Part II of In the Mix: Incorporating Search in the Overall Marketing Mix
By Pat Stroh, Vice President, Analysis & Decision Support, IMPAQT
May 31, 2007
In a previous conversation, I outlined how ups and downs in search activity and success metrics are often related with activity in other media channels, such as TV, radio, print, and online. One common finding is that as media activity increases, impressions and clicks go up as well. In reaction to this situation, we often just expand the budget to ensure sufficient capacity and exposure to our search campaigns. Keywords are often added as well, that reflect any unique phrases conveyed in the other media. Destination URLs are adjusted, etc. End of story? Hardly.
The top-of-mind reaction to external media pushes is to increase bids and budgets. If a brand, product or service is being made more visible via TV or radio, for example, it is a simple corollary that a client wants more visibility (read: more widespread and prominent positioning) in the search results. But that approach can get you into trouble.
We already know that an increasing number of clicks will drive up costs. Bid (position) boosting will drive up costs even further. And for what? Our research on the timing of external media activity and search activity shows that click-thru rates increase no matter what position the search result occupies. (Ok, so the cost per click may come down as your quality score goes up …) But conversion rates may actually decrease. Increasing budget + increasing bids + increasing clicks + lower conversion rates means exploding costs per conversion and declining ROIs. What explains this phenomena?
Simply said … the media blitz oftentimes drives brand awareness to less “qualified” leads. Think about it this way. If there’s no external media on your brand or product/service, and someone does a search, they are probably very intent on finding an answer to a specified question. In contrast, in the post-media blitz phase, all sorts of people suddenly are piqued about your brand or product/service … even those that were marginally interested earlier. Those “activated searchers” tend to convert at lower rates.
That is not to say that external media NEVER drives “highly qualified” searchers through the search conversion process. Sometimes conversion rates do increase with a coordinated media blitz (especially if the media has a very strong call to action, like “limited time offer”, etc.). Nor does it mean that lower ROIs are necessarily bad. Perhaps the goal is to increase brand awareness. But if you’re counting the dollars spent against the dollars coming in, it is quite likely that increasing your budget and bids will be counter-productive. In fact, one way to react to an external media blitz may be counter-intuitive … lower your bids (position) and keep your budget the same. So, when people search for you or your products/services, they are just as apt to notice you in the lower position (as before the media blitz). That lower position and/or lower CPC will stretch your budget, yield more conversions by virtue of greater traffic (impressions and clicks), and boost your ROI.
Am I advocating “going dark” when there is an external media blitz occurring? No. Several studies show the simultaneous presence of a brand/product/service in multiple marketing channels is beneficial, and often produce the so-called “1+1=3” effect (the impact of more than one marketing channel on sales is greater than the sum of their independent parts). But what we don’t want is to have the 1+1=3 equation to apply to your cost per conversion. Map it out. Track your CTR and CPA over the course of pre-, during, and post-media blitz time frame. Consider your rank and total conversions at the same time. Figure out the tradeoffs and where search best fits into the mix.
So, I would like to end this conversation with a cautionary note: Simply increasing your budgets and/or bids to coincide with an external media blitz should not be your knee-jerk strategy. In fact, it could be counter-productive … even as conversions increase, your ROI may decrease (overall costs increase faster than conversions). That may be acceptable given the potential for an increasing volume of conversions. But the relationship between external media activity and search budgets/bids is not a simple 1:1 strategy. You need to carefully examine historical data to see how media activity did influence your search campaigns. What happened to click thru and conversion rates? How many more conversions did you get? What happened to CPCs? And what happened to your ROI? You may be surprised by the answers you get, and that untying the knot of media mix and search requires more thought and effort.
Stay tuned for the next installment when I will talk about how to figure out what to do when your client sends you their media plan, and how testing can help you to identify the best budgeting and bid strategy in light of those TV commercials, radio spots, direct mail drops, and other online campaigns.
Pat Stroh - VP, Analysis & Decision Support
Pat Stroh spearheads key analytical initiatives and decision support activities for IMPAQT’s Search Marketing campaigns, with a special focus on ROI-optimization. In addition to his deep expertise in database analysis, reporting / business intelligence, predictive modeling and forecasting, Pat specializes in actionable insights into complex marketing decisions. That translation of technical results into tangible strategies and tactics makes him a key component of both back-office and client-facing services for IMPAQT.
Pat’s 10+ years of experience in marketing analytics spans a broad array of both large and small companies in many industries, including telecommunications, specialty retail, CPG, financial and entertainment. He has presented at numerous national conferences. Prior to entering the marketing analytics field, Pat held faculty appointments at Carnegie Mellon University and New York University. He holds a M.A. and Ph.D. from the State University of New York-Stony Brook.
