Here’s a big one for you, which one is bigger, better and generates a better ROI. Don’t answer it too quickly and don’t jump to the first conclusion that crosses your mind because the answer is more complicated than you think.
Search advertising has certainly come into its hey-day. Get the terms right, optimize right and bring all of the stars into alignment and you are generating the responses right-on. The fees are there and they mount higher and higher as the campaign ensues but the performance is there. But what is the ROI and how does it fair? Agencies look at this differently than advertisers as they usually do. The net CPA has a ceiling for an Agency whereas it has a floor for an advertiser. Not exceeding the ceiling vs. driving it to the floor. With search the more you do it, the more likely the costs rise. Whether it is because Google and Yahoo incrementally raise the stakes or its because greed pushes you to add terms and drive increasing yield. The net result is the CPA creeps and the ROI drops.
Now what about banner advertising? We’ve discussed banner advertising before, some would say we’ve been discussing it a fair amount. I am a fan of it and believe that it has its rightful place in the mix. I also believe that banner advertising is not getting the continued attention it deserves, does not get managed properly, get optimized or has the application of available technologies to further drive yield and ROI up and costs down.
Advertisers and agencies can push banner advertising to better perform by strategically managing campaigns and optimizing actively. See my post: Site Optimization and Ad Serving. If done right, a campaign can improve exponentially over time with rapid improvement in performance. I have mentioned that I have watched clients drive Click-thru rates by 50% or more over a two-month period, increase revenue by 25% or more all while decreasing their spend by 15%. How do they do this? They simply drop low-performing sites and stick with what works all while rotating in new creative and bumping up placements that work – active optimization.
Optimization with Search means increased cost. Terms that work well mean that you raise your maximum bid and your CPA goes up. It is the opposite to display advertising. So banners vs. search introduce a very interesting paradigm. To do better in search you have to pay more. To do better in banner advertising you can pay less!
I have also talked about re-targeting with banner advertising. Recognition, distinguishment and messaging to distinct audiences in real-time. Not event-based targeting like Boomerang, Tacoda and Advertising.com. DirectServe Technology like TruEffect. This is customer database targeting through ad serving and drives recurring revenue opportunities through ad campaigns. In comparison to search, re-targeting can drive recurring opportunities by as much as an additional 15-20%, effectively blowing search out of the water.
Direct Response advertisers that rely heavily on search today are starting to look for alternatives. They are looking forward at video They are re-testing rich media. They are pushing email and thinking about mobile. But what they need to do, if someone has not already rang the bell, is go back and see how they can become better at display advertising. It is still the most effective, ROI-efficient mechanism model if the management is proactive and the technologies are properly leveraged. Call me if you can’t figure it out and I will explain it to you. Half of the people I talk to don’t do business with me after I educate them first, but I educate them anyway. The smarter people become about all of this, the better decisions they will make. Whether it is to work with me and my company or not. Reacting with Insight.
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