This blog post originally appeared as my column in MediaPost's Online Metrics Insider on August 19.

In my last Metrics Insider column, I wrote about the question of how advertising works. The column generated some great comments, and I got some very thoughtful responses via email; some of you even sent me papers on different components of ad effectiveness measurement. This week, I want to revisit the topic, and perhaps amplify a few points.

1. Advertising works. There are reams of anecdotal, observational, and empirical data that demonstrates that advertising does indeed work. In the late ’80s and ’90s, I remember comScore’s CEO, Magid Abraham, then President / COO of Information Resources (IRI), publishing landmark work, based on hundreds of TV ad campaigns, correlating advertising and sales in a series called “How Advertising Works.” Magid found that incremental TV weight was able to generate sales increases for CPG brands 50% of the time. In our space, my company, comScore, does a lot of work quantifying the effectiveness of online advertising.

Advertising works in many different, sometimes mysterious, ways, with many variables affecting its performance (e.g. creative, media schedule, purchase cycle, share of voice, etc.) Well-designed research can measure that performance, and the best way to do so is against the advertiser’s objective. Suppose a campaign generates robust click-through, but no measurable branding impact. Did that campaign work? Certainly that depends on whether the goal was driving click-through or building brand awareness.

2. Online display advertising works. At my company, we have done hundreds of studies demonstrating the ROI of different kinds of online advertising. In one case study recently presented, we found that, among consumers exposed to a campaign, click-through accounted for only 10% of subsequent site visits and 14% of incremental dollar sales volume; view-through — consumers exposed to the campaign but who did not click on the ads — accounted for 90% of eventual site visits and 86% of incremental dollar sales. In other words, gauging the effectiveness of this campaign based solely on clicks would have missed 90% of the sales impact.

3. Online advertising drives offline sales. Sometimes people forget that the Internet is not a self-contained ecosystem. We can’t ignore the extent to which online advertising can drive offline sales, something else that can’t be counted with clicks. Using our panel and our ability to link it to offline databases, we have been able, time and again, to quantify the impact of online advertising on offline sales. Even for search advertising, wherein one might be tempted to believe the majority of effectiveness accrues in-session and via click, we have observed that 83% of the advertising impact on sales is either latent (sales on subsequent user sessions; 20%) or offline (63%.)

4. Search and display work better together. Another thing we’ve found is that when an advertiser runs a search and a display campaign simultaneously, the impact (as measured by lift versus a control group) of exposure to both search and display is greater than the impact of search alone or of display alone; in fact, impact of search and display together exceeds the sum of the effects of search and display impact individually. In other words, there is a synergistic effect; add two and two and you get five. And not surprisingly, much of the incremental sales generated by the combined exposure group occurs offline.

5. Display ads online are at least as valuable as display ads offline. Television still commands a significantly greater share of ad dollars than the Internet, at higher CPMs. In my last column, I noted that online ads that can be empirically tied to conversion tend to have greater perceived value than ads whose primary impact is measured by awareness, recall and other brand-building metrics. So let me make this point: the impression generated by one consumer watching a given spot presented within long form online video, in full screen mode, is at least as valuable as an impression delivering the same spot to the same consumer on traditional TV. (I would argue that the online impression is probably more valuable because it is likely to also reach the kind of younger, more tech-savvy and harder-to-reach consumer that is increasingly difficult for traditional TV to deliver.)

As we develop new ways to dedicate on-screen real estate to delivering captivating, engaging ads, whether via banner, rich media or emerging formats, I fully expect online display advertising to become an increasingly important component of the media mix. We don’t require a click-through from a magazine ad or a TV ad or a newspaper ad or a radio ad, and all these impressions are valued by advertisers. Impressions online should have at least the same value, wholly independent of the direct linkage to a click. The opportunity to generate that action online is a profound value-add, but let’s make sure that we properly value the ad before we overlay the value-add. Advertising can have immediate effect, but it can also have quantifiable mid-term effect, and profoundly valuable long-term branding effect. And that is as true for online advertising as for any other medium.

Regular visitors to this particular stretch of the blogosphere may remember my first ever comScore post, which charted the influx in traffic to MLS.com following the signing of David Beckham to the LA Galaxy…

A year on and online interest in the MLS remains strong, and I am pleased to say that the league became a comScore Media Metrix client in June 2008, in a month that saw the site rack up 394,000 U.S. and a total of 500,000 worldwide visitors.

Indeed, whether you want to attribute it directly to “the Beckham factor” or not (I, of course, am inclined to do so), U.S. interest in soccer is undoubtedly picking up, as this recent analysis of traffic to UEFA.com – the official website of the Union of European Football Associations and the tournament’s organizing body - during Euro2008 shows.

* Excludes traffic from public computers such as Internet cafes or access from mobile phones or PDAs.

**Rankings based on the 16 individually reportable European countries in comScore World Metrix, + U.S. Total European Internet audience figures are comprehensive and include visitation from countries that are not individually reportable.

European traffic to UEFA.com grew 163 percent in June 2008 (Euro2008 was played between June 7 and June 29) to reach over 9 million unique visitors. Outside of Europe, the tournament also generated great interest online, with unique visitor numbers increasing 223 percent to 8.5 million.

However the most fascinating finding is that during the month in which the tournament was played, U.S. traffic to UEFA.com increased more dramatically than any of the European countries analysed (277 percent), growing at a faster month on month rate than World Cup winners Italy (253) percent, and tournament hosts Austria (226 percent) and Switzerland (198 percent). This highlights the increasing popularity of the sport in the U.S. If the sky was crying when Bex left the U.K., it is certainly looking rosier over U.S. soccer fields these days…

I’m proud to tell you that on Tuesday comScore announced that it will be sponsoring the planting of more than one million trees through its new initiative, comScore Trees for Knowledge. The trees will be planted in developing nations across the globe as part of the incentive program that comScore uses to recruit and retain Internet users for its global panel.

The initiative is in partnership with the non-profit organization Trees for the Future, which has planted nearly 50 million trees throughout developing nations in Central America, Africa, and Asia. Not only do the trees provide environmental benefits by removing carbon dioxide from the atmosphere (one mature tree removes about 50 pounds of carbon dioxide each year just to give you an idea), but they improve the livelihoods of those living in these communities.

Check out the video below from Trees for the Future to see the impact trees can have around the world as told by its fascinating founder Dave Deppner.

Last week, I gave a keynote address at the 4th Annual ShopLocal Summit. ShopLocal.com is a multi-channel marketplace that houses online and offline retailer promo information. With an increasing number of retailers turning to ShopLocal.com, it has become increasingly important for retailers to not only understand the online marketplace but also how online marketing can help increase offline sales.

During my presentation, I shared some results from recent comScore studies that gauged the impact of online advertising on in-store sales. Using the comScore panel, offline sales impact can be measured by linking panelists’ exposure to online ads with their in-store buying (through the use of retailers’ loyalty card data). Lift is computed by comparing the offline buying of consumers who had been exposed to an online ad campaign with the buying of those who had not been exposed to the campaign.

We’ve seen some very interesting findings that I’d like to take a moment to discuss:

#1. Search advertising provides higher sales lift than display advertising, but when combined, the synergy provides the highest lift…

When comparing the offline sales impact among consumers exposed to ‘search advertising only’ with the impact among consumers exposed to ‘display advertising only’, search holds a clear advantage, with an 82-point lift in offline sales compared to a lower 18 percent increase among consumers exposed only to display advertising. This is because the people who get exposed to a search ad are much more likely to be “in the market” for the brand/category being advertised and as a result, a search ad will drive more offline buying than a display ad. But, what’s especially important to notice here is that exposure to both search and display ads provides the highest lift (119-points over the control), which is even greater than the sum of the two tactics alone.

#2. While search advertising results in a higher sales lift than display advertising among the people exposed to the ads, the number of people reached by display advertising is typically markedly higher than the number of people reached by search advertising …

When we look specifically at the total number of consumers exposed to ‘search advertising only’ versus ‘display advertising only’, we see that display ads typically provide the greatest reach by a long shot. Search advertising – which generates an impressive sales lift – typically reaches a much smaller percentage of consumers.

Key Takeaway: So what do these findings tell us?

Based on the research we’ve conducted at comScore, it’s clear that the use of online advertising is a terrific way to grow retail sales. But, what’s also apparent is that media planners need to consider both sales lift and reach when designing online search and display ad campaigns that are intended to drive offline sales. While search advertising generates a much greater sales lift among the consumers it reaches, the far broader reach of display advertising can more than compensate for display ads’ lower sales impact. Smart media planners will carefully mix their use of both types of online advertising so as to optimize the return from their investment in online marketing.

I’m interested in hearing your thoughts on the above and getting a discussion going online…Please let me know what you think about these findings via the comments link below.

Hello, my name is Steve Dennen, and I am a vice president of product management at comScore. I recently was interviewed by Steve Smith in his Behavioral Insider column at MediaPost, and thought I'd share the link with you here on the comScore blog. We discussed cross-media measurement, online/offline media planning and comScore Segment Metrix - click here to check it out.