New Study Shows Many Online Marketers Ignore Sales Funnel

03/27/2009

A new study performed by Microsoft’s Atlas Institute shows that many companies engaged in online marketing are not giving credit where it is due. This study included 17 million online conversions from the campaigns of 250 advertisers across thousands of sites over 90 days. The results of this study show that the average converter, one who performs the desired action of the marketer, was exposed to 18.5 of the marketer’s ads within 90 days of the campaigns. In addition, the study showed that half of the ad exposures occurred within 7 to 60 days before the conversions took place.

The results of this study contend that even though most companies who use online marketing are familiar with the sales funnel concept, they too often ignore most of the top funnel while making their campaign calculations. For those not acquainted with the concept, a sales funnel is a way that marketers may look at the sales process of a company. The large number of individuals who are first interested in a product or service represent the wide top of the funnel and the smaller number of persons who eventually purchase the product or service represent the bottom.

This study shows that by measuring only ads that drive clicks resulting in conversions, these firms are shortchanging all the sites that exposed the converters to advertising before the click was made.

Andrew Martin, author of the report, claims that when a marketer measures the last ad seen or clicked on by a converter they are focusing only on the short time span which exists at the bottom of the funnel. This is only studying a single point of online marketing contact and therefore oversimplifies the delivery and performance of any media channel.

Another finding by the study had to do with brand exposure in online marketing. It found that roughly 5.5 related ad exposures to the marketer’s brands took place within two days of the sale.

The study discovered that this large number of ad exposures experienced before purchasing can be quite surprising to marketers who are used to discussions that are concerned only with site and campaign metrics. So by looking only at the last ad in a conversion history, the true length of the advertiser’s relationship with the consumer is not recognized.

Additionally, the study found that even though search engines and affiliate programs usually reach consumers only a few days, or even hours, before a sale, it is common for both news and entertainment sites to reach them weeks, in some cases months, prior.

The common mistake of giving credit only to the last click or view favors these few publishers while shortchanging the majority of online publishers whose contributions are more spread out over time. The marketers who use action tags, shorter view or click windows are devaluing many publishers that appear in the last week before conversion and are much different from those that appear a few weeks beforehand.

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