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How Consumers Buy and Advertising Influences Decision-Making Online

Daniel Yonts


Knowing how consumers buy online is vital to understanding how advertising influences their decisions. No marketing strategy or tactic can be expected to succeed if this fundamental knowledge isn’t known. It determines targeting, messaging, and how campaigns are measured for effectiveness. This core understanding determines if brands will succeed online or if marketers will retreat to the dwindling audience of traditional media. Without this knowledge, the Digital Marketing profession will establish a brand built around overly-complex tactics that are disconnected from marketing objectives – stripping the profession of its Marketing identity.

Today, most Digital and Traditional Marketers don’t know how consumers buy online. This is demonstrated by engagement strategies built around clicks and the assumption that branding does not or cannot occur online. In traditional media, the ad messaging itself can make people aware your brand exists, what it does and how to get it. Billboards do this for restaurants, hotels and other businesses effectively. TV ads have built countless brands – along with radio, magazines, newspapers, direct mail and other methods. Yet, online ads cannot be judged effective unless they generate clicks, which marketers have confused with “attention” and “interest”. Thus, if branding occurs at all, it happens on landing pages rather than from the ads themselves.
 
This strategic approach has been the foundation of ineffectiveness for Digital Marketers and Digital Media. It has devalued the massive inventory of exposures across the web and placed reliance on a metric that research has shown doesn’t translate into sales online or offline. When brands are instructed to be seen as few times as possible (via high CTR) and to measure things with no relationship to branding or conversions (clicks) – the advertising and marketing industries are in trouble. This becomes even clearer when considering the scarcity of clicks confronting advertisers and publishers alike.
 
Within this approach, consumers are viewed as hostile toward ad messaging -- determined to find what they want or need without advertising. Once on a landing page, however, they become less antagonistic and more susceptible to persuasive messaging. Landing page messaging can be tuned around a conversion goal for those inspired to click via broad pandering, disruption, distraction or the automatic stuffing of keywords into ad copy. Apparently, online consumers don’t want to view advertising but are comfortable with hard-sell landing pages. Consequently, they don’t trust advertising until after a click has occurred.
 
Fortunately, online consumers aren’t another species of humans – who possess an understanding of all possible solutions to their problems and desires. They don’t suddenly search for things they don’t know exist or stay up-to-date on all things via Social Media. They aren’t rigid activists against advertising, who can only be influenced by rating services, bloggers and other activists. They aren’t an abstraction that can only be decoded through algorithms and “Big Data”.  Surprisingly, they’re very similar to the humans who read newspapers, watch television, listen to the radio and shop at the local mall. In fact, they are more similar to our hunter-gather ancestors than the modern online caricatures we’ve made them into.
 
Online consumers are on a mission – and advertisers can help
 
Online, people are looking for information that helps them on their own personal or professional quest. They have objectives built around needs, wants, desires, perceptions, tastes, and biases – just like offline consumers. Some are methodical gatherers on their quest, looking for a solution that offers the best value in relation to their objectives. Others are skilled and decisive hunters, who use their experience and instinct to track down a solution. Both welcome the assistance of advertising to accomplish their mission – especially if this assistance is relevant to them. When it is not, they ignore it or mentally store it away with other useless information.
 
For me, the quest of consumers is represented by intent – as expressed by what they search for, websites they go to and where they’re at in the buying cycle. When ad messaging is related to the intent of consumers, they’ll consider it and use it to shape decisions. This is true of traditional and digital advertising. Online, however, intent can be known with much greater precision because it’s directly communicated by consumers. A search for “gifts for mom” invites suggestions from advertisers and the broader web community. When consumers read an article about “Terrific Gifts for Mom” on a blog, review or traditional media site – they also indicate intent that invites advertiser suggestions. Advertisers can address this intent as its being communicated (search page, article page, etc.) and/or as consumers who already indicated intent visit broader content topics.  
 
As the consumer intent for getting mom a gift progresses, it will become increasingly less broad and more specific. Perhaps, it will transform into a search for jewelry or gift baskets or a cruise – depending on the influences early in the process and unknown objectives of the consumer. Out of necessity, consumers have to reveal more about what they want, what their willing to spend and how they want it in order to accomplish their mission. Advertisers can use this knowledge to disqualify non-buyers, provide more useful information, and establish greater familiarity with their brand along each stage of the buying process. If a brand is established early in the buying journey, it has a definite advantage over unknown competitors. Branding is vital online. The last stage of the buying cycle is dominated by brands and measurable brand activity.
 
Consumer Intent Focused on Brands is How Success is Determined and Measured
 
Once consumer intent evolves from a gift for mom to “Harry and David’s Pear Gift Basket” or “ProFlowers.com”, competitors have been disqualified and the buyer has most likely made a decision to purchase. When ready to buy, the consumer will do a search for a brand (website name, product name, etc.) or go directly to a brand’s website. Those who conduct a brand search on Google or Amazon won’t see competitors or pay much attention to them – but they will pay attention to what others are saying about your brand and other data presented on a search or product pages. They can know your brand’s features, price, shipping options, and really want to buy. All that stands in their way is the ability to trust you and your purchasing process. Knowing that your brand exists at all helps in this regard.
 
For retailers, the majority of their traffic and revenue comes from brand searches and consumers going directly to their site – or Brand Activity. The same is true for most brands. This activity would not occur unless there existed previous exposure to a brand. That exposure would have required messaging about the brand’s name or how to find it. Otherwise, how would consumers search for or go to the site of a brand they didn’t know existed? The exposures that generate Brand Activity can come from offline or online advertising. Exposures can come via recommendations from friends, colleagues, experts and family – online or offline. Yet, no recommendation can occur if the person making it has not also had previous exposure to the brand.
 
What This Means for Marketers
 
By growing Brand Activity, marketers expand the biggest part of the conversion and revenue pie. They focus their targeting and messaging on those most likely to buy – and let consumers know who they are, what they do and how to find them throughout the buying process. Done well, online advertising informs and influences without the need of a click. In most cases, a click simply indicates that messaging failed to provide basic facts and information wanted by consumers. They click in order to gather information that could have been presented within ad messaging. For this reason, ads with the highest click-through rates often have the least amount of practical information for consumers. In fact, a recent experiment demonstrated that blank ads get the highest click-through rate.
 
Based on how consumers actually buy, being seen is far more important than getting clicks. Within Google AdWords, view-through and impression-assisted conversions provide compelling evidence of this. These conversions are tracked when a consumer views an ad but doesn’t click – then, later converts at the advertiser’s site (via Brand Activity). Within display advertising campaigns, the overwhelming majority of conversions are view-through. For every 1-click conversion, well-designed display ads will generate 5 or more view-through conversions. What’s more, advertisers can know what messaging and targeting (intention-based and demographic) produces the most conversions.
 
Impression-assisted conversions show the value of exposures within paid search – in the same way as view-through conversions demonstrate this via display advertising. It turns out that even a small text ad can influence consumers with the right targeting and messaging. For every 1-click conversion, search ads can generate 1 or more impression-assisted conversions. Advertisers can know which ads and keywords generate the most Brand Activity – and optimize around total conversions. Pursuing this approach, clicks become less important and a high click-through rate (CTR) becomes an obstacle to conversions. In a PPC environment, a high CTR simply means that ads are being seen by fewer consumers for the same ad spend.
 
The way consumers buy online can be known by any retailer or brand with access to Google Analytics and AdWords. It can be known within most any analytics tracking software or service. It can be known by visiting Alexa.com and other free services. The data for every retailer and service provider tells marketers how consumers behave online. This data isn’t new and doesn’t require marketers to understand “Big Data” or complex theories of attribution. Combined with studies1,2 and surveys on what customers do within the buying process – marketers can have a high level of certainty in this regard.
 
Once marketers understand how consumers buy online and how advertising influences decisions, they can develop strategies that enable brands and revenue to grow. They can reach their best customers earlier in the buying process...at a significantly lower cost. Their brands can engage consumer intent in ways that build trust, increase authority and encourage interaction. Overtime, brands will not just engage consumer intent – they will replace it within the consumer’s mind. Today, the intent for “streaming movies” has been replaced by Netflix. The intent for “search engine” has been replaced by Google. As brands emerge within intention-based markets, broader intent shrinks and the ability of competitors to engage these markets is diminished.
 
1. Beyond Clicks and Impressions: Examining the Relationship Between Online Advertising and Brand Building
 
2. How Online Advertising Works: Whither the Click
 

 



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