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Two of the main advantages that PPC has over other forms of advertising are transparency and control.

You can see exactly where you are advertising, and control the amount that you pay per conversion with great precision. If you know your conversion rate then you can adjust your cost per click to get any CPA that you want.

When advertisers use Google’s Display Network, it’s inevitable that many apply the same logic to it. They have a target CPA, they know the conversion rate, and so they set the bids accordingly.

But is this the right way to go about it? Many advertisers advertise using banner networks, and it appears that the psychology is very different outside the AdWords environment.

Billing is often based on cost per thousand impressions, which makes the click through rate as important as the conversion rate. This is a totally different model to a CPC model in Adwords.

The lack of transparency and control that you frequently get if you advertise on banner networks encourages advertisers to think about such campaigns as a branding exercise, but this does raise a question.

For a lot of advertisers on AdWords, the display network doesn’t generate an acceptable CPA, and so they don’t use it. Yet at the same time, they are happy to run banner campaigns in order to raise their brand profiles, knowing that the numbers don’t stack up in terms of a direct return on investment (or not knowing whether they do or not).

Google has been quite keen to change the perception of advertisers, you can bid per thousand impressions and they report on View-through conversions. But the message doesn’t seem to be getting across. Or is it?

I think that the main problem is the transparency of the AdWords account performance. As an agency, we send weekly reports to clients showing the performance of the account week on week, and in some cases, our management fee is connected to the performance of the account.

Certainly it’s something that comes up in the discussion when it gets to contract renewal time!

It’s the same for most (all?) agencies – they are judged based on the performance of the account, and even when accounts are managed internally, the account manager is often under similar pressures to deliver good performance (in terms of the objective).

How can a branding campaign that isn’t cost-effective fit into such an account?

Simply put, because it’s easy to assess the performance of the AdWords account, advertisers are reluctant to include ineffective campaigns, such as display network campaigns used for branding purposes.

Yet at the same time, the same advertisers are plunging large amounts of money into banner advertising, where they have far less control or visibility.

So what’s the answer? I believe that advertisers should consider using an AdWords Display Network campaign in the same way that they currently advertise using banners. By ring-fencing a budget for a branding campaign, and assessing its performance separately, using a separate objective, this shouldn’t cause any difficulties.

When you think about it, AdWords has a reach far exceeding many banner networks. Who else can display your adverts on Google Mail or YouTube?

And by giving you visibility on exactly which websites you appear on, allowing you to bid differently on each website (and even each page), block certain sites, or show different adverts on different websites, and test different adverts to see which delivers the best click through rates, Google allows you to deliver a far more refined campaign than almost anywhere else.

So perhaps the question that any advertiser advertising on a banner network is, why wouldn’t you want to advertise on the AdWords Display Network?

Shane Quigley

Published 29 November, 2011 by Shane Quigley

Shane Quigley is Co-founder at Epiphany Solutions and a contributor to Econsultancy.

8 more posts from this author

Comments (4)

Manfredi Sassoli de Bianchi

Manfredi Sassoli de Bianchi, VP Marketing at jobinasecond

Good article, I agree with you 100%. Marketing performance on the GDN is often above that of other networks and ad relevancy should improve further thanks to its recent acquisition of Teracent. I also think that as adwords integrates with Analytics and we are able to optimise to metrics like page views and time on site, the GDN will also be a good network for more awareness driven campaigns.

almost 5 years ago

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Lari Numminen, Creative Director at Timgu Ltd

Thanks for the interesting article.

In many cases the Google display network simply can't match search campaigns in terms of CPA performance, but it usually performs better than 90% of the premium display ad networks used for branding.

You may consider taking in to account the view-through conversions when communicating to your clients the added branding value of display ads.

over 4 years ago

Tom Cull

Tom Cull, Director at Carat Manchester

I agree that GDN needs to be treated separately to PPC however with so many available targeting and optimisation options available within GDN, I don't think it is simply a case of ring-fencing it and classing it as brand activity – it needs to be treated as a discipline in its own right with abilities to deliver activity across both brand and response campaigns. We have many instances where GDN activity costs in at far more efficient levels than generic PPC on a pure response basis, particularly in those markets where PPC landscapes are heavily congested and CPCs are high – equally we have had great success in using it for re-targeting and also branding, looking at post-view metrics as well.

In addition, regarding your comment of “Billing is often based on cost per thousand impressions, which makes the click through rate as important as the conversion rate. This is a totally different model to a CPC model in AdWords” – I’d disagree here: CTR is an integral part of Quality Score, and to ensure Paid Search (AdWords CPC) campaigns are run at their most efficient levels, with the lowest CPC’s driving the highest positions, Quality Score and therefore CTR should be optimised holistically with Conversion Rate, thus achieving a balance of strong CTR reducing QS and therefore cost while maintaining the highest conversion rate possible.

over 4 years ago

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Shelley Ellis

Tom, I agree. The GDN isn't just about branding. I do have to say though that the features in the GDN can take branding to a whole new level with interest based targeting, topic targeting, remarketing. With view through conversions, its also now easier to see how banner (and other ad formats) contribute to conversions. But...I'm also seeing success with other forms of marketing: leads generated, sales, etc.

over 4 years ago

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