Rethinking Google’s place in your ad budget

by

iMedia Connection

By Mario Sgambelluri

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Are you certain you’re accurately measuring search conversions? New metrics approaches could change your mind.

Roughly a third of all online ad spending goes to Google. But that spending — in fact most search spending — is largely based on a performance measurement standard that “completely ignores everything we know about marketing,” said Young-Bean Song, Atlas Institute’s director of analytics. And it’s not hard to do.

The way we look at search performance is based on the “last ad” standard, according to Song, who spoke at last week’s iMedia Brand Summit in Coconut Point, Fla. The problem with the last ad standard is that it attributes sales to the most recent ad viewed. That’s like attributing a car purchase to the most recent commercial viewed on television. But as we know, a purchase is actually the culmination of thousands of factors. So what about billboards? What about magazine ads? What about rich media ads? Why should Google get all the credit for a sale when it’s typically at the tail-end of a sales funnel that includes marketing through many different media and tactics?

Part of the reason search clicks get so much credit is the way people navigate the web. More often than many of us think, Song explained, people are using search engines and search tool bars to navigate in place of bookmarks, portals or typing URLs in a browser’s address bar.

According to Atlas research, 71 percent of sponsored search clicks are “navigational” in nature, that is, searches for brand names, website URLs, or repeated clicking of the same ad. Because of this, it’s easy to misinterpret search spending as driving conversions, when in fact, it could be display advertising, an email campaign, or other online tactics that originally drove product awareness or purchase intent.

In an effort to better understand the impact of all online spending, Atlas has adopted a unique approach to measuring online campaigns. Instead of focusing near the conversion point, Atlas looks at all media in a campaign and considers frequency, creative type, recency (proximity to the conversion) and even “last ad.” Considering all these factors, Atlas distributes value (as a fraction of the CPA) to all media in a campaign’s mix.

Until recently, the right measurement tools haven’t been available to weigh the significance of different tactics in a digital campaign. The actual numbers have always been there, hidden away in piles of log files, but according to Song, “The last thing marketers want is more data.” Now, analytics companies like Atlas are able to make these numbers actionable. And with that, the last ad standard should fade.

“That model is going to change,” Song said, “and a new standard is going to emerge.”

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