Search Audiences: the future of SEA?

Last Thursday, Amsterdam hosted Friends of Search, one of the largest search engine marketing events in the Benelux. Both SEA and SEO were discussed in detail and The Reference also sent a delegation to Amsterdam to attend the event. We are naturally reporting on our findings, but this time it won't be in the standard "eight takeaways" style. This blog post mainly focuses on SEA and we will be looking for an answer to the following questions: as a specialist field, where is SEA heading? And, in the future, how can we ensure the most effective allocation of our SEA budget?

friends of search 

An important SEA-related theme at Friends of Search 2017 was search audiences (naturally including Remarketing Lists for Search Ads, better known as RLSA). These audiences allow you to further refine the targeting of your SEA campaigns, for example based on various demographic properties of the users or actions which they have undertaken (on your website). So should we all start to direct our entire advertising budgets at these search audiences? I would certainly question that!

TL;DR? The conclusions of this blog post are as follows:

  • Search audiences certainly offer added value for SEA, but acquisition must not be forgotten. Each advertiser will have to seek out the ideal balance between acquisition and audience targeting for his or her business.
  • If we adopt a broader view than SEA alone: think in the long term and
    • Create value for your clients and potential clients
    • Ensure a flexible organisation which allows you to respond quickly to changing circumstances
    • Make lifetime value (LTV) the most important KPI in your company

Audiences: remarketing, but also more than that!

IBy now, everyone knows that relevance forms the basis of a successful SEA campaign. Make sure that you respond to the user's intention (based on his or her search query) and ensure a logical link between the search query, your advertisement, your landing page and your product. If you focus on this point properly, you will be giving the user a relevant answer to his or her search query and the invested advertising budget will bear fruit. However, there are also elements other than keywords alone which you can use to refine your targeting for SEA campaigns, for example including the user's location, the type of device which is being used and search audiences (e.g. RLSA). The use of these other factors will make it possible to allocate our SEA budget more efficiently, as Arriane Donoghue also said in her presentation:

andere factoren in SEA-budget

The various factors which you can use to refine the targeting of your SEA campaigns. Source: slides Arianne Donoghue

RLSA was launched in 2013 and became an important method of ensuring extra relevance. RLSA allows us to bid differently and display a different message to people who have already visited our website (or carried out particular actions on the site). Of course, this is extremely interesting as you realise that these people already know your brand and may already be further advanced in the buying process. People who already know your brand will be more inclined to click on your advertisement and in general will also convert better. A higher conversion rate reduces your cost per conversion and increases your ROI. As Larry Kim already pointed out, brand affinity can make a huge difference to your SEA campaigns. If you focus more on a target group which already knows your brand, in principle this will allow you to deploy your budget more efficiently.

IA rather more recent development is the ability to use other audiences within your SEA campaigns too. You can now also make changes based on demographic data (gender and age), although this data is naturally not available for all users and (certainly in Belgium) you will still be left with a large group of "Unknowns".

As a result, SEA is evolving more towards the use of audiences. It is therefore a question of time before we can also create audiences for our SEA campaigns on the basis of interests (or income, for example).

demographics for search

Audiences: the goose that lays the golden egg?

The theory is all well and good, but here at The Reference we constantly ask ourselves the following question: what added value will this provide, and can we actually demonstrate it? In other words: are audiences really the goose that lays the golden egg for SEA?

We have already pointed out that the cost per conversion will get lower (and your ROI higher) as your conversion rate increases. However, one of the conditions is that the cost per click must also remain the same. If you only start focussing on specific audiences (e.g. by using RLSA) and leave your CPC bid as it is, your volume will drop drastically. In order to boost the volume and make the most of your budget, you will need to increase the CPC bid in order to gain a higher impression share within the audience for the keywords which you are targeting. Of course, this also means that your effective cost per click will rise. A higher cost per click also means that you will attract a lower volume of visitors for the same media budget. It goes without saying that visitors aren't the most important KPI, but will the ROI for your campaigns still be better given the higher cost per click?

And if the direct ROI for your campaigns is better if you allocate 100% of your budget to RLSA, is that the end of the story? Not entirely, if you ask me. After all, in this case you will only be taking the direct ROI (last click attribution) into account. You will still be attracting a lower volume, and in addition you will only be attracting people who already know your brand. In other words, your strategy will no longer include acquisition if you direct your entire budget at RLSA campaigns.

In the end, we need to ask ourselves the following question: in the long term, what will generate most value for your business or your client's business? Would it be a good move to wager everything on direct ROI in the short term via RLSA campaigns (in this case, you will only be taking last click attribution into account)?

Calculating what would effectively generate the highest returns in the long term is a complex matter and the answer probably lies somewhere in the middle. In my view, focusing solely on RLSA campaigns will never generate higher returns in the long term. RLSA and other audiences certainly offer added value for SEA, and at The Reference we have already achieved very good results by this means. However, it is still important not to forget acquisition and to allocate the budget accordingly. The acquisition campaigns might generate less direct ROI, but they will ensure that more people get to know your brand. People who might also become clients in the future. These acquisition campaigns will also help to grow your remarketing lists, with people who have already shown an interest in your offerings.

The most efficient balance between acquisition campaigns, RLSA and other search audiences (and the accompanying budget distribution) will be different for each company. This is a balance which every advertiser will have to establish for itself. Lesser known brands will probably have a greater need for acquisition than brands which already have a high level of brand awareness.

The times they are a-changin'

Too much of a cliché? Well then, please accept my apologies. All the same, it is an ongoing truth. The search landscape is changing fast, just like the entire digital landscape. In fact, to put it even more strongly: the entire economic landscape is changing at a rapid pace. Of course, here we are adopting a much broader view than SEA alone. All the same, many companies will find it hard to stay afloat in this rapidly changing environment. This is also what Jono Alderson was talking about in the last presentation at Friends of Search 2017 Surviving the machine revolution: how to become the digital marketer of the future.

Your world is about to end

Jono Alderson's presentation was full of fire and passion, not to mention the necessary sense of drama. Source:  slides Jono Alderson

An important piece of survival-related advice is not just to focus on hard conversions, but to think just that little step further. Don't get me wrong, here at The Reference we are crazy about hard figures and demonstrable results. We have "the culture of figures", as one of our clients recently told me. When we do something, we prefer to use figures to demonstrate the results. But as marketers, sometimes we just need to look beyond that and think how we could establish a bond with people. As Jono Alderson put it:

If you're just chasing conversions, rather than consumers, expect to start losing market share

So, what should you invest in as a company? These three focus points may already help to steer you in the right direction:

  • Create value for both your clients and potential clients. Another cliché? You're right, but it is certainly one which is worth repeating. Provide something of value and people will remember you. You will establish a bond of trust, and before you know it people will think of you spontaneously when they need something.
  • Organise your company so you can adapt quickly to changing circumstances and respond quickly when opportunities arise. If your company structure is too rigid and decisions cannot be made with sufficient speed, your company will never be able to evolve fast enough.
  • Integrate LTV as a KPI in your company culture as soon as possible. Focusing more on LTV as an important KPI will automatically help you to move away from short-term thinking. Also give yourself the opportunity to think about how to create value, which will help you to grow in the long term.

The future promises to be quite a challenge. Our task is to deal with all these changes and to deploy our budgets and efforts as efficiently as possible. Not just with a view to short-term ROI, but above all also with long-term profits in mind.

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