• by David Goetzl  @dgoetzl, May 27, 2008

CAPTIVA ISLAND, Fla. -- Microsoft executive David Barlin said Friday at the MediaPost Email Insider Summit that a campaign combining display ads and email marketing can yield conversion rates at an impressive level.

Barlin, a product planner for Windows Live Mail who works on the Hotmail and instant messenger products, said marketers who prefer efforts combining banner ads and search optimization may achieve positive ROI. Microsoft research shows that an integrated campaign involving the two can yield conversion rate increases in the 22% to 56% range.

But while specifics are still being determined, he's convinced that further research will show that using banner ads linked with email marketing will increase conversion rates at a level above the high-end 56%. The research effort--testing what's termed "engagement modeling"--is being led by Young-Bean Song, who joined Microsoft from Atlas Solutions.

Not surprisingly, one scenario that Barlin proposed was combining a takeover of the entire display inventory on Hotmail for a week to build consumer exposure, and then following that up with an email effort touting a specific offer. "If you can whet somebody's appetite for what you're about to offer them, they're more likely to respond and buy," he said.

A display-plus-search campaign has limits, he said, since marketers cannot control when a person performs a search. But in contrast, they have complete control over when an email is distributed (as well as where, be it Hotmail, YahooMail or AOL).

"Search is waiting until the user is proactive," he said. "With email, (the marketer is) being proactive."