New research suggests branded search terms offer the highest conversion rates, but when used properly, non-branded terms can significantly affect the outcome of a paid SEM (define) campaign.
The research, conducted by search marketing firms 360i and SearchIgnite, looked at over 3.9 million users and 5.1 million clicks during Q1 2006. The study focused on e-commerce retailers with active SEM campaigns.
The study's primary purpose was to track the value of the entire path a searcher takes from the first click through to purchase, comparing the relative effectiveness of branded with non-branded search terms. The focus on e-commerce sites allowed the researchers to capture a user's entire clickstream from the retailer's Web site, from initial search to ultimate purchase.
Fully 25 percent of conversions came from users who clicked more than one ad. The highest conversion rate (9.30 percent) 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 percent).
Notably, conversion rates were seven times higher for searchers who began their search process on a non-brand term and switched to a brand term than when a searcher used only non-brand terms.
These findings have significance for several reasons. They support the findings of other studies of searcher behavior, such as searchers tend to click generic, non-brand terms earlier in the search process and more on brand terms when they're closer to making a purchase. This suggests search marketers can leverage non-brand search terms to drive searchers toward brand terms later in the search and purchase consideration process.
To do this effectively, the metrics used to determine search terms' effectiveness must be adjusted to give more credit to the generic non-brand terms. Although they might not directly lead to conversions, they assist the brand terms that ultimately lead users to a purchase.
Getting users to click on multiple ads pays off. Searchers who ultimately made a purchase clicked an average of 15 percent more ads than those who didn't complete a transaction. Really determined searchers -- those who clicked a search marketer's ads 10 times -- were three times as likely to convert as those who clicked an ad only once.
The study also looks at query length. Most searchers are still using relatively simple queries. Searchers using multiple unique keywords made up just 8.39 percent of the sample studied, but they accounted for 19.2 percent of all ultimate transactions.
This suggests a long tail approach to search marketing also pays off. Targeting multiple-word queries that individually have a low volume of searches can still results in meaningful conversions and high returns on ad spend.
The study defines brand keywords as those where the name of the marketer or marketer-owned site or trademark is present. Non-brand keywords are those that don't include any reference to the marketer, site, trademarks, or proprietary brands.
Though the study was limited to search marketing campaigns for e-commerce sites, the researchers believe similar results are likely for other types of sites when other factors are considered, such as seasonality affecting searcher behavior.
360i and SearchIgnite plan to continue investigating searcher behavior, looking at other vertical sites and expanding the scope to include the effect of brands on organic search results. According to the report: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.
The report also offers numerous tactical suggestions for search marketers wanting to apply the study's lessons. The free report, "Giving Clicks Credit Where They're Due: What You Need to Know When Allocating Your Search Budget" is available as a PDF download.
Want more search information? ClickZ SEM Archives contain all our search columns, organized by topic.
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In addition to being Associate Editor of ClickZ's sister publication, SearchDay.com, Chris Sherman is a frequent contributor to Online Magazine, EContent, Information Today and other information industry journals. He's written several books, including The McGraw-Hill CD ROM Handbook and The Invisible Web: Uncovering Information Sources Search Engines Can't See, co-authored with Gary Price. Chris has written about search and search engines since 1994, when he developed online searching tutorials for several clients. From 1998 to 2001, he was About.com's Web Search Guide.
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