Download pdf - Andrew Pozniak Consumers And Marketing Strategies In The Digital Space

Google Confidential and Proprietary

Consumers and Marketing Strategies in the Digital Space

Andrew Pozniak – Industry Leader, Emerging MarketsBucharest, 04 November 2009

Google Confidential and Proprietary 2

Agenda

Internet evolution

Understanding user activity

What drives Search?

Search and brands

Ideas for an economic slowdown

Final thoughts


Internet evolution

3


3.0The evolution of the Internet

1994 2003 2006

77M 1,000M500MUsers

Information & Communication

Commerce Community Self Expression &

Entertainment

1998 2000

400M

2009

1,600M

1.0 2.0


6.5

Growth in online usage

Information

Communication

eCommerce

Community

Entertainment

2003 2007

Hours online / month

2012

20.5

71.51

4.52.52

642.25

7.565

11 16 32


Where does your business sit?

43% 50% 7%

Source: Fortune 500 web audit (Feb 2008)

Internet as brochureware

Internet as sales channel

Internet as engagement tool


Understanding user activity

7


Search is a universal consumer behaviour


81%of internet users enter websites via a search engine

Source: Forrester Research Inc., “UK Internet User Monitor”


Internet is the number one starting point

Source: Ipsos MORI, Question 4.1: As you started to research your new car purchase, where was the first place you began searching for information?Question 4.2: Which other sources of information did you use at any stage in researching and buying your car?Base: All respondents

80%of new car buyers

started their search on the internet

Automotive Example


Search behaviour is also personal and iterative


On average mobile phone shoppers do 8.5 searches prior to conversion

Number of mobile phone searches per converter

Share of Mobile Phone converters by number of searches conducted per converter

22% do 10 or more


These searches occur over an extended period of time - average 27 days between first search and sale

Purchases & research tracked at a leading set of mobile phone retailers’ websites – Carphonewarehouse.com, dialaphone.co.uk, mobilefun.co.uk, o2.co.uk, orange.co.uk, phones4u.co.uk, three.co.uk, t-mobile.co.uk, virgin mobile, vodafone.co.uk

42% of mobile conversions occur after 30 days

42% Sales

38% Searches

Time from First Search


From ‘holiday in the sun’ to holidaypurchase in 33 days – 11 searches, 28 site visits

Holiday in the sun

5 338 13 21 29

Sear

ches

Visi

ts

HolidayRentals Hotels.com TripAdvisor

TUI

Expedia

First Choice

First Choice

Tui

TUI

TripAdvisors

TUI

AirToursFirst Choice

TUI

AirTours

First Choice

Thomas CookTravelRepublic

Thomas Cook

Teletext Holidays

HolidayWatchdog

AirTours

First Choice

Olympic Holidays

TUI

ebookers

First Choice

Thomas Cook

Cyprus holidays

Holidays in the Sun

Palm Beach Hotel Larnaca Cyprus

Europe Holidays

Spain HolidaysCheap Flights CyprusCyprus Holidays

Beau Rivage Hotel Cyprus

Cyprus Hotels

Thomson Holidays

Day 1

Travel Example

Source: Comscore Research Paper October 2007


Buyers are undecided when they start

Source: Ipsos MORI, Question 3.1/3.2/3.3: When you first started looking, how much did you know about the Type / Make / Model of car you wanted to buy?Base: New car buyers (n=500)

62%Undecided on Brand of car

(eg. Ferrari car)

69%Undecided on Model of car

(eg. Enzo car)

52%Undecided on

Type of car(eg. Sports car)

Automotive Example


Again this is true across different industries

Q: “You indicated that you use search engines to help you research flights. Before using a search engine to help you research flights, have you already made up your mind about the:”

N=1894

Source: Media-Screen/GMI Apr 06

75%

44%

23%

18%

8%Airline you want tofly

Times you want tofly

Price you want tospend

Days you want to fly

Destination youwant to go


In fact search enables discovery of new brands

Source: TNS / Google Automotive consumer study June 2007; Base: All respondents who bought a new car% - Completely Agree - Agree

47%

64%

64%

61%

48%

44%

Find the best price

Make more informed decisions

Compare makes and models

Discover new and relevant websites

Discover new models

Discover new brands

Automotive Example: Search engines help me

Automotive Example


The majority of car buyers switch brands

Source: Ipsos MORI, Question 5.2: What type of car did you buy in the end?Base: All respondents

55%

Automotive Example


What drives Search?

19


All touchpointsdrive online search


37%

30%

39%

Source: iProspect, “Offline Channel Influence on Online Search Behavior,” 2007. (Q. Within the last six months, which of the following prompted you to go to a search engine to look for information on a particular company, product, service, or slogan? Select all that apply.)/ RAB Word of Mouse Study 2007.

20%

40%

67% of online search users are driven to

search for information about a particular

company, product, service, or slogan

by an offline channel


Of course, online ads drive search activity too

Display Ads

vs27% 31%After seeing display

ads, nearly as many users search as those who

click on ads.

Driving Search

Video Ads


Search and brands

23


Search Results pages reflect and influence consumers’ brand perceptions


Advertising on your brand names reinforces your brand in the mind of the consumer


Consumers associate search ranking with the success of the company

26

71% of users expect leading brands to be on top of the search

results page 36% of users link placement to company prominence

Source: comScore, US, CPG study, October 2007Jupiter Research / Ipsos Insight Consumer Survey, n=2.103 (Search Engine users US only), Jan 2008


Search ads have a clear impact on brand metrics

Source: Enquiro Research/Ipsos Interactive Services, May 2008, Aggregated Data: All Industries, all countries (UK, Germany, France)

Brand Recall(do you remember it?)

Brand Affinity(do you like it?)

Purchase Intent(would you buy it?)

+ 2.5x1.18x 1.14x


Ideas for an economic slowdown

28

Google Confidential and Proprietary 29Source: comScore

113 billion searches worldwide in July 2009 + 41% versus 2008

In Europe, 36 billion searches in July 2009

1. Users never stopped searching


Search query growth in Romania (+40% Q3 09 v Q3 08)

3030Source: Google Internal

Allsearches

on Google RO

20082007

2009

+ 40%


2. When incentivised, consumers will buy

Recent retailer incentives spurred great consumer demand and sales

700,000 new car sales

690,000 dealership vouchers

$2.88 Billion

Cash for Clunkers

All passes sold out in 2 days

31 Million searches in 7 hrs

10 Million blog results

jetBlue All You Can Jet


3. Shopping starts earlier…

As of September 2009, consumers have already begun shopping for the upcoming holidays

Have started holiday shopping/researching.1

47%

Have made holiday purchases. 2

36%

Source: Google/OTX Consumer Pulse Check, 9/09. Base: Those who plan to shop/research or purchase this holiday season (Nearly 9 out of 10 plan to shop/research or purchase.) [1] Have you started your 2009 Holiday shopping/researching? n=2,331. [2] Have you started your 2009 Holiday purchasing? Please think of any gifts that you may shop for or purchase

during the Holiday Season, as well as those you may shop for or purchase after the holidays (e.g., post-holiday sales). n= 2,361.


3. …and ends later

During the last holiday season, some consumers waited till close to the holidays to complete their holiday shopping

Source: [3] comScore Press Release, December 2008.

Year-over-year e-commerce sales growth happened during

the weekend before Christmas. 3

98%


4. Consumers have more choice

Consumers today have many more choices: greater product options, new marketplaces (i.e. online, store, mobile), and increased retailer competition

New Retailers Online Expanded Product Offerings

Source: Hitwise. Shopping & Classified Website Ranking Report, week ending 9/26/09 vs. 9/27/08.

+7%


5. Online continues to outpace offline

Online conversions continue to show year-over-year growth, outpacing negative overall retail sales growth

51%59%

174%

135%

90%

Home Furnishings

Apparel Department Stores

Home Improvement

Consumer Electronics

-14%

-7% -7%

-12%

-10%

Home Furnishings

Stores

Apparel & Accessories

StoresDepartment

Stores

Home Improvement

Stores

Consumer Electronics

Stores

Google Search-Driven Conversions YoY Growth

(January – August 2009)

Overall Retail Sales YoY Growth

(January – August 2009)

Source: Compete/Google Retail Dashboard, January through August 2009. Overall Retail sales from US Census Monthly Retail Trade Report for Jan-August 2009.


6. Online increasingly drives offline

Source: [1] Internet Retailer, http://www.internetretailer.com/dailyNews.asp?id=31879.

“Lundgren said that every dollar spent online at Macys.com influences $5.77 spent in stores within 10 days after an online purchase.”1


7. Focus on sales conversion is key

Performance Marketer

THE BOTTOM LINE

Website optimization is key to boosting ROI

Will text work better than display?

It’s easier to double profits by doubling your conversion rate, than trying

to double traffic


Media tested Buttons tested

7. Your visitors will show you what works and what doesn’t

38

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Final thoughts

39


Marketers need to catch up with consumersSearch is at the start of the

consumer processWhere is it in

media planning?

Search is an integral part of the consumer decision process

Where is it inmedia activity?


You can always experiment and measure…


“To have a great idea – have a lot of them"

- Thomas Edison


Q&AAndrew Pozniak

Industry Leader, Emerging Markets

Thank you!