New research suggests that branded search terms offer the highest conversion rates, but that non-branded terms, when used properly, can significantly impact the outcome of a paid search marketing campaign.

The research, done by search marketing firms 360i and SearchIgnite, looked at than 3.9 million users and 5.1 million clicks during the first quarter of 2006. The study focused on e-commerce retailers who had active search marketing campaigns in place.

The primary purpose of the study was to track the value of the entire path a searcher takes from the first click through purchase, comparing the relative effectiveness of branded vs. non-branded search terms. The focus on e-commerce sites allowed the researchers to capture a user's entire clickstream from initial search to ultimate purchase from the retailer's web site.

Fully 25% of conversions occurred from users who clicked more than one ad. The highest conversion rate (9.30%) occurred when a user's first and last click were both on brand terms. However, when the first click was on a non-brand term and the last click was on a brand term, the conversion rate was almost as high (8.73%).

Notably, for searchers who began their search process on a non-brand term and then switched to a brand term, conversion rates were seven times higher than when a searcher used only non-brand terms.

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