Must-Read: CPG and Paid Search

17 08 2008

Ad Age has a must-read article on new research by Publicis Groupe’s MediaVest and Yahoo. It’s a pretty strong endorsement of paid search. But, since paid search basically means “Google” I’m not exactly how it benefits Yahoo. Am I alone in this?

In any case, the full article is here:

Highlights:

  • Sponsored text ads boosted awareness 160%
  • 20% more likely to have positive perception of brands in the top paid-search position
  • 30% more likely to consider purchasing a product when the brand is at the top of paid-search results
  • “Challenger” brands benefit more than category leaders from being at the top of both paid and natural search results.

“The implication is if you’re present, your awareness goes up, and if you’re not present, your awareness goes down,” said Matt Wilburn, senior category director for CPG at Yahoo.

What Do CPG Companies Currently Spend on Paid Search?

EMarketer estimates that CPG companies allocate only ~$140M-$180M (15-20%) of their total online spending to search. CPG search outlay amounts to only about 1% of the $16.4 billion the industry spent on other media last year.

What It Didn’t Test: Open Questions

  • Do paid-search ads increase offline sales? (That’s the subject of an upcoming third phase of the research)
  • Do strong rankings in organic search compensate for not appearing in paid search?

I’ll confess I was a late convert to paid search for my company’s brands. But, I’ve come around: the cost-benefit is too strong to ignore. Plus Google’s content network has been a strong performer.

Predictions? Will this article move more CPG companies to adopt paid search, or not?

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