Online Marketing: Caution required in choice of advertising environment

Budgets for online marketing continue to grow, in fact, in 2017, they exceeded those for the television advertising in the US for the first time. WU professor Nadia Abou Nabout, head of the Institute for Interactive Marketing, advises advertisers to be more selective in choosing the context their ads will appear in online. Her current research confirms that advertising context plays an important role not only in branding campaigns but also in performance campaigns, and in the worst cases can even sustainably damage a brand’s image. 

Advertisers differentiate between two different types of campaign in internet marketing: Branding campaigns are intended to raise consumers’ awareness of the brand and polish its image, and are often presented in large formats on so-called short-tail sites, large, highly frequented internet platforms. Performance campaigns, on the other hand, are meant to encourage the consumer to click on the ad or purchase a product online. These campaigns are usually placed on long-tail, or smaller, less-frequented websites. Marketers will often purchase advertising space on many of these sites, and ads are presented to potential customers based on their user profiles. Many marketers claim that the advertising environment here plays a less significant role, and these ads are considerably less expensive to place than on short-tail platforms. But this is not always the best place to cut corners, according to current research by WU professor Nadia Abou Nabout. She investigated viewers’ reactions to ads for a variety of brands and analyzed how different ads affected users’ click behavior. Her results show that for certain brands, the wrong advertising environment can cause serious problems.

Negative impact on image and wasted money

“Advertisers should be especially careful in the long-tail sector,” Nadia Abou Nabout warns, “When buying large ad bundles, they have no control over where their ads appear. Our studies have shown clearly that a low-quality environment can have a negative impact on image, especially for prestigious brands.” The WU expert’s research also showed that it doesn’t make much sense to advertise low-image brands on high-end platforms. “Advertising in high-end environments is of little or no benefit for brands that compete mainly with low prices. Neither brand awareness nor click rates are better for these brands than in lower-quality environments. Paying for expensive advertising space is a waste of money, unlike for more prestigious brands,” explains Nadia Abou Nabout.

Recent events – Justifiable doubts

Recent events have led marketers to question whether the advertising environment could reflect negatively on a brand, and major companies like L'Oréal, McDonald's, Audi, and The Guardian pulled their ads from YouTube and Google Ad Exchange because their spots were being shown in close proximity to hate speech videos and other distasteful content. This inspired Nadia Abou Nabout to take a closer look at the effects of the advertising environment.

The research

A study at WU’s Institute for Interactive Marketing is the first to observe how well viewers remember advertisements in different contexts, and whether the context changes their attitude and behavior towards the ad. To evaluate recollection and attitude, Abou Nabout and her colleagues were given permission to track the private computers of participants of an online panel. This enabled researchers to conduct a survey without having to rely on an artificial lab situation, and to interview users about their recollections and attitudes during their normal internet usage via pop-up survey windows.  By generating statistical twins, researchers could make comparisons between users with similar demographic and social backgrounds acting in different environments, i.e. premium vs. non-premium websites. Differences in click behavior were analyzed based on the data of a major advertising auction site.