It is obvious that the search market in Finland is much smaller in terms of spend but there is clear room for growth. It seems that Finnish businesses should be spending much more considering the high penetration of broadband internet access in Finland and the demand from Finnish consumers. Dagmar’s recent research on search behavior showed that 77% of internet users are using search engines to find shops and retailers, 76% search for information about products/services prior to (large) purchase decisions and 75% feel that they find good information to support their (large) purchase decisions from searches.
Despite this obvious demand from Finns to purchase or make purchase decisions when using search engines, businesses are clearly missing a major opportunity to convert interest into an immediate or future sale. This was a scenario seen in the UK 3-4 years ago when search marketing was new and unproven media in the UK market and there was a reluctance to spend budget on search marketing.
UK – Google’s second largest market in the world
In the face of the rise of search traffic, as more and more got online access in the UK, opportunities to reach out to consumers with search marketing became too great to resist. The most dramatic illustration has been the continuous rise of Google in the UK.
According to the Guardian and IAB in 2007 Google UK received £1.265bn in ad revenue, overtaking business magazine ad revenue. The UK is now the second largest search market apart from the US, accounting for 15% of Google’s global business. This compares to the IAB Finland figure of spend in search marketing in Finland of €48.1million in 2007, quite a huge difference.
Although Google UK is the dominant player in search it is not quite the dominant force as it is in Finland where it has over 90% market share. In the UK and in some other European markets there is still a case to spend search marketing budgets on Yahoo and MSN, so the budgets spent on search are even higher.
Search advertising has been so successful in the UK because it is easy and relatively inexpensive to accurately measure conversions (brochure downloads, site registrations, or sales). Businesses can clearly see which keywords people have searched for, how much those keywords cost and whether those keywords resulted in a conversion, and you can see this data on a daily basis.
Why use 3rd party tracking?
What strikes me in Finland is the number of Finnish search campaigns that do not use any form of conversion tracking at all. In the UK most search campaigns use some 3rd party tracking tool and use this in preference to anything distributed directly by the search engines.
Why use 3rd party tracking? Well it has real advantages over other tracking solutions. You can record post click conversions, for example if someone searches clicks on the ad but doesn’t purchase straight away but comes back 12 days later, it will still record that sale. If you run campaigns across different digital media channels, display, rich media, and affiliate, a 3rd party system can de-dupe results and correctly attribute results to the correct channel. Latest developments mean you can even see the actual path your customers take from interaction with your online ads either paid search or display to the final conversion. This means business can gain insight into which paid search and display ads influence customer conversions. Business can then use this information to better assess the optimal media mix between display and paid search.
Search marketing can be effectively used by large businesses, to small start-up business and the acquisition costs although rising are still much cheaper than any other form of advertising, especially important in a time when global recession looms large. Every successful business now needs to understand how to use search most effectively as part of their marketing strategy.
This is where agencies such as Dagmar with a dedicated search team and with industry leading in house search specialists can really help businesses get on the fast-track to leveraging search marketing to achieve business goals.
Sources:
Online ad revenues reach £2.8bn – The Guardian April 08 2008
The rise and rise of Google – The Guardian April 15 2008
Online search behaviour report – Dagmar
IAB Finland
IAB UK