Generic search is in rapid decline. Market leaders are taking over your generic keywords. If it hasn’t happened yet, it won’t be long before your generic Paid Search revenue is more or less gone.
We’ve seen a decrease in Paid Search revenues of up to 80 %! How is this possible? And more importantly, how can you save your Paid Search?
The only way to own the Paid Search and outrun the competition is to know how market maturity is impacting your searches on Google.
I’ve been involved in search marketing since 2002. In the last few years I’ve become more and more frustrated. Brands that we are advertising on Paid Search have started to behave really strangely.
1. Some clients who have been with us for more than 10 years have been getting fewer and fewer conversions through Paid Search ads. More precisely, generic keywords which used to perform really well and were responsible for large portion of transactions are now delivering just a few percent of transactions. On the other hand, branded keywords have been behaving steadily throughout the time.
2. There are other clients for whom we also noticed a huge drop in conversions from generic keywords, but we were lucky enough that a part of this drop was substituted by an increase in conversions from branded keywords.
3. To complicate the matter even further, we have some clients for whom generic keywords are killing it, easily outperforming branded keywords and dominating Paid Search.
At first glance there was no logic behind it. In some cases transactions from generic keywords were rapidly decreasing and branded keywords were increasing, in others just the opposite. And there were numerous cases where the situation was somewhere in between. And to be clear, I’m talking about absolute numbers (not relative to other digital channels like Facebook, direct etc.). What the hell is going on?!
It’s not Google and it’s not the competition
At first I thought that the reason behind this might be increased advertising on branded keywords, but that can’t explain the drop in generic transactions.
The second thought was competition. That could explain a drop in generic conversions, but when we carefully analyzed different clients we noticed that in some cases competition had been present before and generic conversion dropped anyway. In other cases competition had appeared in the last few months but transactions from generic keywords were still increasing, often even more rapidly than before.
After thorough research we started to notice some patterns. Clients operating within the same industry were showing some similar behaviour—usually not on branded keywords (which were still all over the place), but on generic keywords.
Then it hit me. Brands age. Industries change. Markets get mature. Even on search.
How market maturity is influencing Paid Search
Ten years ago the majority of online industries / markets were not matured. Brands were not established and users were using search in a completely different way. Most of them, when looking for a specific product, were using generic terms as there was no clear market leader.
As time went by, the majority of online markets became much more developed. Market leaders appeared and started to invest in branding. Users slowly changed their behaviour, replacing generic search terms with branded ones.
In some cases our clients were able to get on the top of the curve and become market leaders. Transactions from generic keywords decreased but branded keywords started delivering more and more transactions.
In other cases clients were not so lucky. The initial hype where users were using generic search terms was gone and a competitor took over, becoming the market leader. As generic keywords started to perform worse and worse there was no brand to replace them.
There are numerous new markets and industries we are working on that are still in the incubation phase, which also explains why, in some cases, branded keywords have been performing poorly and generic keywords are the superstars.
Market maturity stages and Paid Search
Each market can be segmented based on its maturity into a few segments (picture above). Each segment has a dominant user base, from Innovators at the beginning to Early and Late Majority at the peak and Laggards at the end.
As markets mature, search queries change. Different user bases will use different search terms, not only because they have different characteristics (Innovators tend to be younger and more open to change than Laggards), but mainly because there is nothing there at the beginning.
When new markets form, when new innovations enter the market, people don’t even know what to call them. There is no market leader, there is not even a market. Innovators tend to use a variety of different keywords to describe the same thing. Synonyms and related terms are often used. Generic keywords volumes at this stage are low, while branded searches are close to non-existent.
The market is slowly forming leading to industry standards or in our case use of the same keywords to describe the technology or product. As interest in the market grows, generic keyword volumes start to increase. The majority of purchase decisions are still made by researching the market using generic keywords. By the end of this stage, branded search terms start to appear, but are still widely spread between different companies on the market.
The market is going mainstream and the majority of the public now know about it. The Early Majority is already well educated about the terminology (generic keywords) and will use them in the early stages of the decision journey, replacing them with branded keywords at the purchase stage. Generic keywords volumes start to stagnate, while a real breakout is noticed on branded search terms.
The market slowly starts to consolidate, which leads to less competition. Brands invest more in brand awareness leading to another change in user behaviour— users start to use branded search early in the decision journey. Leading brands see an increase in branded volumes, while the not-so-fortunate brands will see a huge decline. Generic volumes start to decrease.
Users are well aware about the market leaders and use branded search throughout their decision journey. Generic search queries are rare. Nevertheless, as market starts to close companies see a decrease in branded search volumes.
Market maturity strategies for Paid Search
As we saw, usage of branded and generic keywords changes through time. Not only that volumes change, users approach their decision journey in a different way.
It is crucial to adapt your Paid Search tactic to those changes. Use the market maturity strategies described below to adapt your Paid Search.
1. Pay attention to market maturity when you are comparing the YoY results of your Paid Search and when you are evaluating the performance of Paid Search. There will be huge changes in the performance of generic and branded keywords through time and it doesn’t necessarily have anything to do with your own performance. These are market-driven changes.
2. Invest in brand awareness. As markets mature a strong brand name makes a huge difference and there is no way of surviving without it. I’m not talking only about advertising on branded keywords, but also about investing in your user experience. It was a tough lesson for me as well.
3. On new markets focus on using a wide variety of keywords including synonyms and keywords describing substitute products. Try to drive users from similar, but more established markets.
4. On growing markets focusing on generic search terms will drive short-terms results, but to make it sustainable you need to start investing in your brand.
5. If you are late to the party, don’t expect Paid Search to be a main driver of your success. You can try piggybacking on established brands (market leaders), but main growth will need to come from somewhere else.
6. No matter what stage of market maturity your market is at, you can always benefit from a well-developed remarketing strategy. You might think there’s only one type of users on search, but in fact there are 12 types of search users.
Bonus: How market maturity is influencing user search queries (real case studies)
How market maturity impacted the CRM market
As the CRM market matured branded search terms (“Salesforce”, “Zoho” and “Odoo”) increased in volume while the generic search term (“CRM”) started to decline.
How Hubspot dominated the marketing automation market
Hubspot became a clear market leader, far surpassing the competition and generic keywords in search volume.
The OTA market is closing
While Booking.com is still not even close to surpassing the generic searches (“hotel”), it is (together with numerous other competitors) starting to erode the supremacy of generic keywords.
How Uber, Airbnb, Skyscanner and Zalando built the market for themselves
As markets mature and brands start to invest in brand awareness, search volumes increase dramatically.