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Understanding the Consumer Buying Cycle

Understanding the Consumer Buying Cycle. The Role of Search. Sara Stevens Director – Marketing Solutions comScore Networks, Inc. Drilling Down on Local: The Online-Offline Opportunity April 19 th , 2005. comScore Research Study Summary & Objectives.

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Understanding the Consumer Buying Cycle

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  1. Understanding the Consumer Buying Cycle The Role of Search Sara Stevens Director – Marketing Solutions comScore Networks, Inc. Drilling Down on Local: The Online-Offline Opportunity April 19th, 2005 Page 1

  2. comScore ResearchStudy Summary & Objectives Multiple Studies focused on better understanding search: • Yahoo! Search Marketing Study: Tracking consumer behavior from initial search to conversion. Include offline connection for conversion. • Performics/DoubleClick: Looking backwards from transaction to understand build-up to purchase. Improve search marketing performance by understanding: • How patterns in overall search behavior provide insight into the buy cycle • The role and relationship among the various types of terms (including trademark) during the buy cycle • The role of search in driving sales – both online and offline Page 2

  3. comScore ResearchStudy Methodology: Represent Total Internet Search • Search behavior for 10 specific products – aggregated to represent CE/C • Time-aligned 3 months – tracked each searcher for 12 weeks • All searches must be relevant to specific product in order to be tracked. • Performics study additional details: Analysis across four categories – travel, apparel, sports & fitness, and consumer electronics • Time-aligned from the online purchase and worked backwards for 3-months • Header: Broad product terms, highest volume, e.g. Camera, Computer • General: Broad product terms, less volume, e.g. Computer Memory, PDA Phone • Specific: Detailed product queries often with manufacturer or model number, e.g. HP Notebook ZX 5000, Epson Printer • Trademark: Merchant name present e.g. Circuit City, Best Buy, Dell, SonyStyle.com Local ties to Trademark terms (retailers and merchants). Page 3

  4. comScore ResearchcomScore Methodology • Global panel of more than 2 million consumers who have given comScore explicit permission to confidentially capture their online browsing and transaction behavior • Proprietary technology collects all Internet activity including eCommerce and search activity • Key advantages of our approach • Fully passive approach • Proper use of surveys with passive screening • Data capture on discreet events • eCommerce activity • Search activity comScore Panelist comScore Servers World Wide Web Page 4

  5. comScore ResearchMulti-Channel Conversion An estimated 90% or more of conversion activity occurs offline – This dynamic speaks to an interesting play for local search Total Conversion – 25.2% (2.1% online & 23.1% offline) Page 5 comScore/Yahoo! Search Study - Total U.S. Consumer Electronic Searchers, Q1 2004

  6. comScore ResearchSearch-to-Conversion Timing Online • 85% of all online search transactions are latent: • 35% are post 30 days • 18% are post 60 days Latent Conversions have a huge impact on ROI, so marketing messages and effectiveness measurement is critical Page 6 comScore/Yahoo! Search Study - Total U.S. Consumer Electronic Searchers, Q1 2004

  7. comScore ResearchFinal Search to Conversion: Apparel Category Findings are consistent – 43% of buyers made their search at least one week prior and 72% at least 5 weeks prior to purchase. Page 7 comScore/Performics Search Study - Total U.S. Q2/Q3 2004

  8. comScore ResearchTotal Share of Searches: Full Buy Cycle Across both the total search and starting terms, broad terms dominate; challenging the long held belief that consumers start broad and end specific. Trademark Terms General 17.5% Terms 56.8% Specific Terms 11.7% Header Terms 14.0% Page 8 comScore/Yahoo! Search Study - Total U.S. Consumer Electronic Searchers, Q1 2004

  9. comScore ResearchCE/C Buyers Based On Start Term: Avg. Product Searches Over 12-Week Cycle. Marketers have over 4 opportunities to communicate during the buy cycle. Among buyers, that opportunity increases dramatically to about 12 searches. Average Number of Searches Prior to Purchase Start Term Type *Includes converters and non-converters Page 9 comScore/Yahoo! Search Study - Total U.S. Consumer Electronic Searchers, Q1 2004

  10. comScore ResearchSearch Refinement Summary by Start Term All shoppers tend to refine within their start category. When they do move beyond their original term type, it’s generally to trademark. Trademark searchers are closest to the retailer. Refinement Activity by Start Term Type 37% 17% 16% 62% Refinement:Describes any search activity occurring after the initial term and related to the same product. Page 10 *Includes converters and non-converters comScore/Yahoo! Search Study - Total U.S. Consumer Electronic Searchers, Q1 2004

  11. comScore ResearchConclusions & Findings • Search offers access to a fantastic target – 25% of all searchers in the study purchased, mostly offline (92%). • Buy cycle is long, even for offline and local conversions, though local is closer to the transaction. • 84% of all trademark conversions were influenced by broad terms during their first search. Linking standard search with Local. • Holistic, multi-channel marketing analysis to best integrate the overall product/purchase search and research cycle with the local hook. Page 11

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