• by Steve Baldwin , September 29, 2008

I spent some time at the MIXX Conference & Expo in New York this week. It was one of those trade shows that -- like the whole advertising business to which it caters -- isn't really geared toward search at all. In fact, if the only information you had came from exhibitors and attendees, you'd walk out of the show with the bizarre impression that Google, search, and the whole industry we call SEM didn't even exist.

A couple of days later, I had to laugh when TNS Media Intelligence's Jon Swallen, presiding over a gloomy report on ad spending, called search "an ugly cousin" to which more and marketers are becoming engaged, instead of shacking up with search's more beautiful (but less intelligent) sisters, namely display and rich media.

I suppose none of this should surprise me anymore. After all, search doesn't create demand, and traditional advertising has always focused on persuasion (some would call it coercion), creativity, and all that other great front-of-the-buy-funnel stuff made by "real" ad agencies. Search -- according to this way of thinking -- is just a rusty collecting pan at the far end of the buy funnel: a place where marketers clobber each other in a battle to harvest searchers who already have a concrete idea about what they want.

Engagement Mapping: Cool Idea Or Desperate Ploy?
But the front-of-the-buy-funnel guys and gals have a big problem: they're losing. Display ad spending is down, search spending now accounts for a whopping 50% of online ad spend (according to the IAB), and these people are desperately trying to nurse their baby back to health (even as the whole advertising world teeters at the edge of an abyss caused by the current macroeconomic cataclysm). So naturally they're now claiming that marketers aren't spending enough to stimulate demand on front-of-funnel channels, and have been unfairly rewarding Google and its search brethren with too much spending on the "last click." This is why Microsoft, among others, has been trumpeting its "conversion attribution" model, which purports to provide marketers a more balanced spending scheme that addresses the whole funnel, not just "the collecting pan" at the end.

I had a chance to see this new model (now an integral part of Microsoft's Atlas tool) demonstrated at the show, and it's a sweet piece of work. With a few clicks of adjustment to a couple of weighting parameter presets, you can distribute your spend along the entire funnel so that you don't overspend on search or under-spend on demand-stimulation. The model looked great on the screen, and if I knew nothing else about the marketing ecosystem, I'd probably start using it to allocate spend. The problem is that conversion attribution -- while great in theory -- bears little resemblance to the real world of SEM. In fact, I can almost guarantee that if you use such a model when thinking about your search spend, you'll get killed in the first 10 minutes of battle.

Engagement Mapping: The Wrong Way to Think About Media
The reason that conversion attribution is a lousy model when allocating spending on search is drop-dead simple. The whole trick in search is to use the other guy's demand stimulation efforts against him, in the marketing equivalent of jujitsu (which uses the other guy's weight and mass to trip him up). Let your competitor spend a zillion dollars up front stimulating demand: what you need to be prepared to do is grab prospects when they're finally in the mood to buy, grab their attention and convert them.

It isn't quite fair, is it? I mean, how could we let things get to a point where competitors are free to swoop in and steal your best customers after you've invested so much in them? You can see why so many people hate search's model and liken it more to hijacking and hostage-taking than good old-fashioned marketing. Sorry, folks: you'll never win a street fight by abiding by the Marquess of Queensbury rules. And, hey -- if you have a problem with the way that search allows such "crashing of the cashier line," take it up with Google (and quite a few marketers have, including American Airlines, GEICO, and countless others).

In the meantime, take everything you've heard or read about "more balanced multi-channel marketing models" with a big grain of salt. The words might sound great, the flowchart might look stunning on the big screen, and the logic behind it might be enough to convince old-line Madison Avenue types that they should give the display folks more money. But conversion attribution is damned useless for all of us fighting our savage battles at the bottom of the bloody buy funnel: the only stage of the funnel that really matters .