According to the latest IAB stats, online advertising expenditure in Australia for the third-quarter 2008 totaled $451.25 million. This represents and increase of 29.8% from this time last year. This increase is happening predominantly within Search & Directories which currently account for 47.0% of IAB statistics.
I would pose the question however: Is the increase because of the importance of search in the consumer purchase path or is it because there is a perception on the part of advertisers that search is more effective?
Many marketers want the ability to measure customers’ paths to purchase and understand the influences of each channel on a sale. Historically, we looked at the CTR to measure the effectiveness of spend. We later became a little more sophisticated and started tracking conversion and CPA. The problem with both of these measures in their purest form however, is that they only measure the number of people who responded to an individual ad and which creative execution drove a conversion.
Neither, when viewed in isolation, really take into account the other media channels that may provide an assist to conversion.
For example, the following charts illustrate that the search activity rises during the later part of the day and evening.
This correlates closely to the TV watching patterns and indeed to overall internet usage in the home. We have also seen multiple studies that observe the increasing levels of multitasking by the average consumer.
In other words, a consumer may watch a TV ad or view a banner that tweeks their interest. If they ten type the search term into google and click on a paid result. In the traditional measurement approach, it is the SEM budget that is credited with the click and the ROI.
In this case, the measurement techniques (and marketing budgets) are allocated based on last click wins rather than reviewing the impact of all channels on the ultimate conversion.
The idea behind this panel session is to seek some perspectives on this conundrum and hopefully generate some ideas for marketers on how to view marketing spend and measurement more holistically rather than with a single channel focus.
Interested in your thoughts on this one.
Multi-touch attribution models have been talked and talked about, but I don’t believe anyone has got it “right” yet. Interestingly I posed this question to Conrad Bennet of webtrends a few weeks ago and he believes that once it is measured correctly, it may not be worth the effort.
Anywas, attributing all ROI to the last SEM (or SEO) click is extremely short sighted as you are not considering any impacts of other channels (online and offline) on peoples search behaviour.
Search is often the last activity before purchase, but there are many tasks performed prior to that final search that businesses can influence. SEM ads are (usually) up against a stack of competitors ads (even on a brand search) so outside messaging will influence what the user clicks.
If Marketing budgets start getting cut next year, eventually you will get to a ceiling on your search budget if you stop everything else!
How does a customer know to search for something in the first place?
I think Google gets far too much credit for the sales process and simply funneling more budget to search will likely deliver diminishing returns. Of course most companies still are woefully underutilising SEM so there are still low hanging fruit but beyonf that, it gets much harder.
The old approach of advertising your way to sales is no longer the silver bullet it once was. Attention fragmentation requires having a presence in more channels and connected marketplaces punish inauthentic spin.
Smart companies (i.e. Zappos) realise that every touchpoint is a marketing opportunity so they focus on developing a culture of customer service and empower everyone in the organisation to be a marketer in whatever channel/community they naturally participate in.
We are all in buisiness to help our customers solve their problems – we just seem to forget that a lot of the time. Allocating marketing budget to understanding what these problems are and then sincerely going about solving them is the long term approach that will keep those last clicks streaming in.
Great topic and one that needs to be addressed. Search often receives too much credit … there is a ceiling as to what google can bring you in terms of custom. Also, there needs to be more debate/insight/discussion into the incremental benefits of search engine marketing … especially around brand terms.
This would be a cracker of a session Jenny!