Search, Display and Retargeting: The Holy Trinity of Online Advertising

It’s difficult to convince budget-conscious small business owners that they need to invest their marketing dollars into multiple channels. Many are hoping to find the one “silver bullet” that will release a floodgate of hungry buyers. But advertising and marketing work more like a team than a shotgun. It’s best to place your marketing eggs in many baskets, rather than just one.

Combining advertising channels can have an exponential effect on overall response rate. For instance, direct mail has a response rate of .5 to 1 percent, and telemarketing gets around 2 percent. But when a software company combined their direct mail and telemarketing campaigns, they saw an overall response rate of 13.5 percent, resulting in 10 new contracts.

These results are by no means unique.

Likewise, real-world ads like the Yellow Pages can extend the reach of other advertising. If a commuter sees your billboard or hears your radio commercial, they might use the Yellow Page directory to find your phone number once they get home. And if they don’t see your ad, they’ll choose a competitor instead.

This dynamic has extended to the online world because, although media may change, buying behavior doesn’t. While offline advertising continues to drive search, a combination of search, display and retargeting is a trio that’s hard to beat. Display advertising can help create demand, search can help capture that demand, and retargeting can re-engage lost demand.

First, a refresher course on the different kinds of online advertising:

Search Advertising

Search advertising allows you to place text ads above and to the right of the organic listings on a Search Engine Results Page (SERP), or elsewhere on the web when another site in the ad network displays relevant content. These ads appear whenever a search query matches the advertiser’s chosen keywords.

Search advertising uses the Pay-Per-Click (PPC) advertising model, where advertisers bid on the keywords they want and only pay when their ad is clicked.

Display Advertising

Unlike ads that appear as a direct result of a search, display advertising appears next to content on news sites, blogs and other niche sites across the Internet. Display (or banner) ads are graphical advertising that can include logos, images, and rich media.

Rather than targeting specific keywords, display advertising can zero in on your ideal audience based on geography, demographic, and/or behavior.

The primary difference between search and display advertising is user intent. Search advertising targets buyers who are looking for a seller. Display advertising targets people who are engaged in consuming content rather than actively searching for a product or service at the moment when the ad appears.

Retargeting

Retargeting brings back visitors who have left your website without taking action. As they visit sites within the display ad network, retargeting technology serves up customized display ads about your company or the product they just searched for, reminding them of their purchase intent.

Retargeting can be used as a stand-alone service, or it can be combined with search and/or display advertising.

The Symbiotic Relationship between Display and Search

Google says that television commercials are the largest driver of search. Likewise, repeated exposure to online display advertising drives consumers to paid search. According to the Harvard Business School paper, Do Display Ads Influence Search? Attribution and Dynamics in Online Advertising:

Initially, an increase in display impressions does not generate any search applications. However, after a period of two weeks, display impressions positively impact search applications.

The Search Engine Marketing and Online Display Advertising Integration Study found that nearly as many Internet users respond to a display ad by performing a search as those who click on the ad itself:

The survey reveals that 31% of Internet users INITIALLY respond to online display advertising by clicking on an ad, while 27% respond by searching for the product, brand, or company by launching a search on a search engine.

But it gets even more interesting. The percentage of users who eventually (rather than initially) searched for the product, brand or company featured in the display ad rose from 27 percent to 49 percent.

Clearly, exposure to display advertising drives consumers to paid search, both initially and over time.

How Retargeting Affects Search Conversions

Only two percent of consumers convert on the first visit. That means the remaining 98 percent leave without taking action. Retargeting has proven to be an effective strategy to bring these visitors back.

Does retargeting work? Judge for yourself. Without it, only 8 percent of the 72 percent of ecommerce shoppers who abandon a shopping cart return to make a purchase. But with retargeting, that percentage jumps to 26 percent.

Retargeting decreased Value City Furniture’s cost per acquisition from $168 to $29, and increased their conversion rate by more than 700 percent—in just one month.

In a comScore study, retargeting resulted in a 726 percent lift in site visitations within four weeks of the initial ad exposure.

Search and display are effective advertising channels in their own right. But they become even more powerful when retargeting is added into the mix. For a higher response rate and greater return on investment, consider implementing all three in your online advertising strategy.