Assessing the relative performance of online advertising media

Abstract

Online marketing campaigns are the big trend in today’s advertising world. The obvious advantages of online ad media – low costs, multiple tracking options and better segmentation -, are forcing marketing managers to re-allocate big portions of their advertisement budgets from traditional offline marketing media to online ad campaigns. Several digital communication channels are suitable for online advertising, each serving different communication goals - awareness, engagement, traffic generation, lead generation and sales conversion – according to the overall brand strategy. Yet, which channel or mix of channels should advertisers or marketing agencies employ in order to best achieve its communication goals is something that still remains highly unclear. This is particularly true for advertising markets outside the USA. The overall aim of this dissertation was hence to compare the performance of different advertising media channels – E-mail marketing, Social Networked Media and Paid Search -, with performance being assessed from the viewpoint of a digital marketing agency, both in terms of campaign effectiveness (traffic and lead generation) and campaign profitability (ROI). To this end, secondary panel data regarding the features and performance of six online ad campaigns (five of which were conducted in more than one channel), namely click-through rates (CTR; traffic generation), lead conversion rates (LCR; submission of a registration form) and Return-on-Investment (ROI), conducted over the course of the first trimester of 2014 were compiled. OLS multivariate linear regression analysis was then performed to understand which channel and campaign features significantly affected campaign effectiveness and profitability. Moreover, primary data were also collected by selecting a poorly performing campaign, optimizing it based on the results of the secondary data analysis, re-launching it and re-analyzing its performance results. Results show that e-mail marketing campaigns seem to be the most effective and the most profitable ones for digital marketing agencies operating under performance (lead conversion)-based pricing models. Social Networked media such as Facebook, however, seem to perform better when the campaign goal is drive traffic to advertisers’ websites, as CTR rates for this channel tend to higher on average. Regarding the quasi-experiment done, E-mail and Google had similar performance in terms of target effectiveness. The number of conversions was also similar, However, Google had substantial higher costs, due to the number of impressions. After dropping that channel, campaign’s results have improved. Nevertheless, the increase in the number of leads may have been due to E-mail design rather than the channel choice.

Date of Award	18 Jul 2014
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Ana Isabel Almeida Costa (Supervisor) & Fernando Santos Jorge (Supervisor)