Major advertisers adapt search strategies

23 October 2009

NEW YORK: Major marketers including Volkswagen, Sprint Nextel and Xerox are all adapting their approach to online search advertising in the US, as they seek to drive up the payback generated by this channel.

A recent forecast from eMarketer, the research firm, estimated that internet adspend would decline by 2.9% in America this year, to $22.8 billion (€15.2bn; £13.8bn), although the company said search should still enjoy some modest growth.

GroupM Search, part of WPP Group, and comScore, the measurement specialist, also issued a report earlier this month arguing the combination of search and social media had a greater impact on consumers than paid-for listings alone.

One way in which advertisers are attempting to increase their return on investment is through taking a more nuanced approach to choosing the keywords they buy via platforms like Google's AdWords.

Sprint Nextel, for example, has moved away from solely using general category terms like "cellphone", which are often only entered on portals like Yahoo and Bing at the start of the purchase process.

Rather, it is now looking to take ownership of more specific phrases which are indicative of the fact that consumers are close to buying a product, such as "cellphone rate plans" or "Samsung Reclaim."
According to Simon McPhillips, director of media at the telecoms giant, these sorts of terms tend to be cheaper, and deliver an improved ROI, as they apply to enquiries made by users who are near to making an acquisition.

"A few years ago, search was a little bit more progressive. Now, it's mainstream. The incumbents are trying to figure out, 'What is the next new frontier?'" he added.

Volkswagen, the German automaker, is similarly seeking to more closely manage the search activity of its 600 dealerships in the US, so as to ensure that these outlets do not end up bidding against one another for the same keywords in auctions.

It has also developed a new game for Apple's iPhone and iPod Touch, linked to the launch of its GTI hatchback, which offers consumers the chance to win a car.

This game includes links it to a variety of Web 2.0 services, such as a facility letting players send "tweets" to their contacts on Twitter, and the ability to add videos of their efforts to YouTube.

In May, Xerox released a viral video based around a fictional disorder, called Information Overload Syndrome, which went on receive over 1 million hits, and delivered a 65% uptick in the number of searches linked to the company and this content.

Barbara Basney, head of global advertising for Xerox, said "everyone is growing their search budgets and has been for a long time. There is no exception to that."

Social media, she added, "is giving us another way to help influence people's propensity to search."

Data sourced from Wall Street Journal; additional content by Warc staff