Television is toying around with a new pricing model. From now on, you’ll only be charged for the television ads that prompt you to actually take action. If you choose not to visit a place of business or eventually buy something, the advertiser won’t be charged for that ad. If successful in television, the same pricing model will likely be used in all forms of advertising, including newspaper ads, magazine and radio.

Yeah...right!

One of the paradoxes of search is that the pricing model described above, which is relatively unique to search, has proven to be a blessing and a curse. The idea of paying just for your performing ads and the accountability that brings has fueled search’s meteoric rise as a marketing channel. Its appeal has been particularly popular with direct marketers, where every single advertising expense is measured against the return it can bring. For these marketers, a pure performance based pricing model was a gift from on high.

But in adopting this pricing model, search has also done itself a disservice. By not putting any value on the ads not clicked on, search has implied that these ads are worthless. But as more research comes out showing that search’s role in customer’s buying decisions is much more complex and long term than we though, it’s beginning to appear that the unclicked search ad could be the bargain of the century. Because search, my friends, does build awareness and those ads do have value.

The Role of Search in the Buying Cycle

I’ve talked about where search is typically used by a prospective customer often enough. Research conducted by ComScore has shown that potential customers can launch anywhere from 2 to 6 related searches in the 12 weeks preceding a purchase. That means 2 to 6 interactions with a number of search results pages. Combine that with our own eye tracking research that shows that the top region of the search results page (referred to in our study as Google’s Golden Triangle) has 100% visibility. This includes top sponsored ads and the top 3 or 4 organic ads. So, every eyeball for that search will see an ad in this prime real estate. But the advertiser only pays if the ad is clicked. We know that proportionately, only about 15 to 20% of the clicks will happen in these top sponsored locations on Google.

So let’s put some real numbers to this and try to get some sense of the value provided. Let’s assume you’re bidding for a term that will get 50,000 searches in a month. You bid enough to capture the top sponsored spot. Your per click bid price is $1.50. And we’ll estimate that you capture about 7% of all the clicks on the page. One last assumption. Every search does not result in a click through. So let’s say that 15% of the searchers will not find anything on the page worth clicking and they’ll either relaunch the search or click through to the second page.

So, in a month, given the above assumptions, you would get 2975 visitors at a cost of $4462.50. But you’ve also had your ad seen by 47,025 other people, for free! True, these visitors didn’t click through to your site, this time. But remember, chances are they’ll be coming back to a search engine and launching a related search at least one more time in the buying process. If your ad comes up again, the reinforced brand recognition might prompt a click through during this second session.

We have to Measure the full value of Search

Search marketers are fond of saying that search is the most measurable of marketing channels, and that’s true, up to a point. I believe one of the reasons we don’t give search full value is that we’re not always measuring the right things. How do you measure the value of a split second glance at a brand name in a search listing? How do you assign a value to the cumulative impact of seeing the same site appear in 4 or 5 different searches? I know these things have value, but I’m not sure how to measure it.

We’re very good at measuring the easy conversions. We can track back from a purchase or the submission of a quote request form to see which listing on which engine generated this lead. But we’re not good at measuring subtleties and nuances. It’s difficult to assign values to different patterns of site side user behavior. It requires a conversion tracking mechanism that extends into every aspect of the business to track offline purchases that are generated by online research activities. And the online analytics industry is just beginning to grapple with the challenge of getting a more balanced picture of true visitor value.

The role of search in a customer research session is much more complex than we ever imagined. As we do more research, we’ll get more clarity about how search helps influence buying decisions and the nature of a customer’s cognitive interaction with the search results. As we find these answers, we’ll get better at assigning value to our search advertising, whether the ad is clicked on our not. But until then, recognize it has a value and enjoy the free ride!

Discuss this article in the Small Business Ideas forum.
June 20, 2005





Gord Hotchkiss is President and CEO of Enquiro, Canada's leading search engine marketing firm and one of the top firms in North America. His articles are regularly published in both on and off line newsletters, including Marketing Monitor, SEOToday, Marketing and many other trade journals. Enquiro's own information portal is www.searchengineposition.com.

With an extensive 20 year background in the marketing and advertising business, Gord has been working to increase client's search engine visibility since 1996 and has specialized in search engine marketing since 1999.





Search Engine Guide > Gord Hotchkiss > Search’s Multiplier Effect: The Hidden Value of SEM