Research by the Atlas Institute shows that the conversion rate from Search advertising is 22% better when used in conjunction with Display advertising.
The study demonstrates that there is a quantifiable “synergy” between these two channels and will hopefully encourage advertisers to take a more integrated approach to their online marketing.
The research is welcome because there are still companies out there who are shifting their budgets from display advertising into Search without a full understanding of how this might affect their conversion success or long term prospects.
Esco Strong, the Atlas research author, says that there are three key reasons why the synergy exists.
(Synergy is a word I like to see used sparingly – and never in the plural – but it seems apt in this case.)
To summarise …
1) Display advertising generates brand awareness and increased purchase intent, reinforcing messages from other channels.
2) Display ads can help win over interested users who may be “on the fence” about purchasing.
3) Search may be used as a navigational tool on a repeat visit to sites which users have previously visited via a display ad.
As the study makes clear in its recommendations, online marketers need to have a better overview of how different online channels are performing and what balance is most effective, for example by ensuring they do enough display advertising without reaching the point of diminishing terms.
Organisations need to have the right technology in place as well as co-operation and consistency in reporting between different online departments.
The good news is that, as online marketing has become more strategic, companies have appointed managers and directors with an overall responsibility for different online channels. It is part of their remit to have the right co-operation and analytics in place.
However, more organisations need to recognise that the money they are giving to search engines and affiliates for clicks and sales, for example, does not necessarily give an accurate proportional representation of which online channels are giving them the most value.
For practical reasons, there is a culture of giving credit to the channel at the last point of the customer journey before conversion.
Strong told Clickz News: “The ROI model that has been used for so long, where the last transaction gets credit for the sale, is a very simplistic view. It’s really a multi-dimensional problem that requires looking across different channels … People have been complacent with this simple view, but there’s growing interest in measuring across channels.”
This research will hopefully provide some impetus for many advertisers who need to work on building a clearer understanding of their customers’ journeys (both offline and online) so they can allocate their marketing funds as appropriately and effectively as possible.
To help this process, it makes sense for businesses to choose technology platforms and analytics which can enable marketers to compare “apples with apples”.
We are due to publish our 2006 Web Analytics Buyer’s Guide next month and it is encouraging that leading vendors are increasingly keen to stress that they have the technology and services to facilitate an integrated approach to online marketing.