December 14, 2004

comScore Networks releases the findings of a study revealing the impact of search engine utilization on online buying processes.

The study, which was sponsored by Overture, a division of Yahoo, analyzed the timing of search engine usage and the role of different search term categories in the shopping process among consumers searching for electronics and computer products.

The comScore research studied the buying activity of Internet users who conducted a consumer electronics or computer (CE/C) search at one of the top 25 search engines in Q1 2004.

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Among the other findings, the study revealed that 25 percent of searchers ultimately purchased a CE/C product and that an estimated 92 percent of these purchases occurred offline. Among the 8 percent of post-search purchases that were made online, the vast majority occurred in subsequent user sessions (not directly after a search click-through).

Using a combination of online behavioral observation and consumer survey data, comScore estimated that 92 percent of all buying activity following a CE/C search occurred offline.

Searches for consumer electronics, such as DVD players, TVs and cameras, were more likely to result in an offline purchase than were searches for desktop and laptop computers.

The comScore study tracked online buying behavior for 90 days following a CE/C search.

This longitudinal analysis of consumer behavior revealed that only 15 percent of online purchases following a CE/C search occurred in the same user session as the search itself, with 85 percent of conversions occurring in a latent (or non-search) session. Additionally, nearly 40 percent of all purchases occurred 5 to 12 weeks after the initial CE/C search was conducted.

“These findings reinforce the importance of considering the latent impact of search engine usage when evaluating search engine marketing investments,” said James Lamberti, vice president of comScore Networks. “Search cannot be thought of as solely a direct response marketing tool, especially in highly considered product categories where search activity can precede a purchase by as much as 60 to 90 days.”

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Generic product search terms (e.g. “camera,” “plasma television” or “PDA phone”) accounted for more than 70 percent of total search volume, while trademarked retailer terms (e.g. “Best Buy,” “Gateway.com”) accounted for 20 percent and specific product terms (e.g. “Canon digital camcorder,” “HP notebook nx9010”) accounted for 10 percent.

The study found that while generic terms accounted for the majority of purchase conversion (61 percent), branded terms (either retailer or product terms) were approximately 30 percent more likely to result in an online purchase.

"It’s critical that retailers consider generic search terms as an important part of their keyword strategy,” continued Mr. Lamberti. “Marketers focused solely on specific product terms known to convert directly will fail to address the vast majority of consumers in the buy cycle.”

The results of the study challenge a widely held belief that most consumers begin the product search process by using a generic search term (e.g. “plasma TV”) and then later refine their search activity to product-specific terms (e.g. “Sony Plasma KE-42M1”).

Operating under this assumption, many retailers and manufacturers believed that investing only in product-specific terms allowed them to reach the majority of in-market consumers closer to their purchase decision. In reality, by taking this approach, marketers are missing the vast majority of their addressable market, since most consumers never use these types of terms.

The comScore research found that while 85 percent of searchers do indeed conduct additional CE/C searches later in the shopping process, the majority of consumers continue to use the same search term type (either generic or branded) with which they began the search process.

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Since 83 percent of consumers start their search process with a generic term and only a relatively small percentage later search using a product-specific term, retailers or manufacturers that invest solely in product-specific keywords will miss more than 80 percent of CE/C searchers.

As importantly, comScore also found that generic search terms are likely to have influenced even those consumers who converted to purchase after conducting a retailer trademark search (e.g. “Best Buy” or “Gateway”). Fully 84 percent of these buyers searched using a generic term earlier in the buying cycle, reinforcing the importance of reaching consumers early in the search process when they are defining their consideration set.

“This research supports the theory that all types of terms play an important role in influencing the consumer’s purchase decision,” said Diane Rinaldo, director of strategic alliances at Overture. “With this new knowledge, marketers take a major step toward better understanding the full impact of their search advertising campaigns.”

Source: comScore

        

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