Conversions, Not Clicks, Key To Display Ads
Marketers are often taught that click-through rates and conversion rates are the most effective metrics for analyzing their return on investment for online advertising. But smart marketers understand that even if a display ad generates few clicks, it is doing valuable work for a company.
Display advertising is often the first step in the lead generation process. In many cases, a display ad campaign can provide a prospect’s initial point of contact with your company. Although the prospect may not click on the ad, the display advertisement will create brand familiarity and trust, priming the individual for future conversion opportunities when he or she is ready to make a purchase.
While targeted keyword search campaigns are ideal for converting prospects who have already entered “buy mode,” display advertising can help marketers reach a much larger potential audience base. A display ad can even help a prospect recognize a need for a product or vendor solution before he or she has actively started searching.
Display advertising provides a substantial lift to paid-search marketing campaigns. Running a display ad campaign alongside a paid-search campaign has been shown to significantly increase sales volume: For instance, the customer relationship management solution provider Salesforce.com discovered that running a display campaign alongside a search campaign increased branded search and conversion volume by 80 percent.
Branded display ads often lead consumers to make purchases offline. A recent series of studies into consumer packaged goods purchases by comScore and dunnhumbyUSA found that in-store shoppers who had previously been exposed to online advertising of any form were likely to spend 21% more than customers who had not been exposed to online advertisements.
Search and display ad campaigns together can lead to a particularly dramatic increase in in-store sales: Shoppers who had previously been exposed to both search and display ads for a particular store were likely to spend 83% more than shoppers who had received no advertising exposure, according to a Yahoo and comScore study titled "Research Online, Buy Offline: The Impact of Online Pre-Shopping on Consumer Shopping Behavior," 2007.
Retargeting is an effective method to increase brand familiarity and lead prospects into the sales funnel. If a consumer has searched for your product or been to your company’s Web site in the past, you can use a retargeting campaign to show the prospect display ads for your site or product as he or she continues to browse the Web. While prospects will not always click on these display ads, this retargeting approach will keep your brand at the forefront of your prospect’s mind, serving as an essential component in the lead nurturing process.
Focus on overall conversions, not clicks
Rather than focusing on how many clicks a particular ad receives, marketers should instead take a wide-angle look at ad campaigns and how they convert into sign-ups and sales. To increase conversions:
- Hire a creative team to perfect the branding image and call to action in a banner ad.
- Create concurrent search ad campaigns to run alongside display campaigns.
- Focus on specifically targeting and retargeting specific types of desirable prospects.
Large brands are taking these lessons to heart: They are investing heavily in display advertising, with a 38% increase in display campaigns between the fourth quarters of 2010 and 2011. For smaller companies as well, increasing marketing expenditures on display ad campaigns in combination with paid-search marketing could prove to be a wise investment for raising brand awareness and increasing sales.