• by Laurie Sullivan  @lauriesullivan, March 9, 2009

A study by Microsoft's Atlas Institute attempts to define when and where consumers see ads online, and the effect the timing should have on the planning of marketing campaigns.

Microsoft examines the 90-day sales process and defines the "purchase funnel" by measuring the timeline, recognizing that companies often disregard 94% of data that is available to them, and identifying companies within the ad supply line that lead consumers to purchase. It also confirms that the last click is not the first point of reference for consumers, and gives credence to Microsoft's view of engagement mapping, which assigns a value to each ad along the way to the final click in the process.

The data analyzed in the study spans 90 days, and includes 250 advertisers running across thousands of sites. The study is based on 17 million conversions between May and September 2008, and tracks search and display in Atlas, Microsoft's third-party ad serving network.

Many marketing and advertising executives believe the sales funnel is dead, according to Esco Strong, senior group manager, Atlas Institute. "Those who think the funnel is dead are either unwilling or unable to measure it," he said. "There's a one-night-stand mentality online of come-with-your-wallet-out and we will capture the sale."

Not true, Strong said. Social media and photos reach consumers as they discover new products and services, and search advertising closes the deal at the end. But while the concept isn't new, he asserts that the study confirms at what point along the 90-day process ads contribute to the final sale.

In fact, the findings recognize that photographs tend to reach consumers between 30 and 60 days prior to the last click. Categories such as entertainment and news tend to reach consumers weeks or months before making the purchase. Social media tends to affect consumers 21 days prior to making a decision.

Users of social media visit sites to connect and share experiences with friends and family. Most of the functions provided by these sites do not lead directly to a final transaction. On the other hand, the act of gathering information through search engines tends to draw in consumers with a high probability of making a purchase at the end of the cycle.

For example, media buyers for the camera company Canon might want to build awareness on new products and services by starting campaigns in social media sites Facebook, MySpace and Twitter--then follow up with pay-per-click (PPC) campaigns on Google, Microsoft or Yahoo to close the deal.

The study shows that most ads influence consumers as early as 60 days prior, but about half of the ads get conversion credit under the last ad and last click model within the final five days. But this method favors the bottom of the funnel, not giving credit to those at the top that might have built awareness for the product or service. "It's a myopic view that disregards the points at the top of the funnel that brought the consumers down to the bottom," said Strong, who called the study "the scientific part that complements the art of planning a campaign."

Strong believes it's important to understand where different publishers live in the marketing funnel to better optimize campaigns and buy on sites that live in all. For instance, the data reveals that travel site Orbitz tends to reach consumers 22 days prior to taking the last step, compared with Expedia and Travelocity at 17 days. "You make someone aware at the top of the funnel, target them with specific information in the middle, and drive them to buy with search at the end," he said.