Warc Blog

Search strategies change

16 January 2012
BRUSSELS: Major brand owners are adapting their approach to paid search, pursuing greater rigour and increasingly coordinated expenditure plans as they seek to maximise return on investment.

The World Federation of Advertisers, the industry body, surveyed 36 multinational companies from its membership, boasting a combined annual media outlay of $33bn.

Stephan Loerke, the WFA's managing director, said: "Paid search is a powerful platform for brands and 84% of those surveyed plan to increase spend in this area.

Around half of these firms allocate nearly $50m to digital advertising each year. More specifically, 40% of respondents spent over €26m via this channel in 2011, measured against 25% in 2009.

Expenditure levels are still relatively modest in Asia, where 57% of the corporations assessed directed less than €5m to this medium, a total standing at 54% for the Latin American operators featured.

The study also revealed 55% of the panel currently use media agencies to handle paid search, and the amount working with one international search agency had doubled to 23% since 2009.

A further 26% of organisations had a single international digital agency network, up from 17% in this period, and 39% utilised specialist search agencies in at least one market.

Over the next 12 months, centralising search spending was a goal for 68% of companies. Some 47% of interviewees reported bidding against their colleagues for keywords in the last year, and 44% mentioned coordination problems between paid and natural search agencies.

When it came to search agency remuneration, 33% of advertisers used fixed rate commission and 30% employed fixed- or output-based fees, up from 11% in 2009. A 12% share had mixed payment methods.

Exactly 66% of participants did not have a dedicated mobile search budget, falling to 44% for social search. Among the enterprises that did, mobile took 1.3% of search marketing budgets, and social took a 3% share.

In defining success, the typical brand owner focused on four different key performance indicators. The most widespread were clickthroughs on 71%, cost-per-click on 65%, cost-per-conversion on 52% and conversion rates on 28%.

By contrast, sales metrics logged just 19% here, suggesting that search is usually deployed at an early stage of the "consumer journey".

While not statistically relevant, the findings drawn from the survey are indicative of the thoughts and actions of the large multinational marketers in the WFA's membership.

Data sourced from World Federation of Advertisers; additional content by Warc staff

 
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