The Unexpected Impact of Display Ads on Search

Attorneys demand evidence and facts to make decisions and so do digital marketers. For the latter, one of the most attractive aspects of online advertising is that it can be measured. We can review impressions, clicks, ROI and others to determine which of our advertising tactics is performing best. Basing our analysis on the numbers engenders confidence that our decisions are sound.

Sometimes, however, the numbers aren’t as straightforward as they seem. For example, we often fail to consider how multiple tactics influence each other. In a Harvard Business School study that applies advanced analytics techniques to evaluate online advertising options, the authors take a more nuanced view of online advertising performance and reach some interesting conclusions.

Display ads boost search ads
While we often assume that all our marketing tactics generate either a direct and immediate conversion (i.e. contacting your firm) or none at all, in many cases a marketing event can start the user on a multi-step process that may eventually result in a conversion. The authors found this phenomenon at play in the interrelationship between display ads (i.e. banner ads) and search ads (the ads you see on search results pages). While display ads did not always directly convert to a click or customer acquisition, they clearly appeared to influence the effectiveness of search ads in later stages of the buying process and drove a significant increase in search impressions and clicks. Thus, the authors found that a mix of display and search ads often performed better than merely search or display ads alone.

The sustained impact of ad buys
Another interesting finding was that both search and display ads delivered a sustained performance increase. In their tests, the authors applied “burst” ad buys that resulted in an immediate, significant increase in conversions. Most analysis of ad performance would focus only on this immediate increase. However, the authors demonstrated that this initial burst led to a sustained increase in ad conversions – especially from search ads – weeks after the ad spend took place. This persistence of ad performance resulted in significantly lower cost per acquisition and increased ROI.

Search ads deliver the better ROI
Finally, the authors found that search ads delivered a higher ROI than display ($1.75 per $1 spent for search ads vs. $1.24 per $1 spent for display ads). Consequently, they recommended devoting a larger percentage of the typical digital ad budget to search.

This post has just scratched the surface. To dig even deeper, we encourage you to read the entire study (be ready for some advanced mathematics!). The study demonstrates there are many lessons yet to learn in optimizing the performance of all of our programs.

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