Paid search ads: do they really work?
“Online advertising, and in particular search advertising, is more effective than traditional advertising in terms of overall sales impact, primarily due to the strength of its cross effect on the offline channel.”1 Paid search ads are the mainstay of the online advertising world. The proof is in the numbers: in the first half of 2017 digital ad spend in the United States reached $40.1 billion (a year over year increase of 23%) with the search format accounting for 47% of total revenues2. The implication is that advertisers spent $19.1 billion in the first six months of 2017 on paid search ads, 18.4% more than the previous year. Clearly, companies’ believe that there is benefit in advertising their brands, products and services through paid search ads. Why?
Paid search ads allow you to meet customers in the buying process
Search ad formats have a unique benefit, which no other advertising channel can beat – search ads are shown to consumers who are in the process of buying that product or service. Every other marketing channel is simply creating awareness.
The implications of this “in the process of buying” advertising are profound. Firstly, your ads are shown to consumers who are looking for your product or service, which means that your target market is narrowed to potential customers. Secondly, you are able to influence a consumer’s purchasing decision by introducing product reviews, education videos, key benefits and other information at the point of purchase. Thirdly, consumers looking to buy your product are most likely to have the purchasing power to actually complete the purchase.
All of these implications combine to produce a very high return on investment (ROI) for your advertising spend. The math is simple: spend less on advertising media by narrowing the target market and receive more revenue by showing adverts to consumers who are considering buying your product or service. It is not uncommon for search ad campaigns to have an ROI of 500% to 600%3.
Paid search ads can drive in-store sales
The development of the internet as an omnipresent source of information has given rise to the “research shopper”4 – consumers who research most purchasing decisions online before going to a physical store to make the purchase of the final product.
There are a number of reasons for research shoppers taking an omni-channel approach to their purchasing decisions. They may want to try on a pair of shoes to get the right fit; make use of an in-store loyalty card; prefer the security of an in-store payment; or have instant “delivery”. The key point is that consumers use the internet, primarily on their mobile device, to research purchasing decisions before going to a physical store to buy what they research.
“According to a Bain & Company survey, people interact with their phones an average of 13 times per hour. That means during the 16 hours or so people are awake, they’re doing something with their phones more than 200 times per day.”5
Google have specifically created Local Inventory Ads to meet this consumer behaviour. The catch – these ads only show on mobile devices. This is an exceptionally powerful advertising channel. Not only can you harness the power of paid search ads, but you can combine it with full retail experience created by your brick and mortar stores. All of which takes place on a mobile device, which is where 54% of total internet advertising revenues were delivered in the first half of 2017.6 Oh, did I mention that all of this is measurable?
What is a Local Inventory Ad?
Local Inventory Ads showcase your products and store information to nearby shoppers searching with Google. When shoppers click your ad, they arrive on a Google-hosted page for your store, called the local storefront. Shoppers use the local storefront to view in-store inventory, get store hours, find directions and more.7
Results for paid search ads are immediate
Why else would search ad formats be so successful? Because paid search ads are delivered immediately.8 As soon as the search ad campaign is switched on, consumers begin to be shown relevant ads in the midst of their buying process.
There are no long lead times or onerous contractual commitments. The simplest search ad campaigns can be set up in minutes and the flexibility is incredible. For instance:
- If the search ad campaign is not working – pause it.
- If it is getting some results – test, experience and adapt.
- If it is a great success – increase the budget.
Is it time you and your brand gave this a try? If you want to talk about this some more, give us a call. Our qualified experts will be happy to help.
1 Isaac M. Dinner, Harald J. Van Heerde, and Scott A. Neslin (2014) Driving Online and Offline Sales: The Cross-Channel Effects of Traditional, Online Display, and Paid Search Advertising. Journal of Marketing Research: October 2014, Vol. 51, No. 5, pp. 528.
2 2017 Internet Advertising Revenue Half-Year Report
3 Isaac M. Dinner, Harald J. Van Heerde, and Scott A. Neslin (2014) Driving Online and Offline Sales: The Cross-Channel Effects of Traditional, Online Display, and Paid Search Advertising. Journal of Marketing Research: October 2014, Vol. 51, No. 5, pp. 540.
4 Peter C. Verhoef, Scott A. Neslin, Björn Vroomen, Multichannel customer management: Understanding the research-shopper phenomenon, International Journal of Research in Marketing, Volume 24, Issue 2, 2007, Pages 129-148, ISSN 0167-8116, https://doi.org/10.1016/j.ijresmar.2006.11.002. http://www.sciencedirect.com/science/article/pii/S0167811607000134
5 Mobile Marketing: Don’t Miss the Moment
6 2017 Internet Advertising Revenue Half-Year Report
7 Local inventory ads overview
8 Isaac M. Dinner, Harald J. Van Heerde, and Scott A. Neslin (2014) Driving Online and Offline Sales: The Cross-Channel Effects of Traditional, Online Display, and Paid Search Advertising. Journal of Marketing Research: October 2014, Vol. 51, No. 5, pp. 539.
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