thesis on marketing performance

S&P 500 Historically: When Are All-Time High Streaks Exhausted?

• Analyzing historical data suggests that even when always buying at all-time-highs, attractive returns could be generated with the S&P 500.
• For long-term investors, history therefore shows that all-time highs are no reason not to buy the index.
• However, buying at all-time highs could indicate weak performance in the short term.
• Moreover, extended streaks of all-time highs indicate psychologically daunting temporary draw-downs ahead.
• I typically rate Hold/neutral, even when my inclination is bullish or bearish. Rating systems don't consider time horizons or investment strategies. My articles aim to inform, not to make decisions.

honglouwawa

The S&P 500 (SP500, SPX) is currently on a 6-month+ streak of reaching week-closing all-time highs when allowing for some weeks of tolerance with interruptions. This naturally opens discussions about whether buying at all-time highs is still sensible or, more specifically for me, how long such a streak could historically last . With this research article, I emphasize once again the well-known fact that buying at all-time highs has historically still promised attractive returns over the long term . Nevertheless, it obviously makes a difference whether it is the first or the last in a series of ATHs. The current series has not necessarily reached extremes yet, but already carries the potential for significant interim draw-downs .

Research Design

• Weekly S&P 500 index-closing data from 1970 to 2024 YTD .
• Therefore, an all-time-high (ATH) in this context is defined as a week-closing ATH .
• This research observes historical S&P 500 data in an isolated manner, i.e., without paying attention to other highly important factors like valuation, overall state of economy, monetary policy or index-constituents. These are clear limitations of this research article.
• Some observed time-periods were chosen arbitrarily to land at exemplary insights.
• While applying the greatest care in data analysis, this article is nonetheless not meant to be considered a comprehensive scientific paper.
• Keeping all of the above in mind, this research contributes a small excerpt to the abundance of related existing research and, with its limitations, opens up possibilities for future further research.

Investing At All-Time Highs

Firstly, with my research I want to add to the widely discussed common opinion among opponents of market-timing, claiming that one should invest at all times. This is because historically, even the worst market-timer has always yielded results that for some do not significantly differ to the worst compared to random investors and best market-timers. However, while this might be the case, and I am not at all about perfect market timing, I am into avoiding high draw-downs shortly after investing from a purely psychological perspective .

I have observed the performance of the S&P 500 within various periods following week-closing all-time highs, and have then annualized them for comparison. It indicates that the average annualized return within 1 week after a week-closing ATH was a lackluster 3.4% . The average annualized return within 4 weeks after a week-closing ATH stood at 5.6%, after 8 weeks 8.2% , and all the way up to 9.9% over a 3-year period after a corresponding ATH.

This indicates that all-time highs were, in fact, potential indicators for lackluster performance in the very short term of the following approximately 1 to 8 weeks, meaning buying at the ATH and selling 1 to 8 weeks later. However, on average, if always buying at an ATH and selling 6 months to 3 years later, the annualized return still stood at an attractive 8 to 10% .

Author | Data: investing.com

All-Time-High Streaks

What, from my perspective, is lacking in all of the above is that no distinction is made between whether an all-time high was the first in a series of ATHs within a bull market, or the last one. Because, purely from intuition, the first ATH after a long period is more likely to be an indicator of further rising prices, which logically leads to additional ATHs, while after a series of ATHs there have typically been significant corrections.

First, I defined an ATH streak not only as the number of weeks that closed at an ATH, but also claim that one can designate a series as an ATH streak even when it is briefly interrupted by a few weeks without an ATH. For example, an ATH streak for me could be:

+ a 10 -week series of ATHs,

+ followed by 4 weeks without an ATH,

+ and then another 3 -week series of ATHs,

X and then I observed, let's say, 23 weeks without a new ATH.

In that case, my observed streak would total 17 weeks, given a 4-week tolerance .

I have observed week-streaks with 4 weeks of minimum tolerance, as well as 10 and 20 weeks of tolerance to capture long-term ATH streaks. Let's start with the latter – very long-term upward ATH streaks, with a tolerance of 20-week interruptions without ATHs.

The shortest ATH streak of that kind lasted 5 weeks in 2018. The longest streak lasted 268 weeks, over 5 years, from 1995 to 2000. Currently, we are in a 30-week streak that has been ongoing since the end of 2023 up to the present. This is approximately in the middle of all observations. Therefore, the historical probability that the current streak will continue is about 50:50 , assuming a 20-week tolerance is allowed to define it as a streak.

But what happened after streaks that lasted longer than the current one ? To address this, I investigated the maximum drawdown after the end of longer streaks until the next ATH. The table on the right should be read as follows:

The longest streak of 268 weeks ended with an index value of 1528 at the beginning of 2000, resulting in a maximum drawdown of -48% , and it took 7 years until the next ATH, which occurred in 2007. On average, the maximum drawdown after a streak that lasted longer than the current one was -23%.

Let's now look at a somewhat shorter time frame and define an ATH streak only if it is not interrupted by more than 10 or 4 weeks. Naturally, with fewer weeks of tolerance to call it an ATH streak, the number of observations increases, while the duration of each streak decreases. The longest streak with a 10-week tolerance lasted 121 weeks from 2013 to 2015 . The current streak since the end of 2023 is in the top 30% of the longest streaks with its 30 weeks. Even with just a 4-week tolerance , we are currently already in the top 30% of the longest streaks . The current streak has been ongoing since May and has lasted 10 weeks, with the longest such streak being 44 weeks from late 2020 to mid-2021 .

In summary, while we are not yet among the top values for long-term ATH streaks (with a 20-week tolerance), the maximum drawdown during streaks that lasted longer than the current one averaged -23% and ranged up to -48%. In the shorter term , with less tolerance, we are in the upper third of the longest ATH streaks , indicating that while the streak could naturally continue, we are already approaching the longest historical ATH runs in the short term.

Combined with the insight that even the worst market timers have achieved attractive returns over the long term, I, personally, would continue to buy the index but at a significantly reduced rate currently , as I consider a drawdown highly likely — though I am like any other investor unable to time it optimally. Therefore, my cautious hold rating should be taken quite literally.

This article was written by

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. I have no index-like/ETF holdings but single-stock positions that are represented in the index.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Knowledge at Wharton Podcast

What does your writing style say about you, july 23, 2024 • 15 min listen.

Wharton’s Jonah Berger explains how writing style can predict future success.

Listen to the podcast.

Wharton marketing professor Jonah Berger discusses his published study, “ Topography of Thought ,” which was co-authored with Olivier Toubia , business professor at Columbia Business School. The paper examines how someone’s writing style can be indicative of their future success, and where generative AI might come into the picture.

Read an edited transcript below.

Studying How Successful People Think

Angie Basiouny: Give us an overview of this paper by way of explaining your title. What is topography of thought?

Jonah Berger: I don’t have to tell you that we all use language all the time. We write emails, make presentations, and submit job applications. We use language all the time. And language, in some sense, is a fingerprint. It reveals or reflects things about the people who produce it. You can predict how extraverted someone is, for example, based on the words they use.

But beyond the individual words people use, might the pattern of ideas they put out there, the way they organize their ideas, reveal something interesting about them and their likelihood of future success?”

I think it’s important to talk about what I mean about the pattern of ideas. When someone talks about something, they can cover a small amount of ground or a large amount of ground. If you ask someone about their work history, for example, they can talk about a variety of things they’ve done or a smaller set of things they’ve done. They can cover a lot of ground or a little bit of ground.

If you want to use an analogy here, you can almost think about going for a run. Someone can go for a run and go all the way around the city, or they can go for the same number of miles, but just go around the block a number of times. In both cases, they did the same distance, but they covered more ground in one than the other. So, one way we express ideas is the amount of ground we cover. We cover more ground with our ideas, or less. We can talk about more ideas, more topics, more themes, more things that are disparate from one another, or things that are related to one another.

But it’s not just that. It’s also the speed with which we move between adjoining ideas. Imagine a movie. It can cover more or less ground across the course of the movie, but it can also move faster or slower between ideas. If a movie has one scene, for example, that’s at the beginning of a wedding, if the next scene is the later part in a wedding, that’s related to the first part. Different things may happen, but it’s pretty closely related. But if you jump from a wedding to an action scene, that would be really different sorts of ideas. They’re not very related. They’re moving further across those two points.

We wondered if these two ideas, how much ground someone covers, and how quickly they move between ideas, might tell us something about their likelihood of future success.

Basiouny: You’re not talking about the length of the piece of writing. You’re not talking about whether it’s a 500-word essay or 1,000-word essay. It’s really about how they use that space to move through their ideas. Correct?

Berger: Yes, great point. It’s not about the length. It’s about the ground covered. Are they covering a lot of ground in their hundred or thousand words, whatever it is? Or are they covering less ground? Someone talking about their vacation could share 1,000 words, but they could use those words to talk just about the food they ate, or also to talk about the sights they saw and the places they visited.  The former would cover less ground while the latter would cover more.

Basiouny: How did you go about studying this?

Berger: The same ideas can be applied to any type of content, but here we looked at college applications. In other work we’ve looked at online reviews, and in related work we looked at books, movies, and TV shows.

We took 40,000 college application essays from a variety of folks who were applying to school, and we looked at what they wrote and the topography of thought of what they wrote — how much ground they covered in that essay. Again, similar length, but how much ground they covered, and how quickly they moved between ideas. And we looked at their future success. How well did they do in school? What was their GPA once they got there? We were interested in seeing whether, not just the individual words they use, but the way they express ideas might that reveal something or predict how likely they are to be successful in the future.

The Essay Writing Style That’s Linked to Greater Success

Basiouny: What did you find?

Berger: We found two very important things. First, covering more ground, that notion of covering a broad range of things in the same amount of length, was linked to greater success. But doing so while moving rather slowly, was also important.

Think about the numbers arrayed on a circular clock. You could cover a lot of ground by moving in a circle, (e.g., going from 12 to 1 to 2 to 3 to 4) or by traversing the same ground but going from like 12 to 6 to 1 to 7 to 3 to 11. You’ve covered the same amount of ground, but you’ve taken a much longer route between each individual point.

What we found is that folks who are successful in school are able to blend these two things that might seem mutually exclusive. It might seem like covering a lot of ground requires moving really quickly between points to get there. But folks that end up doing well in school figure out a way to cover that ground really efficiently. They’re able to do so by moving slowly between these points, and they don’t have to take a lot of big jumps along the way.

Basiouny: In this paper, you controlled for some socioeconomic factors. Can you talk about that a little bit?

Berger: Yes, so someone could wonder, “OK, so you’ve found that people did well in school, and you’re using writing as a way to indicate how they think. But does it indicate something else?” Maybe it’s just that people who do better on the SAT also have higher grades and also tend to write a certain way. Maybe it’s that people who have parents who are more educated tend to write a certain way and also do better in school. Or maybe people who have parents who are more educated can afford to pay for an essay consultant who helps them write a certain way and also helps them do better in school.

So, we controlled for a variety of different things. We controlled for what they wrote about. Maybe certain types of people tend to write about certain types of things, rather than other types of things. Maybe it’s not about how they write, it’s about what they wrote about — the topics or themes they discussed. No, it wasn’t that.

Maybe it’s parents’ education. No, we controlled for that. Maybe it’s SAT scores. No, we can control for that. What this suggests is that the topography of thought goes beyond things related to just socioeconomic factors or family background. It’s not just that people who might have had wealthier families, for example, tend to write a certain way or have application consultants and do better in school because they get tutoring. No, it really suggests that writing reveals something about the way we think, which can reveal or predict our likelihood of being successful in the future.

Implications Beyond College Essay Writing

Basiouny: There are other critical forms of writing that we do every day in business, like cover letters, resumes, a press release, communications to the C-suite. Can you take this research and translate it into a business context?

Berger: What I find fascinating about these ideas is yes, we looked at the case of college application essays, but it doesn’t have to be only about application essays. These same ideas should apply more broadly to a variety of contexts, whether it’s a cover letter that someone writes, whether it’s an online review that someone puts together, whether it’s the emails they write at the office — all these things provide insight into who people are and what they’re likely to do in the future. I think on a previous episode that you had me on, I talked about a paper I loved recently, where they can tell whether someone is going to default on the loan or not by the language they use in their application. Similarly, you can predict whether someone is going to get promoted or fired or leave a job for a better opportunity elsewhere based on the language they use in their email.

Most of this work that I just mentioned is using individual words, but I think what our work suggests beyond the individual words someone used, you can get insight into who they are, how they think, and how well they’re going to do in the future, based on the pattern of ideas that they have or their topography of thought.

Basiouny: As a manager, it gives you an indication of how they might move through their physical work or their knowledge work, right?

Berger: Yes, one thing we’re looking at right now is, as people learn more, does that change the way their topography of thought looks? Obviously, as we gain more knowledge in a given domain, we may talk differently. We may think about ideas differently. One thought we have is, “Hey, if people who are able to cover a lot of ground really efficiently by moving slowly between points, how did they get there? Are they naturally that way?” Probably not. They may have gained more knowledge along the way that allows them to represent their ideas differently.

One thing we’re doing right now is looking at online forums where people write multiple reviews over time. Someone, for example, might write hundreds of wine reviews over the years. They’ve learned more about wine years later. We’re looking at how do they represent ideas differently as they gain knowledge? And that may help us understand why people who represent ideas certain ways end up doing better.

Humans Still Write Better than ChatGPT and Gen AI — For Now

Basiouny: ChatGPT and artificial intelligence have entered the conversation. People have access to these free tools that can help them perfect their cover letters and written business communication. How does this change things? We can’t really tell how good someone’s topography of thought is if they have an AI-assisted piece of writing. What do we do?

Berger: Yes, so I’d say a couple of things. I agree with much of what you said, except one word. I’m not sure they allow you to “perfect” your writing. At least at the moment. What they do is allow you to write something pretty good quickly and easily. You give it a prompt, and it produces content that’s pretty interesting, does a pretty good job of doing something that might have been difficult for you to do.

And to a degree it uses your own content somehow. Like you could say, “Take my CV and use it to put together a cover letter based on my past experiences.” So that is based on you, and someone else’s might look different, to the degree that their CV is different, but I wouldn’t say it necessarily perfects anything. At least at the moment.

Certainly, tools like ChatGPT and others have made the production of content much easier, and I can imagine a time down the road where we do use them for many tasks, rather than writing ourselves. But I still think there is a lot to be understood about how language reflects the people that produce it and how to write more effective content, based on understanding what makes language impactful.

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How to Use AI to Market Your Small Business [+ My Favorite AI Tools]

Updated: July 23, 2024

Published: June 03, 2024

Being a small business is both easier and harder than ever. Yes, the competition is tough, but there have never been more AI tools that can help you in almost every segment of your business.

For example, I'd long wanted to sell merchandise with my designs. However, the thought of getting started and thinking about the initial steps felt overwhelming.

Turns out, I was wrong. With the help of AI tools, I got the name, slogan, and brand color suggestions in just a few minutes, and they were all stunning (more on this later).

So, in this piece, I’ll show you how AI can benefit your small business, going far beyond just communication and content creation. Let’s dive in.

How AI Can Level Up Your Marketing

There are so many different ways that AI can improve your marketing, and the list could probably include more than 100 ways, but I’ll show you the 12 greatest.

How to Use ChatGPT at Work

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1. Speeding Up Content Writing

79% of marketers believe that AI improves the quality of the content they create. And I totally agree. AI has changed content marketing in a very positive way (of course, only for those who know how to use it properly).

Struggling with writer's block? AI can analyze trends and suggest engaging content ideas which is the top reason why many marketers use AI, according to our study.

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New research into how marketers are using AI and key insights into the future of marketing.

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• Practical Tips
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5. Automating Email Campaigns

Email marketing automation has been around for a while, but new AI tools are making it even better.

They can help you write more interesting emails and understand what your subscribers like. This lets you spend less time planning and more time running successful campaigns.

Here’s how AI can help you with emails:

• Analyzes user data to send targeted messages that resonate, boosting open rates and clicks.
• Checks historical data and subscriber behavior to predict the optimal send time, so your emails land in inboxes when recipients are most likely to open and engage.
• Automates A/B testing of various email elements like subject lines, CTAs, and design layouts to identify the best versions for future campaign
• Analyzes your email content and flag potential spam triggers, so you can avoid landing in the dreaded junk folder.
• Identifies subscribers at risk of unsubscribing and creates personalized re-engagement campaigns to win them back.

Pro tip: HubSpot's AI assistant can create an email that grabs attention and gets your subscribers clicking through to your content. It crafts catchy subject lines, product descriptions, and even whole email drafts.

11. Intelligent Advertising

As a small business owner, the last thing you want is to throw money on ads that bring nothing. That’s why you should think about incorporating AI advertising tools. AI digs through information about past customers and website visitors.

It analyzes things like demographics (age, location) and browsing habits to understand who your ideal customer is.

With this customer profile in hand, it finds similar people on the web and personalizes your ads accordingly. Another way to use AI tools in advertising is for designing.

Kipp Bodnar, HubSpot's CMO, shared that using AI to design ads for subscriber growth slashed contact acquisition costs by 300%.

How A $25B Company Uses A.I. To 300x Their Marketing Results (#129)

A great AI advertising tool is AdCreative.ai, which helps generate high-performing ad creatives quickly. It provides insights, generates text and headlines, creates social media post creatives, and even produces super-quality videos for ads.

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What SEO Should Know About Brand Marketing With Mordy Oberstein

Learn how building a strong brand online prepares SEO professionals for a future driven by brand-first strategies.

For the SEO industry, the Google documents leak offered an important view behind the scenes. Although the leak was not a blueprint of how the algorithm worked, there was considerable confirmation that SEO professionals were right about many elements of the algorithm.

From all the analysis and discussion following the leak, the one insight that got my attention was how important the brand is.

Rand Fishkin , who broke the leak, said this:

“Brand matters more than anything else … If there was one universal piece of advice I had for marketers seeking to broadly improve their organic search rankings and traffic, it would be: “Build a notable, popular, well-recognized brand in your space, outside of Google search.”

Mike King echoed this statement with the following observation:

“All these potential demotions can inform a strategy, but it boils down to making stellar content with strong user experience and building a brand, if we’re being honest.”

Mordy Oberstein , who is an advocate for building a brand online, posted on X (Twitter):

“I am SO happy that the SEO conversation has shifted to thinking about “brand.”

It’s not the first time that “brand” has been mentioned in SEO. We began to talk about this around 2012 after the impact of Panda and Penguin  when it first became apparent that Google’s aim was to put more emphasis on brand.

Compounding this is the introduction of AI, which has accelerated the importance of taking a more holistic approach to online marketing with less reliance on Google SERPs.

When I spoke to Pedro Dias, he said, “We need to focus more than ever on building our own communities with users aligned to our brands.”

As someone who had 15 years of offline experience in marketing, design, and business before moving into SEO, I have always said that having this wide knowledge allows me to take a holistic view of SEO. So, I welcome the mindset shift towards building a brand online .

As part of his X/Twitter post , Mordy also said:

“I am SO happy that the SEO conversation has shifted to thinking about “brand” (a lot of which is the direct result of @randfish’s & @iPullRank’s great advice following the “Google leaks”). As someone who has straddled the brand marketing and SEO world for the better part of 10 years – branding is A LOT harder than many SEOs would think and will be a HUGE adjustment for many SEOs.”

Following his X/Twitter post, I reached out to Mordy Oberstein, Head of SEO Brand at Wix, to have a conversation about branding and SEO.

What Do SEO Pros Need To Know About ‘Brand’ To Make The Mindset Shift?

I asked Mordy, “In your opinion, what does brand and building a brand mean, and can SEO pros make this mindset shift?”

Mordy responded, “Brand building basically means creating a connection between one entity and another entity, meaning the company and the audience.

It’s two people meeting, and that convergence is the building of a brand. It’s very much a relationship. And I think that’s what makes it hard for SEOs. It’s a different way of thinking; it’s not linear, and there aren’t always metrics that you can measure it by.

I’m not saying you don’t use data, or you don’t have data, but it’s harder to measure to tell a full story.

You’re trying to pick up on latent signals. A lot of the conversation is unconscious.

It’s all about the micro things that compound. So, you have to think about everything you do, every signal, to ensure that it is aligned with the brand.

For example, a website writes about ‘what is a tax return.’ However, if I’m a professional accountant and I see this on your blog, I might think this isn’t relevant to me because you’re sending me a signal that you’re very basic. I don’t need to know what a tax return is; I have a master’s degree in accounting.

The latent signals that you’re sending can be very subtle, but this is where it is a mindset shift for SEO.”

I recalled a recent conversation with Pedro Dias in which he stressed it was important to put your users front and center and create content that is relevant to them. Targeting high-volume keywords is not going to connect with your audience. Instead, think about what is going to engage, interest, and entertain them.

I went on to say that for some time, the discussion online has been about SEO pros shifting away from the keyword-first approach. However, the consequences of moving away from a focus on traffic and clicks will mean we are likely to experience a temporary decline in performance.

How Does An SEO Professional Sell This To Stakeholders – How Do They Measure Success?

I asked Mordy, “How do you justify this approach to stakeholders – how do they measure success?”

Mordy replied, “I think selling SEO will become harder over time. But, if you don’t consider the brand aspect, then you could be missing the point of what is happening. It’s not about accepting lower volumes of traffic; it’s that traffic will be more targeted.

You might see less traffic right now, but the idea is to gain a digital presence and create digital momentum that will result in more qualified traffic in the long term.”

Mordy went on to say, “It’s going to be a habit to break out of, just like when you have to go on a diet for a long-term health gain.

The ecosystem will change, and it will force change to our approach. SEOs may not have paid attention to the Google leak documents, but I think they will pay attention as the entire ecosystem shifts – they won’t have a choice.

I also think C-level will send a message that they don’t care about overall traffic numbers, but do care about whether a user appreciates what they are producing and that the brand is differentiated in some way.”

How Might The Industry Segment And What Will Be The Important Roles?

I interjected to make the point that it does look a lot like SEO is finally making that shift across marketing.

Technical SEO will always be important, and paid/programmatic will remain important because it is directly attributable.

For the rest of SEO, I anticipate it merges across brand, SEO, and content into a hybrid strategy role that will straddle those disciplines.

What we thought of as “traditional SEO” will fall away, and SEO will become absorbed into marketing.

In response, Mordy agreed and thought that SEO traffic is part of a wider scope or part of a wider paradigm, and it will sit under brand and communications.

An SEO pro that functions as part of the wider marketing and thinks about how we are driving revenue, how we are driving growth, what kind of growth we are driving, and using SEO as a vehicle to that.

The final point I raised was about social media and whether that would become a more combined facet of SEO and overall online marketing.

Mordy likened Google to a moth attracted to the biggest digital light.

He said, “Social media is a huge vehicle for building momentum and the required digital presence.

For example, the more active I am on social media, the more organic branded searches I gain through Google Search. I can see the correlation between that.

I don’t think that Google is ignoring branded searches, and it makes a semantic connection.”

SEO Will Shift To Include Brand And Marketing

The conversation I had with Mordy raised an interesting perspective that SEO will have to make significant shifts to a brand and marketing mindset.

The full impact of AI on Google SERPs and how the industry might change is yet to be realized. But, I strongly recommend that anyone in SEO consider how they can start to take a brand-first approach to their strategy and the content they create.

I suggest building and measuring relationships with audiences based on how they connect with your brand and moving away from any strategy based on chasing high-volume keywords.

Think about what the user will do once you get the click – that is where the real value lies.

Get ahead of the changes that are coming.

Thank you to Mordy Oberstein for offering his opinion and being my guest on IMHO .

More resources:

• Why Brand Awareness Is The Fifth Pillar Of SEO
• Building Brand Authenticity Through Community
• SEO Strategy: A Full Year Blueprint (+Template)

Featured Image: 3rdtimeluckystudio /Shutterstock

Shelley Walsh is the SEO Content Strategist at SEJ & produces the Pioneers, a series about the history of SEO ...

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From google to social media: the new era of search and commerce.

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Bob McKay is President and Owner at McKay Advertising + Activation , Florida's first digital media agency.

Remember when Google was the first stop for any question?

While it remains so for many, a shift is underway, especially among younger generations. Instead of heading to Google, they’re turning to social media platforms like Instagram and TikTok for information queries. In a TechCrunch article , Google Senior Vice President Prabhakar Raghavan shared that “something like almost 40% of young people, when they’re looking for a place for lunch, they don’t go to Google Maps or Search. They go to TikTok or Instagram.”

Social media platforms have become a hub for entertainment, queries, news and trend updates. Their immediacy, visual richness and the genuine human interaction they facilitate are what make them so appealing. Google was once celebrated for its streamlined efficiency, but many users may now struggle with its vast scale and the overwhelming influx of SEO—strategic human and AI-generated content attempting to buoy sites. This has made searching for unbiased, authoritative answers more cumbersome than ever.

In contrast, social media’s approachable, personal touch through short videos and direct consumer engagement offers the appearance of authenticity that Google seems to lack.

According to eMarketer , over 110 million Americans will engage in social commerce this year. This type of buying is on the rise, transforming how people shop online. A substantial 36% of consumers use social media to discover new products. Furthermore, an overwhelming 87% of brands report success with social media selling, with 80% of social media marketers agreeing that purchases made directly through social apps are outpacing those from brand websites.

This data underscores the increasing importance of social media as a primary channel for commerce.

AI’s Role: A Blessing And A Curse

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Artificial intelligence is revolutionizing digital marketing, offering tools that enhance efficiency and effectiveness. According to a leaked Google presentation , its AI-powered Performance Max tool claims an 18% increase in conversions.

However, the rise of AI also introduces challenges, especially in maintaining the quality of search results and control inside the Google Ads platform. Blind trust in attribution reporting is also a concern.

Performance Max: Expectations Vs. Reality

Google Performance Max (GPM) is advertised as a comprehensive solution that optimizes ad placements across all Google channels. However, my agency has found that it often falls short, particularly in brick-and-mortar, lead generation and e-commerce areas.

A major concern with GPM is its tendency for false attribution, where reported performance metrics do not align with actual outcomes. For example, we’ve found that GPM’s attribution model overstates Google store visits and lead generation results. In one instance, a restaurant client that consistently had 55 to 90 store visits a month had over 650 store visits in the month when we tested GPM. This increase in attribution had no increases in revenue at the store level.

Lead Generation: Google Vs. Social Media

Google Search captures leads with specific intent, making it invaluable for businesses targeting consumers in the decision-making phase. For instance, a user searching for “best wireless headphones” is already considering a purchase, and Google’s targeted advertising can significantly enhance conversion rates.

On the contrary, social media platforms like Instagram, Facebook and TikTok excel in generating leads through broad-based engagement. These platforms foster a more informal, immersive environment where users might not initially intend to purchase but are influenced by strategically placed content, peer recommendations and engaging visuals. This organic discovery, facilitated by algorithm-driven content and social interactions, allows social media to sway consumer behavior subtly yet effectively.

Additionally, social media’s ability to segment audiences and integrate e-commerce functionalities, such as Instagram Shopping, directly enhances its lead generation capabilities. These features allow for highly personalized campaigns and streamline the conversion process by enabling purchases directly within the platform. As consumer habits evolve, particularly among younger demographics who spend considerable time on these platforms, social media’s role in lead generation is becoming increasingly crucial.

A Blended Approach Supported By Lead Nurturing

Social media marketing complements traditional search-driven strategies by offering dynamic, interactive opportunities that are tailored to the modern consumer’s browsing and shopping behaviors, making a blended strategy involving both search engines and social media essential for today’s digital marketers.

Lead nurturing through email and text message campaigns is a critical component of this blended approach. The goal is to turn mid-funnel leads into consumers and encourage them to make future purchases. Once you’ve captured potential customers via search engine marketing (SEM) or social media marketing (SMM), you can use lead nurturing campaigns to keep them engaged and guide them down the sales funnel.

Best practices for lead nurturing include segmenting your audience based on behavior and preferences, delivering personalized content that addresses their specific needs, and maintaining consistent communication to build trust and loyalty. Combining the immediacy of SEM, the engagement potential of SMM and the personalized touch of lead nurturing creates a robust marketing strategy that maximizes conversions and enhances customer retention.

Incorporating these tactics ensures a holistic marketing approach. By aligning SEM and SMM efforts with a strong lead nurturing program, you can create a comprehensive strategy that attracts, converts and retains customers. This integration allows for more precise targeting, efficient use of marketing budgets and, ultimately, a more impactful and measurable return on investment.

Navigating The Shift In Digital Strategy

The digital marketing landscape is rapidly shifting from a Google-centric world to one where social media dominates search and commerce. For businesses, this means rethinking strategies to capitalize on each platform’s unique strengths.

Effectively blending search engine marketing and social media marketing requires a strategic approach leveraging both channels’ strengths. Best practices include using SEM to capture high-intent search queries and drive immediate traffic, while building brand awareness with SMM and engaging with audiences through targeted content and community interaction. A balanced blend involves allocating budgets based on campaign goals—typically prioritizing SEM for conversion-focused efforts and SMM for brand-building activities. Using cross-channel data to refine targeting and messaging ensures cohesive and effective marketing efforts.

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THE EFFECT OF MARKETING STRATEGIES ON THE MARKETING PERFORMANCE OF SMES IN MALAYSIA.pdf

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