The SEM Opportunity Curve

CHIEF MARKETER welcomes another monthly columnist to the fold: Cam Balzer, director of search strategy for Performics, the Chicago-based performance-based marketing division of DoubleClick.

As marketers know only too well, TiVo, blogs, iTunes, and other innovations have put control of media consumption firmly in the hands of consumers. Our former “marketing targets” now have the wheel and are navigating their own path from awareness to purchase.

Many marketers may not realize how rapidly this change is occurring. Recently the Pew Internet & American Life Project reported that between June 2004 and September 2005 the number of consumers using search engines on a daily basis rose approximately 55%. In the time it took to go through one budgeting, planning, and buying cycle, 21 million more Americans became self-directed search-enabled consumers.

“The evolution of search engines as everyday consumer Web tools has made them a vital resource for marketers,” says James Lamberti, vice president of research firm and marketing consultancy comScore Networks. “Search engines are obviously a critical vehicle in reaching consumers during the buy cycle.”

Obviously, then, adaptable marketers can accomplish more and more with search. But to do so they need to not only provide what consumers seek but also cater to how consumers use search engines.

Case in point: Last week I typed “cell phone” on Google. What I found in the sponsored search results would upset many corner-office dwellers at the “big five” wireless companies (Cingular, Sprint/Nextel, T-Mobile, Verizon Wireless). After scanning down to the seventh sponsored listing, I finally found one of the big five; the first six results basically consisted of little-known providers or simple lead aggregators – companies without chief marketing officers, most likely.

In this case, marketers could follow up their multimillion-dollar broadcast and print campaigns with incremental search investments that capture brand buzz and engage consumers. Indeed, between January and May 2005, the “big five” providers contributed a mere 3% of their ad budgets to the entire online channel—only a portion of which went to search.

Their missed opportunity is a big one, as wireless customers typify the searching consumer. Nearly two-thirds of wireless consumers say search engines are important to their wireless purchase decisions, according to the March 2005 Telecommunications Survey conducted by GMI and Media-Screen. The same study found that 89% of Google users would likely conduct a search after seeing an offline advertisement for a telecom service that interested them.

Consumers also form brand impressions at the engines. An August 2005 Yahoo!/Compete survey of wireless purchasers, for example, found that 61% of respondents thought a “brand leader” should always be first on the search results page (34%) or consistently in the top three search results (27%).

By that measure, then, 60% of consumers are let down by their preferred brands when they search for “cell phone” on Google today. Not the best return on the offline spend that got them to search in the first place.

Certain innovative marketers are capitalizing on the opportunities at hand, and the most substantial rewards will come to those that move fastest–the Hewlett-Packards, Eddie Bauers, and Boses of the world.

The search marketing programs of such companies predate Google’s offering of sponsored results, and they achieved great success with direct sales before many competitors could even define “PPC.” Today they build on their ROI-based learnings to support a broader range of marketing objectives. Their definition of ROI has expanded beyond directly tracked online sales to account for value in building brand awareness, driving store traffic, and supporting post-purchase consumer satisfaction.

Eventually more advertisers will “test and invest” and leverage search in concert with other marketing channels to engage self-directed consumers. Meanwhile, those looking to search only as a direct sales channel may find the once stellar ROIs eroding as the inefficiencies are wrung from keyword marketplaces.

In upcoming articles, we’ll explore best practices for leveraging search across a full spectrum of marketing objectives, metrics that can be used to quantify the additional value, and a host of other topics.