According to the Forrester Research/Shop.org report “State of Retailing Online 2014,” paid search campaigns continue to get the lion’s share of the marketing budget. The report notes, “More retailers say they plan to spend more budget on paid search programs than on any other tactic in their marketing arsenal.”
On one hand, it’s hard to argue with success. More than 76 percent of the retailers surveyed said their paid search efforts were more effective this year than they were last year. On the other hand, is paid search enough to increase your shopper base? This time last year, retailers across the globe clearly thought so, since they increased their spending by 27 percent in an effort to win the business of holiday shoppers. In the U.S., spending was up 48 percent, driven, in large part, by mobile.
I totally get the logic behind paid search. For many consumers, a query in a search engine is the first step of the purchasing process, and intuitively it seems like a no-brainer to target consumers early and often.
One of the issues about search, though, is that the consumer has to be in a search engine in order to see your ad. But it’s easy to get distracted when roaming the Web, and unless you’ve buttressed your paid search campaign with retargeting or some other tactic, you risk losing that consumer. Plus, it’s super competitive, which means it’s an expensive tactic.
Another other issue: Search isn’t always present in the purchase cycle. Lots of consumers begin their decision-making by visiting a retailer’s website directly, by checking out some of the shopping comparison sites, or even tweeting out a request for suggestions and input.
And of course, lots of consumers search for products out of sheer curiosity, but have no intention (or the means) to purchase them. In these cases, search is a poor indicator of intent, and a waste of a retailer’s budget.
It’s important to remember that search is just one of many behaviors that may signal a consumer’s intent to buy a specific product or service. There are numerous other data points – lifestyle, referring URL, interests, occupation, income level, to name a few – that provide critical context. If leveraged, retailers can separate the curiosity-seekers from real deal, and focus their ad spend on consumers who are most likely to make a purchase.
Here’s where programmatic marketing provides a distinct advantage. Programmatic tactics can help online retailers focus on ideal prospects by collecting the browsing data from hundreds of millions of individuals (including which websites they visit) to identify in real time consumers who are actively shopping for a particular product or service. Once you know who’s shopping at that moment in time you can target them with relevant messages wherever they are in the digital universe.
Programmatic can also leverage rich contextual data – such as browser data, time of the day individuals make online purchase, and other contextual information – to help identify the right audience to target for a display ad, a sponsored tweet, or even a Facebook News Feed ad. And, programmatic marketing can make great use of behavioral and historical purchase data to create appropriate audience segments to target.
In short, programmatic uses many intent signals to find net new customers that search simply can’t reach.
Here’s what it looks like if you combine paid search with programmatic marketing: A consumer searches for a product in Google and clicks on a paid ad, then leaves the landing page without converting. The programmatic platform gathers the contextual data, including other sites visited and sees that the consumer has looked at review sites for the product. Realizing that the majority of conversions happen after business hours, the programmatic platform targets the consumer with a product ad while he or she is on Facebook later on that evening.
Given the well-proven ability of programmatic to identify and reach consumers in-market, I hope that by next year’s State of Online Retailing study, programmatic marketing will be on the top-three list of tactics.
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