Global Media Intelligence Report - Q2 2013

 

THE GLOBAL MEDIA INTELLIGENCE REPORT

Where Math Men Meet Mad Men

According to Gartner analyst, Laura McLellan, CMOs will spend more on IT than their CIO counterparts by 2017. This means that the role of the CMO is changing - they are now owning and managing their own capital budgets and are mNeustaring investments in technologies to help them do their jobs better and deliver against established goals. While there may still be some debate in the industry as to who ultimately owns the budgets, it has become clear that there is a need to align internal resources, budgets, and data to drive better results. Major advertisers and media agencies are demanding cross-channel visibility, actionable insights, and real time information to make informed decisions to increase their overall media efficiency.

This report covers key insights into cost, customer engagement and reach, and channel influence, as seen by the industry’s premiere media intelligence company. The report also adds new metrics around operating system and web browser usage based on overall online events, unique users, and converting users. The goal is to inform marketers on industry trends in Q2 2013 so they can increase the efficiency of their current media budget, resulting in increased reach and sales.

About the Report

The Neustar Global Media Intelligence Report answers key questions such as:

  • Which channel delivers clicks and conversions at the lowest cost?
  • Which channel is most efficient at reaching new users not seen on other channels?
  • Which channel has the highest quality users that can be marketed to consistently?
  • What channels are most undervalued or overvalued in a last-touch model?
  • What operating system sees the most online events and delivers the most converting users?
  • What web browser (desktop or mobile) delivers the most/least unique and converting users?

Neustar has the data that Fortune 500 brands, advertisers, and agencies need to keep up with the explosion of digital channels and spend their media dollars more efficiently. In Q2 2013, over $230 million of media was bought based on the actionable insights provided through Neustar’s Media Intelligence Platform™ (MIP).

EXECUTIVE SUMMARY

Today’s marketers are faced with many challenges due to the explosion of digital channels and the major shift of traditional marketing dollars moving into multiple online channels. According to Tim Armstrong, Chairman and CEO of AOL, “in terms of offline dollars coming online, I know we’ve seen a huge spike so far, but that will probably pale in comparison to what we see in the next 5-10 years.” Given this shift, marketers must think smarter about which channels will deliver the broadest reach and best performing or converting audiences.

Neustar brings together media and audience data on a single platform so marketers can make decisions based on real-time information and analysis. Cross-channel visibility across exchanges, networks, portals, and social delivers command and control for marketers to adjust media spend on the fly to ensure the highest efficiency.

This report delivers key channel findings from Neustar’s analysis across approximately 130 billion ad events, 34 billion impressions, and 72 million conversions. The report also looked at 84 billion online events, 12 billion unique users and 321 million converting users to identify top operating systems (OS) and web browsers. Some key trends seen in Q2 2013 include:

  • Exchanges cost efficiency eroded and networks made the biggest jump, delivering a cost below the indexed industry average for the first time
  • Social and portals delivered the highest reach efficiency, performing 34 to 61 percent better than the indexed average
  • Socials’ ability to deliver high quality users not seen on other channels continued with above average performance for the third quarter in a row
  • Mac OS users deliver 8.6% more conversions than Windows OS users. Windows operating systems make up 78.5% of all online events seen
  • Web browsers Internet Explorer and Safari encompass more unique and converting users than online events
  • Mobile browser and OS usage make up almost 8% of online events but deliver only 7.3% of converting users while desktop browsers and OS’ deliver more converting users than online events

Channel index keys include:

  • Exchanges
  • Networks
  • Portals
  • Social

COST INDEX

A Channel’s Cost in Relation to Driving Impressions, Clicks, and Conversions

Costs in Q2 start to normalize across all channels. Exchanges cost advantage erodes and networks cost drops below the indexed average for the first time.

media intelligence report chart

Insights

Comparing costs across channels in Q2 we see CPMs, CPAs, CPCs starting to normalize across channels. Exchanges which have had an advantage in the past two quarters are now in-line with networks and portals. Networks made the biggest move this quarter, decreasing average costs by 67% quarter over quarter. This was driven by the number of actions (both clicks and views) that were seen across the quarter. While costs dropped because activity increased, Neustar did not see a proportionate increase in revenues, suggesting that networks were used for lower valued actions (e.g. newsletter sign up, email opt-in) versus higher valued actions (e.g. product purchase, subscription sign up).

REACH EFFICIENCY INDEX

A Channel’s Efficiency in Reaching New Users, Coupled with Exclusivity and Cost

Social and portals continue to drive reach efficiency, perform- ing 34 to 61 percent better than the indexed industry average.

media intelligence report chart

Insights

In Q2, portals and social continue to perform above the indexed industry average in reach efficiency. This confirms each channel’s ability to reach users only seen on that channel and at an efficient cost. While networks and exchanges drive volume in terms of overall users, they are not channels that have a high number of exclusive or unique users. For marketers wanting to grow their reach and find new users that they have not yet marketed to in the past, they should think about allocating more marketing dollars to campaigns run on portals or social channels.

USER QUALITY INDEX

A Channel’s Ability to Reach a User That Can be Marketed to Consistently

Socials’ ability to deliver high quality users continues with above average performance for third quarter in a row.

media intelligence report chart

Insights

The next step beyond reach efficiency is to look at a channels ability to deliver quality users. Social and portals continue to perform above the indexed average in Q2, delivering a unique audience and having the ability to market to them on a consistent basis. Networks and exchanges moved closer to the normalized average indicating they might be doing a better job at allowing advertisers to consistently target users.

FUNNEL ATTRIBUTION INDEX

The Likelihood That a Channel Influenced Conversion in the Upper Funnel

Social and exchanges perform above the indexed industry average, with exchanges increasing the most of any channel.

media intelligence report chart

Insights

Funnel attribution provides a more granular look at upper-funnel activity versus just looking at a pure last-touch attribution (LTA) model. In Q2, exchanges hit an inflection point given their huge increase in volume of impressions over Q1. LTA credited conversions rise but at a lower rate than overall impression volume. This points to exchanges being used as an upper funnel vehicle due to their low cost.

In contrast, social impression volume decreased in Q2 but it continued to deliver strong conversions, better reach efficiency and higher user quality than most other channels.

OPERATING SYSTEM METRICS

Operating System Usage Based on Traffic, Unique Users, and Converting Users

Mac OS users deliver 8.6% more conversions than Windows OS users. Windows operating systems make up 78.5% of all online events seen.

media intelligence report chart

Insights

The Mac OS delivered the highest unique user conversion rate compared to all other operating systems, which points to its user base that may encompass luxury users or users more likely to have higher disposable income and with a higher propensity to convert. Windows operating systems dominate online event traffic. The Mac OS covers 10.5% and Linux makes up a very small percentage, accounting for only 1.7% of online events seen.

WEB BROWSER METRICS

Web Browser Usage Broken Down by Traffic, Unique Users, and Converting Users

Web browsers Internet Explorer and Safari encompass more unique and converting users than online events.

media intelligence report chart

Insights

Web browser usage in terms of online events is dominated by Internet Explorer and Chrome followed by Firefox and Safari. However, when looking at unique and converting users, both Internet Explorer and Safari’s shares increased. This points to each browsers’ users which may being more stable with a higher propensity to convert.

MOBILE VERSUS DESKTOP METRICS

Mobile OS and Web Browser Usage Versus Desktop OS and Web Browser Usage

Mobile browser and OS usage make up almost 8% of online events but deliver only 7.3% of converting users. Desktop browsers and OS’ deliver more converting users than online events.

media intelligence report chart

Insights

Mobile browser and operating system usage remains low overall at 8% versus desktop usage at 92%. Safari mobile had the most converting users of any mobile browser, converting users 15% more than Android mobile. The fact that mobile users convert at a lesser rate than desktop users compared to online events generated suggests that users may be viewing ads on their mobile devices, but may then go to their desktop to convert.

APPENDIX

Q4 2012 and Q1 2013 Data Tables

Cost Index
Channel Q4 Score Index Q1 Score Index Q2 Score Index
Social -250 150 150
Portal 350 -250 -50
Network 250 250 -50
Exchange -350 -150 -50
Reach Efficiency Index
Channel Q4 Score Index Q1 Score Index Q2 Score Index
Social 284 145 134
Portal 32 162 161
Network 62 68 57
Exchange 22 25 49
User Quality Index
Channel Q4 Score Index Q1 Score Index Q2 Score Index
Social 196 165 114
Portal 108 124 110
Network 65 48 67
Exchange 31 64 82
Funnel Attribution Index
Channel Q4 Score Index Q1 Score Index Q2 Score Index
Social 8 13 3
Portal 2 -3 -2
Network 0 -3 -4
Exchange -10 -7 3

APPENDIX

Q2 2013 Operating System Data Table

Operating System
Name Online Events Online Events (%) Unique Users Unique Users (%) Converting Users Converting Users (%)
Windows 7 43.6B 50.3% 5.9B 49.5% 165M 51.7%
Windows XP 11.9B 13.7% 1.7B 14.2% 40M 12.5%
Mac OS X 9.1B 10.5% 1.3B 10.9% 38M 11.8%
Windows Vista 7.6B 8.7% 1.0B 8.5% 27M 8.5%
Windows 8 4.9B 5.7% 650M 5.4% 18M 5.7%
Mac iOS Mobile 4.5B 5.2% 670M 5.6% 16M 5.1%
Android Mobile 2.4B 2.8% 346M 2.9% 7.3M 2.3%
Linux 1.5B 1.7% 210M 1.7% 4.4M 1.4%
Other 1.1B 1.3% 163M 1.4% 3.5M 1.1%

**Other: Includes all operating systems with online events contributing 0.2% or less

APPENDIX

Q2 2013 Web Browser Data Table

Web Browser
Name Online Events Online Events (%) Unique Users Unique Users (%) Converting Users Converting Users (%)
Internet Explorer 31.5B 36.3% 4.5B 37.1% 130M 40.4%
Chrome 27.8B 32.1% 3.7B 31.0% 93M 28.9%
Firefox 13.6B 15.7% 1.8B 15.3% 46M 14.2%
Safari 5.3B 6.1% 772M 6.4% 25M 7.7%
Safari Mobile 4.4B 5.1% 648M 5.4% 16M 5.0%
Android Mobile 1.8B 2.1% 258M 2.2% 5.4M 1.7%
Chrome Mobile 361M 0.4% 52M 0.4% 1.1M 0.3%
Opera 288M 0.3% 37M 0.3% 1.0M 0.3%
Opera Mobile 252M 0.3% 35M 0.3% 760K 0.2%
Other 1.2B 1.4% 182M 1.5% 4.0M 1.2%

**Other: Includes all web browsers with online events contributing 0.2% or less

APPENDIX

Methodology

For this quarterly report, Neustar compiled data from a representative sample of its customer base. This includes 34 billion impressions, accounting for 72 percent of Neustar’s total impression volume across approximately 130 billion ad events.

The methodology for data collection, analysis, and reporting consisted of multiple steps. Data was collected through the Neustar “pixel” (or “tag”), which was then ingested by the Neustar MIP using Neustar’s proprietary Summarizer technology. Neustar’s team of data scientists then worked with the platform, querying the Neustar MIP for channel-based performance and cost data, as well as targetability, overlap, and exclusive reach metrics. Neustar also looked over the raw event data for converting users to see whether or not those users had seen an ad on a particular channel (or combination of channels) further upstream, providing additional insight beyond that exposed by last-touch attribution. Neustar’s team also reviewed Neustar’s server access logs, parsing the logs’ user agent strings to glean insights into traffic and conversion patterns by operating system and web browser.

Data represented covered over 500 different inventory providers across key vertical industries such as telecommunications, finance, media, beverage, retail, automotive, and consumer packaged goods.

APPENDIX

Glossary of Terms

  • Ad Event: The delivery mechanism (envelope) for the impressions and audience data that Neustar counts and reports on.
  • Attribution: Credit, typically given to an ad for leading a user to a subsequent conversion.
  • Average Frequency: Amount of times a user sees an ad within x period of time within y channel.
  • Channel: Electronic mediums used for communication such as blogs, social networks, web portals, etc.
  • Click: A record that a user has clicked on a specific advertisement or message.
  • Conversion/Action: A record that a user has performed a particular action (purchase, acquisition, etc.).
  • Converter or Converting User: A user who performs a conversion/action.
  • Cost Index: A comprehensive cost measure, encompassing eCPA, eCPC, and eCPM.
  • CPA: Cost per one conversion/action.
  • CPC: Cost per one click.
  • CPM: Cost per 1,000 impressions.
  • CPUU: Cost per unique user.
  • eCPA: The effective CPA of the data (total data cost/total number of conversions).
  • eCPC: The effective CPC of the data (total data cost/total number of clicks).
  • eCPM: The effective CPM of the media (total media cost/total number of impressions x 1,000).
  • eCPUU: The effective CPUU of the data (total data cost/number of unique users).
  • Exchange: Technology platform that facilitates the bidded buying and selling of online media advertising inventory from multiple ad networks.
  • Exclusive Reach: The size of audience reached that was not seen on any other channel (i.e., seen only on ad network and not on social, exchange, or other).
  • Frequency: Amount of times a user sees an advertisement.
  • Frequency Cap: Maximum number of ad impressions served to a user per day.
  • Funnel Attribution: A complete view of credit given to every touch point prior to and including a conversion (from first touch to last touch).
  • Impression: A record that an ad was shown (clicked or not).
  • LTA: The current industry standard for attribution. Last-touch attribution gives full attribution to the most recent ad event (either the most recent click, or if there are no clicks then the most recent impression).
  • MTA: Multi-Touch Attribution refers to attribution models that extend credit beyond the last touch. Neustar’s MTA solution is a time-based, multi-touch attribution model that provides credit to all ad events in a user’s history, with more credit going to ads closest to the conversion point.
  • Network: A company that connects advertisers to web sites that want to host advertisements. The key function of an ad network is aggregation of ad space supply from publishers and matching it with advertiser demand.
  • Online Event: All Neustar traffic seen on a particular operating system or web browser.
  • Operating System: A collection of software that manages computer hardware resources and provides common services for computer programs.
  • Portal: A website that brings information together from diverse sources in a uniform way.
  • Quality User: A user that was seen multiple times on a single channel within a specified period of time. Because the user is seen again, this generally means that their likelihood to click or convert is higher than a generic user who is seen only once and then never seen again. This qualification is used to eliminate the poorest quality users that are the most difficult to target or track in the future.
  • Reach Efficiency: Impressions x CPUU x exclusive reach.
  • Social: Includes any company that drives campaigns directly through a social media channel or website that is focused on enabling users to be part of a community.
  • Stack Rank: Ranking several metrics against each other to determine a scoring value.
  • Unique User: De-duplicated count of individual users seen across a channel, operating system or web browser.
  • User Quality Index: Represents the ability to consistently market to quality users.
  • Web Browser: A software application for retrieving, presenting, and traversing information resources on the World Wide Web.

DISCLAIMER
Only inventory providers with a meaningful amount of impres- sions are included in this report. When selecting items for inclu- sion in the report, Neustar’s data science team selected metrics that were clear and meaningful. Granular measures were broken down along many categories, which resulted in a large amount of data. Rather than reporting all of this data, the Neustar team chose to high- light those measures that give meaningful insights into the data set as a whole.

All data contained in this report is proprietary and owned by Neustar. Any and all data that you wish to use or redistribute needs the prior consent of Neustar.