I spoke yesterday about Google’s strategy, but a few people wanted to understand a bit more, so I am revisiting that topic. To understand what Google (and many other companies) are trying to do, you need to think more carefully about the purpose of advertising. Sure, sometimes it’s simple brand awareness, but more often it is to influence a purchase decision. It stands to reason that the most valuable advertising you can do is at the moment someone is considering a purchase. Google’s strategy is to be there at the moment that your customers are making their purchasing decisions, and to charge you for access.
Internet advertising is different from offline advertising in significant ways. It’s an interactive medium, so you must attract people to listen to your marketing message, rather than interrupting them when they are doing something else. It is a more personal medium, so you must speak in a more subdued, less bombastic tone. But one difference is often overlooked. Marketers can identify each customer’s progress through a personal buying cycle.
In many ways, Internet customer behavior is an open book—we marketers must just be willing to read it. Think about a big purchase you’ve made, such as an automobile. How did you start?
Many of us would start such a purchase by searching for broad words describing the type of car we want, such as “hybrid sedan” or minivan” or “mid-size SUV”—you get the idea. Searchers using those broad terms are learning about what is available. They have some idea what they want, but they are at the beginning of the buying cycle.
Depending on what you sell, you might break up your customer’s buying cycle in different ways. I recently purchased a Slingbox, but when I started out, I didn’t know what a Slingbox was. I began my learning with “wireless TV” and found everything from an adapted nursery monitor to Verizon V CAST for mobile phones. After some reading and a lot more searching, I narrowed down what I wanted over time, but I started out searching for a solution to a problem, not even knowing the right words for that category.
Your customers might start even farther back, searching for problems themselves. They know there’s something wrong, but they don’t have the slightest idea what to do about it. Regardless of the exact path that customers take through the buying cycle, you need to focus on what messages to send based on where they are in the process.
This is fundamentally different from most advertising. No matter how many TV ads or print ads you do, you’ll never know how many people are actively ready to purchase and how many are only vaguely aware they have a problem. That’s why traditional marketing messages have been scatter-shot full of different messages that try to explain the problem, explain the product, and persuade that this is the right one for you—all in the same ad.
Internet marketing allows you to break up the message so the right pieces are pinpointed at the right people. Wouldn’t you prefer to deliver a different message to someone looking for “family sedan under $25,000″ then “family sedan”—perhaps one segment cares a bit more about price? If the Slingbox folks tell me how it works when I search for “wireless TV” and tell me about free shipping when I search for “buy Slingbox Solo,” they will sell a lot more.
Google knows this. Google’s paid search ads are effective precisely because advertisers will pay more to get at the customer at the exact moment a buying decision is being made. But Google wants to go further, Google wants to reach people at the point of that decision even when they aren’t searching. Yahoo! is already using retargeting, a technique that uses past behavior (such as searching for “Las Vegas hotel”) to trigger personalized ads within a content network (such as tickets to an upcoming fight in Las Vegas, or promotions for nearby casinos). Google will do the same with DoubleClick, using searches and other customer activity to predict which banner ads might be more persuasive to this customer at this moment.
Google wants to own the real estate where customers make their buying decisions because that’s the most valuable real estate to advertisers. But don’t worry. They’ll be more than happy to rent that real estate to you.