To Pay Or Not To Pay, That Is The Power Shopping Question

Much hype, and many public relations wars, has been waged over the last couple of months centering on the physical dynamics of paying your way into shopping results. Most of the attention has been focused on Google, and as often happens in the search community, Big G’s motives have been dissected, reviewed and morally judged, before short-attention-spans took the angry masses off to gripe about something else.

The much larger debate, the industry’s familiar old cold sore, is the “pay or no pay” argument. Every time there’s a case where a free product suddenly becomes a pay-for-play, it receives a media flare up, regardless of the outcome.

Look at Google Shopping. Adobe recently revealed that nearly 11 percent of its paid search retail spend went toward Google Shopping in Q4 2012, even after marketers were so vocal about the inconvenience of this change.

It’s Easy to Experiment When It’s Free

This illuminates the fact that marketers will always exploit free tools as much as they can, because they are free, but refuse to invest later.

In fact, free is one of the only ways to get marketers to actually experiment in digital, because they are so beholden to ROI. The return is always going to be high if marketers put nothing into it. So, if a retailer gets a boost through organic shopping recommendations because its other marketing channels are succeeding and driving shares, that retailer will love it.

The larger problem is that marketers are so fearful of losing money on a new ad tool or strategy that they almost never invest in the early stages. This is why the display landscape is still stuck on the click. Everyone knows it’s not an effective measurement, but advertisers don’t want to invest in new measurement tools or try a new approach. Agencies are so scared at the thought of  losing  clients that they don’t really push back, either.

Give a marketer something for free, and they’ll certainly experiment. In the online world, most of the media players give their partners value adds to show them what’s capable on new channels or delivery systems. Mobile advertising and connected TV are two of the most popular right now, especially for the pure-play video ad networks.

Marketers Abandon The No-Longer-Free

Marketers love experimenting with free tools and services, which is why so many beta tests are given away. Product marketing learned a long time ago that you could identify potential customers and improve products by giving them to the people most likely to pay for them in the future. The irony here is that once products suddenly cost money, no one wants to pay for them anymore.

It’s a basic tenet of marketing – build demand for something, watch it grow in popularity and then sell it. Adobe had $2 billion in search spend under its control in 2012, so even 10 percent is a big chunk of change. The shopping recommendations showed advertisers that they were an effective way of driving page traffic and sales, and retailers clearly thought it was worth the investment to buy this ad space.  It’s somewhat amazing that marketers always respond to product marketing 101 by throwing their hands up and complaining.

Again, there’s experimentation with free products because no one will lose their job if the results are poor. There’s an old tenet in advertising – one I won’t repeat – that makes it clear that no one knows how much of his or her advertising actually works. Why then, are CMOs so hesitant to devote a small portion of budget to experimentation? Why are we so determined to hold on to our free products and then complain when a tech company suddenly wants to be paid for something that adds value?

Create A Risk-Taking Atmosphere

The problem won’t necessarily work itself out, but we can avoid all of this by actually encouraging an atmosphere where a few risks are encouraged. Agencies should probably push their clients to experiment more, while CMOs can free up some budget for innovation. And everyone else, for his or her own health and well being, needs to stop the public outcry.

If there was a free tool, one you did not need to pay for, that contributed greatly to your success, then it probably makes sense to invest in that product. You’ll never know how 100 percent of your budget performs, but if one segment is a clear winner, it’s worth the time. That’s basic marketing.