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 I really had to sit down and mull
the facts released in a joint study by comScore Networks
and DoubleClick. The ‘Understanding Online Buyer Search
Actvity’ report studied 1.5 million internet users
purchase decisions as related to 30 different web sites.
It followed users over 12 weeks time acquiring data on how
searchers made their buying decisions online.
While many advanced marketers may find this information to
be old news they should be embracing the release of this
data by DoubleClick and comScore. It’s significant
research that can help to enhance the visibility of search
marketing in general (both organic optimization and paid
placement) and helps to dispel common myths involved in
online search marketing. This research got very little
press in the search marketing community today and I’m
kind of upset by that.
This is research that helps pave the way for new online
advertisers to completely understand the metrics behind
why search engine marketing is absolutely vital to the
success of their web site(s).
These companies should be applauded by search marketers
for proving some of the assumptions we have guessed at for
the last few years.
Three things stand out in this research that are
significant findings:
More than 50% of online buying decisions begin on a search
engine.
Using “generic search terms” is extremely important
for search marketing.
Contrary to popular belief, one click will never equal one
sale.
Of course there are more stats like 75% of all searches
for travel related information result in an eventual sale.
In other words if you have a travel related site and you
are not focusing your online advertising dollars on web
search then you are just plain crazy. Still, I want to
elaborate on the three notes above.
50% or more of ALL online buying decisions begin with a
web search.
Search marketers have known this for a long time. The
reason that this is a significant fact is because no one
has ever produced a solid number to emphasize the impact
that search engine usage has on the buying process. It is
a powerful statement to be able to say to potential search
advertisers, “50% of all your sales are going to emanate
from web search”. If you are not listed on the engines
24/7 you are killing your own sales revenue and handing
business directly to your competitor.
What the study reveals is that searchers look for
information on their purchases over a period of weeks
before they make their buying decision. They repeatedly
return to search results looking for valid information on
their purchase. If your web site is not listed constantly
in a prominent position on the 1st page of search results
you might as well pack it in and go home. You’re getting
beaten badly by every competitor ahead of you in the
search results not to mention losing a major branding
opportunity on every search.
In other words, if you’re doing pay per click, maintain
your bid in one of the top 3 to 5 positions on the first
page of search results ALL THE TIME, if possible. Turn on
your auto-charge account at the pay per click provider and
set a daily budget cap. Better yet figure out what times
of day generate the most sales on your web site and
implement a day parting program for your ads. (Day parting
is when you time your search ads only to appear during
certain hours of the day).
If it’s organic optimization techniques then shoot to be
on the first page of search results. Searches for “web
hosting” will count for far more brand impact and sales
than “cheap web hosting in Louisville Kentucky".
Frankly if you’re ranking well for long search queries
like that one then you need to fire the guy/gal working on
your organic search optimization program. Although it’s
great to say, YAY! We’re ranked #1 on the phrase “cow
chips and moose patties” it sure as hell isn’t going
to do much for your search volume and it will not
contribute to your sales growth. Yes, it is important but
it is also extremely useless to focus effort on optimizing
for long phrases like that.
Using “generic search terms” is extremely important
in search marketing.
Generic search terms heavily dominate the buyers “search
vocabulary". There has been a big movement
(especially prominent among pay per click search
advertisers) that believes bidding on “generic” search
terms is a waste of money and if you do bid on those terms
you should maintain the lowest possible bid price. If you
are one of those advertisers/search marketers that
believes in this idea...guess what? You’re absolutely
dead WRONG.
This study finds that searchers prefer to use generic
search terms up until very late in the buying decision.
Although there is some lift for brand specific searches
directly before purchase, the impact of those brand
specific searches (i.e. “the brand name search” as I
like to call it) is minimal compared to generic terms. In
my opinion, I would consider all brand name searches
occurring during subsequent searches (by the same user) to
be a direct result of the branding impact of search
marketing in general.
Adapt to using generic terms and use them to your
competitive advantage. Still you must account for your
cost on generic terms. The search volume is much higher on
generic terms which means a greatly increased number of
clicks to your site and more money spent on your pay per
click ads. How do you manage ad spend for search then?
 One click can NEVER equal one sale.
Common misconception among new search marketers is that,
“I got 30 trillion clicks and not one sale". I see
this all the time in the search engine marketing forums.
Especially when people complain about pay per click
traffic.
Look here’s a slice of reality. Searchers will come to
your web site many times over a period of weeks before
they decide to buy from you. It’s a part of general
Internet user behavior. Many people are still leery about
online shopping. It is becoming more acceptable and
mainstream as each day passes but you need to realize that
the clicks you got today might result in sales weeks, or
even months from now. If you are not tracking that users
multiple visits to your web site somehow then how are you
ever going to account for the conversions and calculate
the right ROI?
Every search marketer needs to justify his or her ROI.
They need to track sales to search engine traffic over a
period of months, not days or hours. One click does not,
will not, and will never be, equal to one sale. If it
worked that way I would retire tomorrow and leave the
country for a tropical destination never to be seen or
heard from again!
Track everything over a long period of time. Implement
cookie tracking that can tag the IP and original visit
date of your web site’s visitors, as well as, the
information on how that user was referred. Re-evaluate
your search marketing on a monthly basis and assuming you
are optimizing your titles, descriptions, and landing
pages properly you should see your ROI steadily increase
over time.
Lastly, to get the full benefit of understanding your core
metrics for search marketing, adjust your ROI calculations
based on the average number of visits to your web site by
the same user. How many visits (by the same user) on
average does it take for your web site to convert a sale?
You can build this profile and see the trend over time.
Soon you’ll understand how some companies can spend
thousands of dollars every day on search
marketing/advertising.
They have figured out how to calculate their ROI
properly:
Average # of Visits By One User Before A Sale = Total
Clicks Needed For A Sale
# Of Clicks x Cost Per Click = Ad Spend Needed For A Sale
Cost of Product + Ad Spend = Total Cost Per Sale (Figure
in whatever else is appropriate here based on your costs)
Profit Per Sale - Cost Per Sale = ROI +/-
With the formula above you should be able to adequately
figure out how much you can spend (even on a keyword by
keyword basis) on pay per click advertising and still get
a positive return on your advertising investment. As long
as you are making $0.01 more than you spend on advertising
then I consider that a success. Hey, we all want to do far
better than that but it sure beats losing money on
advertising.
Now go download the study above and read it.
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