Earlier this month, Travelocity’s chief marketing officer Jeffrey Glueck
generated a bit of a stir in the search marketing world after giving a speech
saying his company found only 4 percent of non-branded search terms brought in
bookings. Problem is, Glueck now says those figures weren’t reported correctly.
As it turns out, nearly 25 percent of Travelocity’s conversions come from
non-branded terms. But the big "assist" that non-branded terms are sometimes
said to give to branded terms wasn’t happening for Travelocity. It might happen
for others, but Glueck’s main challenge is for marketers to better measure
assists and know for themselves.
"I think search marketing is a fantastic channel. My plea is for companies to
get more precise about measuring it, to bid smarter. Because if they don’t, they
can lose their shirts," he said in a
left about his speech at Search Engine Land, where people have been discussing
it. Glueck also clarified more about the study, which I’ll dive into below.
Glueck had spoken about Travelocity’s study at an IAB conference earlier this
month. Why a Strong
Brand Is a Search Marketer’s Best Asset from AdAge was the original coverage
from that, reporting:
[Glueck] tracked Travelocity’s visitors coming from paid search and found
that 65% of people only interacted with paid search once, via a single
keyword. He found 27% interacted with paid search multiple times — but just
searched repeatedly on the same term. Only 8% searched multiple times with
The final findings? Only 2% of paid-search conversions fall into the
category where the searcher originally clicked on a nonbranded term only to
click and convert on a branded term at a later date. Travelocity now credits
nonbrand phrases as being responsible for only 4% of each booking attributed
to branded search.
"For us, we can take a loss on nonbranded terms like ‘Hawaii vacation’ —
but not much of a loss," Mr. Glueck said. Ultimately, he said, it is a
"profound mistake by all of us to think we’ve figured out how to measure ROI
on search. We’re in stage one."
We mentioned the
AdAge story on Search Engine Land, which generated a series of comments, the
Glueck himself. He noted:
There were several inaccuracies and mis-quotes in the original AdAge
article, and AdAge has been kind enough to issue a correction.
This story incorrectly implied that nonbranded keywords convert only 4% of
searches. It should have stated nonbranded keywords are responsible for only
4% of the profits from branded paid keywords. Of the bookings on Travelocity
attributed to search, about 80% are attributed to branded terms. Of that 80%,
4% should be credited to earlier clicks on nonbrand terms. Mr. Glueck also
cited a Nielsen NetRatings study, and it should be noted the study, published
in November 2005, specifically addressed travel-related searches in Google and
Yahoo. The study found 47% were composed of 100 terms, and most of those were
To spell it out further, Travelocity is saying that 20 percent of its
bookings come from non-branded terms. Of the other 80 percent, where Travelocity
buys a branded term, 4 percent of those get an "assist" or a click that converts
after someone made an earlier visit via a non-branded term. For example, someone
might have done a generic travel search, then later searched for a specific
travel brand and made a booking. The branded search gets the credit for the
sale, but a non-branded term helped.
So non-branded terms are important. On their own, generating 20 percent of
conversions is significant. Add in the assists, and you get to 24 percent of
conversions happening from non-branded terms. But still, I think many assume
non-branded terms generate more than a 4 percent assist rate when it comes to
helping branded terms to convert.
Indeed, search marketers often talk about a "search funnel" that happens.
Someone searches for "new york" when thinking about traveling there. Then they
get more specific — "new york hotels" — when they decide to stay. Then they
get brand specific, "new york hilton," when they’ve found a specific place they
want to say. The searches go from wide (the top of the funnel) to narrow (the
spout of the funnel).
Travelocity’s Chief Marketing Officer Explains Why Brand Terms Are Better
from AdAge is a follow-up article with Glueck that gets into this more, done
with Glueck after his speech. Is the funnel real?
We then studied whether people are starting on a nonbrand term like Hawaii
vacation deals and, through multiple searches on a search engine, narrowing
down to their favorite brands through multiple paid clicks and then, in some
magical way, always going to the brand name and clicking on the paid link
before buying. That is the funnel theory. If that were the majority of
purchases, then the portfolio theory would make sense. We’d be OK to lose
money on Hawaii vacation deals and make money on branded search terms.
This January we got the first detailed web analytics study from
Travelocity.com about multiple clicks. Last-click measurement is very popular,
and it’s what has for the last few years allowed search engines to say they’re
the most measurable form of media in history. Travelocity’s point was that you
should do the research on your own brand and nonbrand click behavior and don’t
let brand profits fool you into overbidding on nonbrand terms. … Every
advertiser sets their own threshold based on their conversion and profit
level. We weren’t saying search wasn’t measurable. We’re saying advertisers
should get more sophisticated and accurate about how they measure it.
About 4% of the bookings that occurred on brand terms should actually be
credited to an earlier search on a generic term like Hawaii vacation. That 4%
was less than the 12% that other companies had reported in a 360i study last
year. Every company will have a different number, but the point is, we didn’t
see any evidence that the funnel theory was the majority of bookings. Most
people who bought with us only clicked one paid search ad in the 45 days
before booking. About 76% of bookings from search were based on a brand
search. … Thanks to that 4% funnel, we could lose a couple dollars on each
booking from nonbrand phrases and still feel good about our spend.
All of these figures apply to Travelocity in a given period of time. Other
marketers should do their own research in the same way. You have to calculate
an accurate "assist percentage" for your business. Every business is
different. … Small companies without a strong brand will probably gain more
exposure through generic searches. But they still have to do the math and
decide if they’re getting profitable business or not.
Overall, interesting findings, and it’s hard to disagree that anyone should
take a close look at how their own site is converting. Some may find the funnel
effect is stronger; others might find they are more like Travelocity and want to
take a harder look at their purchases.
As I said, Glueck’s comments sparked some reaction on Search Engine Land.
Here’s a close-up on his replies to some questions raised (see our
original article to
view all the comments on the story):
1) I never said that buying non-brand search terms was a waste of time, or
that it’s impossible to measure. Far from it. At Travelocity we spend half our
marketing budget in online and search. My point was that search marketers
should get more precise about calculating "assist" percentages, and more
accurate in their ROI methods. As the
from SearchQuant agrees above, I was simply saying that assist percentages
only modified our ROI by a few percentage points– same as SearchQuant
2) We calculated that 4% of brand bookings should be attributed to earlier
nonbrand clicks. Based on better "assist" measurement, we think non-brand
terms drive about 24% of our search bookings, rather than the 20% indicated by
last click measurement. Every SEM campaign will be different, so you have to
calculate your own figures. I was very clear everyone should do their own
research, depending on their own unique situation. AdAge misunderstood the 4%
assist and jumped to the conclusion that 96% of bookings were from brand
terms, but the math is closer to 76%.
2) The Nielsen NetRatings study I cited was for the TRAVEL category, not
the whole internet. It indicated 47% of all searches came from 100 terms, the
majority of which were brands.
3) On the
by Mr.Greitzer in regards to natural SEO, I would simply say that thanks to
click tracking, buyers who come back to a site thanks to SEO links would still
be attributed to the original paid CPC click (within a long lookback window),
so the problem is not in natural clicks being missed, but rather that last
click tracking has problems with multiple paid clicks.
4) As to the
by DanielR that my October 2006 speech at Shop.org was a change in tune,
that’s an easy misunderstanding as well. In that speech, I cited the authors
of a 360i published study which looked at a large number of large etailers
(not including Travelocity) and noted that 12% of their brand profits should
be attributed to earlier nonbrand clicks. I invited the audience to do their
own studies on their own circumstances. Travelocity upgraded its web analytics
to VisualSciences and we finally in 2007 were able to do our own study on
clickstream for the first time, and that’s where the 4% figure emerged. Every
company will be different.
Regardless of whether the assist is 4% or 12%, that’s a long way from the
funnel/clickstream theory that the majority of generic term searchers come
back via brand terms to buy. That was my key point, and it remained unchanged.
There is some lift/assist, absolutely, just not a huge one.
5) As to the comments that focusing on landing page optimization and
conversion is the key to making paid search work, I couldn’t agree more. I
think we’re a strong site– or we wouldn’t sell over $10B of travel a
year–but we absolutely can get better. And that will help our non-brand
6) As to the
above that offline marketing is completely unmeasurable, I respectfully
disagree. Those who heard my speech know that I emphasized multivariate
regression models across all channels. My point is that nearly ALL marketing
is measurable over the long term, and that unified models will actually
measure MORE ACCURATELY than click tracking in some sense, because they get at
the inter-relationships between TV and Radio and search.
In sum, I think search marketing is a fantastic channel. My plea is for
companies to get more precise about measuring it, to bid smarter. Because if
they don’t, they can lose their shirts. And I suppose, I have a second plea:
To read my comments in the proper context.