Understanding your online acquisition funnel for SEM

So we learned in our last blog post – 5 reasons why SEM is crucial in modern day advertising – that we can target people if they express interest in your product or service, great!
Imagine now if you could target them with a different message and call to action, and/or send them to a different landing page, if you knew how close they are to converting. Well guess what? You also can.

See, there is a common marketing term called online Acquisition funnel (also called Purchase or Conversion funnel).
While it differs from a website to another, in most cases it follows a specific model. To those with knowledge of traditional marketing, you will find similarities with the AIDA model.

 

What is an acquisition funnel?

1. Attention/Awareness – In traditional marketing, this stage usually refers to how your ads need to attract the attention of potential customers. While this is true in Display Advertising, it is not in SEM. Yes, you need to have attractive ads, but this applied to every stage of the funnel. I consider the first stage to stand for people that express very broad interest in whatever you are advertising. Let’s say you are selling luxury cars from the brand Froggy Motors (no need to Google it, it’s a fake brand I just made up), well people in the top stage of the funnel are those who may be searching for ‘cars’, ‘luxury cars’, etc.

NOTE: These are very broad terms and usually represent a large volume of searches. Your goal is to generate brand or product awareness amongst these people. This may be a good way to generate traffic but you are also more likely to face more fierce competition, as well as a lower conversion rate.

2. Interest – This second stage of the funnel contains users that are one step closer to reaching a decision. They are doing more detailed research about the product. The searches are usually longer (more precise) and may also include comparative words. A few example searches: ‘australian made luxury cars’, ‘top 10 luxury passenger cars’, ‘best cars if you have a billion $ to spare’

NOTE: Interest searches, being more precise, are not searched as much and traffic volume may be much smaller. However, the competition is also lower (cheap car makers may not show for terms containing ‘luxury’) and traffic will be more relevant to your brand, which means higher conversion rate. Leads may not be as numerous as with stage 1, but will be more affordable.

3. Action/Commitment – This is, in SEM, an important stage of the funnel. These are the searches that give us an indication that the person is ready to become a serious prospect or even better, a client/customer. Either they know exactly what they want (Eg ‘new Froggy Motors sedan 2013’) or specify a call to action in their search (Eg. ‘Froggy Motors test drive bookings’). In other industries, these are usually searches containing terms like ‘buy’, ‘application form’, ‘book online’, etc.

NOTE: These searches are probably the smallest in terms of volume, but are highly relevant, and therefore the most likely to convert.

 

Once you understand what your acquisition funnel looks like, you can adjust a number of elements in your paid search campaigns in order to target these people the most effectively, increasing both your Click through rate (CTR) and conversion rate (CVR).

 

Show me some examples!

There is nothing better than a few examples to illustrate the above.

Stage 1 – Awareness/Knowledge

Search: ‘cars’

Ad:
Froggy Motors Luxury Cars
So Fancy You’ll Feel like a Pimp.
View our Majestic Car Range Today
froggymotors.com.au/Our-Cars

Example destination URL: Homepage

 

Stage 2 – Interest

Search: ‘top 10 luxury passenger cars’

Ad:
Why look in the top 10?
When you can find us in the Top 3!
View the Froggy Luxury Car Range Now
froggymotors.com.au/So-Luxurious

Example destination URL: Car Range page

 

Stage 3 – Commitment

Search: ‘new Froggy Motors sedan 2013’

Ad:
Froggy Motors Sedan 2013
Because 2012 wasn’t Luxury Enough.
View the New Features & Design Now
froggymotors.com.au/Live2013inLuxury

Example destination URL:
Actual car model page or action page such as test drive booking or dealership appointment booking.
Best practice is to do some A/B testing on your different landing pages until you find a winner.

 

Feel free to try this technique in your own campaigns and update us on your findings via the comment section below.

If you need any help in determining your online acquisition funnel or with your digital marketing efforts, get in touch with the Reef team!

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