Are search ads really effective?

Are search  ads a waste of money? This isn’t to say that big brands should never invest in search advertising, but they should bear in mind that search ads work best when they alert consumers to something they’re not already aware of.  For instance, Gap might forgo search ads that would pop up when users search the company’s name or its best-known categories, such as jeans, and instead pay to appear in results for categories it isn’t commonly associated with, such as shoes.

Technologies such as radio, television, and the internet have given companies new venues for self-promotion, but the age-old problem persists: How to tell whether ad dollars are really boosting sales?  Not only are people spending more time online, but advertisers believe that companies such as Facebook and Google, which track people’s online habits, can put the right ads in front of the people most likely to buy (and the companies can measure what results).

Although most advertisers have come to believe that ads delivered when a customer is searching specific terms are more effective than the static banner ads that once dominated the web, recent research has cast doubt on that.

Harvard Researchers created a randomized sample of 18,295 U.S. restaurants, selected 7,210 that had never advertised on Yelp, and designed free ad packages for each one in that group. (The restaurants weren’t told about the ads or the experiment.) For the next three months they closely tracked user engagement with all the restaurants. Then they took the ads down to see what would happen.

They found that while the ads were up, the restaurants in them got more page views than the others—22% more on desktop browsers, 30% more on mobile devices, and 25% more overall. Users requested directions to them 18% more often, made 13% more calls to them, and clicked through to their websites 9% more often. The differences disappeared as soon as the ads were taken down. “This was a big effect,” Luca says. “It looks like Yelp ads are a positive investment, even for a business that doesn’t ordinarily advertise. The value Yelp ads seem to provide is in surfacing brands to customers.”

Today too many brands are wasting valuable marketing dollars in search marketing.  Research has consistently shown that consumers prefer organic search as opposed to paid search but there are other opportunities as well to improve the online branding experience.  Marketers should THINK like consumers, not marketers.

 

 

 

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