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Search and Display:
Capitalizing on the
Retargeting Opportunity




A Search Marketing Now E-Book
Search and Display:
                                                                            Capitalizing on the Retargeting Opportunity




                                                   Introduction
With PPC marketing standing front and center in online marketing plans and budgets, display advertising fell out
of favor over the past few years. The transition of display creative from glossy, full-color magazine ads to the web
was awkward, at best. Add to that the inefficiency of using CPM pricing parameters and the absence of standard
formats and sizes, and the future for online display advertising looked bleak.

But much has changed in the past twelve months. Investments in new technologies, new ad formats and
improved buying and selling processes are growing both the luster of online display advertising and its share of
marketing budgets. A majority of ad agency executives – 62% – surveyed by Acquisio said they are expanding
display capabilities to all of their customers. The emergence of real-time bidding auctions through display
advertising exchanges, as well as demand and buy-side platforms now enables advertisers to buy display like
search, using sophisticated rules and algorithms to formulate the most efficient bids.

As a result, search marketers are moving into display (or back into display) with ease, already owning the tools
and skills needed for these new ways of buying media. In particular, search retargeting, a display advertising
technique that engages searchers or website visitors based on a very specific online action they have taken in the
past, is jumpstarting display budgets and ROI impact. According to a recent eMarketer survey, targeting is one of
the primary reasons advertisers are funneling more dollars to their display budgets, with 52.8% of those surveyed
saying increased ad budgets were directly impacted by increased targeting options.

This ebook discusses the current state of online display advertising, including its growth, its synergies and
relationship with PPC, and the new retargeting opportunities. Acquisio and Search Marketing Now would like to
thank the following SearchEngineland and SMX East contributors for their assistance in developing this report:
Frost Prioleau, CEO and Co-founder, Simpli.fi; Jeff Green, CEO, The Trade Desk; Dax Hamman, Chief Revenue
Officer, Chango; Cameron Jonsson, Co-Founder and Managing Director, Inventiv Focus; and Kevin Lee, CEO, DidIt.
Thanks also to Karen Burka for researching and preparing this E-Book. n




2    © 2011 Third Door Media, Inc. 	   http://searchmarketingnow.com • Email: whitepapers@searchmarketingnow.com • (203) 664-1350
Search and Display:
                                                                                Capitalizing on the Retargeting Opportunity




Display Advertising Growth Outpaces Search
Although search marketing still represents the largest piece of the online advertising pie, display advertising is now
growing at a faster pace. According to the Internet Advertising Bureau (IAB), PPC revenue hit $12 billion in 2010,
for a 46% market share. But while PPC revenue grew in 2010, its share of the online advertising market decreased
slightly from 2009. Display advertising – including digital video commercials, sponsorships, ad banners and display
ads – reached $9.9 billion in 2010 to grow from 35% to 38% of the online ad revenue market.

Forrester Research forecasts similar growth trends for PPC and online display advertising. From 2011 through 2016,
Forrester predicts a 20% compound annual growth rate (CAGR) for display advertising compared to 12% for search.




Source: Internet Advertising Bureau


Online Ad Revenues, 2009 vs. 2010 (in $ millions)
                                                                                             According to the Internet
 Ad Format                            2009 Revenues         2010 Revenues
 Search	                              $10,698               $12,004
                                                                                          Advertising Bureau (IAB), PPC
 Classifieds & Directories            $2,254                $2,597                     revenue hit $12 billion in 2010, for a
 Lead Generation                      $1,451                $1,339                      46% market share. But while PPC
 Email                                $292                  $195                         revenue grew in 2010, its share
 Display*                             $7,965                $9,906
                                                                                         of the online advertising market
Display advertising includes digital video commercials, ad
banners/display ads, sponsorships and rich media. Source:
                                                                                          decreased slightly from 2009.
Internet Advertising Bureau

Several factors are driving the growth in online display advertising, including:
  •New pricing structures
  •Increased market efficiency in buying and selling ads
  •Synergies between PPC and display advertising
  •Retargeting

Buying online display advertising used to be extremely inefficient: it was based on the print world’s CPM
paradigm that required large minimum spends on high-volume, untargeted audiences and metrics such as reach
and frequency. This model ignored the inherent targeting capabilities that came with the online channel, as well
as the emerging opportunities to pay for performance.



3        © 2011 Third Door Media, Inc. 	   http://searchmarketingnow.com • Email: whitepapers@searchmarketingnow.com • (203) 664-1350
Search and Display:
                                                                            Capitalizing on the Retargeting Opportunity



Today, online display advertising is increasingly being
bought and sold in real time and through bidding
auctions that enable advertisers and publishers to
make and receive highly efficient bids. The real-time
bidding (RTB) process uses a chain of intermediaries,
including demand-side platform (DSPs) providers and
ad exchanges/supply-side platform (SSPs) providers,
to connect advertisers and publishers in a bidding
exchange that occurs in less than one-tenth of a second
and utilizes business rules and bidding algorithms set
by advertisers and their agencies.


Synergies between
Search and Display
There are strong synergies between online display
advertising and search marketing, which can jointly
be used to leverage targeted keyword advertising                                  Moving into display is proving relatively easy for
alongside branded display campaigns to achieve                                    search marketers, who already have many of the
greater lift, as well as maximize clickthrough rates,                             tools and skills needed for buying and optimizing
conversion and engagement metrics. Industry studies
                                                                                  auction-based media. One simple way to get started
have found that exposing search users to display
media from the same advertiser can result in double-                              is to set up a display campaign using existing PPC
digit increases over using search alone. Using search                             ad groups and optimize at the keyword level – just as
and display together allows advertisers to reuse                                  with PPC, each keyword carries a different message
valuable search data, drive more search conversions by                            of intent and naturally has to be treated uniquely.
widening the sales funnel and lower CPC costs.                                    Secondly, create new groups of keywords that lack
                                                                                  a proper presence in your search program, such as
Ironically, one of the primary reasons that search and
display are so complementary is the differences in their                          competitor brand names or broad head terms. Once
market dynamics. The PPC market is dominated by                                   the campaign is live, data will start to flow back
three large publishers: Google, Yahoo! and Microsoft;                             showing the sites and keywords that are driving the
though in the US and Canada, Microsoft and Yahoo                                  best results – go back to your PPC program and use
have joined forces and marketers can access all of their                          this information to your benefit.
joint search inventory through adCenter. PPC marketing
is based on keyword targeting that pulls users to the
brand or product when they have already formed intent
to purchase or shown a need for more information.                                Search                                Display
                                                                                 Pull marketing                        Push marketing
The display advertising market is characterized by
thousands of online publishers, many of which are                                Bottom of funnel                      Top of funnel
not even accessible through Google Display Network                               Scarcity of supply                    Abundance of supply
(GDN), one of several large display ad exchanges. The
others include Right Media (owned by Yahoo!), which                              Hosted auction                        Real-time auction
controls nine billion impressions daily, ContextWeb,
                                                                                 Google is often the publisher         Google is rarely the publisher
Pubmatic, OpenX, Rubicon, Admeld, and AppNexus/
Ad ECN. Display campaigns that only utilize GDN may                              Keyword targeting                     User-based targeting
not be reaching the premium publishers that aren’t
available through Google. For example, all of Yahoo!’s
content sites (including Yahoo! Finance, Autos, Local                          Source: The Trade Desk
Maps and Mail), MSN, eBay, CNBC, Billboard and
eHarmony.

4    © 2011 Third Door Media, Inc. 	   http://searchmarketingnow.com • Email: whitepapers@searchmarketingnow.com • (203) 664-1350
Search and Display:
                                                                            Capitalizing on the Retargeting Opportunity




Although Google is forecast to have 77% of search                               By using search retargeting as a form of display
marketing revenues in 2012, it will only account for                            targeting, advertisers bring the two largest segments of
12.3% of display revenues for the year, according to                            their online advertising budget together to work as one.
eMarketer. As a result, display advertisers that rely on
Google Display Network (47% according to a survey by                            There are two types of search retargeting:
The Trade Desk) are missing a huge part of the market.
                                                                                1) Retargeting search users that visit the advertiser’s
                                                                                    website (also called site retargeting).
The Retargeting Opportunity                                                     2) Retargeting search engine users searching on
                                                                                    relevant keywords.
Perhaps the biggest reason online marketers have
jumped back into display advertising is the emergence                           Both types of retargeting are effective strategies for
of search retargeting (also called remarketing), a display                      brand and search advertisers. Search retargeting
advertising technique that engages search engine users                          overall enables advertisers to target users at the top of
or website visitors based on a specific online action                           the purchase funnel, instantly build custom audience
they have taken in the past. Numerous research studies                          segments based on user intent and continuously fine
have found that the majority of online shoppers never                           tune segments during a campaign, providing insight
complete the sale. According to Digital River: Fireclick                        into which types of users respond to what creative sets.
Index 2011, 77% of consumers that fill a shopping cart
ultimately abandon it. The same study found that 97% of                         Site Retargeting
search clicks do not end in conversion.
                                                                                This is the most straightforward type of retargeting
The familiar search metrics of CTR, CPA and CPC have                            – show a display ad to someone who has previously
helped make retargeting a starting point for many                               visited an advertiser’s website from one of that
search marketers. Search retargeting combines the                               advertiser’s search ads. This gives the advertiser an
precision and efficiency of search marketing with                               opportunity to retarget any such visitor with a display
the reach and branding power of display, allowing                               ad urging the visitor to come back for more. Visitors
marketers to marry existing keyword lists with                                  are retargeted using first-party cookies, which provide
relevant banner ads to target consumers who have                                data including keyword searched, time of day, reverse
demonstrated interest in a particular offering and                              DNS of IP address, preferred search engine, preferred
continue the conversation with prospective customers                            browser, and what the user did or looked at on the
beyond the search engines.                                                      advertiser’s site.
Search retargeting campaigns help to convert, retain                            The advantage of site retargeting is that advertisers can
and upsell existing web users that have either searched                         further segment visitors into individuals that did or did
on a relevant product or brand term or visited the                              not convert. This differentiation then makes the display
website. The data can be gleaned from first-party or                            advertising much more effective, taking the individuals’
third-party cookies and target either on-site or off-site                       actions into account.
actions.


5    © 2011 Third Door Media, Inc. 	   http://searchmarketingnow.com • Email: whitepapers@searchmarketingnow.com • (203) 664-1350
Search and Display:
                                                                             Capitalizing on the Retargeting Opportunity



For an individual that converted, an advertiser may
show them an ad asking how they liked their purchase                               Five Reasons to Use
and recommend similar products. Individuals that
didn’t convert could see an ad inviting them back                                  Search Retargeting
for a second chance, maybe with a new and more
compelling promotion.                                                              1. Reach intenders. Search retargeting allows
                                                                                   advertisers to combine the brand impact of static
The challenge with site retargeting is that it may drive a                         or flash banners with the targeting capability and
low amount of impressions since it requires individuals                            precision of search.
to actually visit the advertiser’s website; the number of
visitors getting cookied may be low depending on the                               2. Create custom segments for each campaign. In
advertiser’s search engine marketing budget.                                       search retargeting, behavioral segments are defined
                                                                                   by the search terms on which users have searched.
                                                                                   Additionally, advertisers can see exactly how each
Keyword-Based Retargeting                                                          keyword is performing in its campaign, whether on
                                                                                   a CTR, CPC or CPA metric. The targeting that works
To increase share, search retargeting can also be used                             for one set of creative may be very different from
to monitor the keywords that individuals are searching                             the targeting that works for another set of creative
without visiting the advertiser’s actual website. This is                          for the exact same product. Different calls to action
accomplished by dropping a cookie on the individual’s                              and graphic elements impact response rates of
system from a partner site and then dynamically                                    different types of targeted users.
monitoring the type of keywords they are searching
                                                                                   3. Eliminate the wait to build cookie pools. In
for on the search engines. If one of the keywords being
                                                                                   many cases, custom behavioral segments require
“targeted” is searched for, that individual is retargeted
                                                                                   weeks for a cookie pool to be built up in order
with the advertiser’s display ads.
                                                                                   for a campaign to be delivering at full strength.
Third party search data providers, such as BlueKai or
                                                                                   With keyword-level search retargeting, this wait is
AlmondNet, as well as Yahoo!’s Right Media or Google
                                                                                   eliminated as data is stored in memory for instant
Display Network, will also append user cookies with
                                                                                   access. This “instant-on” feature provides flexibility
enhanced data such as demographics (age and gender)
                                                                                   in creating and launching multiple campaigns that
and interests. To protect user privacy, most display ad
                                                                                   test and improve performance.
exchanges require advertisers to only use personally
identifiable information with express consent.                                     4. Fine tune segments during campaigns. Because
                                                                                   the keyword lists that drive search retargeting can
Using both of these targeting options together is                                  be instantaneously adjusted at any time during a
ideal, and experience is proving that site retargeting                             campaign, audience segments in search retargeting
will almost always beat the keyword-driven search                                  are typically fine tuned for optimum performance
retargeting when a conflict occurs. Initially, a good rule                         during campaigns. As initial campaign data begins
of thumb is to spend 25% of current search marketing                               to show which keywords are performing well and
budget amounts on new retargeting or display                                       which are not, segments can be fine tuned by
campaigns. For example, one high-tech B2B marketer                                 eliminating poorly performing keywords and adding
spending $85,000/month on its search efforts added                                 keywords similar to those performing well. In
retargeting to its marketing plan (spending 15-20%                                 addition, bids on individual keywords can be raised
on the additional campaigns). The result was a 33%                                 or lowered to achieve the desired KPIs.
increase in website forms and 25% lift in software sales.
                                                                                   5. Gain valuable insights into target audiences.
                                                                                   With keyword-level search retargeting, advertisers
Creating Effective                                                                 see exactly how users respond, broken down by
                                                                                   the keyword searched. Advertisers can see the
Retargeting Campaigns                                                              spend, number of impressions, clicks, conversions,
                                                                                   CPM, CTR, CPC, and CPA for each keyword in the
                                                                                   campaign. Using this insight, advertisers can design
Making the most of retargeting opportunities requires
                                                                                   more effective campaigns going forward based on
sound search marketing strategy and execution.
                                                                                   the most effective keywords.
Challenges to effective retargeting include creative


6     © 2011 Third Door Media, Inc. 	   http://searchmarketingnow.com • Email: whitepapers@searchmarketingnow.com • (203) 664-1350
Search and Display:
                                                                              Capitalizing on the Retargeting Opportunity



formats, ad placement and frequency, and accurate                                 payments to convert the same user. The solution is to
attribution, to name a few.                                                       have a unique transaction code that shows up in both
                                                                                  the PPC and display reports, and compare these codes
The following section highlights four best practices to                           in each of the channel’s reports. E-commerce sites,
maximize retargeting results.                                                     for example, can utilize the already existing order ID.
                                                                                  Otherwise, a single javascript command can be used to
#1: Utilize Segmentation                                                          generate a sequential number each time someone hits
                                                                                  the confirmation page.
Effective segmentation is a key driver of retargeting
success – particularly for retargeting website visitors.                          This code should be passed into the PPC and display
Just as a generic piece of ad copy and a link to the                              tracking software as a hidden variable. For PPC this
homepage won’t work in PPC, neither will dropping the                             might be the bid management platform’s conversion
same cookie on all of a site’s pages and serving one                              pixel or the Google Analytics tag. DART users can
display ad for the media campaign.                                                create a simple custom variable. When pulling the
                                                                                  regular PPC and display reports, be sure to include
By using multiple pixels, advertisers can divide the                              these unique ID numbers and look for the quantity
site into actions, or areas of intent, such as homepage                           of IDs that are unique and the number that are the
(browsing), product page (researching), shopping cart                             same. If the percentage of IDs that is the same is
(buying) and conversion page (customer). The result                               less than 10% then the display advertising is driving
is that instead of one generic audience the advertiser                            incremental revenue over the search investment. If
has four distinct audiences to target and can mimic PPC                           the overlap is a higher percentage, determine how to
strategies more easily. For example, a “researcher”                               divide the revenue between the two channels. Most
may need encouragement about the brand’s benefits                                 search marketers attribute 50% to each channel for the
or a financial incentive, whereas a “customer” can be                             conversions that overlapped.
targeted with upsell opportunities.
                                                                                  #3: Implement a Frequency Cap
#2: Avoid Overlapping Results
                                                                                  Display advertising offers the ability to set a
One question that arises when adding display to a                                 frequency cap, a control mechanism that essentially
search marketing program is whether or it is actually                             stops targeting a user cookie after “x” number of
driving incremental revenue or just creating two                                  impressions. This is an important control and prevents




    Case Study                                             Sample Campaign Results: PPC vs. Retargeting

    A B2B technology marketer with                         Search                             Cost                 Leads              CPA
    high-value customers began                             PPC                                $6,854               34                 $202
    retargeting prospects who had
    requested a software demo.                             Search Retargeting                 $965                 13                 $74
    Using three different retargeting                      Site Retargeting                   $12,654              66                 $192
    campaigns during August 2011, the
    additional display ads generated                       Creative Retargeting*              $4,356               5                  $871
    3.5 times more leads over PPC
                                                           Overall                            $24,829              118                $210
    campaigns alone, while the CPA
    increased only 4%.                                   *Defined as retargeting users that previously viewed the
                                                         display ad. Source: Third Door Media




7      © 2011 Third Door Media, Inc. 	   http://searchmarketingnow.com • Email: whitepapers@searchmarketingnow.com • (203) 664-1350
Search and Display:
                                                                             Capitalizing on the Retargeting Opportunity



users from feeling “stalked.” Begin by looking at your                           When advertisers know the right credit to give to a
own site, product or service and analyzing the buying                            conversion, they also can address the question of the
cycle in order to calculate how long a cookie should be                          quality of the traffic being generated by the retargeting
retargeted. In nearly all cases it will be less than 7 days,                     program or campaign. Using the unique order ID being
providing a good metric with which to program the                                used to gauge media overlap, compare the value of the
length of any retargeting program. In addition, cap the                          IDs against the existing customer or CRM database.
number of impressions to be served each day to avoid                             Are retargeted customers spending the same, more
saturating the user’s browsing experience.                                       or less per transaction than existing customers? Are
                                                                                 they shopping as frequently? What is their estimated
Tools like The Trade Desk provide reports that show                              Lifetime Value (LTV)? An effective retargeting program
CTR at each impression frequency, offering a clear                               should show similar behaviors and numbers, but this is
indication of what the setting should be. It’s helpful to                        an excellent exercise to see where campaign tweaking
set some padding into the program – the minimum                                  might be necessary.
time in between each ad impression to one cookie – to
avoid serving all the impressions in just a few seconds
or minutes.                                                                      Conclusion
                                                                                 Thanks to investments in new technologies, new ad
#4: Attribute Credit Properly                                                    formats and improved buying and selling processes,
                                                                                 online display is enjoying a resurgence among both
Accurate view-thru credit – i.e., when a user is exposed                         search and brand marketers. The emergence of real-
to an ad, does not click on it, but goes on to convert in                        time bidding auctions through display advertising
another action – is difficult for most search marketers.                         exchanges, as well as demand and buy-side platforms
The solution is a study to benchmark the right view-                             now enables a broad range of advertisers to buy
thru percentage for the display investment.                                      display like search, utilizing sophisticated rules and
                                                                                 algorithms to formulate the most efficient bids.
Using a Public Service Announcement (PSA) targets
two groups of the audience and exposes one to                                    With both PPC and display advertising extremely
the advertiser’s display ads and the other to a PSA                              important and efficient forms of online advertising
announcement. Clearly, the advertiser’s ads can                                  in their own right, using them together through
influence the buying behavior of the audience, whereas                           retargeting is proving to be even more beneficial for
the PSA ads cannot as it contains no brand messaging.                            advertisers seeking strong bottom-line results and ROI.
To calculate the percentage of appropriate view-thru
credit look at the delta between the two sets of results.                        Search retargeting combines the precision and
For example:                                                                     efficiency of search marketing with the reach and
                                                                                 branding power of display, allowing marketers to marry
• PSA ad group – 1 million ad impressions – $10,000 in                           existing keyword lists with relevant banner ads to
  view-thru revenue                                                              target consumers who have demonstrated interest in a
• Advertiser ad group – 1 million ad impressions –                               particular offering and continuing the conversation with
  $100,000 in view-thru revenue                                                  prospective customers beyond the search engines.

This shows that the audience was going to spend                                  In addition, as advertisers gain more experience with
$10,000 whether or not they were exposed to the                                  retargeting they will look at all the places it makes
display ads, but that when exposed to the ads they                               sense to drop cookies – on syndicated content, shared
spent 10 times more as a group. The percentage of                                videos or email programs – to add to the cookie pool
revenue that should be counted from view-thru is                                 for retargeting with their own messages. Ultimately,
therefore 90%.                                                                   the most effective retargeting programs will combine
                                                                                 marketing prowess, smart budgeting and an awareness
Currently, best practices are to run a PSA twice a year                          of consumer privacy concerns to provide relevant,
for each type of display campaign since each audience                            compelling campaigns to interested users. n
group will have its own benchmark.




8     © 2011 Third Door Media, Inc. 	   http://searchmarketingnow.com • Email: whitepapers@searchmarketingnow.com • (203) 664-1350
Search and Display:
                                                                            Capitalizing on the Retargeting Opportunity




The world’s leading Performance Media Platform, Acquisio helps marketers buy, track, manage, optimize, and
report on media across all channels. The platform was designed for search marketing, and it has evolved to include
Facebook ads and all major RTB display networks. Acquisio provides the industry-leading technology for marketers
buying ads on any online channel, allowing them to handle all tasks associated with performance advertising, from
ad purchase through conversion tracking and beyond, within a single integrated platform. With more than $500MM
in ad spend under its management, Acquisio is the multi-channel advertising solution preferred by advertising and
marketing agencies around the world. For more information, visit www.acquisio.com.

465 Victoria, Suite 300
Saint Lambert, QC
Canada
J4P 2J2
toll-free: +1.866.493.9070
direct: +1.450.465.2631
fax: +1.450.465.2841


Search Marketing Now webcasts and white papers provide authoritative and actionable education about search
engine marketing issues. Register today for one of our free webcasts covering topics about search engine
optimization, paid search advertising and search marketing in general.

Search Marketing Now is a division of Third Door Media, which publishes web sites, and produces in-person
events and webcasts. Each of the four brands - Search Engine Land, Search Marketing Expo, Search Marketing
Now, and Sphinn - fosters continuing education, evolution and engagement for the community we serve.




9    © 2011 Third Door Media, Inc. 	   http://searchmarketingnow.com • Email: whitepapers@searchmarketingnow.com • (203) 664-1350

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Search and Display: Capitalizing on the Retargeting Opportunity

  • 1. Search and Display: Capitalizing on the Retargeting Opportunity A Search Marketing Now E-Book
  • 2. Search and Display: Capitalizing on the Retargeting Opportunity Introduction With PPC marketing standing front and center in online marketing plans and budgets, display advertising fell out of favor over the past few years. The transition of display creative from glossy, full-color magazine ads to the web was awkward, at best. Add to that the inefficiency of using CPM pricing parameters and the absence of standard formats and sizes, and the future for online display advertising looked bleak. But much has changed in the past twelve months. Investments in new technologies, new ad formats and improved buying and selling processes are growing both the luster of online display advertising and its share of marketing budgets. A majority of ad agency executives – 62% – surveyed by Acquisio said they are expanding display capabilities to all of their customers. The emergence of real-time bidding auctions through display advertising exchanges, as well as demand and buy-side platforms now enables advertisers to buy display like search, using sophisticated rules and algorithms to formulate the most efficient bids. As a result, search marketers are moving into display (or back into display) with ease, already owning the tools and skills needed for these new ways of buying media. In particular, search retargeting, a display advertising technique that engages searchers or website visitors based on a very specific online action they have taken in the past, is jumpstarting display budgets and ROI impact. According to a recent eMarketer survey, targeting is one of the primary reasons advertisers are funneling more dollars to their display budgets, with 52.8% of those surveyed saying increased ad budgets were directly impacted by increased targeting options. This ebook discusses the current state of online display advertising, including its growth, its synergies and relationship with PPC, and the new retargeting opportunities. Acquisio and Search Marketing Now would like to thank the following SearchEngineland and SMX East contributors for their assistance in developing this report: Frost Prioleau, CEO and Co-founder, Simpli.fi; Jeff Green, CEO, The Trade Desk; Dax Hamman, Chief Revenue Officer, Chango; Cameron Jonsson, Co-Founder and Managing Director, Inventiv Focus; and Kevin Lee, CEO, DidIt. Thanks also to Karen Burka for researching and preparing this E-Book. n 2 © 2011 Third Door Media, Inc. http://searchmarketingnow.com • Email: whitepapers@searchmarketingnow.com • (203) 664-1350
  • 3. Search and Display: Capitalizing on the Retargeting Opportunity Display Advertising Growth Outpaces Search Although search marketing still represents the largest piece of the online advertising pie, display advertising is now growing at a faster pace. According to the Internet Advertising Bureau (IAB), PPC revenue hit $12 billion in 2010, for a 46% market share. But while PPC revenue grew in 2010, its share of the online advertising market decreased slightly from 2009. Display advertising – including digital video commercials, sponsorships, ad banners and display ads – reached $9.9 billion in 2010 to grow from 35% to 38% of the online ad revenue market. Forrester Research forecasts similar growth trends for PPC and online display advertising. From 2011 through 2016, Forrester predicts a 20% compound annual growth rate (CAGR) for display advertising compared to 12% for search. Source: Internet Advertising Bureau Online Ad Revenues, 2009 vs. 2010 (in $ millions) According to the Internet Ad Format 2009 Revenues 2010 Revenues Search $10,698 $12,004 Advertising Bureau (IAB), PPC Classifieds & Directories $2,254 $2,597 revenue hit $12 billion in 2010, for a Lead Generation $1,451 $1,339 46% market share. But while PPC Email $292 $195 revenue grew in 2010, its share Display* $7,965 $9,906 of the online advertising market Display advertising includes digital video commercials, ad banners/display ads, sponsorships and rich media. Source: decreased slightly from 2009. Internet Advertising Bureau Several factors are driving the growth in online display advertising, including: •New pricing structures •Increased market efficiency in buying and selling ads •Synergies between PPC and display advertising •Retargeting Buying online display advertising used to be extremely inefficient: it was based on the print world’s CPM paradigm that required large minimum spends on high-volume, untargeted audiences and metrics such as reach and frequency. This model ignored the inherent targeting capabilities that came with the online channel, as well as the emerging opportunities to pay for performance. 3 © 2011 Third Door Media, Inc. http://searchmarketingnow.com • Email: whitepapers@searchmarketingnow.com • (203) 664-1350
  • 4. Search and Display: Capitalizing on the Retargeting Opportunity Today, online display advertising is increasingly being bought and sold in real time and through bidding auctions that enable advertisers and publishers to make and receive highly efficient bids. The real-time bidding (RTB) process uses a chain of intermediaries, including demand-side platform (DSPs) providers and ad exchanges/supply-side platform (SSPs) providers, to connect advertisers and publishers in a bidding exchange that occurs in less than one-tenth of a second and utilizes business rules and bidding algorithms set by advertisers and their agencies. Synergies between Search and Display There are strong synergies between online display advertising and search marketing, which can jointly be used to leverage targeted keyword advertising Moving into display is proving relatively easy for alongside branded display campaigns to achieve search marketers, who already have many of the greater lift, as well as maximize clickthrough rates, tools and skills needed for buying and optimizing conversion and engagement metrics. Industry studies auction-based media. One simple way to get started have found that exposing search users to display media from the same advertiser can result in double- is to set up a display campaign using existing PPC digit increases over using search alone. Using search ad groups and optimize at the keyword level – just as and display together allows advertisers to reuse with PPC, each keyword carries a different message valuable search data, drive more search conversions by of intent and naturally has to be treated uniquely. widening the sales funnel and lower CPC costs. Secondly, create new groups of keywords that lack a proper presence in your search program, such as Ironically, one of the primary reasons that search and display are so complementary is the differences in their competitor brand names or broad head terms. Once market dynamics. The PPC market is dominated by the campaign is live, data will start to flow back three large publishers: Google, Yahoo! and Microsoft; showing the sites and keywords that are driving the though in the US and Canada, Microsoft and Yahoo best results – go back to your PPC program and use have joined forces and marketers can access all of their this information to your benefit. joint search inventory through adCenter. PPC marketing is based on keyword targeting that pulls users to the brand or product when they have already formed intent to purchase or shown a need for more information. Search Display Pull marketing Push marketing The display advertising market is characterized by thousands of online publishers, many of which are Bottom of funnel Top of funnel not even accessible through Google Display Network Scarcity of supply Abundance of supply (GDN), one of several large display ad exchanges. The others include Right Media (owned by Yahoo!), which Hosted auction Real-time auction controls nine billion impressions daily, ContextWeb, Google is often the publisher Google is rarely the publisher Pubmatic, OpenX, Rubicon, Admeld, and AppNexus/ Ad ECN. Display campaigns that only utilize GDN may Keyword targeting User-based targeting not be reaching the premium publishers that aren’t available through Google. For example, all of Yahoo!’s content sites (including Yahoo! Finance, Autos, Local Source: The Trade Desk Maps and Mail), MSN, eBay, CNBC, Billboard and eHarmony. 4 © 2011 Third Door Media, Inc. http://searchmarketingnow.com • Email: whitepapers@searchmarketingnow.com • (203) 664-1350
  • 5. Search and Display: Capitalizing on the Retargeting Opportunity Although Google is forecast to have 77% of search By using search retargeting as a form of display marketing revenues in 2012, it will only account for targeting, advertisers bring the two largest segments of 12.3% of display revenues for the year, according to their online advertising budget together to work as one. eMarketer. As a result, display advertisers that rely on Google Display Network (47% according to a survey by There are two types of search retargeting: The Trade Desk) are missing a huge part of the market. 1) Retargeting search users that visit the advertiser’s website (also called site retargeting). The Retargeting Opportunity 2) Retargeting search engine users searching on relevant keywords. Perhaps the biggest reason online marketers have jumped back into display advertising is the emergence Both types of retargeting are effective strategies for of search retargeting (also called remarketing), a display brand and search advertisers. Search retargeting advertising technique that engages search engine users overall enables advertisers to target users at the top of or website visitors based on a specific online action the purchase funnel, instantly build custom audience they have taken in the past. Numerous research studies segments based on user intent and continuously fine have found that the majority of online shoppers never tune segments during a campaign, providing insight complete the sale. According to Digital River: Fireclick into which types of users respond to what creative sets. Index 2011, 77% of consumers that fill a shopping cart ultimately abandon it. The same study found that 97% of Site Retargeting search clicks do not end in conversion. This is the most straightforward type of retargeting The familiar search metrics of CTR, CPA and CPC have – show a display ad to someone who has previously helped make retargeting a starting point for many visited an advertiser’s website from one of that search marketers. Search retargeting combines the advertiser’s search ads. This gives the advertiser an precision and efficiency of search marketing with opportunity to retarget any such visitor with a display the reach and branding power of display, allowing ad urging the visitor to come back for more. Visitors marketers to marry existing keyword lists with are retargeted using first-party cookies, which provide relevant banner ads to target consumers who have data including keyword searched, time of day, reverse demonstrated interest in a particular offering and DNS of IP address, preferred search engine, preferred continue the conversation with prospective customers browser, and what the user did or looked at on the beyond the search engines. advertiser’s site. Search retargeting campaigns help to convert, retain The advantage of site retargeting is that advertisers can and upsell existing web users that have either searched further segment visitors into individuals that did or did on a relevant product or brand term or visited the not convert. This differentiation then makes the display website. The data can be gleaned from first-party or advertising much more effective, taking the individuals’ third-party cookies and target either on-site or off-site actions into account. actions. 5 © 2011 Third Door Media, Inc. http://searchmarketingnow.com • Email: whitepapers@searchmarketingnow.com • (203) 664-1350
  • 6. Search and Display: Capitalizing on the Retargeting Opportunity For an individual that converted, an advertiser may show them an ad asking how they liked their purchase Five Reasons to Use and recommend similar products. Individuals that didn’t convert could see an ad inviting them back Search Retargeting for a second chance, maybe with a new and more compelling promotion. 1. Reach intenders. Search retargeting allows advertisers to combine the brand impact of static The challenge with site retargeting is that it may drive a or flash banners with the targeting capability and low amount of impressions since it requires individuals precision of search. to actually visit the advertiser’s website; the number of visitors getting cookied may be low depending on the 2. Create custom segments for each campaign. In advertiser’s search engine marketing budget. search retargeting, behavioral segments are defined by the search terms on which users have searched. Additionally, advertisers can see exactly how each Keyword-Based Retargeting keyword is performing in its campaign, whether on a CTR, CPC or CPA metric. The targeting that works To increase share, search retargeting can also be used for one set of creative may be very different from to monitor the keywords that individuals are searching the targeting that works for another set of creative without visiting the advertiser’s actual website. This is for the exact same product. Different calls to action accomplished by dropping a cookie on the individual’s and graphic elements impact response rates of system from a partner site and then dynamically different types of targeted users. monitoring the type of keywords they are searching 3. Eliminate the wait to build cookie pools. In for on the search engines. If one of the keywords being many cases, custom behavioral segments require “targeted” is searched for, that individual is retargeted weeks for a cookie pool to be built up in order with the advertiser’s display ads. for a campaign to be delivering at full strength. Third party search data providers, such as BlueKai or With keyword-level search retargeting, this wait is AlmondNet, as well as Yahoo!’s Right Media or Google eliminated as data is stored in memory for instant Display Network, will also append user cookies with access. This “instant-on” feature provides flexibility enhanced data such as demographics (age and gender) in creating and launching multiple campaigns that and interests. To protect user privacy, most display ad test and improve performance. exchanges require advertisers to only use personally identifiable information with express consent. 4. Fine tune segments during campaigns. Because the keyword lists that drive search retargeting can Using both of these targeting options together is be instantaneously adjusted at any time during a ideal, and experience is proving that site retargeting campaign, audience segments in search retargeting will almost always beat the keyword-driven search are typically fine tuned for optimum performance retargeting when a conflict occurs. Initially, a good rule during campaigns. As initial campaign data begins of thumb is to spend 25% of current search marketing to show which keywords are performing well and budget amounts on new retargeting or display which are not, segments can be fine tuned by campaigns. For example, one high-tech B2B marketer eliminating poorly performing keywords and adding spending $85,000/month on its search efforts added keywords similar to those performing well. In retargeting to its marketing plan (spending 15-20% addition, bids on individual keywords can be raised on the additional campaigns). The result was a 33% or lowered to achieve the desired KPIs. increase in website forms and 25% lift in software sales. 5. Gain valuable insights into target audiences. With keyword-level search retargeting, advertisers Creating Effective see exactly how users respond, broken down by the keyword searched. Advertisers can see the Retargeting Campaigns spend, number of impressions, clicks, conversions, CPM, CTR, CPC, and CPA for each keyword in the campaign. Using this insight, advertisers can design Making the most of retargeting opportunities requires more effective campaigns going forward based on sound search marketing strategy and execution. the most effective keywords. Challenges to effective retargeting include creative 6 © 2011 Third Door Media, Inc. http://searchmarketingnow.com • Email: whitepapers@searchmarketingnow.com • (203) 664-1350
  • 7. Search and Display: Capitalizing on the Retargeting Opportunity formats, ad placement and frequency, and accurate payments to convert the same user. The solution is to attribution, to name a few. have a unique transaction code that shows up in both the PPC and display reports, and compare these codes The following section highlights four best practices to in each of the channel’s reports. E-commerce sites, maximize retargeting results. for example, can utilize the already existing order ID. Otherwise, a single javascript command can be used to #1: Utilize Segmentation generate a sequential number each time someone hits the confirmation page. Effective segmentation is a key driver of retargeting success – particularly for retargeting website visitors. This code should be passed into the PPC and display Just as a generic piece of ad copy and a link to the tracking software as a hidden variable. For PPC this homepage won’t work in PPC, neither will dropping the might be the bid management platform’s conversion same cookie on all of a site’s pages and serving one pixel or the Google Analytics tag. DART users can display ad for the media campaign. create a simple custom variable. When pulling the regular PPC and display reports, be sure to include By using multiple pixels, advertisers can divide the these unique ID numbers and look for the quantity site into actions, or areas of intent, such as homepage of IDs that are unique and the number that are the (browsing), product page (researching), shopping cart same. If the percentage of IDs that is the same is (buying) and conversion page (customer). The result less than 10% then the display advertising is driving is that instead of one generic audience the advertiser incremental revenue over the search investment. If has four distinct audiences to target and can mimic PPC the overlap is a higher percentage, determine how to strategies more easily. For example, a “researcher” divide the revenue between the two channels. Most may need encouragement about the brand’s benefits search marketers attribute 50% to each channel for the or a financial incentive, whereas a “customer” can be conversions that overlapped. targeted with upsell opportunities. #3: Implement a Frequency Cap #2: Avoid Overlapping Results Display advertising offers the ability to set a One question that arises when adding display to a frequency cap, a control mechanism that essentially search marketing program is whether or it is actually stops targeting a user cookie after “x” number of driving incremental revenue or just creating two impressions. This is an important control and prevents Case Study Sample Campaign Results: PPC vs. Retargeting A B2B technology marketer with Search Cost Leads CPA high-value customers began PPC $6,854 34 $202 retargeting prospects who had requested a software demo. Search Retargeting $965 13 $74 Using three different retargeting Site Retargeting $12,654 66 $192 campaigns during August 2011, the additional display ads generated Creative Retargeting* $4,356 5 $871 3.5 times more leads over PPC Overall $24,829 118 $210 campaigns alone, while the CPA increased only 4%. *Defined as retargeting users that previously viewed the display ad. Source: Third Door Media 7 © 2011 Third Door Media, Inc. http://searchmarketingnow.com • Email: whitepapers@searchmarketingnow.com • (203) 664-1350
  • 8. Search and Display: Capitalizing on the Retargeting Opportunity users from feeling “stalked.” Begin by looking at your When advertisers know the right credit to give to a own site, product or service and analyzing the buying conversion, they also can address the question of the cycle in order to calculate how long a cookie should be quality of the traffic being generated by the retargeting retargeted. In nearly all cases it will be less than 7 days, program or campaign. Using the unique order ID being providing a good metric with which to program the used to gauge media overlap, compare the value of the length of any retargeting program. In addition, cap the IDs against the existing customer or CRM database. number of impressions to be served each day to avoid Are retargeted customers spending the same, more saturating the user’s browsing experience. or less per transaction than existing customers? Are they shopping as frequently? What is their estimated Tools like The Trade Desk provide reports that show Lifetime Value (LTV)? An effective retargeting program CTR at each impression frequency, offering a clear should show similar behaviors and numbers, but this is indication of what the setting should be. It’s helpful to an excellent exercise to see where campaign tweaking set some padding into the program – the minimum might be necessary. time in between each ad impression to one cookie – to avoid serving all the impressions in just a few seconds or minutes. Conclusion Thanks to investments in new technologies, new ad #4: Attribute Credit Properly formats and improved buying and selling processes, online display is enjoying a resurgence among both Accurate view-thru credit – i.e., when a user is exposed search and brand marketers. The emergence of real- to an ad, does not click on it, but goes on to convert in time bidding auctions through display advertising another action – is difficult for most search marketers. exchanges, as well as demand and buy-side platforms The solution is a study to benchmark the right view- now enables a broad range of advertisers to buy thru percentage for the display investment. display like search, utilizing sophisticated rules and algorithms to formulate the most efficient bids. Using a Public Service Announcement (PSA) targets two groups of the audience and exposes one to With both PPC and display advertising extremely the advertiser’s display ads and the other to a PSA important and efficient forms of online advertising announcement. Clearly, the advertiser’s ads can in their own right, using them together through influence the buying behavior of the audience, whereas retargeting is proving to be even more beneficial for the PSA ads cannot as it contains no brand messaging. advertisers seeking strong bottom-line results and ROI. To calculate the percentage of appropriate view-thru credit look at the delta between the two sets of results. Search retargeting combines the precision and For example: efficiency of search marketing with the reach and branding power of display, allowing marketers to marry • PSA ad group – 1 million ad impressions – $10,000 in existing keyword lists with relevant banner ads to view-thru revenue target consumers who have demonstrated interest in a • Advertiser ad group – 1 million ad impressions – particular offering and continuing the conversation with $100,000 in view-thru revenue prospective customers beyond the search engines. This shows that the audience was going to spend In addition, as advertisers gain more experience with $10,000 whether or not they were exposed to the retargeting they will look at all the places it makes display ads, but that when exposed to the ads they sense to drop cookies – on syndicated content, shared spent 10 times more as a group. The percentage of videos or email programs – to add to the cookie pool revenue that should be counted from view-thru is for retargeting with their own messages. Ultimately, therefore 90%. the most effective retargeting programs will combine marketing prowess, smart budgeting and an awareness Currently, best practices are to run a PSA twice a year of consumer privacy concerns to provide relevant, for each type of display campaign since each audience compelling campaigns to interested users. n group will have its own benchmark. 8 © 2011 Third Door Media, Inc. http://searchmarketingnow.com • Email: whitepapers@searchmarketingnow.com • (203) 664-1350
  • 9. Search and Display: Capitalizing on the Retargeting Opportunity The world’s leading Performance Media Platform, Acquisio helps marketers buy, track, manage, optimize, and report on media across all channels. The platform was designed for search marketing, and it has evolved to include Facebook ads and all major RTB display networks. Acquisio provides the industry-leading technology for marketers buying ads on any online channel, allowing them to handle all tasks associated with performance advertising, from ad purchase through conversion tracking and beyond, within a single integrated platform. With more than $500MM in ad spend under its management, Acquisio is the multi-channel advertising solution preferred by advertising and marketing agencies around the world. For more information, visit www.acquisio.com. 465 Victoria, Suite 300 Saint Lambert, QC Canada J4P 2J2 toll-free: +1.866.493.9070 direct: +1.450.465.2631 fax: +1.450.465.2841 Search Marketing Now webcasts and white papers provide authoritative and actionable education about search engine marketing issues. Register today for one of our free webcasts covering topics about search engine optimization, paid search advertising and search marketing in general. Search Marketing Now is a division of Third Door Media, which publishes web sites, and produces in-person events and webcasts. Each of the four brands - Search Engine Land, Search Marketing Expo, Search Marketing Now, and Sphinn - fosters continuing education, evolution and engagement for the community we serve. 9 © 2011 Third Door Media, Inc. http://searchmarketingnow.com • Email: whitepapers@searchmarketingnow.com • (203) 664-1350