When allocating digital marketing budgets across channels, it is certainly important to dedicate an appropriate amount of budget to "closer" channels such as affiliate, search, and email. These channels are often the last ones that a consumer touches, prior to converting.
However, maintaining a significant spend in display advertising (also known as online banner advertising) is just as important. Banner ads introduce consumers to the brand, and influence people's brand preference along the path to purchase, both online and offline. Furthermore, display advertising provides volume and scalability that other digital channels don't have.
It is well known that banner ad click-through rates are obismal. Even the most compelling banner ads on the Internet aren't clicked on by 99% of people who see them. This often scares marketers away from display advertising, because the immediate value isn't obvious. However, it is important to understand that even when consumers are exposed to display ads, but don't click, these ads can still have a significant impact on website traffic and retail foot traffic.
This makes sense, when you think of the context of banner ads, and how consumers behave. A person who is just browsing their favorite information, news, or entertainment website (i.e., business.transworld.net) usually doesn't have an active intent to purchase something at the moment. But once they see a display ad several times, they consciously (or sub-consciously) associate the advertiser's brand with a product category, or at least reinforce an existing association they've made. That can happen whether they click the ad or not. When the consumer eventually does have a need that the advertiser's product can solve, they remember that association, and go directly to that website by typing in the url, or by searching for the brand name on a search engine like Google. In fact, a 2010 study from comScore and Valueclick Media showed that highly targeted ad buys, such as retargeting or audience targeting, can result in 500%-1,000% increase in the number of brand name searches that consumers conduct on search engines for the advertised brand.
The same study showed overall website visitation is lifted significantly through display advertising too – by at least 250%. Because brand search and direct traffic are typically the top conversion sources for a brand website, driving incremental clicks from these sources can be a highly effective way to increase digital ROI.
Display ads can influence offline behavior too, in a similar way to how print ads, circulars, TV, and radio all drive people to retail. A recent study by Google and a leading US retailer compared retail sales in test markets saturated with online media, versus those in control markets that had no online advertising. The results showed that, when combined with search ads, display advertising created a 1.6% increase in offline sales and a 1000% return on investment. In this case, online ads performed at least as good as circulars did for the same brand.
Another great advantage to display is that the inventory is virtually limitless in comparison to other digital channels. Email campaigns are limited by the number of subscribers you have in your database. Search campaigns are limited by the number of people actively searching for your brand or other relevant keywords. And social campaigns are limited by the number of followers/fans that you have. But display campaigns are only limited to one thing – the size of your target audience online. Given that ad networks like Google Display Network, AOL, and Value Click are able to reach upwards of 97% of the global Internet population, chances are that you can serve billions of impressions to consumers in your target market, and still have room to spend more.
As more marketing dollars shift to digital, action sports brands that want to scale their spend will need to move beyond solely investing in direct response channels. Ad clicks and ecommerce conversions are highly valued, and rightly so. But it's a mistake to focus all of your effort on closer channels, while ignoring the opportunity that display advertising presents.
John Faris is Director of Cross-Channel Marketing at Red Door Interactive, where he leads a team of experts on email, SEO, paid search, social media, and display advertising. He can be reached at [email protected] or www.reddoor.biz.