How would you respond?
Refresher
Search ads are used
to instantly connect a business with customers.[1] They are also known as paid search ads or sponsored
links on a web page, based on the search terms entered in a search engine. Search ads can be extremely effective by
dropping your product/service on a customer’s lap who is ready to purchase.
Display ads appear as
banners on the top or sides of web pages.
They are often used to remind customers of previous searches or page
views to nudge them to visit their site and lead to conversion. In the Tech Crunch page to the right, the
online advertisers knew that I had been browsing the Sony Flip laptops at Best
Buy’s website. Also, they knew I had
recently purchased a new car and had shopped around for insurance rates.Recent Findings
In an article published by
the Harvest Business School, Pavel Kireyev, Koen Pauwels, and Sunil Gupta
explained that many firms justify higher online marketing spend by analyzing
metrics such as click-through rate (CTR) and cost per acquisition (CPA). However, they explain that standard online metrics
are “plagued with attribution problems and do not account for dynamics.”[2] Attribution problems occur because, based on
limitations, we which ad really leads to conversion – search or display ads.[3]
“When you look at most
consumers’ behavior, they do a search on Google when they are ready to make a
decision,” says Gupta. “So search ads get all the credit for the sale. But
search ads are at the bottom of the [purchase] funnel; display ads are at a
higher level. Everybody in the industry intuitively believes that display ads
drive people down the funnel, so they should get some credit—but they don’t.”[4]
Results
Based on their research,
they concluded that display ad exposure not only increases search conversion, but
also increases search clicks, increasing the overall search advertising costs. Their study of a large commercial bank found
that for “each $1 invested in display and search leads to a return of $1.24 for
display and $1.75 for search ads, which contrasts sharply with the estimated
and returns based on standard metrics.”[5]
Other Options
While internet users today
are being bombarded with more and more banner adds, there are other tools being
used to lead to conversion. Mike Volpe, chief
marketing officer at HubSpot, says the level of targeting and personalization
that can be done on social media sites is where much of the action can be found.
For instance, Facebook offers “Sponsored Stories” and Twitter has “Promoted
Tweets” integrated into a site’s content.
Also, sponsored tweets from celebrities can be highly effective and
provide another outlet to reach target audiences. However, the social-video advertising could
be the fastest growing ad medium in history, reaching 5.6 billion ads watched
in 2011, according to Brian Shin of Visible Measures.[6]
Conclusion
When little information is
available, the short answer to the manager probably would be to increase search
over display ads. However, the long
answer would include outlining your overall business objective, performing a
baseline analysis with A/B testing, a review of the firm’s key performance
indicators (KPIs), and a study on the attribution and dynamics of search and display
ads. The firm will be more successful if
it is continually monitoring, analyzing, and acting on the lead information
gathered from these tests. In the end, the best answer may be allocating more advertising spend on other tools.
Other Resources:
Over the past year, the world of paid advertising has evolved significantly, What's a key benefit of responsive display adswith many new tools and features now offering advertisers more dynamic ways to reach their audiences.
ReplyDelete