There is No Floor on Search Spending

by Admin


13 Apr
 None    Internet Related


by Gord Hotchkiss


by Gord Hotchkiss
http://www.mediative.ca

I was asked an inter­est­ing ques­tion by a client the other day:

“What is the min­i­mum spend­ing thresh­old for paid search? Below what level does it not make sense to invest anything?”

A lit­tle con­text is in order here. This same client had been through a vig­or­ous round of bud­get dis­cus­sions, where the dig­i­tal and brand­ing teams were fight­ing for the same bucket of dol­lars. They were try­ing, with almost no suc­cess, to com­pare effec­tive­ness of dig­i­tal and brand­ing on a dol­lar for dol­lar basis. The brand team’s tac­tic was that they couldn’t give up any bud­get because they were already at min­i­mum spend­ing lev­els. Even a dol­lar less would drop them below the level required to hit the reach/frequency min­i­mums dic­tated by the agency who was han­dling the media buys.

The answer, of course, is that there is no min­i­mum when it comes to paid search. Each click you buy gen­er­ates a poten­tial lead. But the rea­son­ing behind that answer speaks to the unique nature of search, when com­pared to tra­di­tional brand build­ing channels.

Online Brand­ing is a Dif­fer­ent Beast

Search ven­dors have been try­ing to prove the brand build­ing effects of search for years now. I’ve been per­son­ally involved in some of the ear­li­est of these stud­ies. And I’m here to tell you, brand­ing is much dif­fer­ent in an online envi­ron­ment than it is in the tra­di­tional worlds of print and elec­tronic media.

When you use research to cre­ate a direct com­par­i­son between two dif­fer­ent alter­na­tives, you have to con­trol for vari­ables. If you don’t, the results are mean­ing­less. If you’re try­ing to mea­sure the brand lift of search, you have to use tra­di­tional brand aware­ness met­rics, which, as I said, have sig­nif­i­cant method­olog­i­cal challenges.

The biggest chal­lenge, iden­ti­fied by more sophis­ti­cated research approaches such as neu­roscan­ning, is that most mar­ket research doesn’t really take into account how the brain works. And it’s here where the brand impact of search really can leave its more tra­di­tional coun­ter­parts in the dust.

The brain can inter­act with poten­tial mar­ket­ing mes­sages in two dif­fer­ent modes – a “bot­tom up” mode or a “top down” mode. The “bot­tom up” mode is how most tra­di­tional adver­tis­ing works. It inter­rupts the brain, what­ever it’s engaged with, and tem­porar­ily side­tracks the brain long enough to hope­fully leave a “brand imprint” that will stick in long term mem­ory. Often, this is done at a sub­con­scious level. And therein lies the prob­lem with most brand aware­ness met­rics. By their very nature, they have to engage the con­scious brain and sud­denly you’ve mud­died the men­tal waters to such an extent that it’s almost impos­si­ble to get a true pic­ture of the impres­sion the brand left. Tra­di­tional brand impact research is a crap­shoot, at best.

It’s this sub­con­scious impact that has cre­ated the “min­i­mum buy” hypoth­e­sis. If you don’t hit a poten­tial tar­get with enough impres­sions to make even a slight ding in their men­tal armor, you have wasted your entire bud­get. It’s the “Chi­nese water tor­ture” approach to advertising.

But search engages the brain in a “top down” mode. We’re actively engaged with task at hand, which means that no inter­rup­tion is required to implant the brand impres­sion. It’s imme­di­ately loaded into work­ing mem­ory and we’re ready to act on it. That’s why there is no such thing as a min­i­mum search spend. Each click bought has the poten­tial to work, because there are no men­tal bar­ri­ers to break down or atten­tion to grab.

Some­times the Truth Hurts

Iron­i­cally, in this par­tic­u­lar bud­get dis­cus­sion, the effec­tive­ness of search turned out to be its down­fall. We didn’t have the same “min­i­mum spend” argu­ment as the brand­ing agency when it came to mov­ing ad dol­lars from one bud­get to the other. But, when the dust set­tled, I took some solace in know­ing that while we may have lost the bat­tle, the effec­tive­ness of search will even­tu­ally prove tri­umphant in the war.

Orig­i­nally pub­lished in Mediapost’s Search Insider March 29, 2012


Biography / Resume : Gord Hotchkiss is the founder and senior vice president of Enquiro, now part of Mediative. He is renowned in the industry for his expertise when it comes to understanding online user and search behaviour. He and the Enquiro team have built a solid reputation for being the leading experts when it comes to understanding what happens on a search portal and why. Before Enquiro, Gord was chairman and director of SEMPO (The Search Engine Marketing Professional Organization), he worked as a columnist for MediaPost and Search Engine Land, and he was a regular speaker at industry conferences and events. Gord is also the author of The BuyerSphere Project: How Business Buys from Business in a digital marketplace.



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