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Coupons, Web Ads Click For Holiday Shoppers

Friday, 22 Dec 2006 | 1:47 PM ET

Sure, it pays to advertise –- but in the competitive holiday season, questions of when and where to place ads are what plague retailers.

Gary Drenik, president of retail, politics and media impact analysis firm BIGresearch, has answers that might surprise you. He told CNBC's “Power Lunch” that a National Retail Federation study ranked the most potent advertising venues, in descending order, as coupons, newspaper inserts and word-of-mouth –- the latter used as shorthand for viral marketing via e-mail, instant messages, text-messages and the like.

But Roger Selbert, editor and publisher of Integrated Retailing, told CNBC’s Bill Griffeth that 80% of consumers surveyed say they are unaffected by the ads they see. And contradicting Drenik, he cites one advertising type as particularly effective: Internet search-and-display spots, or ads linked to Internet search results.

A firm that Selbert says is hitting home runs all across the spectrum of ad venues: Home Depot. The home-improvement company gets a two-to-one return on ad expenditures, he says.

Drenik’s firm says consumers named spots for Target, Wal-Mart and Best Buy as their “favorite” ads –- though he pointed out that a mere 26% of consumers said they actually had a favorite, and his firm didn't specify the return on those ads.

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