Jon’s In Waikiki (AKA The Waikiki Marketer)

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The Most Cost Efficient Way To New Customers? Search!

October 20th, 2006 · No Comments

This has been said before, but many remained skeptical about search marketing and its results. This just released study by Piper Jaffray will hopefully bring them around. The study confirmed, using a ‘cost per customer aquisition’ measurement to give their conclusions a quantitative, understandable conclusion. Here’s the rundown of the marketing tools they used in the study and how they fared:

Search: $8.50
YP: $20
Online display ads: $50
Email: $60
Direct mail: $70

Interesting that the Yellow Pages remains strong, taking the #2 position. One wonders if it will still be there in 10, or even 5 years, as the Web takes a greater share of eyeballs looking for a business or a phone number. At least, that’s what the experts are saying will happen. Then again, the ‘experts’ thought that was a great investment.

Another thing that should be noted is that email, the favorite tool of the spammer lags far behind. I shudder to think that this will turn more of them to try their luck on the search engines. There’s enough of those screwing up the results as it is. There is no shortage of spammers on Google.
The most amazing realization that I personally take from this – assuming the accuracy of this study – is how yet another recent study takes the advantages of search advertising to new levels. This 2nd study found that the conversion rate for Search Engine Ads (ie PPC) was better than the conversion rate for organic, or regular, Search Engine listings. This flies fully in the face of the assumption that regular listings are head and shoulders above the ads.

If you ask most people, they’ll tell you that they NEVER click the ads and are never persuaded by them. This disconnect is just the online version of what advertisers have seen offline for years. Everybody, when asked directly, will tell you that most advertising is stupid (that’s actually true) and that they aren’t affected by it (that’s often not true).

So – in light of this, maybe you should take another look at an AdWords campaign? Hopefully these new studies will prove helpful when I pitch a search ad campaign next time. I have often had clients immediately dismiss the idea because you paid for the ads. My reply of ‘Who cares if you make more money than you spend?’ fell on deaf ears. Maybe I wasn’t persuasive enough.

Happy Halloween!

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