The Impact of Search Engines on Corporate Advertising Strategy

Outline

I Introduction

II Theoretical Framework

Cognitive filtering

1. The theory of weak ties.
2. Diffusion of innovations theory

III Findings

Data mining

1. Referral marketing

IV Conclusion

V Reference List

Introduction

The development of Internet technologies has opened entirely new opportunities for the enterprises which intend to promote their products and services to the target audience on the Web. The use of search engines is one of the most effective methods because it enables to increase consumers awareness of the brand; in this way it is possible to improve the visibility of the companys website (Ramos & Cota; 2008). On the whole, search engine advertising has become of the most widespread strategies among many corporations. By associating the content of the commercials with a particular keyword or a group of keywords, private businesses strive to attract users attention to their trademark. This paper aims to investigate the future impacts of online search technologies on corporate advertising strategies. For this purpose, we need to discuss several scientific approaches, which are relevant to this question, namely: cognitive filtering models, diffusion of innovations and the theory of weak ties. They have been chosen for the discussion because they help to explain and even predict the decision-making of a potential customer. Furthermore, they describe the way in which he or she perceives information on the Internet. Overall, we can hypothesize that in the near future, leading organizations will pay more attention to the so-called referral marketing that heavily relies on the word of mouth or any oral as well as written recommendation. There is a very great likelihood that private businesses will give preference to social network advertising and the use of search engines will be the major driver of these strategies. Yet, this is just an assumption, which needs to be substantiated. This is why we need to refer to the scholar views and the practices, adopted by small and large businesses.

Theoretical Framework

The Theory of Cognitive Filtering

A great number of researches have been carried out in order to examine the spread on the Internet and the way people perceive it. The theory of cognitive filtering lays the foundation for the study of consumer behavior. According to it, a persons attention is extremely selective and goal-oriented (McCain, 1992). It automatically rejects everything that appears to be irrelevant to the search query, made by the user (Schumann & Thorson, 2007, p 189). This is one of the reasons why so enterprises attempt to make their commercials look very similar to the search results, which may seem of some value to the user. For example, an advertisement of a hotel can be disguised as an article about the city in which this hotel is located.

However, such tactics very seldom yields results, because it is extremely obtrusive. The most likely outcome is rejection of the product or service. On the whole, the theory of cognitive filtering pays special attention to peculiarities of the search process. This approach gives a very detailed account of the pathways which lead an individual to the website.

In accordance with this theory, practically all Web-users can be subdivided into two major groups: 1) those, who seek specific information, and 2) those who seek certain experience or enjoyment (Schumann & Thorson, 2007, p 189). They may need to access online libraries, forums blogs, chats and so forth. In the vast majority of cases, they access social networks. In this context, the term social network can be interpreted as any web-site accessed by a great number of people, who may share common interests, preferences, friendship, or activity. In turn, commercials are normally skipped. This is why many enterprises choose to place their commercials within a social network. This practice has already achieved popularity and it may become one of the conventional techniques in the future. Under such scenario the search engines like Google or Yahoo play the most crucial role, as they help to rank various social networks according to their traffic, content or popularity. Their key role is to find the most suitable location for the advertisement or commerial.

The theory of weak ties

The second question which we need to discuss is the diffusion or spread of information and decision-making of a person. Currently, many firms struggle to identify the criteria according to which customers evaluate the reliability and authoritativeness of commercials. Furthermore, they strive to use every possible communication channel to address the target audience. Among such communications channels, we can single out the following ones (television; radio, newspaper, or WWW). Their strategies are based on the idea that there is a direct link between them and the buyer. Usually, this premise is erroneous as people can learn about products or services not only from mass media but from other sources as well. Unfortunately, these sources are frequently overlooked by advertisers.

According to Mark Granovetter (1973), almost every kind of message can pass through many intermediaries before it reaches the recipient. For instance, people form the judgment about their product on the basis of feedbacks, given by the relatives, friends or group. Yet, the most paradoxical thing is that the decision-making of an individual may immensely rely on the data, given by accidental acquaintances or people, whom he or she can barely know. This is normally known as a word or mouth or sometimes simply rumor. This evidence indicates in the future, more and more companies will concentrate on social networks. Such websites are extremely conducive to quick diffusion of information. Search engine will be the key instruments to put this policy into practice. Certainly, at the given moment they are primarily used to make their products of the corporations more visible, however the situation can drastically change in less than a decade or two because with time passing search engines become more elaborate.

Diffusion of innovations theory

Grannovetters hypothesis about weak ties is strongly supported by the diffusions of innovations theory. Many scholars have investigated its relationships with the outcome of advertising. One of the landmark studies was done by Johan Arndt (1967), who ascertained that product-related conversation can either boost the promotion to a great extent or vice verse entirely ruin even the most well-staged advertising campaign. According to this theory, the adoption of any innovation (in this case product) consists of five stages:1) knowledge, 2) persuasion, 3) decision, 4) implementation and 5) confirmation (Rogers, 2003). Apart from that, adopters (or customers, to be more exact) can also be subdivided into several subsets: 1) innovators;2) early adaptors; 3) majority and 4) laggards (Rogers, 2003). The first two categories encompass people, who are more susceptible to the impacts of advertising; they are more open to innovations and new ideas. In sharp contrast, the other two categories are more skeptical about the reliability of commercials. As a rule, they adopt innovations only when they see the obvious necessity for doing it. It takes much time and effort to persuade them not to disregard the product.

The point is that social networks are visited by people, belonging to each of these categories. Therefore, the target audience of the companies is much wider. However, the management can take full advantage of social networks, only they efficiently utilize search engines. So, it would not be an exaggeration for us to say that search engines can enhance the advertising strategies of the companies: 1) they help to understand customers decision-making, their preferences, sources from which they derive information etc. To some extent, search engine is a very effective method of consumers studies: by means of this instrument, advertisers can describe, analyze and predict the line of reasoning of potential customer. This strategy has been employed by various enterprises, for example, such international giant as Microsoft has used it in order to improve functional characteristics of their software solutions.

Findings

Data mining

It has to be admitted that at this point, search engines are predominantly employed to increase visibility of the firms websites or products. However, even now the field of their application is growing wider. One of the areas that we need to describe is data mining (France & Yen, 2002). It is the process which enables to see patterns or regularities in data which may seem to be random at the first glance. For instance, it is possible to determine which items the customers are going to buy. The analysis of search queries gives a good opportunity to identify informational needs of the potential clients such as functional characteristics of the product, its image, aesthetic qualities, probable benefits and so forth (France & Yen, 2002). This feature can be of great assistance to mature companies who have can spend considerable amounts of money on R&D (research and development).

Apart from that, we should take into account that search engines are instrumental in measuring the selling effectiveness of the advertisement or commercial as they provide specific data about the attendance of the web-site. In this regard, it should be pointed out that for a long period of time, ROI (return on investment) from commercials could not be ascertained due to the fact that sales rates can be affected by a host of factors: like demand for the product, intensity of competition, presence or absence of substitutes etc. Search engines make the task of assessment less arduous.

Nonetheless, the most important advantage lies in a different area. Search engines help to identify the websites where customers usually obtain word of mouth information about a specific product. Again, we have to emphasize an idea that this information is not necessarily reliable. Very often, it is an opinion of people, who are not experts in this field. The major paradox is that it is sometimes regarded as authoritative, because this feedback is given by a disinterested party (Steffes & Burgee, 2009). This approach is most applicable for small businesses, which does not have sufficient financial resources in order to stage an advertising campaign.

It seems that many companies will soon try to exploit this opportunity by placing an advertisement in such social networks. There is a great likelihood that these commercials will be disguised as recommendations posted by the users. The major advantage of this approach is that it reduces marketing expenses to a minimum and helps to attract clients in the most unobtrusive manner.

At this stage, we need to emphasize the importance of referral marketing, which is equally useful for small and large business (McCain, 1992). The thing is that advertising campaign in mass media can only attract customers attention to a certain product or services but there is small probability that a commercial will convince the client to buy them. Under such circumstances, he or she mostly refers to the views of other people. The development and sophistication of search engines will make corporate advertisement more manageable and measurable. Nowadays, it is mostly a qualitative discipline and many businesses are even unable to assess their effectiveness. It seems that in the foreseeable future, the management will no longer face this problem.

Conclusion

Thus, in this paper we have tried to analyze hypothetical impacts of search engines on corporate advertisement strategies of the companies. Judging from various theoretical frameworks, we can come to the conclusion that after a certain period of time, commercials will target not only individual customers but social networks. These technologies will help to appeal to and attract a wider range of audience. They will help to mark out characteristics of the potential customers: like their major informational needs, attitude towards the product, main criteria for selection a particular brand or trademark and so forth. Finally, the use of search engine will make the outcomes of advertising more measurable. Overall, search engines will considerably transform marketing strategies of small and large enterprises.

Reference List

France T. & Yen D (2002). Integrating search engines with data mining for customer. Oriented information search. Information Management & Computer Security. Vol. 10, issue 5, p 242-254.

Grannovetter M. (1973). “The Strengths of Weak Ties”. American Journal of Sociology. Vol. 78, issue 6, pp 1360- 1680.

Johan Arndt. (1967). Role of product-related conversations in the diffusion of a new product. JMR, Journal of Marketing Research (pre-1986), 4(000003), 291.

McCain. R. A. (1992). A framework for cognitive economics. Greenwood Publishing Group.

Ramos A. & Cota S.2008. Search Engine Marketing. New York: McGraw-Hill Professional.

Rogers E. 2003 Diffusión of innovations. New York Free Press Schumann. D & Thorson E. (2007). Internet advertising: theory and practice. London Routledge.

Steffes. E. & Burgee. L.(2009). Social ties and online word of mouth. Internet Research. Vol. 19, issue 1, pp 42-59.