Monday, 18 June 2007

Search advertising's impact overstated?

A recent piece of research produced by Atlas (part to aQuantive in the US) questions whether search advertising gets too much credit for converting online sales at the expense of other forms of brand building advertising. They based this finding on a study that tracked online user behaviour and sales conversion tracked by cookies for, apparently, 5 billion adverts and 1.7 million online sales transactions.

The conclusion was that, although search advertising displays a high sales conversion rate from users clicking through from ads which lead to a sale, around two-thirds of these customers who took action had actually previously reached the websites 2 or more times via ads on several sites. Therefore awareness plays a more important role in driving that final sale than some may think.

What this still indicates is that search is driving the eventual sales as users are looking to buy a product or service. However, in all forms of marketing, brand awareness can also be a strong factor in deciding a sale - a previous Atlas study has shown that brand awareness can lead to a 22% higher chance of a sales conversion. This latest research perhaps also indicates that many large brand organisations are also now embracing search marketing as part of their advertising mix.

In the data-heavy world on Internet marketing, this latest research provides an interesting slant on the way that PPC advertising works, based on a significant base of data. It also gives some additional measurement to the impact of brand advertising, the effect of which is often difficult to quantify, whether online or offline.

What's more, this trend will also build pressure on smaller advertisers who are using PPC as an effective marketing method, but who are facing increasing cost pressures from bigger companies who are using their purchasing power to bid high as a brand-building exercise as well as a direct sales tool.

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