Using both sponsored search ads and display advertising produces a better conversion rate than using either channel by itself, according to a study from digital marketing firm Atlas, a subsidiary of aQuantive.
The report, issued last year, studied a month’s worth of online advertising by 11 marketers, analyzing more than 10.8 million impressions and 2.5 million paid clicks from 1.8 million users.
Atlas Institute analyst Esco Strong told an audience at ad;tech Chicago that the study grew out of a realization that search and display advertising are mostly treated separately by advertisers, with very little cross-platform measurement to see how they interact, Strong told the audience. “But the question of interaction of these two channels has recently become a hot topic among our clients, who want to know the right mix between the two media,” he said. “We wanted to find out if there really is the synergy that a lot of folks have assumed, and to find out if it’s quantifiable.”
The resulting report took a look at 11 Atlas clients who used both display online advertising and pay-per-click search ads during the month of April 2006. Those clients’ online conversions were calculated, and ad users/viewers were classified into three groups: those who clicked on display ads from an advertiser but not search ads; those who clicked on search ads but had no display views or clicks for the same advertiser; and those who clicked on sponsored search listings and also had one or more display impressions or clicks from the same advertiser. That last group was large enough to be statistically significant: 44% of users studied both clicked on a PPC ad and saw or clicked on a display ad from the same marketer.
Atlas found that on average, users who clicked on a search ad without seeing a display ad converted more than three times as often as those who saw a display ad but didn’t click on a PPC ad. But the group that was exposed to both display and search advertising converted at a rate four times higher than the display-only group and 22% higher than those who saw search ads alone.
He added that lift values differed greatly for the advertisers involved in the study, indicating that synergies for the search and display channels should be measured by each specific advertiser for each campaign. Of the 11 advertisers tracked in a range of unspecified industries, four saw a much greater conversion increase among two-channel users compared to search-only users than the 22% average. In fact, one saw conversions run more than 60% higher using both search and display ads, Strong said; another saw a lift of more than 40%.
“On the other hand, three advertisers saw essentially zero lift using both search and display ads,” he said. These flat results could be explained by ineffective buys in either the search or display channels; on the other hand, the advertisers could have been spending on offline marketing campaigns that raised conversion rates both for search-only and search-and-display users, cancelling out any lift effects.
“The synergistic effect has been theorized for a long time, but it’s never been quantified,” Strong said. “This research tells us that it definitely exists.”
Advertisers who carefully measure the effects of their own online cross-media ad efforts may gain a strategic advantage by optimizing that synergy, he said. By supplementing search marketing with well-chosen display ads on sites and against terms that are appropriate for their offerings, marketers may get a lift in conversions that enables them in turn to spend more on search marketing, bidding against more expensive keywords or bidding their search positions higher without trashing their return on investment.
The report also found a strong correlation between display ad frequency and higher conversions among advertisers who used both media. Users who saw three or more display impressions in conjunction with at least one search-ad click had better conversion rates and click-to-conversion rates than those who only saw one or two display ads.
But advertisers must watch for a point of diminishing returns at which increased display frequency leads to wasted ad spending, the report pointed out.
And the report’s conclusions about synergy underline the importance of tracking all media centrally Strong said, to be able to compare their effects on a level basis. “If you’re using different silos or different technologies to track search and display ads, this type of analysis is impossible,” he said. “Tracking all online media centrally is the starting point for opening up the strategic opportunities of both search and display.”
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