When an online search becomes an online sale, that conversion can usually be measured. That’s how you calculate the true ROI of sponsored search listings. But is there an additional, hidden value to that investment?
Consider these examples:Â
- A j.jill online visitor — who got there through a Google search – decides she really needs to try on the jacket she found in a store. She goes there based on her online search and makes the purchase there.Â
- A search on a favorite author causes someone to browse the virtual stacks of Barnes & Noble. Later in the week he buys the book at a bricks-and-mortar location.
Those examples don’t include business-to-business purchases. For instance, someone needs a widget, so they type the phrase into a search engine. This person finds a promising widget merchant, but closes the deal much later, via phone and email.
How do you capture the value of those original search listings — whether they are paid or organic?
ROI Research attempted to find out (in the b-to-c space, at least), and their findings turned up some provocative numbers, including the following:
- As many as one out of every three offline purchases was precipitated by an online search
- Search can influence an incremental 3 times the dollar value of e-commerce transactions by reaching consumers who shop in traditional channels
- Those who search up to 10 times annually spend an average of $1,789 online
- Those who searched 31+ times spent an average of $2,943 online
- As you might expect, off-line purchasing volumes went up as well with the number of online searches a consumer made in a year.
Take-away:
As measurable as search engine marketing is, its full value is much larger than what you see in ROI reporting. For the right keywords, the search engine results pages become ad hoc portals attracting people more likely to purchase, both online and offline.
There’s something that that research is missing regarding consumers’ use of search engines: Some use search simply as a navigational tool. Attributing a sale (online or offline) to a search in that case is misguided. That customer would have bought anyway.
One other point: Even for those that aren’t using it for navigation, their intentions are not the same. There’s a spectrum of intention from exploratory to validation.
Some consumers are truly exploring, i.e., have not made up their minds about the specific product and provider they will ultimately choose, and attributing a sale (again, online or offline) is valid.
But many consumers are validators. According to data from Yahoo! and Compete, nearly eight of ten credit-card related searches are “brand-specific” — that is, somebody typed in the name of the brand vs. product-related terms. Regarding online credit card activity, Forrester found that 34% of consumer said the Web helped them “confirm the choice of product and provider they had already made” or “choose the right product from a provider I had already selected”. In contrast, just 9% said it helped them find a product from a firm they hadn’t already considered.
Should this stop firms from purchasing keywords? No. But they need to be more cautious about assigning credit to the sale to the search engine.
Good comments, as usual. Your summation makes sense: “Should this stop firms from purchasing keywords? No. But they need to be more cautious about assigning credit to the sale to the search engine.”
There has been some excellent work in attempting to allocate brand communication ROI. I love the stuff done by Don E. Schultz, for instance. In a spreadsheet that takes in all brand communication expenditures, you make WAGs (wild ass guesses) as to the proportion that something contributed to sales in that fiscal year. These metric can help assign some guesses to the support of search in the “real world” — even if the guesses prove to be off somewhat.
Ya gotta start somewhere!
yep, ya gotta start somewhere.
but my guidance to CMOs starting out would be: Be consistent.
A lot of the firms I talk to place an “incremental sales” burden on the direct mail channel. If they’re going to start measuring the impact of search, it should have to live up to the same criteria that other channels are subjected to.
At the end of the day, the online marketer needs to bump up the online sales by some factor to account for spillover into stores.
Surveys are one good way to estimate this multiplier. Printable web-to-store pdf POS-scannable coupons are even better.
Here’s a post on the web multiplier idea:
http://www.rimmkaufman.com/rkgblog/2006/12/18/your-off-web-revenue-multiplier/
Had I been writing this a year ago, I’d have included “call center spillover” in my list of search-leading-to-untracked sales. But some catalogers are starting to embed source codes on their web pages and ask for these codes in the call center.
Post on that inexpensive incredibly powerful idea here:
http://www.rimmkaufman.com/rkgblog/2006/11/09/can-you-read-me-the-code-on-the-bottom-right-of-the-web-page/
These are great links. Thanks, Alan!