Interesting article by Jack Neff at AdAge. For those of you without subscriptions, the premise here is that consumer package goods (CPG) companies are unhappy with search marketing. Not because they don’t believe it’s a good branding vehicle. In fact, the article goes out of its way to assure us that CPG companies have been sold on the branding properties of search – instead, they’re upset that their traditional methods of buying media (wielding giant budgets in order to negotiate preferred placement and rates) don’t fly in an open auction marketplace.
Especially vexing to these advertisers is the idea that they might actually get penalized for showing up more frequently:
“An executive at one CPG marketer recently noted how perverse the search-pricing model has become for the industry.
‘It used to be that impressions weren’t in the pricing model,” he said. But Google eventually incorporated them in a roundabout way, he said.
‘If you get too many impressions without getting clicks, the price goes up, or they kick out off completely,’ he said. ‘So they thwarted with their pricing model the window we had to actually deliver impressions…because of course it makes their revenue go up. But that makes our value go down – for everybody in package goods.’
He said the company had purposely tried to maximize impressions while minimizing clicks in search ads, though he termed that ‘smart buying’, not ‘gaming the system’.”
To me, this approach seems completely wrongheaded.
Search ads absolutely contribute to branding – having a brand show up in a prominent place on Google or Yahoo’s results page draws a big mental connection between the query and the company. But simply showing up in search isn’t valuable. The ad placement isn’t really where the value is. It’s in the click. The click is what transforms a branding opportunity.
When a person visits a search engine, it’s not because they want to read a bunch of company listings side by side. It’s typically because they want to visit a site that can offer useful information to a question or need they have. The ad itself doesn’t have much value… it’s all about context and intent. “Does this ad answer my question? Let’s click through and find out.” After the click, the user makes a decision about the relevance of the result, and therefore the brand.
Saying that you appreciate the branding value of search and actually understanding the branding value of search are two completely different things. I understand what’s causing the dissonance – CPM pricing is comfortable. They understand it, and it gave them advantages. But this new model isn’t going away anytime soon. It’s provided users with a service that they generally appreciate, and has made more money for the engines than they could have made under the old two-martini-lunch-and-a-handshake model. The smartest brand marketers understand this and have learned to love the click.