Search + Display Advertising = Reduced Cost Per Acquisition

There have been numerous reports published over the years by Google, Yahoo and Microsoft that attempt to prove how the use of display advertising, when combined with search, can increase your overall campaign performance.

A recent report published by iProspect, Search Engine Marketing and Online Display Integration Study was featured in an article for MediaPost titled Study Confirms Display Ads, Paid Search Work in Concert. Robert Murray, iProspect’s CEO is quoted in the article, saying “Internet users are more likely to engage and/or eventually make a purchase from brands with which they are already familiar.” Display ads help breed familiarity. The article also reports findings that suggest that of the people that react to display ads,  31% of those people click on display ads, and 27% go to search engines to do a search related to the ad (brand, offer, product).

At ClearSaleing, we have been tracking the relationship between display and search for over 2 years. We assemble advertising into what we call a purchase path, which is the chronological sequencing of display impressions, ad clicks, organic visits and direct visits that lead to conversions and/or non-conversions or abandoned paths. When we analyze the purchase paths of our clients that use display and search advertising, and specifically look at the types of searches they do after being exposed to display, we learn something very interesting.

Based on our observations, the combination of display advertising and paid search can indeed reduce your cost per acquisition (CPA). Our analysis shows that the most common type of search by a user after being exposed to a display ad is a branded search. We have found that with some of our clients, upwards of 50% of the searches that occur after being exposed to a display ad are brand searches.  A brand search is a search for your company name, a misspelling of your company name, or a typo of your company name that leads a consumer to click on your sponsored listing (your PPC ad).  Brand ads are almost always the cheapest PPC ads that you can buy. Many companies have trademark restrictions on other companies bidding on their branded terms, and for those that don’t have trademark protection, they are still likely to pay a very low CPC when compared to their non-branded PPC ads.

For example, if you were in the auto insurance business and are not running display ads, the most common search for your products is likely “auto insurance,” which is a keyword with a per-click cost between $15 and $30+ historically. Our research shows purchase paths that are all search-based typically start with a general term, and often include a second search for a non-branded term, and then close with a branded term. They also go from a general term to a branded term and then convert. The CPA, when considering the entire purchase path in this case, typically runs in excess of $30 to $60+.

If this advertiser ran display ads in addition to search ads, the search the consumer most often does after seeing that display ad is for a brand term. When we measure just the cost of the advertising in these converting paths, the cost for a banner impression is just fractions of a penny, and the cost of a click on a branded term is typically no more than $.25. Therefore, the cost of these converting paths can be as low as $.25 versus a cost of $30 to $60 for the previously stated search-only converting Paths.

By adding display to your campaigns today, you will create new paths for your consumers to navigate, which are much cheaper than search-only paths, and this can allow for your CPA to decrease and searches for your cheaper brand terms to increase.