Monday, October 22, 2007

He has no credibility, but I think he's 100% correct

For several months now, I have been privately telling anyone willing to listen that search advertising, though incredibly effective, is over rated. At first glance, it would appear that advertising to someone in context of his search activity is an utter utopia for marketers. What better time to advertise a DVD player, for example, than when a consumer types "DVD player" into Google's search box. I agree that in context advertising is as close to utopia as marketers will ever get, but they cannot ignore their other marketing efforts.

What many search advertisers are failing to consider is the impact all their other marketing spend has on their search spend. Back to my example: when you search for "DVD player" on Google, there's a reason why you're 100 times more likely to click on a link to Samsung rather than a link to Apex. For starters, you have heard of Samsung but you've probably never heard of Apex. Second, when you researched various DVD players over the prior few days, you read a lot of positive reviews about the Samsung product but saw next to nothing on the Apex product. Finally, Samsung has a high-tech, high-quality brand. Apex has a cheap, made in a low quality way kind of brand.

Today Bloomberg news reported that Brian McAndrews, an executive at Microsoft, predicts ad buyers will switch away from search advertising and towards display advertising. At face value, it looks like a desperate attempt from Microsoft, which is badly trailing Google in search, to pooh-pooh the segment where it is weak and try to persuade advertisers that banner ads are more important. It's definitely a convenient argument given Microsoft's massive quantity of unsold banner ad inventory and weak search market share.

However, there is an element of truth in the statement. Advertisers are failing to examine the impact their non-search advertising is having on search. They are attributing all of their advertising success to search simply because it is usually the last ad seen by a user before the purchase. Just because it's the last ad doesn't mean it's the only (or even most) important one.

What advertisers need -- and what I would like to invest in -- is a company offering a web-based analytic product that helps bring banner ads, email marketing and search marketing all into a single dashboard/framework. It would allow an advertiser to measure the impact of increased banner advertising on the efficacy of its search marketing. In other words, the tool would allow advertisers to properly measure and allocate performance across ad media.

I have yet to come across such a product. Have you?

14 comments:

Chris said...

We have to agree, we were spending about $1,000 per month on Adwords, with little, if any success. We are getting equally as much traffic from articles, the new blog, and building our mailing list, as welll as gorilla postings on other sites, digg, etc... While Google is trying out content advertising on websites, only the big fish can play now. They want us to try CPM, which only makes them rich. I will never pay for CPM, ever. For the money, I get better results elsewhere & I wonder how long I will stay with Google. Maybe I'll come back when they get the content targeted website adverting going, instead of worthless search advertising...

Dan said...

I think it's a fascinating area, but I'm not sure the dashboard you're describing would be much of a silver bullet. A huge amount of influence derives from offline media, including positive press, product placement and word-of-mouth, none of which is really measurable within the same frame of reference as clicks, conversions, etc. To use your example, I think online display ads probably play a tiny or non-existent role in the credibility of the Samsung brand.

Ironically I think marketing spend is going to go both ways -- becoming ostensibly more measurable (even if the measurements are misleading) as more advertisers spend more on CPC and CPA models; and less directly measurable as brand advertising continues to shift to content-based approaches from traditional paid media.

It also really depends on the kind of product or service being advertised. Maintaining and growing market share in CPG sectors vs. driving online software sales and subscriptions, etc.

Having said all that, people need to invest in this space. I worked with a major luxury car manufacturer a couple of years ago on an integrated marketing measurement project. It was truly terrifying to see how fragmented all of the important data really was, in part because the media spend and accountability was distributed across multiple departments, creative agencies, media agencies and direct marketing agencies.

Anonymous said...

I am not sure how far the Advertising model going to go in this economic downturn. You may find this post interesting.

http://jacobsmith.wordpress.com/2008/02/20/there-is-no-free-lunch/

manny said...

As far as my knowledge goes, a considerable portion of search revenues comes in through smaller advertisers who do not have a brand so to speak. These advertisers view search as an alternative with a better ROI compared to yellow pages.

Ryan said...

Jeremy, I think you are correct in your analysis that pay per click advertising is not the only solution marketers should look at. We've been doing a lot of work around user-generated content and the impact blogs, customer reviews, etc. have on customer behavior and firmly believe that an effective marketing campaign is 1) continuous on a day to day basis (the blogs, YouTube, etc. never go quiet, so why should your marketing), 2) must include some form of a "conversation" with the customer and 3) is going to be multi-modal in nature. Nice post.

RevuPages.com said...

Jeremy,

I agree 100%. All of the innovations in the online advertising, local advertising in particular, have been ad techniques based on Dollars as opposed to relevance. this is giving national advertisers advantage over the often more relevant local advertisers for explicit local search queries.
I also think this contributes greatly to poor local search.
This is very interesting subject. My company is launching a NEW PLATFORM combines social content and local advertising.

My 2 cents,

RevuPages.com said...

To CHRIS,

Are you a small business owner? If you customers are mostly local, i think you should change your technique completely. Ill be happy to tell you more about our new platform and products.
G. Luck

Dash Chang said...

Came to your post via the VC Channel.

Branding advertisers are not served well by online publishers. 200 pages of research at

BTW: Why no credibility? The headline does not tie to the content.

Dash Chang said...

Branding advertisers are not served well. 200 pages of research at The New Economics of Advertising for your reference. I don't think you have time to read 200 pages ;-)

Huge opportunity for disruptive venture - while Yahoo, Google, and Microsoft are distracted with legacy projects.

Jeremy said...

Dash, he has no credibility because he works for Microsoft which has been a weak player (despite meaningful effort) in search marketing but is a significant player in display advertising.

ross said...

Jermey,

My company was actually pitched just today by an analytics company (http://c3metrics.com) that claimed to track not only the conversion, but the originator of the lead, and also what they call the "assist". For example, if a person comes to our site from say a CPA network, then that person leaves and three days later the same person clicks a lead back banner, then leaves again but Googles our branded search term 10 days after that and signs up, they will show you who the originator (CPA), the assist (Leadback Banner), and the conversion (Google) was for that person.

Jeremy said...

Ross, thanks for the tip. I took at look at C3Metrics, and indeed it looks quite interesting. Thanks!

sunny rahman said...

EarlyEntrepreneur is for young entrepreneurs looking to seek tips about entrepreneurship and business advice For Young Entrepreneurs, by young entrepreneurs

Larry Klecker said...


Minneapolis Condo Guide Search Minneapolis Condos, Lofts Real Estate "Jason Geschwind", Minneapolis MINNESOTA Condo Real Estate Agent Access Realty