Search and Display: Capitalizing on the Retargeting Opportunity


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This ebook discusses the current state of online display advertising, including its growth, its synergies and
relationship with PPC, and the new retargeting opportunities. Acquisio and Search Marketing Now would like to
thank the following SearchEngineland and SMX East contributors for their assistance in developing this report:
Frost Prioleau, CEO and Co-founder,; Jeff Green, CEO, The Trade Desk; Dax Hamman, Chief Revenue
Officer, Chango; Cameron Jonsson, Co-Founder and Managing Director, Inventiv Focus; and Kevin Lee, CEO, DidIt.
Thanks also to Karen Burka for researching and preparing this E-Book.

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Search and Display: Capitalizing on the Retargeting Opportunity

  1. 1. Search and Display:Capitalizing on theRetargeting OpportunityA Search Marketing Now E-Book
  2. 2. Search and Display: Capitalizing on the Retargeting Opportunity IntroductionWith PPC marketing standing front and center in online marketing plans and budgets, display advertising fell outof favor over the past few years. The transition of display creative from glossy, full-color magazine ads to the webwas awkward, at best. Add to that the inefficiency of using CPM pricing parameters and the absence of standardformats and sizes, and the future for online display advertising looked bleak.But much has changed in the past twelve months. Investments in new technologies, new ad formats andimproved buying and selling processes are growing both the luster of online display advertising and its share ofmarketing budgets. A majority of ad agency executives – 62% – surveyed by Acquisio said they are expandingdisplay capabilities to all of their customers. The emergence of real-time bidding auctions through displayadvertising exchanges, as well as demand and buy-side platforms now enables advertisers to buy display likesearch, using sophisticated rules and algorithms to formulate the most efficient bids.As a result, search marketers are moving into display (or back into display) with ease, already owning the toolsand skills needed for these new ways of buying media. In particular, search retargeting, a display advertisingtechnique that engages searchers or website visitors based on a very specific online action they have taken in thepast, is jumpstarting display budgets and ROI impact. According to a recent eMarketer survey, targeting is one ofthe primary reasons advertisers are funneling more dollars to their display budgets, with 52.8% of those surveyedsaying increased ad budgets were directly impacted by increased targeting options.This ebook discusses the current state of online display advertising, including its growth, its synergies andrelationship with PPC, and the new retargeting opportunities. Acquisio and Search Marketing Now would like tothank the following SearchEngineland and SMX East contributors for their assistance in developing this report:Frost Prioleau, CEO and Co-founder,; Jeff Green, CEO, The Trade Desk; Dax Hamman, Chief RevenueOfficer, Chango; Cameron Jonsson, Co-Founder and Managing Director, Inventiv Focus; and Kevin Lee, CEO, DidIt.Thanks also to Karen Burka for researching and preparing this E-Book. n2 © 2011 Third Door Media, Inc. • Email: • (203) 664-1350
  3. 3. Search and Display: Capitalizing on the Retargeting OpportunityDisplay Advertising Growth Outpaces SearchAlthough search marketing still represents the largest piece of the online advertising pie, display advertising is nowgrowing at a faster pace. According to the Internet Advertising Bureau (IAB), PPC revenue hit $12 billion in 2010,for a 46% market share. But while PPC revenue grew in 2010, its share of the online advertising market decreasedslightly from 2009. Display advertising – including digital video commercials, sponsorships, ad banners and displayads – reached $9.9 billion in 2010 to grow from 35% to 38% of the online ad revenue market.Forrester Research forecasts similar growth trends for PPC and online display advertising. From 2011 through 2016,Forrester predicts a 20% compound annual growth rate (CAGR) for display advertising compared to 12% for search.Source: Internet Advertising BureauOnline Ad Revenues, 2009 vs. 2010 (in $ millions) According to the Internet Ad Format 2009 Revenues 2010 Revenues Search $10,698 $12,004 Advertising Bureau (IAB), PPC Classifieds & Directories $2,254 $2,597 revenue hit $12 billion in 2010, for a Lead Generation $1,451 $1,339 46% market share. But while PPC Email $292 $195 revenue grew in 2010, its share Display* $7,965 $9,906 of the online advertising marketDisplay advertising includes digital video commercials, adbanners/display ads, sponsorships and rich media. Source: decreased slightly from 2009.Internet Advertising BureauSeveral factors are driving the growth in online display advertising, including: •New pricing structures •Increased market efficiency in buying and selling ads •Synergies between PPC and display advertising •RetargetingBuying online display advertising used to be extremely inefficient: it was based on the print world’s CPMparadigm that required large minimum spends on high-volume, untargeted audiences and metrics such as reachand frequency. This model ignored the inherent targeting capabilities that came with the online channel, as wellas the emerging opportunities to pay for performance.3 © 2011 Third Door Media, Inc. • Email: • (203) 664-1350
  4. 4. Search and Display: Capitalizing on the Retargeting OpportunityToday, online display advertising is increasingly beingbought and sold in real time and through biddingauctions that enable advertisers and publishers tomake and receive highly efficient bids. The real-timebidding (RTB) process uses a chain of intermediaries,including demand-side platform (DSPs) providers andad exchanges/supply-side platform (SSPs) providers,to connect advertisers and publishers in a biddingexchange that occurs in less than one-tenth of a secondand utilizes business rules and bidding algorithms setby advertisers and their agencies.Synergies betweenSearch and DisplayThere are strong synergies between online displayadvertising and search marketing, which can jointlybe used to leverage targeted keyword advertising Moving into display is proving relatively easy foralongside branded display campaigns to achieve search marketers, who already have many of thegreater lift, as well as maximize clickthrough rates, tools and skills needed for buying and optimizingconversion and engagement metrics. Industry studies auction-based media. One simple way to get startedhave found that exposing search users to displaymedia from the same advertiser can result in double- is to set up a display campaign using existing PPCdigit increases over using search alone. Using search ad groups and optimize at the keyword level – just asand display together allows advertisers to reuse with PPC, each keyword carries a different messagevaluable search data, drive more search conversions by of intent and naturally has to be treated uniquely.widening the sales funnel and lower CPC costs. Secondly, create new groups of keywords that lack a proper presence in your search program, such asIronically, one of the primary reasons that search anddisplay are so complementary is the differences in their competitor brand names or broad head terms. Oncemarket dynamics. The PPC market is dominated by the campaign is live, data will start to flow backthree large publishers: Google, Yahoo! and Microsoft; showing the sites and keywords that are driving thethough in the US and Canada, Microsoft and Yahoo best results – go back to your PPC program and usehave joined forces and marketers can access all of their this information to your benefit.joint search inventory through adCenter. PPC marketingis based on keyword targeting that pulls users to thebrand or product when they have already formed intentto purchase or shown a need for more information. Search Display Pull marketing Push marketingThe display advertising market is characterized bythousands of online publishers, many of which are Bottom of funnel Top of funnelnot even accessible through Google Display Network Scarcity of supply Abundance of supply(GDN), one of several large display ad exchanges. Theothers include Right Media (owned by Yahoo!), which Hosted auction Real-time auctioncontrols nine billion impressions daily, ContextWeb, Google is often the publisher Google is rarely the publisherPubmatic, OpenX, Rubicon, Admeld, and AppNexus/Ad ECN. Display campaigns that only utilize GDN may Keyword targeting User-based targetingnot be reaching the premium publishers that aren’tavailable through Google. For example, all of Yahoo!’scontent sites (including Yahoo! Finance, Autos, Local Source: The Trade DeskMaps and Mail), MSN, eBay, CNBC, Billboard andeHarmony.4 © 2011 Third Door Media, Inc. • Email: • (203) 664-1350
  5. 5. Search and Display: Capitalizing on the Retargeting OpportunityAlthough Google is forecast to have 77% of search By using search retargeting as a form of displaymarketing revenues in 2012, it will only account for targeting, advertisers bring the two largest segments of12.3% of display revenues for the year, according to their online advertising budget together to work as one.eMarketer. As a result, display advertisers that rely onGoogle Display Network (47% according to a survey by There are two types of search retargeting:The Trade Desk) are missing a huge part of the market. 1) Retargeting search users that visit the advertiser’s website (also called site retargeting).The Retargeting Opportunity 2) Retargeting search engine users searching on relevant keywords.Perhaps the biggest reason online marketers havejumped back into display advertising is the emergence Both types of retargeting are effective strategies forof search retargeting (also called remarketing), a display brand and search advertisers. Search retargetingadvertising technique that engages search engine users overall enables advertisers to target users at the top ofor website visitors based on a specific online action the purchase funnel, instantly build custom audiencethey have taken in the past. Numerous research studies segments based on user intent and continuously finehave found that the majority of online shoppers never tune segments during a campaign, providing insightcomplete the sale. According to Digital River: Fireclick into which types of users respond to what creative sets.Index 2011, 77% of consumers that fill a shopping cartultimately abandon it. The same study found that 97% of Site Retargetingsearch clicks do not end in conversion. This is the most straightforward type of retargetingThe familiar search metrics of CTR, CPA and CPC have – show a display ad to someone who has previouslyhelped make retargeting a starting point for many visited an advertiser’s website from one of thatsearch marketers. Search retargeting combines the advertiser’s search ads. This gives the advertiser anprecision and efficiency of search marketing with opportunity to retarget any such visitor with a displaythe reach and branding power of display, allowing ad urging the visitor to come back for more. Visitorsmarketers to marry existing keyword lists with are retargeted using first-party cookies, which providerelevant banner ads to target consumers who have data including keyword searched, time of day, reversedemonstrated interest in a particular offering and DNS of IP address, preferred search engine, preferredcontinue the conversation with prospective customers browser, and what the user did or looked at on thebeyond the search engines. advertiser’s site.Search retargeting campaigns help to convert, retain The advantage of site retargeting is that advertisers canand upsell existing web users that have either searched further segment visitors into individuals that did or didon a relevant product or brand term or visited the not convert. This differentiation then makes the displaywebsite. The data can be gleaned from first-party or advertising much more effective, taking the individuals’third-party cookies and target either on-site or off-site actions into account.actions.5 © 2011 Third Door Media, Inc. • Email: • (203) 664-1350
  6. 6. Search and Display: Capitalizing on the Retargeting OpportunityFor an individual that converted, an advertiser mayshow them an ad asking how they liked their purchase Five Reasons to Useand recommend similar products. Individuals thatdidn’t convert could see an ad inviting them back Search Retargetingfor a second chance, maybe with a new and morecompelling promotion. 1. Reach intenders. Search retargeting allows advertisers to combine the brand impact of staticThe challenge with site retargeting is that it may drive a or flash banners with the targeting capability andlow amount of impressions since it requires individuals precision of actually visit the advertiser’s website; the number ofvisitors getting cookied may be low depending on the 2. Create custom segments for each campaign. Inadvertiser’s search engine marketing budget. search retargeting, behavioral segments are defined by the search terms on which users have searched. Additionally, advertisers can see exactly how eachKeyword-Based Retargeting keyword is performing in its campaign, whether on a CTR, CPC or CPA metric. The targeting that worksTo increase share, search retargeting can also be used for one set of creative may be very different fromto monitor the keywords that individuals are searching the targeting that works for another set of creativewithout visiting the advertiser’s actual website. This is for the exact same product. Different calls to actionaccomplished by dropping a cookie on the individual’s and graphic elements impact response rates ofsystem from a partner site and then dynamically different types of targeted users.monitoring the type of keywords they are searching 3. Eliminate the wait to build cookie pools. Infor on the search engines. If one of the keywords being many cases, custom behavioral segments require“targeted” is searched for, that individual is retargeted weeks for a cookie pool to be built up in orderwith the advertiser’s display ads. for a campaign to be delivering at full strength.Third party search data providers, such as BlueKai or With keyword-level search retargeting, this wait isAlmondNet, as well as Yahoo!’s Right Media or Google eliminated as data is stored in memory for instantDisplay Network, will also append user cookies with access. This “instant-on” feature provides flexibilityenhanced data such as demographics (age and gender) in creating and launching multiple campaigns thatand interests. To protect user privacy, most display ad test and improve performance.exchanges require advertisers to only use personallyidentifiable information with express consent. 4. Fine tune segments during campaigns. Because the keyword lists that drive search retargeting canUsing both of these targeting options together is be instantaneously adjusted at any time during aideal, and experience is proving that site retargeting campaign, audience segments in search retargetingwill almost always beat the keyword-driven search are typically fine tuned for optimum performanceretargeting when a conflict occurs. Initially, a good rule during campaigns. As initial campaign data beginsof thumb is to spend 25% of current search marketing to show which keywords are performing well andbudget amounts on new retargeting or display which are not, segments can be fine tuned bycampaigns. For example, one high-tech B2B marketer eliminating poorly performing keywords and addingspending $85,000/month on its search efforts added keywords similar to those performing well. Inretargeting to its marketing plan (spending 15-20% addition, bids on individual keywords can be raisedon the additional campaigns). The result was a 33% or lowered to achieve the desired KPIs.increase in website forms and 25% lift in software sales. 5. Gain valuable insights into target audiences. With keyword-level search retargeting, advertisersCreating Effective see exactly how users respond, broken down by the keyword searched. Advertisers can see theRetargeting Campaigns spend, number of impressions, clicks, conversions, CPM, CTR, CPC, and CPA for each keyword in the campaign. Using this insight, advertisers can designMaking the most of retargeting opportunities requires more effective campaigns going forward based onsound search marketing strategy and execution. the most effective keywords.Challenges to effective retargeting include creative6 © 2011 Third Door Media, Inc. • Email: • (203) 664-1350
  7. 7. Search and Display: Capitalizing on the Retargeting Opportunityformats, ad placement and frequency, and accurate payments to convert the same user. The solution is toattribution, to name a few. have a unique transaction code that shows up in both the PPC and display reports, and compare these codesThe following section highlights four best practices to in each of the channel’s reports. E-commerce sites,maximize retargeting results. for example, can utilize the already existing order ID. Otherwise, a single javascript command can be used to#1: Utilize Segmentation generate a sequential number each time someone hits the confirmation page.Effective segmentation is a key driver of retargetingsuccess – particularly for retargeting website visitors. This code should be passed into the PPC and displayJust as a generic piece of ad copy and a link to the tracking software as a hidden variable. For PPC thishomepage won’t work in PPC, neither will dropping the might be the bid management platform’s conversionsame cookie on all of a site’s pages and serving one pixel or the Google Analytics tag. DART users candisplay ad for the media campaign. create a simple custom variable. When pulling the regular PPC and display reports, be sure to includeBy using multiple pixels, advertisers can divide the these unique ID numbers and look for the quantitysite into actions, or areas of intent, such as homepage of IDs that are unique and the number that are the(browsing), product page (researching), shopping cart same. If the percentage of IDs that is the same is(buying) and conversion page (customer). The result less than 10% then the display advertising is drivingis that instead of one generic audience the advertiser incremental revenue over the search investment. Ifhas four distinct audiences to target and can mimic PPC the overlap is a higher percentage, determine how tostrategies more easily. For example, a “researcher” divide the revenue between the two channels. Mostmay need encouragement about the brand’s benefits search marketers attribute 50% to each channel for theor a financial incentive, whereas a “customer” can be conversions that overlapped.targeted with upsell opportunities. #3: Implement a Frequency Cap#2: Avoid Overlapping Results Display advertising offers the ability to set aOne question that arises when adding display to a frequency cap, a control mechanism that essentiallysearch marketing program is whether or it is actually stops targeting a user cookie after “x” number ofdriving incremental revenue or just creating two impressions. This is an important control and prevents Case Study Sample Campaign Results: PPC vs. Retargeting A B2B technology marketer with Search Cost Leads CPA high-value customers began PPC $6,854 34 $202 retargeting prospects who had requested a software demo. Search Retargeting $965 13 $74 Using three different retargeting Site Retargeting $12,654 66 $192 campaigns during August 2011, the additional display ads generated Creative Retargeting* $4,356 5 $871 3.5 times more leads over PPC Overall $24,829 118 $210 campaigns alone, while the CPA increased only 4%. *Defined as retargeting users that previously viewed the display ad. Source: Third Door Media7 © 2011 Third Door Media, Inc. • Email: • (203) 664-1350
  8. 8. Search and Display: Capitalizing on the Retargeting Opportunityusers from feeling “stalked.” Begin by looking at your When advertisers know the right credit to give to aown site, product or service and analyzing the buying conversion, they also can address the question of thecycle in order to calculate how long a cookie should be quality of the traffic being generated by the retargetingretargeted. In nearly all cases it will be less than 7 days, program or campaign. Using the unique order ID beingproviding a good metric with which to program the used to gauge media overlap, compare the value of thelength of any retargeting program. In addition, cap the IDs against the existing customer or CRM database.number of impressions to be served each day to avoid Are retargeted customers spending the same, moresaturating the user’s browsing experience. or less per transaction than existing customers? Are they shopping as frequently? What is their estimatedTools like The Trade Desk provide reports that show Lifetime Value (LTV)? An effective retargeting programCTR at each impression frequency, offering a clear should show similar behaviors and numbers, but this isindication of what the setting should be. It’s helpful to an excellent exercise to see where campaign tweakingset some padding into the program – the minimum might be necessary.time in between each ad impression to one cookie – toavoid serving all the impressions in just a few secondsor minutes. Conclusion Thanks to investments in new technologies, new ad#4: Attribute Credit Properly formats and improved buying and selling processes, online display is enjoying a resurgence among bothAccurate view-thru credit – i.e., when a user is exposed search and brand marketers. The emergence of real-to an ad, does not click on it, but goes on to convert in time bidding auctions through display advertisinganother action – is difficult for most search marketers. exchanges, as well as demand and buy-side platformsThe solution is a study to benchmark the right view- now enables a broad range of advertisers to buythru percentage for the display investment. display like search, utilizing sophisticated rules and algorithms to formulate the most efficient bids.Using a Public Service Announcement (PSA) targetstwo groups of the audience and exposes one to With both PPC and display advertising extremelythe advertiser’s display ads and the other to a PSA important and efficient forms of online advertisingannouncement. Clearly, the advertiser’s ads can in their own right, using them together throughinfluence the buying behavior of the audience, whereas retargeting is proving to be even more beneficial forthe PSA ads cannot as it contains no brand messaging. advertisers seeking strong bottom-line results and ROI.To calculate the percentage of appropriate view-thrucredit look at the delta between the two sets of results. Search retargeting combines the precision andFor example: efficiency of search marketing with the reach and branding power of display, allowing marketers to marry• PSA ad group – 1 million ad impressions – $10,000 in existing keyword lists with relevant banner ads to view-thru revenue target consumers who have demonstrated interest in a• Advertiser ad group – 1 million ad impressions – particular offering and continuing the conversation with $100,000 in view-thru revenue prospective customers beyond the search engines.This shows that the audience was going to spend In addition, as advertisers gain more experience with$10,000 whether or not they were exposed to the retargeting they will look at all the places it makesdisplay ads, but that when exposed to the ads they sense to drop cookies – on syndicated content, sharedspent 10 times more as a group. The percentage of videos or email programs – to add to the cookie poolrevenue that should be counted from view-thru is for retargeting with their own messages. Ultimately,therefore 90%. the most effective retargeting programs will combine marketing prowess, smart budgeting and an awarenessCurrently, best practices are to run a PSA twice a year of consumer privacy concerns to provide relevant,for each type of display campaign since each audience compelling campaigns to interested users. ngroup will have its own benchmark.8 © 2011 Third Door Media, Inc. • Email: • (203) 664-1350
  9. 9. Search and Display: Capitalizing on the Retargeting OpportunityThe world’s leading Performance Media Platform, Acquisio helps marketers buy, track, manage, optimize, andreport on media across all channels. The platform was designed for search marketing, and it has evolved to includeFacebook ads and all major RTB display networks. Acquisio provides the industry-leading technology for marketersbuying ads on any online channel, allowing them to handle all tasks associated with performance advertising, fromad purchase through conversion tracking and beyond, within a single integrated platform. With more than $500MMin ad spend under its management, Acquisio is the multi-channel advertising solution preferred by advertising andmarketing agencies around the world. For more information, visit Victoria, Suite 300Saint Lambert, QCCanadaJ4P 2J2toll-free: +1.866.493.9070direct: +1.450.465.2631fax: +1.450.465.2841Search Marketing Now webcasts and white papers provide authoritative and actionable education about searchengine marketing issues. Register today for one of our free webcasts covering topics about search engineoptimization, paid search advertising and search marketing in general.Search Marketing Now is a division of Third Door Media, which publishes web sites, and produces in-personevents and webcasts. Each of the four brands - Search Engine Land, Search Marketing Expo, Search MarketingNow, and Sphinn - fosters continuing education, evolution and engagement for the community we serve.9 © 2011 Third Door Media, Inc. • Email: • (203) 664-1350