What a Waste

A new research paper from Go Inspire Group has estimated the amount of money currently being wasted by British businesses on unproductive paid search. This waste stems from organisations not having a complete view of the customer – a critical capability which enables the collection of all sources of customer data.

Multiple sources of on and offline data can then be joined together, giving marketers the visibility and insight needed to recognise behaviours and customer journeys, and ensure the right messages are delivered to the right customer, at the right time, on the right channel.

The retail sector in particular was estimated to have wasted around £144.3 million on fruitless paid search in 2020, the highest of any sector surveyed.

Lack of holistic customer view causes paid search wastage on a number of counts, including: treating engaged customers as if they were new prospects; presenting brand name advertising to customers who were already looking for your website; using paid search to reach customers who would have come to you anyway through other channels; failing to remarket to lapsed customers; and failing to regularly optimise campaign segmentation, to name just a few.

In order to size the problem, Go Inspire Group conducted a series of control tests with its customers between 2018 and 2020, covering the behaviour 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 returns (ROI) by 15%, which is significant given the large sums of money we are talking about across several markets.

Beth Tait, Managing Director at Go Inspire, comments, “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.

“At Go Inspire, our Digital Director, Nick Greatrex, has used his specialist customer insight expertise, in combination with the Group’s resources and technical capabilities, to address this burning issue and scale the true level of the problem across the whole marketplace. Anecdotally, 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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