January Survival Tips For Search Marketers: Revisit Your Budget, Rest Up – The Superbowl Is Coming

The beginning of the new year is usually a very busy time for marketers. Not only do they have to execute on their new goals and budgets, but they also have to deal with seasonal factors that affect many verticals.

While search marketers in particular have to overcome several tactical and strategic issues in January to ensure success; this January, I see three key areas where search marketers would be well advised to focus their energies.

Adjusting To Rapid Changes In Traffic Patterns

For most businesses, the period between December 25 and January 1 is a quiet period when traffic dies down. However, traffic patterns pick up right after New Year’s Day. To complicate matters, advertisers in many verticals see an uptick in traffic due to seasonality.

For instance, consider the chart below that shows traffic patterns of the top categories in the travel vertical, which was made by calculating the traffic volume of several high-volume keywords from the flights, cruises and packages categories. Here, keyword traffic significantly picks up in January.

Seasonality patterns in travel. Note that traffic volume drops significantly in November and December, and picks up sharply in January, especially in the cruises and packages categories.

Similar effects are seen in other verticals, too. In the financial vertical, interest in tax and retirement related products usually picks up in January. Automotive advertisers see a strong pick up in January owing to new cars being launched. While retail, in general, is quiet in the first quarter, niche categories like weight loss products see very strong interest in January, too.

All these factors point in one direction — search marketers must re-evaluate their bidding strategy right after the holidays.

Priming For Super Bowl & Other Semi-Predictable Traffic Jumps

As seen below, a successful Super Bowl advertisement can generate a huge jump in search traffic for an advertiser. This is both a challenge and an opportunity for the search marketer and presents a budgeting dilemma for January.

Google Trends data for a Super Bowl advertiser. Note that while the spike is predictable during Super Bowl day, it is hard to predict the size of the spike.

Under-investment in online channels like search can leave the audience “under-primed” for the Super Bowl ad, leading to lower response rates. On the other hand, spending very high amounts in the online channel, can eat into the budgets for the remainder of the year.

This is also a dilemma for advertisers who see predictable spikes. In these cases, a successful campaign entails careful planning and execution in the following areas:

1. Appropriate budgeting in both the online and offline channels for the entire campaign
2. Successful flighting of the advertisements in all channels before the high spike event to prime audiences
3. Capturing the awareness and demand generated during the high spike event to take consumers further down the funnel.

The third point, is crucial and often missed.

For instance, consider an advertiser with business model where the final conversion is online (for instance, an e-commerce advertiser). If the advertiser invests in a Super Bowl ad, but is under-invested online, then a savvy competitor could capture some of the generated demand by heavily investing online during and immediately after the Super Bowl.

Macro Economic Factors

Macro-economic factors can affect consumer and advertiser behavior in search quite dramatically. For instance, during the 2008 recession, the monthly advertiser spend in the financial vertical was strongly correlated to the S&P 500. Upswings in the economy are reflected by greater consumer spending, which advertisers see as higher ROI.

As a result , ad budgets increase and CPCs rise. During downswings, the opposite happens. In my experience, owing to the measurability of the medium, paid search is very sensitive to economic changes. Experienced search marketers do this and quickly adjust their bidding strategies and budgets when they believe the economy is going through some significant changes.

However, with talks of the fiscal cliff (now settled), we were in a period of economic uncertainty and not in a period of upswing or downswing.  Hence, search marketers would follow their campaign performance very closely in January and take immediate action when they see a trend in campaign performance.

EM spend in the financial vertical in the Adobe digital index and the stock market index for the 9 months through the 2008 recession. The correlation was close to 85% for this period.

Parting Survival Tips

• Adjust your bidding strategy to account for traffic shifts from December to January. If you have not changed your bids from late December, then you are at risk of spending more than your budget, as the same bid would get you more than the expected traffic.

• If you are in a period of high seasonality, build a plan to pace your budgets. For instance, if you anticipate a high spike event in late January or early February, then back loading your budgets might be a suitable strategy. I covered high seasonality forecasting in detail here.

• If you have a Super Bowl ad running in early February, work with the teams in other channels and build a media plan to prime audiences, generate demand and then effectively capture that demand when the Super Bowl ad has run. Make a plan to attribute the conversions effectively. This is a vast topic in itself, but I have presented the basics here.

• Economic news, forecasts, stock markets and new legislation, etc., can have a significant impact on your campaign performance. This period is a particularly sensitive one; hence, it pays to keep a close eye for such events.

I hope these tips help you navigate January and wish you success for the month and the rest of the year.