Questions for the Next Generation

by Mar 25, 2005, 3:00 PM

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By Chris Copeland, and Jennifer Borenstein

Search engine marketing is about the now. You want to know where to buy a stove, check Google. You want to find a Chinese restaurant in Topeka, Kan. ask Yahoo! You want to find the answer to a question that has you stumped, Ask Jeeves, of course. This instant gratification mentality is both the blessing and curse of the current state of search analytics.

By all accounts, paid search engine marketing is online advertising's fastest growing sector. So, what is the secret to this success? Measurability and immediacy. The measurability of search marketing materializes from the ability to collect and report this linear process data precisely and immediately. Instant response and instant return are core components of search measurement and the keys to the value chain as it exists today.

By statistically assessing various data reports on click-through rate, clickstream activity, conversion, landing page retention, creative appeal, and return on ad spending and/or investment, agencies have historically added significant value to clients. Campaign management has revolved around simple heuristics assessing the clear funnel process of search at various points to determine optimization and generate value.

And therein lies the long-term hurdle. To date, paid search engine marketing (SEM) treats all consumers as equal, enabling each to instigate a search with a chosen keyword or phrase. As such, no consumer relationship is established, no segmentation amongst the potential consumer market is developed, and no understanding of consumer decision-making processes can be inferred.

The next wave of search marketing and the analytics that shape it must distinguish these elements in order to be more relevant to both consumers and advertisers. The immediacy of search analytics matching individual searches to specific click-flows that emerge from them will soon be replaced by a more holistic approach classifying the consumer behind the search as a compilation of various behaviors and intricate decision-making processes instead of just identifying the search.

Much like "traditional" online advertising's current practice of behavioral targeting and visitor segment, search should look towards analyzing consumer information-gathering/buying cycles, keyword phrase searches, clickstreams, and conversion actions on a more granular level. This new view of search data will empower agencies and advertisers to explore information on the lifetime value of consumers, to establish better budgeting and planning forecasts based on consumer segmentation, and, most importantly, to offer a direct connection between consumers and advertisers.

It is no longer enough to know that optimizations based on conversion metrics are positively impacting return; it is necessary to know why those returns occur, who is driving the bulk of them, what searches result in the most efficient returns, and when those conversions occur in relation to the bigger picture of consumer consideration and buying cycles.

Similar to traditional direct marketing's ability to assess consumer lifetime value based on historic data translated into future projections, current search marketing analytics are laying the foundation for more elaborate consumer projections and more precise business decisions.

Is it more economical to invest a limited budget in a broad set of keywords at a depressed share of voice or to select a few, highly targeted keywords and increase the share of voice? Do certain consumer segments partake in distinguishable patterns that may help determine site-flow management and increase a desired action such as a sale? Is there a way to determine which consumers are more viable based on lifetime value and to therefore allocate more resources and spending towards them to increase return on investment?

These are just some of the questions to be answered by the next wave of search analytics. As search marketing matures, as keyword lists evolve from single phrases to multi-layered category-keyword drill-down menus, as efficiencies in search relevancy drive up bids forcing strategic decisions to be crucial to campaign success, the next wave of search analytics will determine the true long-term success of paid search marketing.

Chris Copeland is managing director of Outrider and Jennifer Borenstein is associate director, strategy and insights of Digital Edge, part of Mediaedge:cia.

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