Marketer’s Issue: Analysis Paralysis

I joined Yahoo in 2003 partly because I loved the accountability of search marketing, the obvious ROI and the clear value of each click.

In my first year on the job, something became glaringly apparent: As a company, we knew little about the search user and how search fit into the shopping process, and so we couldn’t give marketers the level of insight they wanted.

We had data logs, knew what keywords were popular and could even track seasonality. But our gut told us that there were certain search patterns throughout the buying process and that search was affecting offline sales. However, without supporting independent data, instincts aren’t enough for marketers to make decisions on allocating their multimillion-dollar ad budgets.

To tackle this issue, our company sponsored a study in 2004 to learn how people use search to research and buy electronics. The findings showed our instincts were correct in that consumers search on broad, generic terms in the research stage, then tend to make purchases off brand terms. The results also found a long buying cycle (usually more than 30 days) and that most purchases (90 percent) happen offline. Other companies such as DoubleClick, comScore, 360i and SearchIgnite have published research that confirms our findings.

You would think this rich consumer data would revolutionize how marketers reach customers through search. Well …

Though the industry and marketers have embraced the findings, they have not responded in the fashion we expected. That led us to ask: Why haven’t they opened their cookie duration or demanded new tools to track refinement among different types of keywords? Why haven’t they moved to a portfolio ROI, or applied an offline conversion factor? Why haven’t they adjusted keyword selection and messaging to address customers better based on the findings about multichannel shopping?

A few have, but most of the industry is still managing search marketing the old-fashioned way: keyword-by-keyword ROI measured by click to online conversion with short-term cookies.

The simple explanation may be that marketers are suffering from TMI (too much information), and that has led to the organizational malady known as analysis paralysis. Day in and day out, there is an abundance of data to sift through. How does one make sense of it all?

The good news is, all data about online advertising come to the same conclusion: Search and graphical ads work, and they work better if coordinated with other online and offline marketing.

Because it touches consumers appropriately at every phase of the purchasing cycle, online advertising is effective for branding, influencing and even closing the deal. It drives people to online and real-world stores, and consumers are influenced by their online interactions.

If TMI is the problem, then it’s a good problem to move from no consumer insights to many. The key is to use this information to create advertising that works, engage our customers and generate more leads and sales. Let’s get word to the C-suite executives so they can take the shackles off search and let it work for the entire business. As it turns out, online marketing is advertising that truly works – even better than some of us dreamed. n

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