Paid Search Usage Declines by 8.6% in the Last Six Months Among Optify Customers

Data Supports Negative PPC Trend Among B2B Marketers

We recently concluded our first annual B2B Marketing Athlete Survey and discovered an interesting trend – PPC has scored the lowest on most of the questions we asked related to time spent on tactics (57% of marketers spent no time on PPC, and only 4% spend more than 15 hours per week) and expertise level (25% noted that they have limited to no knowledge in PPC) and scored the highest for areas most likely to be outsourced (29% already outsource it and 13% plan to do so in the next 12 months).

I was somewhat surprised by how consistent the responses about PPC were and wanted to verify the trend. So I asked our Senior Product Manager, Tommy Unger, to pull some numbers from our database and see if a similar trend exists with our customers.

The challenge with doing such analysis is counting the right metrics and normalizing it so we take out the obvious outliers that might skew the data, as well as count for Optify’s natural growth in customers and usage. I started explaining this to Tommy when he replied, “Yep, it’s already done. I just sent you the file. Oh, and I included a few other metrics I thought you’d need.” My hero.

The Analysis

Due to confidentiality reasons, I can’t share the actual usage numbers and sample size but I can share the trends. I will however explain the analysis Tommy did.

As a starting point, Tommy pulled all of the customer sites that have the Optify tracking installed on them. He then cleaned that list by eliminating sites that we don’t fully support – for example, demo accounts and old free trials. That gave us our final data set.

Using this data set, Tommy pulled the number of sites that have paid traffic. It’s important to note at this point that Optify tracks AdWords traffic out-of-the-box, which means that the user doesn’t need to do anything special to track Paid Search in Optify. This allowed us to run this analysis with a high level of certainty that if the site doesn’t show traffic from Paid Search it means that they are not running any AdWords campaigns. To be fair, this doesn’t mean that they don’t run paid campaigns and other forms of advertisement, it just means that they are not running any AdWords campaigns.

Tommy also excluded sites that have less than 10 visits from paid search per month to account for attribution errors. He then added the number of total visits and total visits from Paid Search per month for the last 6 months. And as a bonus, he added the median paid visits and paid visits share per month.

Armed with this data, we calculated the following:

• The percent of sites with Paid Search traffic from the total number of sites in our data set. We calculated that number per month
• The percent of total paid traffic from the total number of visits in our data set. We calculated that number per month as well
• With both numbers per month, we calculated the change in each of the numbers per month and the total change from March 2012 to September 2012.

These calculations allowed us to see if there is a similar trend with our B2B marketers to the one we’ve seen in our Marketing Athlete Study and test our hypothesis– Paid Search usage is declining among B2B marketers.

So what did we find?

We found that in the last six months the share of sites with Paid Search traffic has declined by 8.6%, an average of 1.72% month over month. We also found that in the last 6 months, the percent of total Paid Search traffic has declined by 39%, an average of 8.87% month over month.

These two numbers suggest that the usage of Paid Search is declining among B2B Marketers.

Theories and Thoughts

Since the data in this analysis is only directional and we’ve used proxies to estimate usage, we can only assume why we’re seeing this trend. Here are a few possible explanations:

• This trend is only temporary and will not persist. We need to keep monitoring usage for another six months or support the usage drop with additional data
• Users of Optify are seeing better results with inbound marketing which will explain the drop in paid search traffic out of total traffic
• Paid Search is being outsourced and the 3rd party vendors are using their own landing pages and/or tracking (both will make Optify “blind” to that traffic)
• B2B marketers are redirecting resources from Paid Search to other channels which will explain the decline in number of site with running AdWords campaigns and the total drop in paid search traffic out of total traffic

Okay, so let’s assume that the real reason for this drop is an actual decline in paid search usage. The real question is why? Here are a few thoughts:

• Paid search is expensive, labor intensive and expertise-heavy. With budget constraints it’s simply the easiest tactic to cut
• Paid search isn’t ROI positive for most B2B companies and the money can go to other, more productive channels
• Most B2B companies sell high-ticket items creating a more complex and longer sales cycle. Their buyer personas are not using paid search to find solutions
• Paid search has become too crowded and noisy, driving prices up and conversion rates down – another factor to the low-to-negative ROI of this channel
• New paid alternatives like paid social media and display retargeting gain prominence and take market share from paid search

The Bottom Line

This is our second data-supported indication that Paid Search usage is declining among B2B marketers. Personally, I understand why and have made the decision to cut paid search spend a few months ago. There are better, simpler ways to generate high-quality leads that don’t require a full time employee to manage and optimize, and are also not fringing on the breakeven point (if you’re really good). We will keep our eye on this trend, but would love to hear your thoughts. Are you running Paid Search campaigns?

Oh, and thank you Tommy

As a B2B marketer I recommend having your own “Tommy” but if you can’t afford one, just use Optify…