Marketers often looking at their key performance indicators and draw incorrect conclusions. Why? They fail to take into account a concept I'll call "aspirational searching." Many marketers come to me perplexed at their conversion rates while the search engines ponder the low CTRs (define) yielded by clearly relevant listings. What's confounding marketers is if someone searches for a specific item and arrives at a relevant page with all the information she could possibly want as well as price or offer information, why are conversion rates nearly always under 10 percent?
Truth be told, a 5 or 10 percent conversion rate on unbranded keywords would be welcomed by many marketers. For brand and product keywords, a double-digit conversion rate is considered fairly good in comparison to benchmark data.
To understand the conversion processes and rates across products and industries, it's helpful to move out of the virtual world and into the physical world. In physical stores, conversion rates vary dramatically but are often correlated with the level of consideration the consumer engages in prior to purchase. For example a grocery store probably has a conversion rate for incoming customers of nearly 100 percent, whereas an apparel retailer might be pleased with 20 percent, and a furniture store or appliance retailer might be ecstatic with a 10 percent conversion rate.
Online and off-, there are some shoppers who aren't shoppers at all. These are people who merely like to imagine themselves buying things. Virtual window shoppers enjoy the shopping process even though they never truly expect to be able to purchase the product or service. The buying funnel is essentially useless when evaluating these potential customers because they aren't potential customers at all, at least not in the short term. Branding metric studies are equally worthless in evaluating these aspirational shoppers who manifest themselves online as aspirational searchers.
How many of us have browsed a BMW or Lexus dealership showroom long before we had any chance of affording a BMW or Lexus? The brand metrics look great. Though our awareness of these brands is very high, we skipped the consideration phase of the buying funnel altogether. Should someone ask us if we have a preference for the BMW over our Honda, we answer in the affirmative.
The same may be occurring online for other high-end products and services, such as a ski condo, a Caribbean resort vacation, or a new set of golf clubs. Some consumers may do aspirational searching for shoes and apparel. Browsing merchant sites and informational products and services pages may, for that searcher, be more entertainment than an immediate legitimate interest in the product.
One reason I like the direction Microsoft, Facebook, and others are taking with targeting is they allow marketers to concentrate their paid search (and other API-driven contextual profile-based and behavioral media) firepower on segments that may index high toward buyers, not only those who merely show an interest. The more accurate the targeting gets, the more prominent advertising will be for BMW when it tries to reach those with the means to purchase. Aspirational searchers won't have to work much harder to find the BMW site although they may need to find organic links in the SERP (define) or guess the URL and navigate from there, selecting their country from the international home page.
Eliminating aspirational searchers from a campaign isn't easy. It may require some interesting segmentation models. Given an unlimited budget, include your aspirational searchers in your PPC (define) search campaigns. Some searchers will be using shared computers, be influencers (e.g., a grandparent researching a university for her grandchild), or simply love your brand. If your budget is restricted, concentrate efforts where they more directly impact the top and bottom line and aim for shoppers who have a true interest in your products or services.
When trying to differentiate between clicks from aspirational searchers and those from bona fide prospects, use not only your Web analytics and campaign data but also existing customer data, which may come both from online sources and offline sales.
Next week, I'll review some research that continues to demonstrate search's value in the decision-making and buying process for those individuals, who are in fact within the target market of a marketer, are exposed to search results, and have engaged in search.
Meet Kevin at SES Chicago on December 3-6.
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Kevin Lee, Didit cofounder and executive chairman, has been an acknowledged search engine marketing expert since 1995. His years of SEM expertise provide the foundation for Didit's proprietary Maestro search campaign technology. The company's unparalleled results, custom strategies, and client growth have earned it recognition not only among marketers but also as part of the 2007 Inc 500 (No. 137) as well as three-time Deloitte's Fast 500 placement. Kevin's latest book, "Search Engine Advertising" has been widely praised.
Industry leadership includes being a founding board member of SEMPO and its first elected chairman. "The Wall St. Journal," "BusinessWeek," "The New York Times," Bloomberg, CNET, "USA Today," "San Jose Mercury News," and other press quote Kevin regularly. Kevin lectures at leading industry conferences, plus New York, Columbia, Fordham, and Pace universities. Kevin earned his MBA from the Yale School of Management in 1992 and lives in Manhattan with his wife, a New York psychologist and children.
June 5, 2013
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