SEM and Branding Influence

A lot of hype surrounds the recently released Interactive Advertising Bureau (IAB) Search Engine Effectiveness Committee’s report on the brand lift from textual paid search results. Some search engine marketers laud the report. Others have mixed reactions.

Branding in SERPs

After reading the press release, my first reaction was a very sarcastic “Duh!” Search engine marketing (SEM) firms have known for years top search engine visibility has a branding effect, both with “natural” and paid results. Still, it’s validating when a scientific study supports “unscientific” observations.

In my experience, people assume sites with top positions make millions of dollars in sales, get thousands of qualified leads, and garner tons of search engine traffic. My colleagues and I hear such assumptions on a daily basis. But top positions have never been the be all, end all in search marketing, even with the branding influence.

I asked some colleagues what they thought of the report.

“Most search engine marketers are not surprised at the results of the IAB’s study,” said Erik Dafforn, VP of Intrapromote, a full-service SEM firm. “After all, it’s nothing new to us that a search audience is not only open to, but thirsts for, associating brands with specific needs.”

“For SEMs, the challenge is both old and new,” Dafforn continued. “Old because, as always, the right content coupled with the right ad copy will improve any company’s branding. New because just now, as marketing managers are beginning to flock to the temple of conversions and solid ROI [return on investment] metrics (that we’ve certainly worked so long to build), we’re in a position to say, ‘But in certain circumstances, ignore all that.'”

“The IAB does a great job of establishing the branding impact of a listing with a high ranking,” said Josh Stylman, managing partner at Reprise Media, a New York and San Francisco-based SEM firm. “While research of this type is important in getting brand advertisers to buy the medium, it ignores the reality of SEM. The industry’s astronomical growth to this point has been to due to search engine marketing’s strength as a direct marketing tool.”

Branding Versus Direct Marketing

A site can generate higher conversion rates and more qualified sales leads from lower positions. In fact, in a SERP’s spidered results, people who are willing to go past the top three positions are often better researchers. They are likely to be more qualified prospects than those not willing to research.

Additionally, a top position does not necessarily translate into a closed sale.

“Many marketers wrongly assume that because the first position is the most expensive, it generates the best ROI,” said Stylman. “We’ve actually seen that users tend to visit and compare several sites on… SERPs. While a majority of users click on the first link they see, a very high percentage of them also return to the search page and visit competing sites that appear further down the page. Those same users often don’t make it back to the first site on the list. As a result, the top advertiser pays more than any of his competitors for that initial visit but ends up with a lower conversion rate, bringing down his overall cost per acquisition dramatically.

“A number one ranking is certainly a great way to let people know that your company is out there. We’ve also found that it can be a great way to overpay for clicks that simply don’t convert,” Stylman continued. “Bid prices for the first position rise more quickly than any other position, primarily due to the cachet of being number one. As bid prices skyrocket, many companies forget why they’re buying search marketing in the first place — to reach as many qualified buyers as possible and turn them into customers.”

After the Click

Not surprisingly, the IAB study didn’t measure the branding effect after users click on the ad to the targeted landing page. The design and content of the landing page, as well as the final destination (the Web site), will also have a branding effect.

How fast is the perceived download time? Are users able to see the query words (keywords) when they land on a page, be it from an ad or natural search results? Are the calls to action (CTAs) clear? Is it easy for users to form a mental model of a site? Is the perceived clickstream too long, too short, or just right? Does the landing page match the searcher’s intent? Does the site match the searcher’s intent?

Search engine positioning is only a small part of the branding picture. A positive branding influence from a top position can be lost after users click on the link to a Web site.

“Marketers have made the mistake of framing SEM as an exercise in bid management,” said Stylman. “While paying attention to bid rates and managing costs is extremely important, there are other major factors, such as keyword list generation and creative development, which impact the ultimate success of a campaign. In fact, the importance of each of these factors makes it difficult to isolate one variable and point to its impact on branding, conversion, or any other metric.”

Conclusion

I certainly don’t mean to dis the IAB’s report completely. I just want SEMs, ad agencies, PR firms, and their potential clients to keep the report in perspective.

“What is nice is combing through the IAB’s hard data and seeing the extent to which it’s true and being able to take these numbers back to clients,” concluded Dafforn.

I wholeheartedly agree.

Meet Shari at Search Engine Strategies 2004 in San Jose, CA, August 2-5.

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