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Capital Region Business Journal Article

Article Originally published in the Captial Region Business Journal - July 2010 (page 15)

Title: Display advertising can pay dividends as part of overall marketing strategy

By: Jonny Buroker

Display advertising – what is it?

As companies struggle with where to put their limited advertising dollars, one often overlooked approach is Display Advertising, some times better known as banner advertising.  Display advertising is as close as you’re likely to get to “old fashioned” advertising on the Internet. As the advertiser, you buy space on someone’s website and put a creative ad in that space. When people within your defined geography (or demographics) visit the site, your ad is displayed.  If the ad is effective, people will visit your web site to find out more about your company and your products and services.

Display advertising often gets a bad reputation for being an underperformer as compared to other forms of advertising. Actually, recent research and changes to how display advertising is evaluated and measured reveal that it is a secret marketing gem proven to boost brand recognition, website traffic, conversions, and sales, and at a very competitive cost per thousand (CPM) impressions.

benefits of Display advertising

While I’m not proposing that display advertising should be your only or even your primary online advertising strategy, it has been shown to provide significant benefits to the advertiser when coupled with your other Internet Marketing initiatives (e.g., paid search).  Sure, display advertising will provide some direct click-throughs to your website, and sales, but its real value is in its ability to assist with other forms of online advertising. 

Consider some of these key benefits of display advertising:

·         Increased brand recognition – by having your ads placed on high-profile, high-traffic websites (e.g., Yahoo Finance, Facebook, CNN, etc.), your company will be introduced to tens of thousands of people per month.  The purpose of the display ad is to get people to become aware of your brand and your message so that your company is top of mind when they are ready to make a purchasing decision.

·         Ability to retarget to recent visitors to your site – retargeting is the practice of showing your display ad to someone that has recently visited your company’s website (through the use of cookie technology).  Consider the consumer who visited your website as a result of your email marketing, paid search, organic search, or other Internet Marketing initiatives, but didn’t convert because they haven’t made their purchasing decision yet.  Retargeting allows you to get your ad, and your brand, back in front of that consumer as they surf the Internet and visit any one of the hundreds of sites in the ad network.  Retargeting has been shown to dramatically increase customer conversions with significantly fewer impressions.

·         Increased traffic through direct navigation – the Click-Through Rate (CTR) measures those people that click directly on the banner ad and go to your site.  The CTR has been one of the key metrics associated with display advertising.  Recent studies, however, show that people that have viewed your display ad will often navigate to your site through other means.  In fact, in a recent Forrester study, 61% of people that visited a website within 15 minutes of seeing their display ad got there without clicking the banner ad (e.g., they typed the URL directly into their browser).  What this means is that the effective click through rate (Effective Clicks) of your display ad is significantly higher when you consider all of the different paths they took to get to your site after seeing your ad.

·         Increased sales – what's even more interesting is that site visitors who immediately respond to banner ads without clicking on them are disproportionately more likely to purchase.  On average, 64% of all orders and 77% of all sales from display ads come from Effective Clicks vs. Direct Clicks. What this means is that the traditional measure of click-through sales has been dramatically understated because it does not account for the sales that come from Effective Clicks. 

·         Lower CPM – when compared with other forms of advertising, display advertising has a lower average CPM for all forms except Billboards. (unless otherwise noted, CPM data source: Media Dynamics; Intermedia Dimensions 2008).  Here are the CPM for select advertising mediums:

o       Display Advertising – CPM = $3.20 (source: J.P. Morgan estimate 2010)

o       Newspapers – CPM = $5.50

o       Billboards – CPM = $2.26

o       Magazines – CPM = $6.98

o       Broadcast Television – CPM = $10.25

o       Radio – CPM = $4.54

Display advertising – the bottom line

The combination of paid search and display ads yields the highest return on investment than when used alone. A study by Yahoo! and ComScore revealed that when display advertising is combined with paid search, conversions increased by 22%!

Talk with your Internet Marketing consultant about how you can increase the effectiveness, and ROI, of your online marketing efforts by adding display advertising.

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