5 Dizzying Facts about Vertical Search We Bet You Didn’t Kn…


During the holidays and other peak season times, most consumers will shop around for the best deal before booking travel, which is why comparison search ads – an element of performance marketing and sometimes referred to as vertical search ads – are critical.  In this conversation – a part of our Search and CRO special for July – we explore more about the concept of vertical or comparison search, and how you – the marketer – can apply it practically for better business outcomes. Brett Tabano, Senior Vice President of Marketing, MediaAlpha walks us through 5 key aspects of vertical search that are sure to get you thinking.

1. Search is more than Google: Vertical Search Engines are different from regular search engines.

Brett: When marketers think of search advertising, they often think of running ads on traditional search engines like Google, Yahoo, and Bing. While this type of search advertising is important, it is also critical to consider vertical search or native comparison search, which entails running ads within the native search results from a publisher or platform.

A vertical search engine differs from a traditional search engine because it is specific to one particular product or service category versus the broad results you get from a traditional search engine. For example, KAYAK is a vertical search engine for travel, Zillow for the real estate sector, Progressive for car insurance, and Bankrate for mortgages.

Moreover, vertical search engines often require the user to input a number of structured data fields to get the results they are seeking, versus a typical keyword search from a traditional search engine.

This information is particularly useful because the user is voluntarily inputting information based on the service or product they are seeking a price/quote from versus having to infer data on the user.

2. Vertical search + programmatic is a powerful combination

Vertical search is particularly important for any brand or product in high-consideration service categories where the consumer is likely to compare multiple options before converting to a paying customer. Think auto insurance, life insurance, mortgage rates, credit cards, travel, home services, etc. These are the products and services that consumers typically research and compare quotes/prices before they purchase.

Most ad networks require advertisers to pay an average price for their media regardless of the consumer segments they are trying to reach. When forced into an average pricing model, advertisers pay the same price for everyone, even though each user/impression has a different value to each advertiser. Through a programmatic platform, advertisers can right price each source, user and placement to ensure they are only acquiring traffic that has a high likelihood of converting. Advertisers want to value what they are buying from all supply sources as granularly as possible since each source, and each user has a different value to each advertiser. Without granularity, advertisers are forced to buy media on a one-size-fits-all approach using an average price. Meaning, different prices should be considered for the granular consumer segments you are now able to target through programmatic platforms. Being able to optimize bids for dozens (or hundreds) of different consumer segments in real-time is a benefit only a programmatic platform can offer, but it requires a change in mindset away from the simplicity provided through an average pricing model. 

Also read: Are your customers seasonal spenders? How to Kick Start Your Holiday Campaign This Season

3. In Vertical search, competitor ads could make you money!

A key consideration for implementing a vertical search or native comparison search strategy is centered around your traditional search strategy. If you are actively buying search keywords to drive users to your site to purchase your product/service, how do you monetize the users that do not convert to recoup your marketing costs? Through vertical search or native comparison search, you can not only recoup these costs but more importantly, you can generate a new profitable ad revenue source.

Users search and purchase patterns are changing – and they are looking to obtain the best price/quote before making a purchase decision as quickly as possible. To match these new patterns and enhance the user experience, implementing a vertical or native comparison search is crucial as it allows the publisher to surface additional/competitive offers outside of their own.

It may sound counter-intuitive to showcase your competitors, but there are a number of use cases where you can test the waters to prove this model works.

For example, you are a hotel site and the consumer’s desired dates are sold out. Instead of forcing the user back to perform another search, you can surface additional hotel offers and generate revenue when the consumer clicks through. Or, you’re an airline, and the flight is sold out – the same concept can apply. Or you’re an insurance provider not offering coverage in the user’s state. These are all scenarios in which you should leverage native comparison search to monetize.

Also read: What will CRO look like in 2020? 3 Experts set the Agenda

4. Vertical search is a performance marketing tactic

One of the benefits of performance marketing is that you are graded on how successful you are at driving sales, or at least, driving high-intent users. Vertical or native comparison search media is typically sold on a CPC (cost- per-click) model then backed into a CPA (cost-per-acquisition). This allows advertisers to quickly measure the success of the campaign and optimize accordingly.

Also read: The Latest Trends in Performance Marketing

5. Vertical search can directly impact your CRO (converting existing website traffic into revenue)

One of the best ways to determine when and where to display native comparison search ads is through the use of predictive analytics and machine learning. We are seeing many partners implement this strategy as it allows them to better understand the user’s intention. Perhaps the user is early in the decision process and not ready to buy at this time. Or perhaps this user is predicted to have a low CLV (customer lifetime value). This is when you would want to display additional offers in the form of native comparison search in order to generate ad revenue. Since this is a new revenue source, we are seeing many of our partners use this new revenue to attract new customers, typically through traditional search. By monetizing users that won’t convert, they are now able to generate revenue which can then be used to attract more customers, that hopefully will. This creates a virtuous cycle for the publisher.

Also Read: 3 ways Predictive Analytics is Changing Performance Marketing

Our take: while a traditional search isn’t going anywhere, one cannot deny that user search behavior – and expectations – are changing (however subtly). At the bottom of the funnel, people will tend to turn to a vertical search engine over a generic one to get more specific, tailored and actionable results. In more B2C environments, they want the information they need to make a decision- irrespective of where it comes from. It is certainly an opportunity worth exploring for advertisers. A great way to start would be to test a small budget over the next buying cycle in your industry to see how it pays off!

More about Brett

Brett Tabano is the Senior Vice President of Marketing at MediaAlpha, and is responsible for leading and executing all of the company’s marketing and communication efforts. Previously, Brett has served as VP of Global Marketing for OpenX and as VP of Global Product Marketing and Sales Strategy at Videology.

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