Free Online Advertising?

With the decrease in response rates via display advertising, marketers have devalued its’ import.

While more and more of a marketer’s audience is spending more time online to consume media (as opposed to other areas of the media mix) decision makers feel that there is no ROI to be had with a medium whose metric – the click through rate (CTR) is steadily heading towards zero.

From many client meetings over the past few years, marketers have shown a preference for search marketing which allows them to determine a quick ROI measure. Per the 6.18.09 WSJ, GOOG gets 1/3 of all US Online Ad Dollars!

I won’t digress too much here, but viewing online ROI via search only is like looking out a single window and claiming to know all that is happening in Chicago.

The Atlas Institute has done a ton of work proving that yes, Search is important, but in the current measurement model , it is overvalued. See their Engagement Mapping research here.

When taking a more holistic view of a consumer’s conversion path, and looking beyond just the last view or last click display has some more value. But since no one is actualy clicking on a display ad, it could appear that there is little value.

But if you track all of your campaigns via a Third Party Ad Server (Atlas, DART), including the display exposures, rich media interaction  and search clicks, a different picture appears. Display aids in recall and can assist in better conversions that come via a search engine (GOOG, Y!, bing).

Now take this argument a bit further. Publishers are hurting for revenue and are much more flexible in these times as to how they get paid. If a marketer decided to pay on a cost per click basis (CPC) for their display, this could be very attractive budget-wise. Since the CTRs are so low,  very few ad impressions would actually be paid for. Therefore, the marketer would be getting the display component of their online media mix for close to free (assuming an average CTR of 0.5%).

The other important consideration is that the marketer will be in front of their audience where they live, populating the area with brand messaging. I think that in this online space, the focus gets lost in the data as apposed to what the marketer is actually trying to accomplish.

If all campaigns are tracked via a Third Party Ad Server, all the benefits that could be gained from running display on a CPM basis, and using Search strategically could be realized without the cost associated with a typical CPM media buy.

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