Jansen evaluates buying funnel effectiveness in keyword advertising

July 21, 2011

Jim Jansen, an associate professor at Penn State’s College of Information Sciences and Technology, had an article published in the Journal of Electronic Commerce Research, Vol. 12, No. 1, 2011. The article, “Bidding on the Buying Funnel for Sponsored Search and Keyword Advertising,” evaluates the effectiveness of the buying funnel as a model for understanding consumer interaction with keyword advertising campaigns. He was assisted by Simone Schuster, who recently received a marketing degree from the Smeal College of Business at Penn State.

Jansen and Schuster analyzed the effectiveness of the buying funnel, a paradigm used in search engine marketing campaigns for conceptually understanding customer behavior. The buying funnel, according to the article, is a staged process for describing the way customers make their buying decisions, from becoming aware of the existence of a need all the way to the final purchase of a product or service that addresses this need.

Jansen and Schuster analyzed data of nearly 7 million records from a 33-month, $56 million search engine marketing campaign of a major U.S. retailer. They classified key phrases used in this campaign into stages of the buying funnel (i.e. Awareness, Research, Decision, and Purchase) and then compared the consumer behaviors associated with each stage of the buying funnel using the critical keyword advertising metrics of impressions, clicks, cost-per-click, sales revenue, orders, and items sold.

Findings from Jansen’s and Schuster’s analysis show that the stages from the buying funnel are effective for classifying types of queries. However, results also indicate that the buying funnel model does not represent the actual process that consumers engage in when contemplating a potential purchase. Results show that “Awareness” key phrases cost less and generate more sales revenue than “Purchase” queries, indicating that these broader phrases can be a lucrative advertising segment for sponsored search campaigns.

According to the article, insights from this research could produce keyword advertising efforts being more effectively targeted to consumers in order to achieve campaign goals.

Last Updated August 15, 2011