PetSmart acquired Pet360 for $130 million in cash and up to $30 million more in future performance-based payments.
(Page 3 of 3)
“Search is more than double our display ad spend, and search spending will continue to go up,” says Kuperman of Bidz.com. “With search you’ve already gotten the customer to tell you what they’re looking for before you present the ad, and the text in the search ad can be targeted directly to what they’re seeking. However, it is much easier to show that sparkling diamond ring in a display ad than in five words in a paid search text ad.”
Unlike paid search, online display advertising ultimately is more about branding than selling, and as a result, this means return on investment typically will come in the long term, says Kalma of Zappos.com.
“We see spikes in paid search on days our display ads appear, which in turn makes our ROI for paid search better. But this is not a set-in-stone metric,” Kalma says. “The display ads put us in people’s minds. If you are going to go down the road of online display advertising, you have to take a stand that you likely will not see an immediate ROI like you can with paid search. It’s not a leap of faith, it’s one marketing strategy that benefits others.”
Paying a complement
And it’s these benefits e-retailers should contemplate when considering using online display ads as a marketing tool, experts say.
Display advertising complements paid search, says Don Kennedy, senior vice president of advertising at Platform-A, AOL’s advertising business that includes an ad network, ad-serving unit, behavioral targeting technology, search engine management unit and more.
“It’s a push versus pull mentality,” he says. “With paid search, you get clicks when someone is actively searching for something. With display you are putting ads out there for folks who may be very interested in your products but not going to the engines and looking for them at that moment.”
Bidz.com is generally satisfied with how display advertising performs, but it has shifted dollars away from display to other areas, primarily affiliate marketing, that it deems of greater importance.
“We realize display advertising is definitely not going to disappear, and that it will continue to grow in the coming years. However, we find display to be a medium best suited for branding purposes,” says Kuperman of Bidz.com. “Display can’t offer the same ROI as affiliate marketing. But display advertising is a good complement to our overall marketing efforts.”