UK businesses wasted an estimated £728.9m on paid online search last year alone, due to a failure to implement a 360-degree view of their customers, meaning many are using paid search to reach people who would have come to them anyway through other channels.
So says a new study from Go Inspire Group, which blames advertisers’ failure to study customers across both online and offline channels for the issue.
This lack of an holistic view causes paid search wastage on a number of counts, Go Inspire claims, including treating engaged customers as if they were new prospects; presenting brand name advertising to customers who were already looking for your website; and using paid search to reach customers who would have come to you anyway through other channels.
It also means that firms are failing to remarket to lapsed customers; and failing to regularly optimise campaign segmentation.
In order to work out the scale of the problem, Go Inspire conducted a series of control tests with its customers between 2018 and 2020, covering the behaviours of over 500,000 consumers.
The control tests were able to demonstrate typical proportional savings on paid search spend. The results of the tests were then extended across paid search budgets in a number of markets to demonstrate – in financial terms – the level of savings that could be obtained by taking a more intelligent approach to paid search in practice.
By reinvesting the spend that is currently being wasted on paid search, marketers could improve their ROI by 15%, Go Inspire claims, which is significant given the large sums of money we are talking about across several markets.
Go Inspire managing director Beth Tait said: “Clearly, considerable sums are being wasted on paid search that either does not deliver return on investment, or might even be undermining the relationship with high-spending profitable customers. With sectors under even more pressure because of the current crisis, maximising return is critical. Having the right conversations across the right channels at the right time will drive better results for marketers.
“We have heard many clients saying to us, ‘We know that a proportion of our paid search is wasted… we just don’t know which bit’. As business becomes increasingly dependent on digital channels and digital advertising, it remains critical to understand the totality of a customer’s behaviour – online and offline – in order to use advertising to its full potential and maximise commercial return.”
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