A few weeks ago, I was talking shop with Josh Shatkin-Margolis, CEO and founder of search retargeting firm Magnetic, when he stated, “Display is changing the value of search.”

I balked. But I took the bait. “What’s that even mean, dude?” I said.

Josh went on to explain that all signs point to the fact that display is going to become the dominant advertising channel online and that search retargeting will become the dominant tactic for display advertising.

Thus, display is changing the value of search as search will become even more valuable for targeting than it has been for the last decade with just buying text ads on search engines.

“Soon, not doing search retargeting will be a fireable offense for an advertising agency,” Josh boldly explained, and continued his argument:

“The advertiser will ask: ‘You mean a user went on a search engine, raised their hand saying they want a new cell phone, and the user only received one text ad via the search engine, next to our competitors text ads, and on a page that the user likely only spent 30 seconds? You never followed up with that user beyond the search engine, in a one-on-one setting on their favorite publisher, and with a picture of our product?  You’re fired!

Okay. Got it. But being the skeptic I am, I decided to dive into the evidence to see if he was right.

Exhibit A:  Display Will Outpace Search

Don’t look so surprised. We always knew this was inevitable. The fact is that paid search is a pull medium as it requires users to search on an engine to trigger an ad. Display is a push medium which simply requires page views to deliver [normally multiple] ads to the user.

Bottom line:  page views online are growing exponentially faster than searches on search engines.

Check out the eMarketer chart below. Search spending is on pace to almost double in the US by 2016 whereas display almost triples. If this chart were to extend out to 2020, there’s no doubt (based on current market conditions) that advertisers will be spending more on display by that time.

Exhibit B:  Display Offers More Impressions Than Search

“Search retargeting gives advertisers a second chance to reach consumers who might have not been ready to transact during their search experience,” says Harrison Magun, SVP of Paid Media & Analytics at Covario. “Search retargeting is the gateway to display opportunities for search advertisers.”

Let’s do some fuzzy math. On a Search Engine Results Page (SERP), we’ll assume that on average, there are six paid listings on a page. One million unique user searches for Keyword X would equate to (1 million searches x 6 ads per SERP) six million ad impressions, right?

However, let’s say that there are twenty advertisers who would want to target users who searched for Keyword X.

If they all use search retargeting and were able to reach those million users an average of five times, that would be (1 million searches X 20 advertisers X 5 Frequency) one hundred million ad impressions.

So, in this example for the same one million searches, traditional paid search would deliver six million impressions versus search retargeting with one hundred million impressions.

In the case of highly competitive keywords, there may be literally dozens and dozens of advertisers using search retargeting to push well over ten to twenty impressions to those users.

In that case, this could mean hundreds of millions of impressions chasing those one million users who searched on Keyword X.

Exhibit C:  Search Retargeting Works For The Same Reason Search Works Well

One of the main reasons why paid search works so well is the expressed intent that’s passed from the user to the advertiser. We can reasonably assume that someone is interested in grilling when they search for “buy bbq grill” or are in the market for a Hawaiian vacation when they search for “best deals on cruise to Hawaii”.

The keyword is a huge indicator of what kind of messaging to which a user would respond best. Right now, with many display ads being loosely targeted to user site behavior or geographical location, search retargeting’s ability to target to users who have identified their intentions via searched keywords is proving to work.

According to Michael Davis, Senior Media Planner at Razorfish:  ”By using site and search retargeting with Magnetic, we’ve seen glowing results for our clients. This targeting combination allows us to leverage both customer acquisition and customer retention strategies online.”

Exhibit D:  Search Retargeting Is Growing

This tactic is blossoming as we speak. Besides Magnetic, other search retargeting companies already in this space include Chango and Simpli.fi. As well, Criteo is getting involved and so is mediaFORGE.  The big player that seems to be making moves on this front is Google.

As reported in AdAge recently, Google is “quietly building an exchange for buying and selling data.”  There’s no definitive reports that this data exchange (dubbed “DDP”) will include search data, but the Big G must know that they’re sitting on a virtual fountain of search retargeting gold as the leading search engine in the world.

Judge’s Decision:  Display Is Changing The Value Of Search

Based upon the evidence, I’m going to have to agree with Josh Shatkin-Margolis on this one.

  • It’s inevitable that display’s budgetary importance will outgrow paid search over time
  • Search retargeted display will offer many more times the impression opportunities per keyword search than traditional paid search advertising
  • Due to the passing of the user intent [keyword] to the advertiser, search retargeting could very likely become the dominant targeting tactic in the display ad space
  • The search retargeting industry seems to be growing, not slowing

Josh is not saying that search will become irrelevant. If anything, search will always be a very important part of digital advertising. It’s still growing, albeit slower than display overall, but it’s definitely here to stay.

However, what he’s saying is that because of the reasons listed above, marketers will begin to see the value of search to be both on the SERP and off the SERP. As display grows (and search retargeting grows with it) search extends far beyond where it is now.

Thus, display is changing the value of search which should be good news to the search pros out there! It’s going to make search even more important than ever.

Opinions expressed in the article are those of the guest author and not necessarily Search Engine Land.

Related Topics: Channel: Search Marketing | Search Marketing Toolbox

Sponsored


About The Author: is the director of marketing research for Kenshoo, the leading provider of bid management software. You can follow him on Twitter at @mediatechguy.

Connect with the author via: Email | Twitter | Google+ | LinkedIn



SearchCap:

Get all the top search stories emailed daily!  

Share

Other ways to share:

Read before commenting! We welcome constructive comments and allow any that meet our common sense criteria. This means being respectful and polite to others. It means providing helpful information that contributes to a story or discussion. It means leaving links only that substantially add further to a discussion. Comments using foul language, being disrespectful to others or otherwise violating what we believe are common sense standards of discussion will be deleted. Comments may also be removed if they are posted from anonymous accounts. You can read more about our comments policy here.
  • http://rookstudios.com Rowan

    I can’t find fault with any of the points drawn in this post, but what about some of the negatives of display search – How do you see things like click-fraud affecting the up-take of display advertising?

  • http://www.frontstreetconsulting.com Justin Freid

    Great post Josh. Everything you pointed out makes sense, display is growing and retargeting will be at the forefront of that growth. The one issue I see with many advertisers/clients is ROI and in order to foster that growth display needs to improve its ROI.

    Specifically for lead generation campaigns display needs the benefit of view through conversions and a high attribution percentage to be deemed profitable or worth the investment. If your client puts more value in search or their TV advertising, chances are display will be viewed as the runt of your marketing campaign. This leading to less of an investment. (that said, retargeting obviously has it’s benefits for lead gen)

    I know display is growing, but I fear it is growing for the wrong reasons. It’s growing because there are millions and millions of cheap impressions out there, not because it is a great marketing tool.

  • http://www.whatsthegoodword.com brianpfitzgerald

    I think this article makes a compelling argument for the advertiser demand that exists and how display can help address that demand. I think the trend that is not addressed here, or that is still up for debate, is the frame of mind that a consumer is in when they are served these different types of ads. When someone is searching, on a search engine, they are in a mindset where they have a need for information and they are looking for information. When someone is shown a display ad while they are reading an article, checking their email, etc. they are not in that same mindset. I think this presents challenges.

    Interesting to see how this space will continue to evolve.

 

Get Our News, Everywhere!

Daily Email:

Follow Search Engine Land on Twitter @sengineland Like Search Engine Land on Facebook Follow Search Engine Land on Google+ Get the Search Engine Land Feed Connect with Search Engine Land on LinkedIn Check out our Tumblr! See us on Pinterest

 
 

Click to watch SMX conference video

Join us at one of our SMX or MarTech events:

United States

Europe

Australia & China

Learn more about: SMX | MarTech


Free Daily Search News Recap!

SearchCap is a once-per-day newsletter update - sign up below and get the news delivered to you!

 


 

Search Engine Land Periodic Table of SEO Success Factors

Get Your Copy
Read The Full SEO Guide