Is paid search getting too much credit?

I have a theory. I believe that, when measuring ROI on online media, search gets too much credit. Take the example of someone who buys a widget online. This person may be exposed to the widget through a banner ad online. Assuming they don't click on the banner (and not many people do these days), what's the next action they take if they want to find the widget? They go to Google where a smart marketer has paid for the search ad. They click on the paid search ad and the ROI on the paid search ad goes through the roof.

Which worked harder? I'd argue in many cases it's the banner ad. It was the initial exposure and engaged the customer so much so that they searched for the product on Google.

The problem is that when we're optimizing media, most company's optimize just on the ROI of the media placement. In the scenario above, the banner ad might be eliminated and paid search increased since paid search was credited with the sale. Even if you're tracking impressions, once someone has clicked on the paid search term, paid search gets credit.

Is this the reason that so many companies are dumping so much money into paid search? Are they getting rid of their online display adverting because they think it doesn't work as well? It's time to go beyond what seems like the easy answers and look deeper. - Paul Herring

Comments

[Greg Johns]

Paul:

I agree that the cumulative effect goes largely unmeasured, aside from the occasional test of search response rates against dark/field periods of display media.

Ad servers could theoretically provide multiple attribution data against conversion, but at present they dont (any conversion gets attributed to the last banner/keyword seen or clicked). However a change in the attribution rules (and unfortunately, a lot more data storage to go along with it) would allow marketers to see if that keyword conversion had some prior banner views (and also could tell us what frequency and how long it took for that view to become a click). Hopefully, the product folks at Atlas and Doubleclick might be thinking the same thing, otherwise, anyone want to go build a new ad tracking system?

[Paul Herring]

I think you're right on Greg. Atlas and Doubleclick had better come up with a solution or someone else will. They've got a little bit of a competitive barrier but I don't see how it can last long given the pace of software improvements as well as the decreasing cost of data storage.

[Chria Gale]

Someone else did come up with a better solution. It would have been impossible a short time ago (for data storage, bandwidth, and processing reasons), but over the past 2+ years Revcube has been developing a platform that optimizes multi channel online marketing campaigns in real time (with automated attribution based on conversions)...