Why Nonconverting Keywords Will Drive Search Ad Spend

Apple’s iPod wasn’t the first MP3 player. It may not have even been the second one, for all I know. The first MP3 player was developed by Singapore-based Creative Technology Ltd., best known for the Sound Blaster card. In fact, according to a recent Wall Street Journal article, Creative Technology didn’t merely have a lead in the MP3 marketplace, it had a commanding two-year head start on Apple’s iPod.

The article quotes Sim Woo Hoo, Creative Technology’s founder, explaining the company lost its lead due to inadequate understanding of marketing and (dare I say it?) branding. “Our biggest challenge is marketing, … but I’m stingy, I don’t want to waste money unless I know it’s going to work.”

As I read, the quote leapt out at me, particularly the word “waste.” It seemed to capture the essence, the ethos, the mantra of so many search marketers:

“If it doesn’t convert, hit the dirt.”

“If there’s no conversion, we have an aversion.”

“If it doesn’t fit, you must acquit.”

OK, I’m getting carried away. But face it, most search advertisers function like direct marketers. Period.

Most search marketers justify keyword spending based on conversions alone, although they intuitively know the searcher who buys likely is not finding their Web sites, or being introduced to their brands, for the first time. Though they know the searcher probably conducted other related — or similar — queries minutes, days, or even weeks prior to finding the site ultimately chosen for the purchase, most marketers insist on investing only in keywords that convert.

Yes, companies found at the top of search engine results enjoy brand lift. The Interactive Advertising Bureau (IAB) proved it to a metaphysical certainty with its outstanding recent study. The research was clearly intended to lure brand marketers (and the larger budgets they control) into the paid search marketplace. I have no doubt this aim will be achieved in time. Quite a long time.

Brand Marketers Don’t Drive SEM

On first reading the study, my thought was, “So what?” Most marketers engaged in search engine marketing (SEM) (I’m guessing on the order of 95, maybe 99, percent) aren’t charged with achieving branding goals.

Brand marketers aren’t currently driving the majority of SEM campaigns or spending. That’s the reality we face today and tomorrow. In two, maybe three, more years, as broadband reaches 80 percent of households and even more offline behavior migrates online, brand marketers will surely follow. I recognize we must start somewhere.

A faster, near-term solution requires search marketers prove something more important, more valuable, to those who drive SEM spending today. We must prove a relationship between a nonconverting search click-through and an eventual conversion. Proving this can drive spending today.

Intuitively, we know such a relationship exists, yet few can prove it or assign a value to it.

Let’s look at what we know, what we intuitively believe to be true, and what we can reasonably assert:

• Internet users conduct millions of searches per day.
• Many, if not the majority of, Web site visits resulting from these searches don’t result in conversions. People research, compare, consider, then buy once they achieve a certain comfort level (it’s called a buying cycle, after all).
• Specific keywords are relevant to a product or service that don’t convert at all. You know which ones they are. We’ve all purchased keywords, then dropped them when they didn’t generate a conversion.
• Branded queries (e.g., “nike tennis shoe”) tend to convert better than nonbranded queries (“tennis shoe”) for established brands.
• We can drive branded queries through offline advertising, press coverage, even direct email.
• The higher the price, the more comfort is required before consumers part with their money.
• Comfort can be built by getting to know a vendor over time, through multiple positive interactions.
• We know, from our own use of search engines, users often conduct multiple searches before making a purchase decision.

The Disconnect

What has yet to be proven is multiple introductions to a brand throughout the search continuum (or search funnel) increase the likelihood of an eventual conversion. That increased conversion rate occurs when the Internet user either directly navigates to the site without searching or returns on a branded query or other “converting” keyword. Anecdotal evidence abounds, but no one has definitively proven the connection.

If you know of any such findings or have that proof, drop me a line, and I’ll cover it in a future column.

So long as brand marketers aren’t tasked with SEM — so long as these specific individuals who measure and are responsible for brand lift don’t work directly with the search marketers — proof of brand lift will not drive significant increases in search advertising spending.

It’s time for the SEM industry to prove the relationship between nonconverting search advertising clicks and a conversion outcome, and identify the right organization to communicate it.

This one finding, communicated in a manner that makes it an actionable tactic for all, will do more to drive search ad spending than any study on unaided brand recall. To grow the industry, we must justify buying clicks that don’t convert by illustrating their link to return on investment (ROI).

As Creative Technology learned, when a marketing strategy is focused solely on what’s measurable and ignores the target audience’s intuitively understood behaviors, an Apple has room to enter the space. And companies like Apple, with more enlightened marketing strategies (i.e., nonconverting keywords that focus on earlier stages of the buying cycle), have a distinct advantage in generating brand impressions, positive interactions, prospect comfort, and eventual conversions.

Direct marketing mustn’t be the one-hit wonder of your MP3 playlist. Unfortunately, direct marketing is the only song search advertising is singing now.

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