GoTo.com, the leading provider of pay-for-performance search results, put out a study last week conducted by the NPD Group that found strategically placed text links (e.g., a paid search result) are superior in creating brand recall and purchase origination than a creative ad placement (e.g., a banner or tile ad).
There’s no doubt that sites such as GoTo allow advertisers to drive highly qualified users to their Web sites at (usually) cost-effective rates. The beauty of these ad placements is that your search results appear to be a lot more qualified to a user who is searching for something related to what your site offers. Essentially, advertisers provide (what appears to be) a credible option to a user who is actively searching for something similar to your site’s offering at an opportune time, rather than distracting or interrupting users when they may be in a completely different state of mind. Naturally, conversions on the back end tend to be higher from these ads.
Any ad vehicle appearing to be Web site content rather than an advertisement is going to seem more credible to an audience. But although text links and search results can be highly effective in driving conversions (which should remain the focus for an advertiser, particularly at the start-up stage), there is little or no creative aspect to them. Not to downplay the effectiveness of these links, but it is difficult to display a visual image, concept, or theme without using creative at all.
The best way to convert a stranger into a potential customer is to actually get him or her to sample your product first. Therefore, in the world of the Internet, it is true that there is no better way to build awareness or familiarity than to drive a qualified user to a site to see it and explore the features. Just as in the traditional world, getting a consumer to try on shoes or test-drive a car will dramatically improve the odds of the consumer’s recalling the brand and actually following through with a purchase.
However, this is where the controversy of branding on the Internet comes into play, as advertisers generally measure only the immediate returns on their ad dollars spent that are generated by click-throughs. As beneficial as text links may be, it is still important to support this strategy with ads (on a creative level) to continue building brand exposure and develop familiarity with those who do not visit a site immediately.
The debate that online ads also convert those who do not click on ads has been proven and beaten to death over the past year, and most people are convinced the Web is also a highly effective medium for developing brand awareness as well.
But, for a start-up company that is very performance-oriented, it is only natural to focus on the measurable results that occur immediately. Most of the studies published over the past year have recognized that for every two conversions that result directly from a click-through, there is a third that occurs from a user who has not clicked through but has been influenced by branding over time.
As a new advertiser, however, it only makes sense to bank on your results representing the two-thirds who click now, rather than on the one-third who click later. But it is unlikely that an advertiser will ever benefit from the extra one-third of brand awareness if an ad campaign is built solely around very focused, strategic links leading to the advertiser’s site. It is for this reason that it is so important to ensure an advertiser’s long-term interests are attended to as well.
When explaining different ad options available to an advertiser (or client) in the campaign-planning stage, it is very easy for the client to become completely sold on just a few strategies rather than on the overall strategy being suggested. Obviously, it is critical to ensure that your clients obtain maximum immediate response for their ad dollars, but they also should understand what works in their best interests over the long run.
I worked with one particular client who began with a well-balanced approach to its online ad strategy. The strategy was working well; however, as market conditions grew tighter over the course of the past year, this client got stricter with its ad dollars (as it should have) and reduced its monthly spending to only strategic placements that convert at or above a certain ratio. Naturally, this led the client to allocate the majority of its spending toward text links and other strategic lead generators.
The sales ratios on the site remained fairly impressive. But six months down the road, this client recognized — when its ad budget expired about a month prior — that when no ad dollars were in place, there was very little sales activity on the site. However, once the regular buys were back in place, our regular sales patterns returned. This is an excellent indicator of the importance of a creative campaign to support the other placements. Someone at this company recently said to me that the company might agree to get back up on some ad networks because it was starting to feel the lack of brand association from its audience.
This is a classic example of the need for at least a minimal degree of branding in your ad campaigns. Of course, if you’re a new advertiser, the best way to ensure long-term viability on the Web is to stay focused on your immediate goals and maximize returns on ad dollars spent. However, it is clearly important to take somewhat of a more balanced approach and ensure there is a creative strategy in place as well.
I’ll be the first to admit that testing, measuring, and optimizing is by far the best way to succeed on the Web. At the same time, if the ad placements that produce the most conversions have no visual creative component to them at all, the effects may not be realized immediately but further down the road.
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