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Search and the Buying Cycle

  |  April 4, 2003   |  Comments

Whether a search is aimed at casting a wide net, researching a product, or finding a retailer, you can optimize your campaign accordingly.

Are you always ready to buy, register, call, or subscribe? I didn't think so. Neither is your target audience. Remember Marketing 101 and those sales books that talk about the buying cycle? They have a point well worth heeding when it comes to search marketing: Not every visitor is ready to buy all the time. That doesn't mean these people are worthless to you, however. They may actually be close to becoming valuable customers.

Normally, I rant and rave about measuring conversion so you can optimize your campaign around orders, monetizable actions, and conversions to leads. However, cost per order (CPO), cost per action (CPA), and lifetime value are just the beginning of the story for many marketers.

Last week, I covered the fact marketers need to invest every dollar wisely across media, understanding the incremental profit delivered by that investment to achieve profit maximization. Now marketers must embrace the reality that the stages of the buying cycle must be taken into account when planning and executing search marketing campaigns.

Different Buying Cycles' Phases

Prospects within your target audience go though phases in the buying cycle online, just as they would offline. To ignore that fact results in an inefficient site and an inefficient media campaign, regardless of traffic source (e.g., search traffic, banners, other media). Depending on your role within your organization, you may think of these "not ready to buy" phases differently. A common definition of the buying cycle used by sales enthusiasts is attention, interest, conviction, desire, and close.

Sales

Some marketers prefer to use a definition of the "marketing cycle" or "marketing life cycle," and use the acronym AIDA for attention, interest, desire, and action.

AIDA

CRM marketers have their own steps -- reach, acquisition, conversion, retention, and loyalty -- while branders use lift in metrics such as "unaided awareness" and "purchase intent."

Life Cycle

At the end of the day, all these metrics are attempting to quantify, measure, or at least acknowledge that the customer goes through stages and that to be efficient marketers, we need to keep the buying process in mind when planning and executing campaigns. The same is true for search campaigns -- and perhaps even more so, because those CPCs are getting high and you need to know if they are worth it.

Factoring in the Cycle's Early Stages

As a manufacturer or brander, you definitely want to reach consumers in the early stages of their buying cycle. As a retailer, your preference may be to catch consumers after they have passed through the early stages of the cycle and are ready to buy, or at least ready to register for a specials newsletter. So the extent to which you take into account the early stages of the buying cycle depends on your overall marketing objectives. There are two ways to factor in the early stages of the cycle -- one is more quantitative, the other more qualitative.

The quantitative method of factoring the buying cycle in a search engine marketing (SEM) campaign would be to use survey data or other information about user behaviors post-click to telegraph what stages of the buying cycle the visitor is in.

For example, you could use a blended post-click behavior metric such as BEI, where you assign values to different post-click behaviors based on their impact on the visitor's likelihood to buy (and therefore their value to you). By using this blended metric as your optimization objective, and adjusting the values of the different activities, you can adjust price or position of each listing in your campaign based on the traffic's true value to you. Each listing will deliver a mix of immediate buyers and those in earlier stages of the buying cycle, as well as a few completely disinterested people who clicked on a listing without reading it carefully.

By taking buying stages into account, you optimize for the true value of a campaign. The challenge is in setting the values of actions so they accurately reflect the value to your organization. Brand marketers might do an intercept survey to determine what actions on their sites resulted in a lift in purchase intent or awareness. A direct marketer might use hard data, attributing a value to a catalog request or a newsletter registration based on how many of those requestors actually purchase on average.

The qualitative way to address the early-stage versus late-stage visitor is to use linguistic logic. For example, let's illustrate a typical search marketing campaign containing a variety of keywords (some will likely indicate the mindset of the searcher sufficiently to adjust your CPC for that keyword to reflect early-stage visitors whom you still value at some level):

  • "laser printer" -- generic term, may be mix of early stages and late stages

  • "laser printer review" or "laser printer compare" -- likely not quite ready to buy; however, may be susceptible to marketing messages that concern benefits of a particular unit

  • "cheap laser printer" -- probably close to the purchase stage but price sensitive

  • "best laser printer" -- likely not quite ready to buy; however, may be susceptible to marketing messages that concern benefits of a particular unit

  • "hp 1200 laser printer" -- may be close to purchase due to the specific model number used

Valuing Site Visitors

Should you start valuing your site visitors differently? That depends on your business and if you are likely to be the beneficiary of the attitude or preference changes you facilitated during the early buying stages. You don't want to contribute to someone's buying cycle if she buys from your competition, but you may want to do so if you are a multichannel retailer and have data indicating research done online results in an offline purchase through your retail outlet. Of course, manufacturers benefit themselves as well as their distribution channels when they use SEM, regardless of whether you call it branding, building awareness, lifting purchase intent, competitive positioning, or facilitating the sales cycle.

So, take a moment to think about your marketing objectives. Review how much emphasis you would like to place on the earlier stages of the buying cycle. Then determine how best to modify your current campaign objectives to include early-stage visitors. Addressing the needs of early-stage buyers may be one of the best investments you can make.

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ABOUT THE AUTHOR

Kevin Lee

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.

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