Search Marketing Insights (Search and the Media Mix)
Paid Search Marketing: Can It Learn From Database Marketing?
By: Pat Stroh, VP Analysis and Decision Support, IMPAQT
Download the white paperBelow is a summarization of the key takeaways outlined in “Paid Search Marketing: Can it Learn from Database Marketing?” For a more in-depth analysis on this topic, please download the white paper.
Search Engine Marketing (SEM) regularly and steadily generates copious amounts of data and reports. Some commentators highlight the abilities of database marketers and analysts to synthesize, sift and understand data, and then produce actionable recommendations. In addition, those database marketing abilities translate directly over to the data rich environment of Paid Search Marketing. Thus, it is important to ask: What are the similarities between Database Marketing (DM) and paid SEM? What are the key differences and key pitfalls? And what are the opportunities for “cross learning” from DM and SEM?
The similarities and differences between DM and SEM exist in three primary dimensions – the amount and character of data, the sophistication of the analytics, and message delivery system.
The similarities include:
1. Transactional data volume. The sheer amount of Search data requires substantial computer resources, data management, and analytical sophistication. Excel spreadsheets, much less the human mind, cannot grasp the volume of data.
2. Understanding the customer. Once the marketer understands their customer, they know how best to get their attention, position their product or service, and achieve the desired response.
3. Message timing. As all marketers know, “timing is everything.” Marketers are obsessed with timing their messages to prospects or customers at “critical points” in their lives or business relationship, because it means the difference between success and failure.
4. Quantitative methods. The use of powerful statistical algorithms lends themselves to prediction and goal-oriented optimization that incorporates myriads of data influences on the “response.” In doing so, marketing budgets are allocated to maximize return/response.
5. Testing. Champion-challenger, control-versus-treatment, statistically significant lift over controls, full factorial and partial factorial experimental designs, etc. are the parlance of database and online marketers.
6. Performance feedback. Both database and online marketing explicitly incorporate marketing performance feedback into strategic and tactical marketing actions.
7. Marketing mix. While there is a tendency in both DM and SEM to operate in a silo, each channel depends on the marketing mix or environment in significant ways.
Despite similarities, it is simplistic and misguided to assume that DM skills will transfer over to SEM without major bumps, misunderstandings, and missteps. Here are some differences:
1. Data volume and marketing velocity. In many cases, DM tends to be deliberative with long performance feedback cycles. Whereas SEM data refreshes, scoring, testing, and performance feedback occur very rapidly.
2. Proximity of message timing. In many respects, Search represents the ultimate insight to “what’s on a customer’s mind.” That being said, the common lack of long-term tracking for a specific searcher often limits the ability of SEM to the “here and now” as opposed to the “life cycle” of the customer.
3. Message delivery system. In SEM, the Search Engine is the ultimate arbiter of message delivery. In real time, it determines the relevance of the PROPOSED message, assigns the message value, and serves the message to the searcher. There is no parallel to this independent 3rd-party arbiter function in DM, which looks at, auctions, prioritizes, and controls the delivery of the message.
4. Tracking and Privacy. Online tracking continues to be an area of ongoing development and controversy, as compared to traditional database marketing. Also, the integration of online data with other forms of offline data remains under-developed compared to DM.
The importation of database marketing skill into SEM represents a mixed bag of opportunities and potential pitfalls. By clearly recognizing those situations, companies will continue to capitalize on the growing importance of SEM. Furthermore, they will also be positioned to achieve a competitive advantage as traditional advertising channels, such as TV/rich media, converge online in the future.
