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Search’s Role in Today’s Consumers’ Path to Purchase

Last summer, I worked for a consumer packaged goods (CPG) company where the notion of “going digital” permeated daily conversation. Prior to working in CPG, I had generally thought of consumer goods (anything from cereal to shampoo to cigarettes) as being sold only in brick-and-mortar stores with the exception of Amazon as a major online site that facilitates CPG sales. However, I quickly realized that in this traditionally brick-and-mortar industry, marketers and brand managers were turning to many digital platforms to adjust to a new generation of shoppers. Naturally, when our class discussion turned to the topic of the search industry, I was reminded of how topical this chapter is in today’s changing retail landscape that is greatly affected by the search industry. The article “How Shoppers Get Inspiration: Consumer Search Trends in I-Need-Some-Ideas Moments” explores the first step in a consumer’s path to purchase: awareness. When deciding to purchase a product (whether online or in stores), consumers typically research the product and relevant brands beforehand. With so many options available for any given product category, shoppers must narrow down their choices with an initial search. Google explored a snapshot into the search history of one wheatgrass juice shopper which shows the shopper’s searches becoming increasingly specific from “what is wheatgrass” to “types of juicers” to “centrifugal juicer”. The article then provides concrete ways for marketers to capture the consumer at this initial search stage prior to purchase, including zoning in on related-product searches and then creating captivating supporting visuals once searches click on the desired link.

As I read this article, I wondered about the financial feasibility of using search as a marketing tool for both the search engine and the marketer. Today, the search industry typically sells ad space by charging for clicks on ads (“pay per click”). Thus, the advertiser with the highest value per click should, in theory, receive the ad space with the highest click through rate. However, we also know that the search engine does not know the exact values marketers place on each click. Using the VCG procedure prompts bidding advertisers to bid truthfully which makes search feasible for the search firm, but how about the advertisers? Based on what we know about the search industry and how omnipresent marketers must be, one can assume a relatively high cost for marketing through search. That is, the cost to make one impression (or even a couple hundred) may be trivial while the costs of making millions of necessary impressions may require a substantial investment from the company producing the products. The concern is amplified when considering the ad space marketers should pay on related-product search result pages to maximize their reach beyond just bidding on ad space for product specific search result pages. This additional financial burden may be one explanation as to why CPG and retail companies are just now beginning to take full advantage of digital marketing by buying ad space whereas other industries may have been more willing to experiment and invest in the power of search earlier.

Clearly, consumers will continue to drive changes in ad sales going forward. Although the digital marketing done through Google, Facebook, etc. can directly improve sales (or at the least, brand equity) for CPG companies, it will be interesting to see how much investment in search these companies are willing to trade for a boost in sales and brand awareness.


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October 2016