Search Or Content Ads? A Marketer's Dilemma

One of the issues presenting itself after Google's new focus on quality search ads—CPC inflation, expected higher conversions, reported lower publisher payouts—is the question of which gets more bang for the buck, search or content ads?
Editor's Note: Sometimes the Search Kool-Aid is just too strong and small business marketers ignore branding opportunities via contextual content advertising because of the perception that the ads don't convert. It may have delayed benefits, the same way branding has offline. Or do you think online marketing is a different animal? Let us know in the comments section.
Well, Google certainly seems to be leaning one way, at least in the strictest of monetary senses. The answer may not be a simple matter of numbers, but some numbers make the issue appear pretty lopsided, as though branding online is playing second fiddle to search. The last half of Q4 2007 and first half of Q1 2008 (that's one whole quarter, I suppose) have been good for CheapFlights.com, which announced a sudden spike in unique visitors beginning in November. In the US, visits to the website increased from 1.5 million to 3.5 million by February. In the UK, 4.5 million were attracted. This (8 million unique visitors) was an all-time high, the company announced, and attributed its rocketing success, of course, to strong internal efforts and product strength. "We like to attribute our continued success to our providing consumers on both sides of the Atlantic with a user-friendly product allowing them rapidly to search and conclude terrific flight deals for their chosen destinations. At the same time, we are also giving our small as well as large-sized travel industry advertisers equal access to literally millions of would-be travelers intending to fly," said CheapFlights.com's Chris Cuddy, group managing director, in a press release. He likes to attribute success to that also because that is the corporate line; Cuddy's remarks are pretty standard PR-sanitized, talking-point-centric, generally-useless-for-reporting shtick. Compete.com's Mike Redbord, understandably impressed by the numbers, wanted to find out the referral details of CheapFlights' meteoric surge, instead of relying on the old "we're better than everybody" pitch most executives put out there. CheapFlights seems to have enjoyed a winter spike, especially due to referrals from search and portal sites. Referrals from search and portal sites went up from 600,000 visitors in November to over 1 million in January, quite a nice increase. These referral numbers dwarf referrals from straight content sites, the big online travel agencies like Orbitz, the highest number coming from an assortment of travel sites, perhaps around 500,000 across four of them in January, if I'm reading between the graph-lines right. "Tweaks to the Cheapflights site, SEO, and increased SEM spend could all drive an increase like this in Search & Portal traffic," Redbord writes. A subsequent graph for CheapFlights shows that a trouncing majority of referrals that went on to partners came from Google, as might be expected. But in January*, Google referrals spiked from under 20,000 to over 40,000, a 119% increase. Despite numbers already much, much lower, Yahoo and MSN did not come even close to keeping pace with the sudden spike. That indicates a couple of things about search, at least in the travel sector: Google's referrals in January stomped (stampeded) the competition; search is much more directly effective at generating referrals than ads on content sites. Emphasis, as you can see, is on the word "directly." While every marketer has the judgment to decide which kind of campaign is right for his or her brand (indeed, in some cases a search campaign will be more appropriate than a contextual campaign, just like direct mail is sometimes more appropriate than a broadcast campaign), I think it might be tempting to abandon the branding concept altogether, just based on numbers like these. You gotta admit, the numbers are pretty lopsided, and pretty lopsided in one search engine's favor. Nobody's unaware, either, of the concept of ad-blindness, which most certainly exists in seemingly greater supply the more savvy users become. However – and I understand that smaller businesses have to put their money where it's most likely to bring back results and do not have the branding luxuries of big names – it seems to me a wise thing to take a cue from the big names when possible. Branding is not a direct marketing thing. It is an awareness thing. The big marketers know that awareness, eventually, drives sales. Ask Coca-Cola, Intel, Microsoft, any company that has made sure their brand was ubiquitous in the world, if all that branding effort was in vain. They'll most likely think you're nuts. Admittedly, it could be a different animal altogether when we talk about online marketing – but I doubt it. In conclusion, then, I say focus on your direct referrals via search, where customers are actively seeking you out and therefore more likely to buy, but don't forget about branding via content sites that takes your message and logo and implants it into the back of the customer's mind so that when they search later with the intention to buy, they already remember and recognize your brand instead of the competitor's. **It seems to me difficult to attribute a direct cause of the spike because there are too many unknown variables, seasonality, Google's focus on ad quality scores, and possible offline promotions being three of them.