December 10, 2015

Impact of Search on New / Infrequent Buyers

Take a look at this one ... for a business, this is the percentage of annual demand that comes from search (all search).
In the past year, this file consistently demonstrates predictable trends ... the top 20% of the file is least likely to purchase via search (< 10%) ... the middle of the file (15% to 50%) spend north of 15% of their demand via search. Often, this trend is more extreme, with the bottom of the file skewing heavily to search.

We can also compare year-over-year demand changes within search.

9-12 months ago, customers were spending > 20% more on search than the year prior. But as the year progressed, customer spend in search declined, across the board, and in the past month, year-over-year trends turned negative.

When I see this, I need to dig into the data with the marketing folks. Did they change marketing spend on search (i.e. less)? Did their vendor change their bidding strategy? Or is this a sign that search ... a driver of demand among infrequent (and new) buyers ... is beginning to fail. If search is beginning to fail, what does that mean to the ability of the brand to acquire new buyers?

From 2016 - 2020, the biggest story we're dealing with is finding low-cost new customers ... it's getting harder and harder. Here, we see an example where search helps the bottom of the file, and year-over-year demand volume from search is on the decline. Somebody needs to dig in and research what is happening here, don't you think?

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