Paid search advertising is one of those things that have a lot of new business owners shrugging. The general consensus seems to be that this kind of ‘nuisance advertising’ has the potential to do more harm than good, but this couldn’t be further from the truth.

Aside from delivering a quantifiable return on investment, paid search gives both new and established businesses the opportunity to analyse how new and return customers interact with their marketing material on different platforms. We don’t know about you, but that sounds like a pretty good deal to us.

Recent research regarding the ways in which users behave when clicking on ads and how they evaluate ad choices on search engine results pages has had the social media marketing world reaching for their notepads to re-evaluate existing marketing strategies. It’s all pretty technical, so we’ve decided to boil it down to the essentials to save you some time. Feel free to read the whole nine yard over here if you are interested.

The main piece of information:

When you use paid advertising you should create an infrastructure that links online orders with existing customer profiles so you can tell who’s new and who’s supported your business before. This gives you the opportunity to see what kind of orders come from which digital marketing channel. Dividing the data in this way can also provide insight into which keywords, devices and ad positions are most effective at a) customer retention and b) customer acquisition.

How did they figure this out?

They took the data from one very big retailer, which was divided into new and existing customers and played around with the numbers. This resulted in the following insights:

  1. New customers were more likely to click on a paid ad after searching for non-brand keywords. This makes sense. Say you’re a first-time buyer looking for a drill, you’re more likely to search ‘drill brands’ than ‘Black & Decker’ or ‘Bosch’.
  2. New customers are more likely to click on ads for products that meet an immediate need. I.e. paid search is more effective for products/services that don’t require a lot of mulling over. A customer is unlikely to buy a car after clicking on a paid ad, but might book a weekend away.
  3. Data showed that new customers were more likely to click on a paid ad using a phone, which supports the notion of ‘showrooming’ – a unique marketing situation where a consumer will stand in front on the product on a shelf and use the web to read up about it.
  4. New customers tend to click on ads that are higher up on the search results pages, while existing customers often click on ads lower down. This can be attributed to a host of things, including brand recognition. What this means in practical terms is that if your ad is targeting people who already know your product you don’t necessarily have to be at the very top for it to be effective.

Keep an eye on the blog as we continue to filter the online marketing noise to bring you the most relevant information or get in touch with us if you’d like to chat.