Last month Google’s chief economist Hal Varian in discussing Google business model of PPC advertising site “During periods of slow economic growth, the last thing an advertiser wants to cut is its spending on search-based advertising.”
In other words, display advertising will take a bigger hit than paid search as marketers tighten their purse strings.
Microsoft however argues that search ads get too much credit for click throughs while display ads don’t get enough. The company, which is struggling to build an online ad business to compete with Google is challenging that notion with a new tool that measures the effectiveness of display advertising in an online ad campaign.
Atlas Institute, which is part of Microsoft Advertising’s research division, has released a study that shows that people are more likely to click on ads or buy things online when they are exposed to display ads.
In a study called “Illuminating the Alltel Wireless sales funnel,” those who clicked on search ads for the cell phone maker were 56% more likely to buy a phone or wireless plan from the company when they saw Alltel’s display ads compared to those who only saw Alltel’s search ads.
Search ads typically get the most credit for contributing to a sale because they’re the last ad that is viewed. “When someone is ready to take action by clicking on an ad or buying something, they will go to a search engine and type in what they’re looking for,” explains Morris Martin, an analyst with Atlas Institute who led the study. “The very last ad is the one that gets 100% of the credit.
Microsoft’s new measuring tool tracks branded ads that an Internet user comes across before making a purchase.
The system tracks, then assigns a value for all the ads that contribute to a successful sale.