Your intuition tells you that reaching customers more often across more channels will inevitably improve your brand recognition. But with very little research to support this, and given the industry standard of giving the “last ad clicked” 100 percent of the credit for a conversion, it’s been difficult to prove this theory. And to further obscure your marketing vision, the online channel where that click occurred gets sole credit for the sale.
In the increasingly advertising-filled online environment, though, you know that you’re often exposed to more than one message from a marketer before you buy. You see a display ad one day, a video ad the next day and maybe the day after that you search for the product and purchase it. If the search ad is the only one getting the credit for the conversion, obviously the marketer isn’t getting the full story.
To prove the importance of running and measuring media across multiple channels, we examined how search and display – two of the biggest online channels – work together. Our research clearly showed that users exposed to both channels are more likely to convert than users exposed to search advertising alone.
Eleven advertisers who track both display media and sponsored search clicks through Atlas were analyzed for the month of April 2006. Each advertiser’s primary conversion was considered, and users were classified as having converted or not converted. (Repeat conversions were not considered in calculating conversion rates.) Finally, each user’s history was evaluated and then segmented into an exposure group depending on the media types he or she had seen or interacted with. More than 10.8 million impressions and 2.5 million search clicks from 1.8 million users were analyzed for this study.
For the purpose of this analysis, users were segmented into three distinct groups based on their media exposure:
- Display Click Only. Users who clicked on display advertising but had no search clicks from the same advertiser.
- Search Click, No Display Impressions. Users who clicked on one or more sponsored search listings but had no display views or clicks from the same advertiser.
- Search Click Plus Display Impression(s). Users who clicked on one or more sponsored search listings and had one or more display views and/or clicks from the same advertiser.
The first thing we set out to do was determine how often overlap occurred between search and display to see whether these results would be significant enough to analyze. The research found that 44 percent of users who clicked on sponsored search listings also received display ads from the same advertiser, making up a significant portion of both the search and overall reach.
Figure 1 shows the relative conversion rates for the three groups. Using the Display Click Only group’s conversion rate as a baseline, we see that Search Click Only users convert at a rate more than three times higher. Users exposed to both search and display convert at an even higher rate – 22 percent better than search alone and 400 percent better than display only. Clearly, even in the presence of search there’s good reason to supplement users with display advertising – an idea that’s been overlooked as online advertising dollars have increasingly gone toward search.
There are a number of likely reasons for the synergy between search and display. First, display advertising is a proven method of generating brand awareness, message association and increased purchase intent. Thus, it’s a great way to reinforce both acquisition and brand messaging that users may receive from other channels. Display messaging can help win over users who are interested in a brand or product that they’ve previously searched on but may be on the fence about purchasing. Display also likely drives brand searches – a valuable initial step into the purchase process. Finally, search is often used as a navigational tool for users who cannot remember a website’s URL.
Consumers may first visit that site by clicking on a display ad, then revisit subsequently via search when they’re ready to purchase or register.
Viewing the results in greater detail, data from eight of the 11 advertisers showed that users exposed to both search and display media outperformed those who only interacted with search. The lift values differ greatly across the advertisers used for this study, suggesting that the synergy between these channels is highly variable and should be measured on an advertiser-by-advertiser basis. The results are shown in Figure 2.
Advertisers 1 through 8 in Figure 2 demonstrated significant lift for users who viewed display advertising along with search. Advertisers 9, 10 and 11 showed conversion rates that were essentially equivalent (zero lift) for the two groups, as demonstrated by the standard error bars that appear over their data points and that cross zero. These values indicate that there’s very little, if any, synergy between the online search and display channels for these advertisers.
This could be due to a number of factors. For example, the advertisers’ media may not be producing much overlap between the groups, or they may have run large off-line marketing campaigns that influenced all three exposure groups. The difference between the lowest and highest significant lift values here was more than eightfold, highlighting the broad spectrum of cross-channel performance possibilities that exist depending on the advertiser and campaign.
Users exposed to both media types not only registered higher conversion rates but generally also showed higher search click-to-conversion rates. This means that not only were these users more likely to purchase or register, but their individual search clicks were also more valuable when tracked to conversions on the back end. This is especially important when considering the increasing costs advertisers are paying for search. Display advertising can increase the return on ad spending on search and thus justify some of the higher prices for specific keywords.
THE IMPACT OF DISPLAY AD FREQUENCY ON SEARCH
Another point of interest is the impact of display ad frequency in driving conversion results for users exposed to both display and search. Again, the results varied by advertiser, but generally those users who viewed three or more impressions in combination with at least one search click had better results than those who viewed only one or two impressions. Both conversion rates and search click-to-conversion rates climbed significantly for these users, further suggesting the benefit of display advertising when paired with search.
There does, however, come a point of diminishing returns when display ad frequency gets too high. For many advertisers, higher frequencies tended to yield lower conversion rates even when paired with search – a discovery that’s consistent with previous research on optimal frequency. Thus, when planning search and display campaigns, advertisers should keep in mind that while there’s a synergy between the two, too much display can be wasteful.
WHAT THIS MEANS FOR ADVERTISERS
Our research indicates that advertisers should keep the following suggestions in mind as they plan and carry out their search and display campaigns:
Measure the synergistic effect between your search and display campaigns. Our research clearly shows that users exposed to both channels are more likely to convert than users exposed to search alone. Identifying which sites and keywords are producing a synergistic effect opens a new strategic optimization opportunity. For example, increased search click-to-conversion rates seen for display and search together allow advertisers to pay higher costs per clicks (CPCs) as well as bid to position their keywords higher while maintaining the same return on ad spending.
Buy display media that maximizes reach to users who’ve clicked on your sponsored listings. On average, 44 percent of search users are also being shown display media from the same advertiser, and very often a synergy occurs when these formats are delivered together. Third-party ad-serving data enables advertisers to measure the overlap across channels, adding another dimension to their display media-buying criteria.
To increase conversion rates, maximize the reach of your campaigns and reduce their frequency. This was an important lesson learned from optimal frequency research, and the same rule of thumb applies when optimizing the synergy between search and display. Advertisers can measure where their display ads hit diminishing returns and should minimize waste via frequency caps and budget adjustments.
Track all of a campaign’s advertising touch points to get the whole conversion picture. Advertisers lose sight of significant value and optimization capabilities when measuring search, display, rich media and sponsorships in silos. Measuring the effects of all channels and types of ads will give advertisers the true story of the performance of all of their cross-channel campaigns.