Pound for pound—and based on the results of international advertising awards shows—New Zealand is thought of as one of the most creative nations on Earth. But according to Google's country manager Tony Keusgen, we've got a lot of work to do when it comes to digital marketing. And he's on a mission to create more of what he calls 'white coat marketing', where data and evidence is used to take some of the mystery and emotion out of decision making.
Keusgen, who's been with Google for six years and has been in New Zealand for around nine months, believes there's a big gap between the prevalence of the online realm for consumer decision making and the importance currently placed on it by advertisers. And with 86 percent of the nation now online, and eight out of ten Kiwis claiming their first point of contact when they're looking for products and services is searching on Google, it's obviously becoming more important to be there at what Google calls the Zero Moment of Truth.
In a way, he says he's trying to get marketers back to basics.
"For example, whenever there's talk about changing interest rates, we see a spike in search traffic. And yet right across the board there's yet to be a really complete adoption of search with, for example, home loans, 100 percent of the time for 100 percent of the searches. So if you're a bank you wouldn't be wanting to miss out on that."
So why are we lagging behind? One historical issue, he says, is the need to get their ducks in a row before they start quacking, but that seems to have solved itself and most large advertisers now have good websites. But he says it is also a lack of skills among in-house staff to leverage digital marketing, as well as a lack of prioritisation of digital media that means businesses are missing out on a critical moment in the purchase cycle.
Air New Zealand is held up as an example of global best practice for its content marketing and social media strategy and it has recently moved its estimated $1 million print budget online, backed up by TV. And that, Keugesen says, is a good example of the accountability and adaptability the always-on online realm offers.
"Whenever a business tests search, or digital marketing, we generally see our small customers become our bigger customers. We're not saying you should not do one media in exchange for another, but the most important thing is to find what the most effective media is."
Local media owners might complain advertising money that may once have gone into their coffers is now heading overseas, but it's survival of the fittest out there and advertisers should be going where the consumers are. So while he says many more businesses are dipping their toes in the water of digital marketing, he says there needs to be a lot more rigour and discipline around the data.
As an example, he points to vehicle rental company Jucy, which wanted to measure their online conversions from search. So, if a customer came to their website via a Google search or display ad, then they would be shown a different phone number for the call centre, almost like the top secret red phone in the oval office. And it discovered a significant amount of its inbound sales calls came from its online strategy.
AB testing allows businesses to test different versions of websites or creative and then use the data to get an objective view on what the best option is. And while that's happening, it's not happening enough, he says.
"It comes back to the white coat approach. And we're desperate to see a more scientific approach ... We're trying to take away that mystery. I remember having a chat with a marketer in Sydney and they said people typed in cloud computing; so that was what they're looking and that was their business. But there was so much more search for software as a service so you can solve the argument about where your brand needs to be. The same goes for a PC manufacturer I met. They wanted to bring out the new range, and it was fast and lightweight. But in terms of what consumers were looking for, search showed it was sexy and cool."
Search is also important tactically, he says, which is why they're trying to get local marketers to become more comfortable on Insights for Search (moderately interesting search fact: on average lawyers get more hits than Lady Gaga in New Zealand).
"In Sydney we found there were over one million searches for digital cameras in the seven days preceding Easter. So you can really let data drive decisions, like how many staff do I need to have in store or do I need to have a really good offer to capture that? One of the largest search topics last Christmas was waterproof cameras but the manufacturers and retailers weren't scaled up for that demand so they were putting out offers that consumers might not have been interested in."
He admits that as data and creativity increasingly fuse, there's confusion about whether it comes under the remit of marketing or IT, so they're having to provide some guidance to the larger businesses about where these things need to sit in the organisation. But its importance is starting to sink in.
"As they become more au fait with the results they're getting from search and display campaigns they understand this is a business imperative. We had a big client who moved their marketing budget to become an operational budget. They saw it as a store because the search piece has to be running 100 percent of the time, so we are seeing a lot more of that."
He says there are thousands of businesses using AdWords, but one of the reasons small businesses in New Zealand have lagged behind in this regard is complexity. It has tried to address this by allowing any small business to select keywords, set a budget and have the system automotically generate an ad that can be online inside five minutes with its AdWords Express product. Scale is also an issue because of the lack of people on the ground, so, to access the large SME market it lets a select group of partners (Yellow, Localist and Gopher, a new partner that was announced today) sell AdWords.
Part of the joy of Google is that it ranks the most relevant and popular content in its organic search rankings. For brands, that comes into the earned media compartment, so if you're content is good, it might be closer to the top of the search results. That system can be gamed, of course, with the use of specific words and phrases, but recent changes to its algorithm—Panda and Penguin—meant that low quality content and sites that simply linked to other content were disregarded. Slightly controversially, it also downgraded sites that had high number of valid copyright infringement notices, which some say was due to lobbying from the film industry.
"We make around 500 revisions a year to the algorithm to ensure the most relevant popular results keep coming for users," says Google's Henning Dorstewitz, global communications and public affairs manager ANZ. "That's just about iterating."
Keusgen says it's important to invest in both paid and earned media, but if it's critical to your business, he says you need to ensure you control the awareness. For example, if there's a big news event relating to your business or industry, a news story or a Wikipedia entry could take your place at the top of the organic listings. And given just 13 percent of consumers go to the second page, it's important you're there on that first page, he says.
With YouTube second only behind Google in terms of the number of search queries, there's plenty of emphasis on this channel as a marketing tool too, so it's brought the same concept of AdWords to the audio-visual realm with Trueview's skippable pre-roll ads.
"If no-one clicks on your search ad in Google, it's free of charge and the same concept applies into Trueview. 65 percent of all of our ads are skippable ads now and if someone skips before watching, it's free for the advertiser and a better experience for the user. It's better both ways."
And he says a nice side-effect of this is that it also helps improves the quality of the ads, because when consumers have the choice to skip them, you have to be more entertaining, especially in the first five seconds. Typically, the YouTube strategy for many brands in New Zealand has been limited to uploading the TVC and that's still very common. But he says they are starting to see more campaigns tailored to YouTube (he points to an example in the UK where a Priceline commercial actually asked the user to skip the ad and, perhaps because of the power of reverse psychology, many would stick around to see all the offers).
Keusgen points to Kiwibank's Green Ops as a fabulous example of using smart creative to leverage where consumer interest already is and then measure to a business outcome.
"They ended up getting six times the switches they anticpated and 1180 new mortgages in the period. It's a great example of combining smart creative juices with hard data."
He says Trueview can also be used to test optimal creative by using different edits and sequences to find out when people drop out.
"You can do your testing with millions of viewers, really quickly and really cheaply so you know what the optimal one is."
But it's not just helping create demand. he says YouTube can also be used as a sales tool and customer service function.
"One of the interesting things we're seeing is the rise of educational and how-to scenarios. I remember when I started talking about this there were 356 videos on how to conduct a heart lung transplant and now there are over 2,500. Because there's sound and video and you can fast forward and rewind, it's just a lot easier than reading."
Instead of—or in addition to—providing a confusing instruction book when someone buys a new phone, he says telcos could provide instructional video content (Mitre 10's Easy As is another good example of fusing the two realms).
"You only need to make it once. So you get on the front foot, take calls out of your call centre and reduce costs and that content can also become a sales tool as well, because you can show it to people in the store," he says.
So where to from here?
"The biggest one we're seeing is the very rapid emergence of mobile and the lack of readiness in the market. The stats around that are pretty staggering. One in eight queries to Google in New Zealand are from mobile phones and one in four of those is in some way local in nature, which has huge implications for small and local businesses. Businesses are yet to be ready in terms of how many of them have a mobile site or a mobile-optimised site. The internet has been around for 20 plus years and many businesses are only just getting their websites sorted out. But the mobile internet is growing at eight times the pace the interent did when it was at the same level of infancy so it's so important that they're mobile ready. We've been saying this for a while. The time is now, so we're really starting to see the whites of people's eyes about what we're going to do."
With search all you need to do is tick a box to include mobile. But in terms of best practice he says it's about separating out campaigns so you have a different answer to a mobile query than a desktop query.
"If you're on mobile and you're calling a locksmith your call to action is more likely to be 'click to call, anywhere in Auckland in 30 minutes', but if it's a desktop search you might want to talk more about security systems or changing locks in the home."
Like the AB testing, he says this tailoring is happening a little bit, but not enough. And from here he says it will move into separating campaigns from a handset to a tablet and provide different messages.
Social is increasingly being infused into search in an effort to make the results more relevant and useful. Reviews are trusted above ads, even if they're from total strangers, but being able to see reviews from people in your networks offers more authenticity. And he says the endorsement factor plays out in advertising as well, because people are five to ten percent more likely to click on an ad if one of their friends had pushed +1.
At present Keusgen says 43 percent of media in New Zealand is consumed via the internet and only 15 percent of ad spend is following those eyeballs. That gap is larger than most other developed markets, and it's closing. But if his message gets through, it is likely to close even faster.