The Great Transition: Keyword Discovery Replaced By Display Inventory Discovery

Volume 2, Issue 6 - June, 2012

Editor, IQ Advisor

As any industry matures, it goes through cycles. These cycles are often influenced by a combination of factors, including: technology innovation, the competitive landscape within the marketplace, increased commoditization, and new business models inside the industry and its related industries. Such is very much the case with the digital marketing space, and in particular the abundant opportunity that was available through the search marketing keyword discovery process during the last decade, which I would contend has been all but replaced by the online display ad inventory discovery process of the current decade.

The Last Decade

As more and more consumers started using the Internet to buy products, marketers were able to use their analytics systems to identify how visitors to their site were searching for specific products. A little bit of research into the referring URL’s and the queries that lead to conversions formed the basis of what became known as keyword discovery. It was the marketer’s dream come true - un-tapped demand announcing itself through little hand typed queries called keywords, with the nature of those keywords intuitively pointing to related keywords that represented potentially similar demand. And with the relatively new practice of paid search, marketers no longer needed to wait to build and rank on SEO content - they could write an ad, buy a keyword and begin generating sales in mere hours.

Branded keywords were naturally identified first, followed by non-branded keywords such as product keywords and category keywords, which were eventually followed by the famed long-tail keywords. Marketers worked overtime to figure out which pieces of demand they could service at what price. The market grew rapidly, attracting a slew of technologies to support the marketer: keyword discovery tools, keyword imputation tools, rank measurement tools and bid management tools. Plenty of technologies proliferated and the average search marketer’s practice became more programmatic and quantitative.

Meanwhile, display advertising remained the red-headed step child - competing with other channels for any dollars that would potentially move out of less measurable channels like TV. Some leading edge “ninja” digital marketers were able to make display work, but only if they could convince consumers to click an ad and convert in a manner that could be monetized. Display ads could not work for broader audience segments that would only be influenced to perform a certain desired behavior later, but not raise their hands immediately upon viewing the ad.

This Decade

Fast forward to today. If you’re a search marketer today, everyone knows what you know. You’re paying a premium for your branded keywords just to prevent competitors and affiliates from cannibalizing demand that’s truly yours. Non-branded keywords are completely exposed - and everyone from your competitors, affiliates and neighbors compete on them - and hence are unprofitably expensive. While the long tail can be a worthwhile exercise for advanced retailers, no one else really cares. The playing field has been leveled.

At the same time, technology has caught up with the demands that online display advertising (and the mountains of data it produces) has created. Huge webserver and adserver log files can now easily be manipulated. Computers systems can rip through terabytes of data and tech savvy marketers and business savvy technologists finally have tools to crack display measurement and - more specifically - impression measurement. And attribution management has matured from a subjective, rules-based exercise to its current objective, algorithmic state. A consumer’s digital experience can be accurately analyzed, and credit can be fractionally assigned to the tactics (including display) that contribute to the eventual conversion, enabling the optimization of future marketing spend to those channels (especially display) that had been previously under-valued by traditional measurement system.

Marketers can now test a display inventory source, make a small buy, measure its success in downstream conversions via whatever channel records the conversion and decide to grow or shrink media buys. Much like the last decade, when some keywords worked and some didn’t, marketers are discovering that some inventory sources work and some don’t. And for those that do work, intuition can point marketers to similar inventory sources that represent potentially similar demand. Marketing attribution technology is exposing these winning sources - much like a simple conversion tracking system once did for search. New technology is also proliferating - bid management tools and DSPs are in various stages of absorbing attributed conversion tracking into their bidding systems. Almost any system that took in a search conversion feed is now retooling itself to take an attributed conversion feed:

The rush to capture demand has moved north - to the upper parts of the conversion funnel - where demand is generated by display. Those same ninja marketers are now pumping their buys through an attribution system, figuring out which inventory sources work and which ones don’t and reshuffling their investments to maximize their returns. To this end, attribution technology is truly leading the charge in this new era of display inventory discovery.

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