Search Revenue Underreported?

I attended the Forrester Marketing Forum in Orlando at the end of April. This year's Forum was vastly superior to last year's in that all topics were extremely relevant with specific case studies and highly actionable ideas.

One of the absolute best sessions was presented by Gian Fulgoni, Chairman of comScore, Inc. Based on a study they published in 2007, over 30% of Internet users delete their cookies one average 4 times a month. This is true for both 1st party cookies and 3rd party ad serving cookies. This concept becomes especially interesting in light of measuring ROI of Search Engine Marketing. According to the Search Engine Marketing Professional Organization, over the course of last year, a total of $13.5 billion dollars was spent on search marketing with nearly 90% of that total spent on paid search ads. Given the amount of money at stake, comScore's findings should be seriously considered.

ComScore partnered with Google in a 2006 study based on holiday-related purchases across 11 product categories for a period of 60 days post-search. The latter point means that they counted any purchase related to an online search that was completed within 60 days of the search. Their findings: 16% of the purchases were immediately completed online at time of search, 21% of purchases were made online within 60 days of the search (latent online purchase), and 63% of purchases were made offline within 60 days of the search (latent offline purchase).

Now if you're a pure online play like Hotwire, Amazon or Zappos, then the latent offline effect doesn't exist. It probably does, however, still hold true that the percentage of latent online purchases still exceeds that of direct online purchases.

So here's where your revenue from online search is being underreported:

(1) If you have an offline purchase channel, then the majority of your purchases directly from your customer's search are NOT being tracked nor being attributed to your search program's keywords.

(2) You are definitely not tracking the purchases of those people that delete their cookies on a regular basis therefore you're missing out on revenue from latent online purchases from these Cookie Deleters.

And speaking of cookies, not all mobile browsers support cookies. If they do, chances are high that they are not enabled to accept cookies or they are only set to accept 1st party cookies. Given that Search is the Numero-Uno mobile Internet activity, and that mobile on-line purchases are gaining traction, (a) it's a darned good safe bet that you are underreporting search revenue from your mobile channel, and (b) yes, you should be concerned about it.

What can you do about it? May I recommend that in your Search campaign ROI analysis, you include a new "pro-forma" metric which adjusts your purchases for missed latent online purchases (the deleted cookied effect), and for latent offline purchases. Since comScore's panel includes 2 million participating members, you can use their percentages in your pro-forma calculations since the sample size is large enough to statistically represent the entire population.