branded search 1,55 € revenue per Euro spend.
ROI (gross)*
Although sales uplift for branded keywords is higher and costs for branded clicks are lower, ROI for generic keywords is higher
Reason: The value uplift (sales volume x price) is higher for generic searchers as branded searchers are more loyal to the brand (less incremental value increase possible)
* gross ROI = incremental sales in relation to gross media spend
Source: GfK, Evaluation of cross-media campaign, Dec 2008; Web Efficiency Panel 24 24

20. Potentials

21. Potential I – Actual Keyword List
AdWords offers significant additional inventory for the advertiser: Without a daily budget cap net reach of the AdWords campaign would have been 9 times higher.
150k user
274k user
2,264k user 9x
(with daily budget cap)
(w/o daily budget cap)
* Basis: 42.5 mio internet-user (people 14+ years)
Source: GfK, Evaluation of cross-media campaign, Dec 2008; Web Efficiency Panel

22. Potential II – Additional Keywords
Product buyer can be reached with generic gaming or mobile keywords.
Internet user
Product buyer
CTG years
Keyword package (defined by client) %
Index affinity
Entertainment
19%
100%
96%
68%
Fashion 1%
74%
88%
Mobile/ Handy 2%
152%
117%
Music
33%
101%
132%
Travel
93%
90%
Gaming
136%
Sports 9%
97%
120%
At home 4%
84%
Source: GfK, Evaluation of cross-media campaign, Dec 2008; Web Efficiency Panel

23. Key Findings

24. Key Findings
YouTube:
YouTube added significant gross reach to the cross-media campaign
YouTube added 2.6% incremental net reach
YouTube drive offline sales - one contact increases purchases by 10%
Combination of YouTube & TV is more effective due to interaction effects
With a ROI of 0.42 YouTube is more efficient than TV
Google AdWords:
AdWords drives sales- one contact increases purchases by 35%
AdWords is the most efficient marketing channel with a ROI of 1.91
Generic terms are more efficient – and lot of inventory is still left 29

25. Thank You!
Q&A