comScore Chairman Gian Fulgoni Keynote Live Blog at MediaPost’s Search Insider Summit

Check back here regularly for live blog posts from the summit. You can also find some of my updates at Twitter – @davidberkowitz.

  • Vast majority in the room are here for the first time
  • MC Gord Hotchkiss: Biggest highlight of the event: conversations – new agenda set up to facilitate more of that

Keynote Gian Fulgoni, Chairman comScore

  • Before point of scale scanning, manufacturers had to rely on Nielsen data collected by field auditors to derive sales, data released bi-monthly
  • Scanning let you really dive in and see what’s happening
  • Availability of data changed game for retailers, balance of power shifted
  • 1978-1995 as scanning rolled out, trade marketing dollars jumped from 5% to 13% ($40 billion incremental per year)
  • Question: What’s the value of the click
  • 99% of online population searches each month – 80 searches per searcher
  • 73% of online population streams a video, up 50% vs year ago
  • 6 million fewer primetime TV viewers this May than 07
  • 1/3 of online ad dollars focus on brand building (reverse of traditional media); we need to figure out how to use search/display to increase branding value
  • Internet delivers 40% more ad impressions than TV
  • Click’s vital for search, not as important for display
  • Non-clicked search, display ads have big benefit – latent impact on sales, offline impact on sales, positively impact branding – must use right metric to measure sales impact
  • If we’re only measuring last click, we’re leaving probably 80% of the ROI unmeasured
  • Click: high value for search, low for display; view thru – medium/high value for search, high for display
  • Data: only 5% of Google’s paid search links result in a click; 95% of paid links are really "unpaid links" – yet they deliver value to advertisers
  • Will search engines try to monetize unclicked, unpaid links? Will there be CPM charge in addition to CPC? Will advertisers pay?
    • Ooh, juicy column potential here (pardon, making notes for me too here)
  • Enquiro research: 16% brand lift when brand in top sponsored, top organic results – even without a click, there’s value to this advertising; somebody ought to get paid for it
  • 3 components of how search drives buying: direct online effects (16%),  latent online effects (21%), latent offline effects (63%) – money being left on table
  • Click-through rates declining for display ads – 0.2% for non-rich media (1.12% for rich media, major drop off from 2002 to 2006)
  • 86% of sales, 90% of site visits come from people who haven’t clicked – view-throughs – there is value to a non-clicked display ad
  • Offline dollars per 1,000 people exposed, people who conducted a search, saw an impression in search and saw a display ad – 119% lift on offline $s
  • Next… economy’s impact on ecommerce – Q1 2008 11% increase over Q1 2007, dramatic dip compared to previous quarters; some good news is April 08 was back to 15% growth vs. year-ego
  • Q1 08 vs. year ago: high end dropped 8.3% while others rose – mid-tier 11.6%, discount/mass – 19.4%, club sites – 36.9%
  • Change in total dollars spent – household income level – under $50K: -1%, $50-$100K: 3%, over $100K: 25% – household necessities (food, gas) lowering online purchases
  • Top economic issue: rising prices 64%, job security 15%, financial markets 10%, home values 6% – everyone across income brackets more concerned about prices, job security a bigger deal for lower incomes, financial markets bigger deal for upper incomes, but rising prices dominates all concerns for everyone
  • Declines in paid search ad coverage could be due to economy or to product changes
  • When economy gets tough: first thing that gets cut is marketing. First part of marketing cut: advertising. Ad dollar shift online "very very likely."
  • Trends in paid clicks don’t show any economic impact
  • Google-comScore flap: comScore reported slowing Google US paid clicks in Q1, analysts concluded sky was falling for Google, Google reported strong Q1 and analysts hammered comScore. Yet Google’s international revenues overtook US, US revenues flattened. comScore paid click data predicted that – 0.94 correlation coefficient. Not saying Google will have problem going forward.
  • Q&A: Debate over value of search for CPG. Audience question: People don’t search for toilet paper. Gian: there are times when they do – eg life event like new baby, also looking for general product info. Audience: search volume not big enough for toilet paper. James Lamberti, comScore: it’s not about toilet paper, it’s about new moms and home buyers. Audience: big surge in CPG on their end, as it’s more about brand engagement. Search captures interest from cross-promotions.

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