Why Display Ads Will Become More Important To Search Marketers

Don't discount the impact of display advertising on paid-search ads or search engine optimization. Numerous studies throughout the years have detailed display's impact on search marketing, and the impact of search data on display ad retargeting. Integrated online marketing strategies require a variety of media, from search to display to mobile.

Display ads have become more like search in terms of the ability to finely target and optimize, according to Chris Sukornyk, CEO at Chango, which offers the data management capabilities of a data management platform with the media-buying capabilities of a demand-side platform. The company on Wednesday announced $12 million in funding and launched a programmatic site retargeting platform.

Sukornyk said historically, display advertising campaigns targeted "large buckets" of consumers or focused on context to find an audience. Advances in data management and the explosion of real-time bidding display now support highly, granular targeting that surpasses many of the features that search engine marketing campaigns do, he said, pointing to search retargeting and integrated dynamic creative pieces as examples. 

"The ability to harvest and analyze audience data will help inform smarter SEM campaigns," he said. "A good example -- we capture more than six billion searches each month, as well as all our customers' first party data. By analyzing who is actually converting, we can learn what they search for in the days leading up to a conversion and discover new keywords that might help inform SEM campaigns."

On Wednesday, Ben Schachter, Macquarie Capital analyst, released the Homepage Ad Tracker 1H 4Q 2012 report -- analyzing by vertical such as auto and retail, display advertising sales across the home pages of Yahoo, AOL, YouTube, Amazon and MSN.

Schachter's analysis of Amazon's plans for U.S. home page ads -- as the company begins to "ramp its display advertising business, not only on its own sites, but on third-party properties as well -- suggests the ecommerce site's home page ads will have a supporting role in site search strategy, as consumers continue to turn rely on Amazon for information on products.

Search marketers considering Amazon as an option for paid search should pay attention to Amazon's home page ads. In the report, Schachter tells us he has seen a larger share of brand-focused ad units, up to 26% in the first half of the fourth quarter of 2012, from 13% in the year-ago time period. During that same time, there was a slight decline in direct-response ad units, which fell from 43% to 37% compared with the prior year. A combination of both fell from 45% in Q4 2011 to 37% in the current quarter.

Schachter does not discuss Amazon's "Sponsored Products" paid-search ad program, but as more consumers use the site as a comparison shopping engine, companies like LexMod.com have found a way to take advantage of the offering.

In a post on Amazon's site, Moshe Melamed, co-founder of modern-furniture retailer LexMod.com, describes how Sponsored Products, which helps promote products listed on Amazon.com, generated more than $50,000 in sales for the company.

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3 comments about "Why Display Ads Will Become More Important To Search Marketers".
  1. Kevin Lee from Didit , November 21, 2012 at 8:53 p.m.
    There is of course the risk that wide adoption of "Do Not Track" as a default setting will take away large swaths of behavioral search-based display inventory. However, that alone doesn't decrease the importance of display to digital marketers, including SEMs, it changes the game and makes marketing mix models more important for the larger spenders.
  2. Sione Palu from Feynmance , November 21, 2012 at 10:07 p.m.
    The following may be a useful reading to marketers and analysts. The pre-print is freely downloadable from the author's website. Just Google the title and a PDF link will come up. The title is: "Pricing display ads and contextual ads: Competition, acquisition, and investment". It was submitted and appeared in journal of Electronic Commerce Research and Applications Volume 8, Issue 1, January–February 2009.
  3. Andre Szykier from maps capital management , November 23, 2012 at 3:25 p.m.
    "Pricing display and contextual ads...." is an excellent paper; however, it does not address the pricing through real time bidding (RTB) and the different ad models evolving on mobile, especially with ad video overlays.