There's no doubt that search engine marketing (SEM) is accountable when it comes to measuring marketing effectiveness. All you need is your Web logs, a good analytics program and marketing expertise to interpret the raw data.
A few simple metrics are total pageviews, daily unique visitors, total visits, first-time visitors and repeat visitors. You can find your average pageviews per visitor, average visit length and the average number of visits per visitor. If you have an e-commerce site, you can check out total revenue, total orders, conversions (first-time and repeat visitors) and even the most active and least active time periods.
With paid search, you pay only for clickthroughs to your site. Such accountability is a marketer's delight, but that's only half the story. What about all the people who found the site, saw the pitch but didn't buy?
Talking About Branding
When it comes to banner ads, the longstanding consensus is that even when they aren't clicked, they provide branding exposure every time they're displayed. Therefore, they have value over and above what's measured by the clickthrough rate. That's why they're priced based on the number of impressions.
It's taken longer for search engine marketers to grasp the concept of exposure and awareness in search listings. That may be due to a focus on traffic volume, which has now shifted to conversions and consumer behavior. There have even been a few studies showing that branding takes place in the SERPs (search engine results pages). But, basically, the non-clickers were ignored or considered worthless—until now.
- The 2001 NPD Group study reported that search listings were better at branding and produced more sales than banner ads.
- A 2004 IAB study also reported branding in the SERPs, especially for prominent listings.
The consensus of recent studies is that online search behavior leads to offline sales. This research shows that the role of search engines in customer buying decisions is complex and difficult to quantify. That's because search listings have a latent effect on prospects, because they research products on the Web and later buy offline.
Because search listings create awareness (i.e., branding), even the unclicked ads have value, because they are viewed.
Influence of Listings in the Buying Cycle
Some 2004 comScore research examined buying activity for Internet users conducting consumer electronics or computer (CE/C) searches on a major search engine:
- 25% of the users eventually purchased a CE/C product.
- 92% of the purchases occurred offline.
- 8% occurred online, but not immediately after clickthrough.
- 15% of online purchases occurred in the same user session as the search.
- 85% of conversions occurred in a latent or non-search session.
- 40% of all purchases occurred 5-12 weeks after the initial search.
To quote comScore VP James Lamberti, "These findings reinforce the importance of considering the latent impact of search engine usage when evaluating search engine marketing investments."
The study concluded that latent purchase conversions account for the majority of online buying activity, further stating that search marketing provides benefits beyond direct response.
Measuring the Value of Branding
While the direct response aspect of SEM is accountable, we still have a long way to go toward measuring the added value of search listings that create awareness. The comScore study shows that there is hidden value, but it's not quantifiable. It's easy to measure online conversions, but most conversions take place offline.
The advertising industry is under pressure to show marketing accountability. That's because CEOs are focused on getting the best ROI from their marketing efforts and are demanding greater accountability for all marketing programs.
Therefore, the ad industry has introduced a new digital coding system, Ad-ID, which serves as an industry UPC code for digitally tracking all advertising assets. The Association of National Advertisers reports that 250 companies use Ad-ID to provide marketing and media accountability. The jury is out on how well this will work.
We need such an accountability system in SEM. This will be quite a task for the Web analytics industry as the role of search in consumer buying behavior is complex and diverse. It will be challenging to assign value to search engine branding.
In the meantime, just recognize that the hidden value in search listings can boost your marketing power.