Marketers are rushing to spend a significant part of their media budgets online. Many marketers believe they need to have a presence on the most popular and heavily trafficked websites in order to ensure that they reach customers. But a new study shows that targeting online niche audiences may provide a significantly higher ROI.
As the novelty of online communication and entertainment wears off, consumers are spending more time visiting specific sites and destinations that interest them. Media fragmentation of traditional media like TV has been well documented. And now, statistics from comScore indicate that audiences are widely split among various online sites.
Analysts at ContextWeb contend that marketers should spend more of their media budget on long-tail rather than short ‑ail sites. To support their argument, these analysts note that marketers who promote themselves on short-tail sites like Facebook and the New York Times often spend up to 70% of their display media to reach consumers who spend “only 14% of their online time” at these kinds of sites. When marketers shift part of their media budget to long-tail sites, they are seeing an increase in click-through rates (CTR) of up to 24%.
ContextWeb analysts point out that consumers who visit long-tail sites are often not short-tail site visitors. To reach these consumers, marketers must spend some of their budgets on long-tail sites. According to the firm’s calculations, consumers who enjoy the content at Scholastic.com, cafemom.com and Instyle.com in addition to other long-tail sites such as those devoted to knitting, are visitors who likely skip the short-tail sites.
Marketers are typically paying more to appear before consumers who log onto short-tail sites. Those who pay more than a 35% premium to appear on a short-tail automotive sites may find that their CTR lift is negated when the effects of a similar ad placed on a long-tail site are considered.
These statistics indicate that as the ad inventory increases online, marketers need to carefully consider how they allocate their media budget. Spending on expensive, general media sites will not always yield the best CTR rate or ROI.[Source: Intelligence Report: Long-Tail Sites. Contextweb.com. 2011. Web. 16 Mar. 2011]