The Law of Unintended Consequences

Much has been written (and rightly so) about the value of paid-search advertising and its ability to deliver potential customers actively seeking information about a product or service. And advertisers have bought into the paid-search model in a big way, with a 2010 estimate of a cool $30 billion — just under half of all online ad spending.  But what advertisers haven’t been aware of is that paid search has been benefiting them in other ways, as well. This is a phenomenon known as the “Law of Unintended Consequences.” (Unintended consequences are those unplanned things that occur as a result of some action.) While most unintended consequences have a negative connotation associated with them, the opposite is true for paid search. Specifically, there are two areas where companies with paid-search programs have benefited: branding and improving organic-search results.

Studies done by both Google and Yahoo indicate that paid search helps improve branding, brand perception, and purchase intent. The key findings of the 2008 Google study reveal “…when the test brand appears in paid search positions, unaided awareness and purchase intent increase for that brand.” The survey also took into consideration the impact on competitive brands. It concluded that “… when the test brand appears in paid search positions, unaided and aided awareness decrease for other brands.”

The 2008 Yahoo study “…found that brands generated an average 160% increase in unaided awareness by being present in standard sponsored-text search results compared with when consumers weren’t exposed to their search ads.” It also found that consumers were 20 percent more likely to have positive perceptions of brands in the top paid-search position than those in second or third positions, and 30 percent more likely to consider purchasing a product when the brand was at the top of paid-search results.

While both these studies were done for the consumer package goods category, I believe that the same holds true for other categories. I’m not proposing that paid search will help unaided awareness by 160 percent in all categories. However, a paid-search impression helps create recognition in a potential customer’s mind. And that’s what an advertiser is seeking.

Additionally, a good paid-search campaign will also help boost a brand’s organic-search listing by increasing site traffic. Increased site traffic helps a brand’s relevancy scores in the paid-search algorithms. So, even when a brand might not be served as a paid listing, it may show at the top of the organic listings. Either way, it’s a win/win for an advertiser.

While the unintended consequences may often be negative, it’s not the case in paid search. Clients who make an investment in paid search will see a positive effect on their brand’s marketing efforts, and that’s an “intended” consequence.

— Dave Capano, EVP, Director of Media Services


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Filed under advertising, Paid Search

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