March 19, 2008

New Data: How to Maximize Impact of Email Newsletter Ads - 4 Takeaways on Ad Recall, Forwards & More

SUMMARY: Ads in third-party newsletters can generate plenty of leads. But you should focus on an ad campaign's longer-term effect -- not simply immediate clicks.

A new study by a professional association offers 4 takeaways for marketers wanting to maximize the impact from enewsletter ad campaigns. Among the findings: trust and believability go much further than tantalizing incentives.
Some marketers and ad agencies treat their email newsletter campaigns like Web banner ads: they focus on immediate clicks. But this might not fully show how subscribers respond to ads.

Hank Berkowitz, Director, Online Publishing and Business Development, American Institute of Certified Public Accountants, says the most successful campaigns he has seen in his newsletter can’t be measured simply by clicks.

“We haven’t seen a direct correlation between clients who are continually renewing campaigns with us and direct clicks,” Berkowitz says. “Some of our longest-standing clients are in the middle and lower tiers in terms of clickthrough rates.”

To illustrate how financial planners interact with ads, Berkowitz and his team conducted a survey of more than 2,000 readers of the AICPA’s flagship newsletter, the CPA Insider. The survey measured response rates to different types of ads and asked readers to describe how certain creative elements influence their recall and buying decisions.

The answers may provide new insight for marketers -- particularly on ad creative and strategy for conservative buyers with a longer sales cycle. Here are Berkowitz’s top 4 takeaways:

-> Takeaway #1. Direct clicks don’t represent complete response rate

Clicks represent only a portion of an ad campaign’s impact on an audience. There can be a significant “latent effect” on readers who don’t click on ads right away.

Berkowitz says he has seen many advertisers call the day after a newsletter has been published, expecting to see a surge in traffic to their websites or landing pages. In fact, those ads will affect readers long after they received an email newsletter. Clicks will continue for 14 to 21 days.

To measure this effect, the survey compared recall rates and a series of actions for newsletter readers who clicked and *did not* click on an ad.

Here are some of the key metrics:

- Ad recall rate
o Readers who clicked: 27.7%
o Readers who did not click: 21.8%

- Saved ad for future reference
o Readers who clicked: 34.1%
o Readers who did not click: 30.3%

- Called company or visited website
o Readers who clicked: 19.9%
o Readers who did not click: 14.3%

- Forwarded the ad to a colleague
o Readers who clicked: 4.5%
o Readers who did not click: 6.7%

The survey also measured readers’ banner ad recall rates for three time periods after delivery:
o 1-7 days after viewing: 32.4%
o 8-14 days after viewing: 26%
o 15-21 days after viewing: 25.3%

To help capture latent responders, Berkowitz tells his newsletter advertisers to coordinate their marketing elements across multiple channels: websites, direct mail, tradeshow booths. Consistency helps reinforce the message to readers. Those who come back later need a hook to remind them of their interest.

Another tip to capture latent response: Include a telephone number in your ads. A previous study with his advertising clients showed Berkowitz that 50%-60% of the total response came from calls to the company rather than visits to the website.

-> Takeaway #2. Sex doesn’t sell; trust and believability does

Because of this latent effect, Berkowitz says the most effective ads should take an educational approach. They should provide resources or services that prospects would use during the research phase of a purchase decision. Using a hard-sell approach and limited-time offers will not resonate with readers after the initial newsletter delivery.

For instance, CPAs are a conservative bunch, says Berkowitz. They’re often diligent about choosing products and services. If they work in the accounting departments of large companies, they often are part of a large committee that makes buying decisions.

The survey quantified this conservative mindset by asking readers to rank eight attributes of advertisements -- such as believability, actionability and interesting creative/message --- that were most likely to influence recall and ultimate purchase decisions.

Here are the top three attributes that influenced key reader responses:

- Ad recall
1. Understandable
2. Relevant
3. Believable

- Purchase influence
1. Understandable
2. Believable
3. Memorable

For this B-to-B audience, it’s clear that the substance of an ad matters more than style. The best ads provide useful information.

This characteristic was demonstrated even more clearly when the survey asked specifically about the use of head shots in advertising. Head shots had a big impact on ad recall and purchase decision:

- Recall rate
o Ads with a head shot: 44%
o Ads without a head shot: 27%

- Purchase influence
o Ads with a head shot: 11%
o Ads without a head shot: 2%

Another preference became clear: Ads that featured head shots of realistic looking CPAs, such as conservatively dressed men, had more impact than ads that featured head shots of models. They were 17% more likely to be recalled and five times more likely to influence a purchase decision.

->Takeaway #3: Frequency works -- up to a point

Ads in third-party email newsletters should not be viewed like a one-off blast to a mailing list. Their effectiveness depends on the frequency with which those ads appear, according to the AICPA study.

The survey determined the impact of frequency by comparing the recall rate and purchase influence for ads that ran on different schedules during a six-week period.

For advertisers who appeared once or twice during the six-week period:
o 14% of readers could recall the ads
o 2% said the ad influenced their purchasing decision

For advertisers who appeared three or four times during the six-week period:
o 41% of readers could recall the ads
o 6% said the ads influenced their purchasing decision

But the survey also found a limit to the boost advertisers get from frequent insertions. Ads that appeared more than five times during the period saw the recall rate drop to 33% and the influence rate decline to 5%.

Too many insertions in a newsletter can lead to ad blindness. Berkowitz recommends that his clients run every two or three weeks during their marketing cycle.

-> Takeaway #4. Sponsored content outperforms banner ad

Subscribers to CPA Insider look for education, insight and news related to important industry trends and practices. For similar verticals, marketers should gear their campaigns toward this educational/product-research phase of a prospect’s buying process.

The survey found that sponsored content -- white papers and case studies -- garner more attention than banner ads:

- An analysis of the amount of time readers spent on specific elements of an email newsletter found that sponsored editorial pieces get about 90% of the time that readers typically spend on a regular, by-lined column from the newsletter’s authors. That means sponsors’ content gets as much attention as content prepared by the publisher.

Despite that draw, Berkowitz says he still sees clients using the same banner ad creative they might run in a brand-awareness campaign on third-party websites in the email newsletter channel.

- What’s more, the survey found that marketers can significantly improve their results by running a combination of sponsored editorial, banner advertisements and text links within the same newsletter.

An advertiser who has a presence in more than one place within a given newsletter will probably get more attention from readers. But including sponsored content is a key to maximizing results:

- A combination of a banner ad, text link and sponsored content achieved 8 times the number of relative clicks as did a combination of a banner ad and text link alone.

“These people like to read,” says Berkowitz. “If you don’t have the sponsored content to reinforce the message in your ads, they are less likely to remember who provided the information.”

Useful links related to this article

AICPA’s ad analysis and sample ads:

Executive summary of the AICPA survey:

Bay Street Group - helped with the survey:

American Institute of Certified Public Accountants:

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