Google Gets Undue Credit for Ad Conversions
Currently, systems for tracking ad conversions and analyzing online marketing campaigns focus on the last ad a user viewed or clicked on, he said. This gives all credit to that last publisher and not to others the user may have been at before and influenced the user to seek more information about the advertiser, McAndrews said.
In particular, this situation has unfairly benefitted Google because many times someone will see a display ad on a site and go to Google, search for the vendor's name, and then click on the vendor's text ad served by Google, he said.
But Microsoft is developing a technology called "conversion attribution" that will track the trail of ads seen by a user, so that advertisers get a more complete understanding of how effective their marketing campaigns, he said.
Along the way, advertisers will get a more balanced view of the value of their ads across a wider trail of Web sites and via a variety of ad formats, not just the last ad displayed by the last publisher, which is often Google, he said.
"We'll introduce conversion attribution to give [more publishers] credit and it will devalue search [advertising]," McAndrews said.
Search advertising is the largest online ad format, accounting for about 40 percent of total ad spend. Google has built its empire on these pay-per-click ads, which the company matches to the content of queries on its search engine and to the content of third-party Web sites on its ad network.
While search has been the main driver of the blistering growth of online advertising in the past five years, that won't be the case in the coming five years, McAndrews said.
In addition to the "conversion attribution" technology, the shift away from search ads will be fueled by the increased spending in online ads from large companies which prefer display and rich media advertising designed to boost their brands, and for which pay-per-click text ads are less effective, he said.
Google didn't have any representatives participating in the panel. The company didn't immediately respond to a request for comment.
Microsoft didn't immediately respond to a request for clarification on the availability of the "conversion attribution" technology.
McAndrews, who came to Microsoft recently via its US$6 billion of aQuantive Inc., of which he was the CEO, shared the stage with other ad executives in a panel titled "Edge: The Advertising Model" moderated by conference chair John Battelle.