Tuesday, March 21, 2006

Google Search Forecasts Buying Habits

Google Inc., looking to confirm online search behavior influences offline buying habits, has released a study by comScore Networks that finds 63 percent of search-related queries are followed up with purchases in brick and mortar stores.

The study, released Tuesday, examines the impact of Web searches on offline buying during November and December in the United States. Consumers who searched for video games and consoles, 93 percent, followed by toys and hobbies, 88 percent, were among the highest groups to search online before making a purchase in a physical store.

Among the 83 million consumers who searched for items in one or more of the eleven product categories -- from music, movies, and video to computers, peripherals and PDAs -- the 8.6 million who bought the products online were more "intense" users of search technology, performing nearly ten times the number of searches compared with non-buyers.

The study, which validates search as a tool, aims to help Google direct business partners on where to spend multi-channel marketing dollars. "Google is considered a sales channel for Best Buy, Dell, and Hewlett-Packard, so any information to help them interpret general consumer buying habits and strategies is useful," said John Burke, Google's vertical director of technology. "Our objective is helping companies make smarter marketing decisions."

But will the data trickle down the supply chain to allow retail and consumer goods companies to make better decisions on raw-material purchases to build finished goods from iPods to computers and servers? Technology companies from semiconductor and capacitor manufacturers to makers of finished consumer goods continue to struggle with analyzing demand.

The findings could help companies throughout the supply chain understand market trends even prior to October and December when consumers tend to reach deeper into their pockets and spend more. "We've been working with our partners for years to provide them insight," Burke said. "Have we solved this problem? No, but we're getting closer."

The data Google stores relates to "macro keyword searches." Names and addresses aren't kept, Burke said. From these search queries, Google can analyze, down to the Zip Code and region, the demand for goods and services throughout the world.

In the United States, Google completed 18 months ago a reorganization of its corporate sales and marketing divisions into vertical segments -- technology, healthcare, finance -- and has begun the task in Europe. Asia-Pacific will follow during the next year.

Google also can use the data to support click-through advertising sales for AdWords and Adsense. Google's March 16, 2006, United States Securities and Exchange Commission filing reveals several pages dedicated to AdWords and AdSense, offering detailed explanations of many features and tools included in two paid-advertising packages.

Google's interest in buying and selling goes even further. The company has developed Google Base, a place for people to list nearly any type of digital content or any item for sale, making them searchable by Google.

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