For the number of big brands that do employ PPC effectively, there is a greater number that do not employ it effectively, or who do not employ it at all. Here are 6 specific data points that might be of interest to the latter group:
10% 1 to 20% 2 of consumers are strongly influenced by paid search results when searching online. That is a significant number of people for most generic searches.
People in the purchase phase are more likely to click on paid search listings while people in research phase are more likely to click on organic listings 3.
The amount of time spent by searchers on a number one organic and number one paid listing both exceed two seconds, and those focusing on the paid search term seem to linger longer 3.
US paid search advertising revenues were $11.8B in 2007 and are projected to grow to $26.8B by 2011 4 as new players enter the market and those already engaged increase spend.
People looking to purchase look for keywords in headings and prominent places in results, images in results, offers, prices and reviews. It is now possible 5 to include each of those in the sponsored results.
Video search is growing exponentially. More than 10 billion people in the US viewed online video in February 2008. Google and Yahoo! are now including links to video in their sponsored results 6.
This data lends itself to the following single summarized fact:
- ROI for paid search is exceptionally high, over 300% for more than 50% of initiatives. 7
Why then are many big brands still reluctant to embrace Paid Search?
The primary issue is simply that the historical analytics data available to many companies indicates – correctly – that many big brands receive more than 90% of search traffic from searches on their brand name. As they already hold the number one organic position for the brand name search term, they see no reason to spend money on their brand name.
There are a few issues associated with this mentality that I specifically want to consider:
1. Not everyone searches for a brand name when they are researching an offering or planning a purchase.
More and more potential purchasers are interested in reviews, price comparisons, performance comparisons and other generic data.
This is particularly relevant for first time purchasers, regardless of brand knowledge.
By limiting themselves to organic listings primarily based on brand exposure, big brands may be losing enormous amounts of potential new customers as their SERP results do not speak to search query language nor answer search query intent.
They are also limiting brand consolidation by not targeting key terms like ‘reviews’ 8, ‘compare’ and ‘price’ in a targeted PPC ad which includes the brand name alongside the utilized primary search query language in a prominent position.
2. Many searchers are inherently reluctant to click on large brand organic listings due to implied or associated cost considerations (I’ve picked an example: athletic shoes).
Millions of people are fitness enthusiasts. A great number of these immediately associate the big brand athletic shoe names (e.g. Nike) with higher costs. When searching for a generic training or running shoe, they are more likely to click on a less well known name if, or when, cost is a consideration.
By including a paid search ad targeted to a highly relevant search term, a big brand can immediately allay those concerns in the adtitle and adcopy:
If a big brand is offering a sale on last years models, there is no ‘brand dilution’ if they offer a carefully created text ad to the effect that new models are coming in and old models need to be sold, and make the price and discount both immediately clear to the searcher. Millions of people on a budget would probably jump at the chance of owning a new Nike pair of trainers, especially if the percent discount made the cost of those shoes competitive with less known brands.
If you search for ‘Nike’ in Canada on Google.com, there are no paid search ads. If you search for ‘Nike Sales’ there are 2 ads, neither of which are Nike.com ads. In my mind this translates to a loss in online revenue. (It may also be a breach of Google’s terms, but even big brand names remain difficult to control regarding use of copyright names in paid search advertising.)
3. Copyright – I own it, that means no one else can advertise using my brand name!
Seems reasonable? But then again, how many people are involved in affiliate sales and resale? A big lot if we’re honest. If a company’s bread and butter identifies them as being a legal vendor of a major big brand supplier it’s hard for that supplier to limit the ability of the vendor to sell their product online.
Big brands need to revamp their contractual agreements regarding advertising ability and culpability, and they need to watch their space. Even then, they are going to need to outbid their vendors and affiliates if Google et al. do not see valid reason to de-permit advertising on core names. What the brands need to keep easily accessible to their legal teams are clear and careful records of exactly who has a right to sell their products, and what their trading URLs are.
4. Not everybody knows about your brand.
It might seem silly to those immersed in the marketing profession, but there are hundreds of thousands of people who do not use the internet every single day, let alone numerous times per day. They are knowledgeable about their particular market and locale to be sure, but may not know which branded hotels offer great ‘family friendly vacation’ packages.
I am in Canada, so it is impossible for me to see paid search results targeted to other countries. What I can see though, if I search for ‘family friendly hotels’ on Google.com from my little office is this:
There are three paid search listings for this term, and I don’t see a Hyatt, a Hilton, a Fairmont, a Holiday Inn or a Great Western among them. What I do see is a hotel in Austria, a hotel in Ireland, and a site for which the URL is hotelplanner.com.
I admit it is a generic term. So I dug a little deeper; ‘family friendly hotel Dallas’ yielded not a single paid search result from my Google datacenter. Neither did a search on ‘family friendly hotel Toronto’ – I’m in Canada for Pete’s sake….
5. “Oh, but It’s getting more expensive to utilize PPC”
It’s pretty darn expensive to advertise on TV, and the results are not nearly as potentially measurable in terms of ROI, but the big brands do it. Before your big brands moan about cost per click, they need at the very least to be encouraged to try it on a test trial basis in a test market and view the cost per conversion.
Big brands are so concerned about pure cost data, and in many cases so unsure of possible ROI from online initiatives – especially paid search – that they ignore the real data; the profit based on cost per conversion.
Paid search is only worth investing money in if you get it set-up right and manage it consistently and effectively. In summary at the very least you need:
1. Search language appropriate keywords carefully divided into targeted adgroups
2. Search language appropriate ad copy per adgroup to answer to search query intent
3. Search query appropriate landing pages
4. Fully measurable analytics (and a benchmark to compare against based on organic traffic alone)
5. Full management of the account to allow for tactical refinement on an ongoing basis.
If a big brand cannot manage a well considered, created and managed PPC campaign in-house, there are many great vendors out there. A little research and interaction with the online community can lead them in the right direction.
Good PPC’ing! I firmly believe that when conceptualized, created and managed effectively, PPC will be an enormously powerful and effective advertising medium for all brands, especially those with the budgets to gain highly converting positions, and reap the sales.
1. Big Research
4. JP Morgan
5. SearchEngineJournal (January 2008)
Laura has worked on big brand and small brand PPC campaigns,
all with high conversion rates and profit tallies.
She can be reached on laura at semcanada dot org
or you can follow her on Twitter.
Join us at SEMCanada in Calgary in September!