In the film “Minority Report,” Tom Cruise’s character John Anderton walks down a hallway lined with sleek, thin screens upon which colorful ads are shown. Each provides him with a personalized marketing message, after a scan of his retina. “John Anderton, you look like you could use a Guinness right now!”
While this was meant to be spooky and entertaining, the idea of “right-place, right-time” placement is a dream of marketers everywhere. It doesn’t take a behavioral scientist to think of putting a lemonade stand near a little league game, but finding and actually taking advantage of these opportunities can be difficult, especially on “high consideration” products and services.
Enter broadband Internet. Consumers search for information instantly (mostly using broadband connections) to the tune of 450 million queries daily. While many searches are recreational, Forrester Research reports around 70 percent of consumers will research products and services this way in a given year. In addition, a majority will then purchase the product or service locally.
With this huge number of consumers scouring the web, a new marketing tool has entered the picture, known as Local Search Advertising, which works like this:
Let’s say a web-savvy Lexington family needs a new refrigerator. They visit a web search engine to research the models. Typing “Frigidaire” on Google or AOL yields typical results, displaying a link to Frigidaire’s site with other “less useful” listings. But there’s something more going on here.
Even without entering their location, the top and right sides of this results page display ads for Frigidaire showrooms right here in Lexington. One click to the local company’s Web site can let the potential customer see current stock and a special Internet sale for Frigidaire buyers. The merchant has been presented as both a solution for the information and a local contact for the purchase, and the loop is closed.
A search for “Tax Forms” shows accountants’ ads, “Steel Building Types” shows contractors, and so on. And more than half of these searchers don’t have a particular vendor in mind at this stage, making it a great opportunity to find new customers. This is not spamming, and I am not talking about those annoying pop-up ads; rather it’s a chance for a merchant to react to a customer-initiated request for help.
The search engines aren’t providing this fancy technology out of the goodness of their hearts. Businesses spends $22 billion a year on local advertising, and many studies show that local firms are looking to shift parts of their budget in favor of the Web. There are many reasons, including the difficulty in saying “We’re in the yellow pages” without “Which one?” coming back as the reply.
Some of the programs being offered for local search placement in major search engines are Google Adwords, Yahoo! Search Marketing and Verizon Superpages pay-per-click. Each wants to become the consumer’s (and by extension the advertiser’s) next choice for local purchase-oriented searches. These large ad networks claim to cover 70 to 80 percent of the Internet with their pages and “partner sites.”
In addition to the timing, a benefit to the advertiser is the pay-per-performance pricing model. The ads are free until someone clicks, at which time a small fee is charged and the visitor is sent to the advertiser’s Web site.
There are no long-term commitments, and advertisers can change or stop ads any time. They can create predefined budgets for the day or month and fraud-proofing mechanisms prevent competitors from rapid-fire clicking. Markets can be limited by single or multiple cities, states, languages and countries.
The actual cost of a click is usually based on a bidding model. Whoever is willing to pay the most for the visitor in a region is able to buy his or her way to the top, in most cases. For markets the size of Lexington, bidding wars are not that common, and you can usually get into a good position for under 50 cents per visitor. If you’re like my clients, the value of a targeted site visit is many times this amount.
During a campaign, reports are generated about click-through rates (how many visited a site from an ad) and conversion rates (how many visitors made an inquiry or purchase.) Advertisers can nurture effective ads and remove poor ones. My favorite use of this data is as a planning guide for Web site redesigns. I tend to carefully measure inquiries and near-purchase pages such as “directions to our store.” Ads must be carefully written to avoid “window shoppers” and monitored closely at first to look for leaks.
As usual online, this is just the start. In development are special pay-per-call advertising technologies and mobile device/phone searches using GPS. Businesses will be able to reach out to consumers with timing accuracy never before possible.
Now, about that Guinness.