Researching or Ready to Buy: 7 Ways the Buying Cycle Impacts AdWords Advertisers

As any salesman will tell you, buyers typically move through stages of a predictable cycle when they make a purchase.

That cycle starts with an initial enquiry and ends with the placement of an order.

In marketing terminology, those stages are described as the research and engagement stage, the consideration and comparison stage, and finally the purchase stage.

The buying cycle has several important implications for anyone conducting pay per click (PPC) search marketing campaigns:

1. Campaign Objectives

Your campaign objective will influence which stage of the cycle you need to target.

A manufacturer who distributes nationally via resellers should be interested in reaching consumers early in the buying cycle. The same goes for a B2B marketer seeking to influence business buyers reseaching all the available options.

A retailer on the other hand will usually prefer to connect with consumers later, when they are ready to buy.

2. Keyword Research and Selection

In the context of online search, the buying cycle manifests itself as the keywords people use.

Those at the beginning of the cycle tend to use a small number of general keywords and phrases, which are typically only 1 to 3 words in length and desrcibe the niche in generic terms.

These often form the bulk of the most popular searches in any given niche through sheer volume and attrition. That's because there will always be more people populating the mouth of the sales funnel than there are make it all the way to the end of the cycle.

An offline analogy would be the average retail clothing store. There may be 10 or 20 people enter a store for every 1 that buys.

And therein lies one of the great ironies of keyword buys . . . advertisers bid up the cost of these general words and phrases because they're easily discovered and individually represent the most volume, but they usually don't convert so well.

Search users later in the cycle tend to use more specific terms and phrases. That means the query might include a brand name, a model, even an SKU product number.

These are the keywords that constitute the bulk of the now legendary 'long tail' of marketing (and search).

These terms often cost less and convert better. However they cost less for a reason . . . they take time and effort to find and aggregate in sufficient numbers to make the volume worthwhile.

3. Campaign Structure

You should separate early and late cycle keywords in your Ad Groups for Quality Score optimization and reporting reasons. Depending on the size of your campaign (read number of keywords), it may even make sense to have completely separate campaigns.

4. Ad Copy

Search marketers should be deliberate in targeting different stages of the buying cycle with PPC ad copy.

Ads that offer a free report, a review, or specifications will attract people who are in the early stages of the buying cycle, looking for information. Ad copy that mentions price, free shipping, or a special offer will attract those further along in the cycle.

5. Landing Pages

Your keywords, ad copy and landing pages should all reflect the same consistent message . . . and that message must be in sync not only with the subject of the query but also with the user’s current position in the buying cycle.

A user in the research stage of the cycle should land on an information page, while someone who specifies a product model as the keyword should be delivered to a page where they can actually buy that product.

So don't just send them to your home page.

A 2004 report from Atlas OnePoint found the average conversion rate for lead generation sites that used the home page as a PPC destination was just 6.3%.

The same Atlas study found that landing pages that match the theme of the keyword have a 9.3% conversion rate, and pages that match the keyword specifically have an 11.8% conversion rate.

That's 47% and 87% more conversions, respectively!

6. Bid Strategy

Depending on your campaign objective, you may decide to use 'stage of cycle' as a reference point in developing a bidding strategy. For example, a retailer may decide to bid lower on less targeted, early cycle keywords and higher on more targeted, later cycle keywords.

7. Performance Analysis

You'll often see advice from commentators that you should analyse your PPC results down to the keyword level. "Keep the keywords that convert and ditch those that don't. You'll save yourself a fortune" goes the mantra.

And there’s no doubt about it . . . there's always savings to be made by deleting keywords that never convert, especially very general and irrelevant ones.

But the buying cycle provides at least three reasons why you might not want be too literal in your interpretation of that advice:

- First, analysis at the keyword level won't be appropriate for some business models.

For example, B2B vendors selling high value products with a long sales cycle often only have a few conversions during the average month, so analysis at the keyword level would be overkill.

Analysis at the AdGroup and campaign levels is usually more meaningful in those cases.

- Until recently, the lack of click trail reporting meant that many valuable 'assist' keywords - those keywords which introduce users to your brand but don’t get any credit for subsequent conversions - were deleted unnecessarily.

A 2006 SearchIgnite survey found that 37% of purchase transactions were completed with at least one 'assist' click . . . and these multi-click conversions accounted for two-thirds of all clicks measured in the study.

One of the strengths of Yahoo's new pay-per-click system is that it can correlate and report this type of data. Sadly, this is not yet a feature of Google AdWords.

- Early cycle 'assist' keywords may also play a significant role in the well documented web-to-store conversion trend. Consumers evidently often prefer to research products online, then go offline to complete any subsequent purchase at a local store.

A 2005 benchmark survey The Dieringer Research Group estimated that 83 million people a year do that in the U.S. alone.

So there you have it . . . seven ways the buying cycle impacts Google AdWords marketers.

Happy advertising!