New research suggests that branded search terms offer the highest conversion rates, but that non-branded terms, when used properly, can significantly impact the outcome of a paid search marketing campaign.
The research, done by search marketing firms 360i and SearchIgnite, looked at than 3.9 million users and 5.1 million clicks during the first quarter of 2006. The study focused on e-commerce retailers who had active search marketing campaigns in place.
The primary purpose of the study was to track the value of the entire path a searcher takes from the first click through purchase, comparing the relative effectiveness of branded vs. non-branded search terms. The focus on e-commerce sites allowed the researchers to capture a user's entire clickstream from initial search to ultimate purchase from the retailer's web site.
Fully 25% of conversions occurred from users who clicked more than one ad. The highest conversion rate (9.30%) occurred when a user's first and last click were both on brand terms. However, when the first click was on a non-brand term and the last click was on a brand term, the conversion rate was almost as high (8.73%).
Notably, for searchers who began their search process on a non-brand term and then switched to a brand term, conversion rates were seven times higher than when a searcher used only non-brand terms.
These findings have significance for several reasons. Supporting the findings of other studies of searcher behavior, searchers tend to click generic, non-brand terms earlier in the search process, and more on brand terms when they are closer to making a purchase. This suggests that search marketers can leverage non-brand search terms to drive searchers toward brand terms later in the searching and purchase consideration process.
To do this effectively, the metrics used to determine the effectiveness of search terms must be adjusted to give more "credit" to the generic non-brand terms. While they may not directly lead to conversions, they offer an "assist" to the brand terms that ultimately lead a user to make a purchase.
Getting users to click on multiple ads pays off. Searchers who ultimately made a purchase clicked an average of 15% more ads than those who didn't complete a transaction. Really determined searchers—those that clicked a search marketer's ads ten times—were three times as likely to convert as those who clicked an ad only once.
The study also looked at query length. Most searchers are still using relatively simple queries. Searchers using multiple unique keywords made up just 8.39% of the sample studied, but they accounted for 19.2% of all ultimate transactions.
This suggests that a "long tail" approach to search marketing also pays off. Targeting multiple-word queries that individually have a low volume of searches can still result in meaningful conversions and high return on ad spend.
The study defined brand keywords as those where the name of the marketer, website or trademark owned by the marketer is present. Non-brand keywords are those which do not include any reference to the marketer, its website, its trademarks, or its proprietary brands.
While the study was limited to search marketing campaigns for e-commerce web sites, the researchers believe that similar results are likely to be observed for other types of web sites, and when other factors are considered, such as seasonality affecting searcher behavior.
360i and Search Ignite plan to continue investigating searcher behavior, looking at other vertical web sites, and expanding the scope from paid search marketing to include the impact of brands on organic search results, as well. As the report states:
"We're also aware of other questions that have yet to be answered. How do interactions with natural search and other forms of interactive marketing affect the results? How do these findings impact transactional metrics such as average order size and return on ad spending? How does offline brand equity play a role? For the scope of this report, we've had to be selective as to which questions we tackle, but we will delve deeper into these questions and others as we proceed with this research."
In addition to reporting on the findings of the searcher behavior study, the report offers numerous tactical suggestions for search marketers wanting to apply the learnings gleaned from the study. The free report, "Giving Clicks Credit Where Theyre Due: What You Need to Know When Allocating Your Search Budget" is available as a PDF download.
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