Measuring the Value of Search

Online search has been around for merely 20 years, but it has had a tremendous impact on the way we behave and get work done at home or office. Today one can probably not even imagine a world without search technology. Imagine how tough it would be for us if we didn’t have Google at our fingertips to search for some quick information.

Search engines are now not limited to just website search, they have images, videos, documents, audio clippings and what not.

The growing popularity and usage of Search can be proven by these numbers – In 2010, an average American Internet user performed 1,500 searches, while 1.6 trillion searches are conducted globally per year.

But how to assess the value and benefits of search. You will come across many studies that show how much money marketers are spending on search marketing but none that can concretely tell that how search creates values and who benefits from search. Last month Mckinsey created a report measuring the value of search. The key findings of the report include:

• Till date most of the surveys and research have identified three sources of search value – time saves, price transparency and the raised awareness. Though these are very important values, but they do not capture all the values created by search. Mckinsey identified 8 values.
• Better matching of customers with their needs
• Time saved to find information
• Raised awareness about brand
• Price transparency
• Long tail offerings i.e. niche items demanded by small segment
• People matching
• Problem solving
• New business models taking advantage of the search potential
• Entertainment with the plethora of music and videos available on search.
• The global gross value created by search was $780 billion in 2010, yet across the 4 countries that were measured, only 4% of the gross value created by search was captured.
• 65% of search value flowed directly through to GDP in 2009. Seventy percent of total search value contributed to GDP in the developed countries – United States, France and Germany and an average of 40 percent contributed towards GDP in two developing countries – India and Brazil.
• Between 30-65 percent of the value of search accrued to individuals rather than companies.
• The return of investment for those that deploy search are higher. Advertisers generate an average earning ROI of 7:1. Individual information seekers, consumers and content creators earn an average ROI of 10:1 and enterprises deploying search strategies earn an ROI of 17:1 as a result of time saved.
• Some benefits of search are not measurable but still are very valuable, e.g. the importance of search in helping people find the right information in case of emergencies or formation of support communities while fighting with a disease. Using search it is very easy to share valuable information with the global population which otherwise would have been limited to only a small number of people.
• Though there are certain negative costs associated with search. For e.g. due to free pirated music and videos being available online, the gross revenue of such companies comes at the cost of other companies selling official music DVD’s and videos.

Search is evolving continuously, before it was just search engines, now it has social networks. Future is really unpredictable, but it goes without mention, search is now one of the key drivers of any enterprise and if you are not there in search, then you are losing to the race.