Online Insights: Search Engine Marketing

Growth of Paid Search Puts Spotlight on Technology

The huge growth of the paid search marketing industry in recent years has spawned a raft of technology companies pledging to help their customers use their budgets more efficiently by optimizing pay-per-click campaigns.

As budgets have become more significant and the stakes have become higher, the number of advertisers paying for bid management and related search marketing technology has increased accordingly.

Data from the SEMPO State of Search Engine Marketing Report, published by Econsultancy earlier this year, revealed that the North American search marketing industry was worth $14.6 billion in 2009 and is expected to grow by 14 percent in 2010 to reach a value of $16.6 billion.

Photograph by Hemera/Thinkstock

Are You Using Third-Party Solutions?
Even if the bid management technology industry is conservatively estimated at 1 percent of the overall market value, this is still huge business and represents considerable investment for many companies. Beyond the direct costs of these services, the more considerable number may well be the net gain that results from improved campaign performance or the opportunity cost if that is not achieved.

However, despite the proliferation of companies offering third-party software and services to improve pay-per-click marketing, the SEMPO study found that the majority of companies (53 percent) conducting search engine marketing are not using a third-party technology for paid search marketing, either themselves or via their agencies (see chart).

Instead, most companies rely on the tools provided by search engines themselves and non-specialized software such as Microsoft Excel.

These organizations tend to be smaller advertisers with modest budgets whose managers have not been persuaded that the additional expense of licensing a bid management technology is worthwhile.

Yet, although there are exceptions, most of the largest companies and agencies managing tens of thousands of keywords and phrases regard specialist technology as essential rather than a luxury.

New types of ad format and ways of targeting have made the picture even more complex and increased the reliance on specialist tools such as Dart Search, Efficient Frontier, Marin Software and SearchIgnite.

Another consideration is the need to look at paid-search management as part of the bigger picture of a company’s marketing activity and overall business plan. Technology plays an important role here, and it is no surprise that companies with a heritage in web analytics such as Omniture and WebTrends offer bid management technology as part of their broader portfolios.

Advertisers are also increasingly reliant on technology to make sure that their advertising accurately reflects what they have in stock, and that the copy in the advertisement is flexible enough to reflect differences across thousands of products.

Research by Econsultancy has found that “ease of tracking” and “integration with analytics” are two of the three most important factors for companies selecting a paid search bid management technology platform.

For those investing in technology, one of the main priorities is to get maximum value. The value derived from tools can often be seriously diminished if those operating the technology don’t properly understand how it works.

An inexperienced campaign manager will fail to maximize the optimization opportunities offered by the technology, no matter how powerful the tool.

So a key question for advertisers is whether they carry out paid search marketing in-house or rely on their agency. The arguments for and against agencies are well rehearsed.

Agencies can be more adept at maximizing return on investment from search technology (especially when it is their own), and many adopt a technology-agnostic approach so that they use the best tools for the job in hand.

But an organization can reap the benefits if it keeps its knowledge in-house and develops its own employees to make the most of its search marketing activity.

Simply, the savings relating to in-house paid search management need to be weighed against the possible increased ROI that an agency might be able to extract.

Many companies cite the need for internal understanding and expertise in SEM as a prerequisite for maximizing the benefits of an agency relationship. So, the key requirement for organizations is to invest in their staff and ensure that they are kept up-to-date with search marketing developments and technology, irrespective of whether they are managing search in-house or outsourcing to an agency.

Stefan Tornquist is research director (U.S.) at Econsultancy. Contact Tornquist at sktornquist@gmail.com. For more information about the SEMPO study, go to http://econsultancy.com/reports/state-of-search.

July 2010 – Online Strategies: Online Insights

Social Media and SEM: Friends or Foes?

The explosion of social media and the steep growth trajectories of sites such as Twitter, Facebook and, more recently, FourSquare, have created huge opportunities and challenges for marketers in equal measure. According to the SEMPO “State of Search Report 2010,” based on a global survey of nearly 1,500 digital marketers, 59 percent of client-side respondents said social media budgets will increase over the next year compared to only 4 percent who said budgets will be less. Agencies are even more bullish, with 85 percent saying they expect increased client-spend this year.

Although social media marketing budgets are still modest compared to those for search engine optimization and paid search, many companies are starting to take this relatively new channel very seriously.

Social Media’s Impact
Effective social media marketing can help drive website visitors by giving companies and brands more visibility on search engines and social media sites. A good social media strategy can have SEOs licking their lips at the prospect of new links and opportunities for visibility on social media-friendly search engines. Three quarters of agencies surveyed (74 percent) for the SEMPO survey, carried out by Econsultancy, say the rise of social media has had an impact on their clients’ search engine marketing activity.

It should be noted that while social media marketing can help search efforts, the main objectives of social media marketing, and the skill-sets required, are often very different from search.

Although the research found that the primary objectives for search marketing are most likely to be “selling products” (for paid search – see Figure 1) and “generating leads” (for SEO – see Figure 2), the primary objective for social media marketing is most commonly increasing brand awareness and enhancing reputation (see Figure 3).

The skills required for social media marketing, where creativity is paramount, are not the same for paid search marketing, which generally speaking, requires deeper analysis and left-brain thinking. Similarly, the metrics used to measure success are very different.

The primary skills required for a staff member managing SEM, search advertising campaigns include: the ability to stay on top of the latest campaign management and analytics tools, the ability to convert campaign performance data into action plans and the ability to execute exact and different campaign best practices based on the advertising channel.

By contrast, the core skills required for a new staff member to develop and execute effective social media campaigns include: be adept at listening and understanding what your target audience is saying about your company’s product; be able to work with the appropriate social media tracking tools to effectively monitor dialogue and answer questions; know how to drive community conversation; and recognize that successful social media marketing takes time as you work to expand your customer base.

Where SEO and paid search success can be worked out on a more tangible return-on-investment basis, measuring the success of social media campaigns often requires more intricate analysis. The metrics will likely vary based on the objectives.

These differences don’t mean that the same agencies and same people cannot be well equipped to help a company with both search engine and social media marketing. But what should be clear is that social media marketing should be seen as something more than just a search-marketing tactic.

Linus Gregoriadis is research director at Econsultancy, which carried out and published the SEMPO “State of Search Report 2010.” Contact Gregoriadis at linus.gregoriadis@econsultancy.com.

July 2010 – Online Strategies: Brand Protection

What You Should Know to Safeguard Brands in an Online Advertising World

BY FREDERICK FELMAN

Search advertising is a fast-growing marketing channel for brand advertisers and is only getting larger in 2010. According to the Search Engine Marketing Professional Organiz-ation’s annual “State of the Market Survey,” search-marketing spending will grow from $14.6 billion to $16.6 billion in 2010. The lion’s share of this spending will go to pay-per-click advertising campaigns, staff and software solutions. Unfortunately for brand advertisers, there are thousands of online scammers who leech traffic and new customers from legitimate e-commerce brand campaigns.

Illegitimate pay-per-click advertising activities range from click fraud (the practice of a person or computer program clicking on an advertisement for the sole purpose of generating a charge per click) to pay-per-click scams. A pay-per-click scam occurs when a brand name and its derivations are used in such a way that traffic is diverted away from the actual site belonging to the brand, often infringing on the brand’s trademarks. In some cases, these scams even drive traffic to sites that sell counterfeit products. What’s the bottom line? The scammer is driving traffic to his or her own site so he or she can profit at the expense of the legitimate brand.

A variant of this practice occurs when an affiliate uses a branded search term to drive traffic to its own site. While an affiliate grabbing traffic from a brand is not a scam, it adds cost to the brand’s pay-per-click advertising campaigns and often results in the brand paying the affiliate for traffic that the brand itself generated!

According to the recent SEMPO “State of the Market Survey,” the value of the North American search engine marketing industry is projected to increase $2 billion from $14.6 billion to $16.6 billion in 2010.

Scale of the Problem
The amount of traffic diverted from branded pay-per-click advertising campaigns is staggering. In the U.S. alone, there are 4.2 billion brand-based searches on major search engines every day. One in seven of these searches lures searchers to a destination other than the brand’s site. As a result, over 600 million searches are hijacked every month. This affects brands in several ways, beginning with diminished traffic and lower ad campaign ROI. In addition, scammers can bid up the costs on branded keywords. Last but not least, a brand can suffer by being falsely associated with a counterfeit site.

The leading search engines all have programs in place to provide pay-per-click advertisers options for dealing with intentional click fraud or pay-per-click scams. However, it is incumbent on the brand’s ad campaign managers to be proactive in monitoring and reporting problems to the search engines.

It is also notable that not every pay-per-click scam occurs with the use of a branded term. A good example to illustrate this point is the term: “designer handbags.” In a recent survey of 20 popular online product searches, this item stood out. A startling 32 percent of paid search ads that appeared on a search of this term led to sites appearing to sell counterfeit handbags. The misleading ads worked in several different ways. Some ads would inappropriately use branded terms, while some used generic terms. But in every case, counterfeiters are taking advantage of paid search–and brand names–to intercept traffic and profits. Legitimate brands are faced with the reality that they are competing every day with those who would divert traffic from their sites to illegitimate destinations.

How to Fight Back
To fight scammers, ad campaign managers have two options: build an in-house monitoring and detection team with dedicated staff, or outsource to specialized vendors that provide automated detection, auditing and reporting solutions. For large global brand companies, in-house solutions can be extremely labor intensive to implement and manage. In contrast, products from third-party solutions providers are continually updated to address the latest manifestations of pay-per-click advertising scams, are able to prioritize offenses based on the brand’s criteria and can provide automated reporting methods tailored to the brand’s needs.

Remember that pay-per-click scams are borne of and reliant on technology, so they can be prevented and fought through technological means as well. Highly effective automated solutions can be highly adept at detecting search-advertising abuse, and most will prioritize for the worst offenders and immediately take action. Any e-tail brand wishing to maximize its ROI should consider initiating these strategies and making them a top priority.

Some Important Tips
Given the seriousness of pay-per-click scams and the solutions available, brand advertising professionals should consider implementing the following:

Conduct an informal, qualitative audit to assess if your company is a potential victim of pay-per-click advertising scams. A simple way to start is to search for your branded terms on one of the leading search engines and follow the ads that are presented.

If your company sells house-brand goods, your supply chain may also be contributing to a related facet of the problem–counterfeit goods. As part of your informal audit, examine business-to-business exchange sites to see if your house-branded goods are being sold in bulk. A variety of offshore suppliers often make use of these B2B exchanges to sell overruns and ‘name brand’ goods, which could be counterfeit.

Research the third-party software solution providers that can help your company address pay-per-click advertising fraud and scams. Look for the solutions that can help to address the full range of abuse that your company’s brand is experiencing.

Finally, as pay-per-click advertising budgets increase, there are a growing number of educational webinars and e-commerce conference panels to assist brand-advertising managers with addressing these problems. Great places to monitor how pay-per-click advertising problems evolve and how to manage them include e-commerce association blogs and publications, LinkedIn groups comprised of thousands of pay-per-click professionals at www.linkedin.com/in/ppcmarketing and conferences and training events that specialize in pay-per-click and search advertising.

Frederick Felman is the CMO at MarkMonitor, a leader in enterprise brand protection, where he is responsible for promoting the company’s brand protection products. Contact Felman at (415) 278-8400.

May 2010 – Online Insights: Search Engine Marketing

Real-Time Results: Google’s Latest Addition to Search

Traffic to Facebook outpaced that to Google in the second week of March this year, according to Hitwise. The implications of this for search are huge. Consumers are now more likely to get up-to-date news, information and links from their social networks than from leading search engines. But don’t think Google and Bing are going to go down without a fight. Welcome to real-time results.

Betting on Change
Real-time results quietly became available on Bing and Google in the latter part of 2009. Basically, these results are live updates from popular social sites like Twitter and FriendFeed, as well as headlines from blog posts embedded within the search results. When a person does a search on Google or Bing, they will now see these live updates that were published just seconds ago. But is anyone paying attention?

In a recent eye-tracking study conducted by Oneupweb in February 2010, we found that nearly three-quarters of the participants had never even heard of Google’s real-time results. Honestly, we weren’t surprised by these findings. Just take a look at how public opinion toward social networking has changed in the past few years. In 2006, many people considered Facebook to be a site strictly for college and high school kids. Today, the most active users on social networking sites are the baby boomers and Gen X-ers. YouTube was a novelty in 2005 and Twitter didn’t even exist. Today, Twitter is the talk of the town and social networking sites are the mainstays of the digital marketer’s tool kit.

Sometimes, the “quiet beginnings” eventually make the biggest splash. Real-time search is no different–while it was launched quietly, it’s sure to make a big bang since it’s about re-defining the search process altogether. The rules are going to change, and that’s what online retailers need to focus on.

Real-Time Results Matter
Basically, Google and Bing are now offering their complex algorithms for filtering through the firehose of social feeds, as they happen, in real-time. This gives the consumer unprecedented access to the most up-to-date and relevant information. Whereas exposure to brands on social sites is limited by the reach of the individual’s network, anyone can see a real-time result in Google.

And there is a huge audience for real-time–in a single day Google processes over 300 million search queries. Now that’s opportunity for real exposure.

Information Seekers are Tomorrow’s Consumer
In the eye-tracking study Oneupweb conducted on real-time results, we wanted to see if the people conducting those 300 million search queries were paying attention to the real-time results they were served. We split our test subjects into two groups: information seekers and consumers. We asked them to do a search on the same keywords, but the information seekers were told to simply look for information on a product, while the consumers were informed that they were looking to buy that product. Then we tracked how and when they used the real-time results.

We found that the consumer group quickly zeroed in on the top results, and often favored results that were associated with pictures of the search term. The information seekers behaved differently, however, and were more likely to take a closer look at the scrolling real-time results.

So it would appear that real-time results aren’t too valuable to a company when it comes to making an immediate sale of its products or services. But don’t discount them quite yet.

Those “information seekers” who engage with real-time results today may expect this feature to help them with a product search later on. The majority of the participants surveyed in this group were equally split as to whether they liked (47 percent) or where indifferent to (47 percent) the real-time results. Comments included “the latest updates were helpful and almost crucial to the product search” and “Twitter results are more ‘human.’” Only six percent of the information seekers we surveyed disliked the real-time component.

This is just the beginning. Before real-time results, users doing searches online were isolated from social inputs. But now consumers have the opportunity to get instant feedback on a product or brand from other consumers without ever having to log in to a social profile. And, for the consumer, the value of this kind of “live” feedback will grow as they come to expect real-time results.

Looking Ahead to Real-Time Relevancy
While the expectation is that everything online happens at the speed of light, don’t forget the human element. People are in the process of learning how to adapt to a new way of thinking when it comes to real-time results, so we’re not going to see any drastic changes overnight. But search is changing, and those who adapt early will be the first to discover how to leverage real-time search.

The idea is simple: search the content of the web as it happens to find the most up-to-date and relevant information. To actually achieve this, however, is not so simple. And it is still a long road ahead as we attempt to harness the real-time web. But the implications are huge, particularly at this time when we are seeing a dramatic rise in mobile devices. Expectations for search and social engagement are changing, and it will require a robust and well integrated online marketing strategy to stay relevant to your consumers in the future. You can bet on it.

Lisa Wehr is CEO and founder of Oneupweb, a full-service digital marketing agency. She has been counseling clients on improving website ROI and search engine marketing since 1996. She can be reached at info@oneupweb.com. Or send her a tweet@LisaWehr.

April 2010 – Online Insights: Ad Networks

Tier Two Networks

New ad networks are popping up all the time. Some of them have earned a negative reputation as providers of poor quality traffic. Unfortunately, these networks have not operated with advertisers’ best interests in mind and, as a result, Tier Two networks in general have received a bad rap. It’s important to remember, however, that not all networks are created equal. Before initiating a partnership with a Tier Two network, you need to ensure they can deliver the quality traffic you are seeking. Here’s a useful checklist of issues to address while you are vetting search networks, along with some specific questions to ask to allow you to determine if the network is a fit to help you reach your PPC campaign goals:

Vetting A Tier Two Network
Experience – It’s important to work with a tried-and-tested network with a proven track record. How long have they been in business? Can they share client case studies and/or testimonials as validation of their achievements?

Third-Party Partnerships – Some networks employ partnerships with third parties to help ensure click quality and safeguard against invalid traffic. For instance, Anchor Intelligence and Click Forensics are two traffic-quality solution companies that many networks work with to serve as a kind-of check and balance to their internal traffic controls. Ask if the network has any of these traffic-quality partnerships in place and if/how they filter invalid traffic.

Targeting and Tracking Capabilities – You need to assess whether the Tier Two network you are evaluating operates on a platform with the necessary capabilities to meet your targeting needs. Determine if they offer any or all of the following:

• Geo-targeting that allows you to focus your ads in the location of your desired customers;
• Ad scheduling or dayparting so that you can schedule your ads to only appear at certain times of day; and
• Conversion tracking to give you visibility into what traffic sources are converting for you and which ones aren’t–so that you can adjust campaigns accordingly.

Customer Service – Make sure the network you are considering has the customer support to help you optimize your campaigns and reach your goals. Will they offer you a dedicated account manager? Who will be held accountable for helping you ensure your campaigns are running smoothly?

Asking these basic questions are the first steps toward broadening your PPC campaigns to include valued and trusted Tier Two networks that will deliver quality traffic to your e-commerce site. Leverage these questions as a starting point to rely upon when you’re looking to expand your reach beyond your existing PPC campaigns.

Kaley Dobson is marketing manager at LookSmart, a long-time provider of search marketing solutions and operator of an independent search advertising network. She can be reached at kdobson@looksmart.net.

April 2010 – Online Insights: Display Advertising

Re-Marketing Display Advertising: Ready for Take-Off

“Re-marketing” is a term used in online display advertising. Essentially, it’s about giving your initial website traffic a “round two” reminder to come back to your site. With re-marketing, you are able to target the vast majority of visitors who come to your site without taking the desired action. This is accomplished by setting tracking pixels or cookies on the user’s initial site visit. Then you can set up campaigns to show ads on other sites targeting these individual users.

You may have seen this in action in the last several months in your own web surfing. If you visit a popular cruise line website to research options for a family vacation, you may later notice a big up-tick in the banner ads that you see from that exact cruise line as you later leave the site and visit news or other content websites. Coincidence? Could be, but I don’t think so. It’s probably a cruise line who is using online banner ad re-targeting to pull you back into their website for a second look, and hopefully–for them–a sale.

In a recent survey of marketing professionals conducted by the Search Engine Marketing Professional Organization (SEMPO), 46.3 percent of respondents believed re-marketing to be the most underutilized form of advertising. Of that 46.3 percent, I bet most of them are underutilizing this laser-targeted form of “re-advertising.” Since you are targeting people who have already been to your site, it stands to reason you’ll have a much higher response rate than with contextual, site-targeted or even behaviorally targeted display ads. At the end of the day, a re-targeted ad will be much more relevant to most web users than ads targeted any other way.

Even so, the perceived hurdles involved in launching re-marketing campaigns have kept all but the most aggressive advertisers out of the field. Re-marketing appears to be reserved for only the big guns with huge advertising budgets. Casual observers may see it as a parlor trick for the rich. “Come to my site once and you’ll magically see my ads on your favorite websites.”

Sure, a few ad re-targeting firms have sprung up such as Retargeter and AdRoll, lowering the barrier of entry. Paste some code and you’re good to go. Yet in the scheme of things, nearly all re-targeting platforms have been relatively unknown, overly simplistic or out-of-reach for many businesses. This won’t be the case for very much longer.

Google Launches Re-marketing Beta Program on its AdWords Platform
Google’s re-marketing beta test is no secret. While presently offered to a limited number of advertisers, I expect it will be rolled out sometime in 2010. Google’s re-marketing inventory is vast, reaching over 80 percent of global Internet users. And it’s offered through the platform in use by nearly every online marketer–Google AdWords–with its mature user interface and transparent reporting platform. Whereas smaller re-marketing shops offer simplistic pricing and reporting, Google offers the same functionality and settings as traditional content-network campaigns. This includes CPC or CPM bidding, ad scheduling, geo-targeting, device targeting and frequency capping.

Display Ad Space Will Get More Expensive
As more and more advertisers venture into display re-marketing, it stands to reason that online banner ad inventory will become saturated with re-marketing creative. This will have a noticeable effect: higher prices. It is nearly always more profitable to target a previous site visitor than a total stranger, no matter what your industry. Because of this, re-marketing campaigns with their higher CPM bids will tend to beat out contextually targeted ads competing for the same inventory. Advertisers already employing re-marketing will hasten to expand the efficiency of their campaigns thereby increasing the complexity. Those who were content to target all site visitors will start to target those who have completed certain actions on their site. Those that targeted product categories on their site will start to target individual products.

Re-marketing May Provoke Consumer Privacy Attention
The changed advertising landscape won’t go unnoticed. Even the most unaware consumer won’t write it off as coincidence when she abandons her shopping cart and begins noticing ads on several sites featuring the exact product that had previously caught her interest.

You will have to weigh the benefits of exact product re-marketing with the potential consumer push-back to the perceived privacy breach. To further complicate matters, dynamically driven re-marketing creative may also have the technological capability to include personal information. While this might seem to be the holy grail of direct marketing, we can all agree that for many consumers, it represents a crossing of the line. The most developed re-marketing campaigns may be forced to throw some ambiguity into the creative so the unique messaging doesn’t come across as creepy.

E-mail List Without the E-mail
Advertisers will begin to think of their re-marketing lists as akin to e-mail. While you shouldn’t personalize the ad creative to specific users for the privacy implications discussed above, it is helpful to think of your re-marketing lists as an important corporate asset just one level down from your prospect database. Just as you’d draft an e-mail to your prospects and click “send,” you can launch a new ad into your re-marketing campaign and increase your bid for more coverage. For your prospects, the entire Internet is their inbox as your ads are placed onto their favorite websites.

While the privacy implications of re-marketing may get some press, it is actually a way to ensure privacy. As opposed to e-mail, consumers don’t have to give out any identifying information. It could potentially become the inbound marketing channel of choice among consumers. A simple checkbox could replace the e-mail newsletter opt-in form. There is no reason why your re-marketing can’t be so transparent.

Remember That Re-marketing is Supplemental
Keep in mind that even with a substantial upswing in re-marketing, it will likely never be responsible for more than 10 percent of your online advertising returns. This is because you have to initially drive users to your site before you can re-market to them. Given that only a small fraction of your re-marketing audience will return to your site as a result of your efforts, you need to start out with a huge audience. This huge audience is created through more conventional advertising like television, radio and even large-reach paid search campaigns.

Second Chance ROI
Online display advertising is on track to become more relevant for the web user, more expensive, yet more effective for the advertiser and easier to implement once Google publicly releases access to all AdWords advertisers. You’ve already spent loads of money driving tens of thousands of visitors to your website. If your website visitors don’t transact with you immediately, there is still hope. This previously one-off traffic can be coaxed back to your site for a second look and–hopefully–a purchase.

Timothy Seward is CEO of ROI Revolution, an agency specializing in PPC management and Google analytics and website optimization. He can be reached via e-mail at timothy@roirevolution.com.

Feature: Content-Based Advertising

How to Profit From the New Frontier of Internet Advertising. An Excerpt From the Popular Marketing Book Customers Now

By David Szetela

The Future Is Content
Legendary ad man Jay Chiat once described a round of golf as “very fascinating, very addictive and incredibly challenging. You’re never satisfied. It’s kind of like advertising.” Chiat didn’t live to see the advent of search engine marketing, but his observations fit with what search engine marketing is today. Search engine marketing has come close to satisfying its users with its ability to be measured, analyzed and optimized. The growth of SEM certainly shows a continued attraction, as advertisers continuously search for that magic keyword that will drive clicks and revenues.

There is still much more ahead for Internet marketers. Even if you’re a Google AdWords pay-per-click advertiser–one who’s getting spectacular results–there’s another level. It’s very likely that you can increase your profitable sales significantly–by up to 75 to 100 percent–while at the same time creating more customer demand for your products or services. This not-so-well-kept secret comes in the form of learning to mount successful campaigns using a little-understood capability built into Google AdWords, which is advertising on the Google Content Network. It also comes in the form of a new ad exchange that’s making it easier for advertisers to mount and manage campaigns: ContextWeb’s ADSDAQ Exchange.

AdWords is hardly a secret. Campaigns display ads on search results pages, at the top and right side of the page, when a search is performed on Google and on Google search engine partners (like AOL)–collectively known as the “Search Network.” The ads displayed are relevant to the person who typed in the search term.

Less well understood is the fact that, by default, ads also appear on website pages–sites that have chosen to participate in Google’s AdSense program to monetize their content. When a site visitor clicks on an AdSense ad, the advertiser pays for the click, and Google shares some of the click revenue with the site owner. Google calls this network of sites its Content Network.

Advertising on content networks allows advertisers to reach a huge proportion of Internet users–many times the number of people who use search services to find specific sites covering specific topics. Even better, advertisers can reach potential customers before they’re likely to conduct searches–avoiding crowded ad competition on the search pages. But tapping into this huge network requires specific best practices and techniques that aren’t widely known. Those techniques are often counter-intuitive to PPC advertisers who are accustomed to think in terms of ads displayed as the result of search engine searches as the best measure of success.

Many AdWords advertisers have tried advertising on Google’s Content Network, only to watch click costs soar while revenues and profits fail to keep pace. Others have shied away from advertising on the Content Network because they’ve heard that it delivers poor-quality traffic. But that thinking needs to be re-examined. The truth is that Content Network advertisers can get excellent results: better-than-acceptable conversions (sales or leads) that deliver profitable revenue to the bottom line. The key lies in understanding how Content Networks operate, and adopting best practices in controlling ad placement to attract potential high-quality site visitors (prospective customers).

As mentioned, content-based campaigns display ads on the web pages of site owners who participate in a search engine’s ad-serving program. Google has AdSense, while Yahoo has Yahoo Publisher Network. Microsoft will soon roll out a similar program. We will also spend a fair amount of time detailing the strategies and tactics for successfully using ContextWeb’s content based ADSDAQ Exchange.

First let’s take a look behind the scenes. How does Google “decide” which ads should be served? Google’s ad-matching software examines the words (content) on the website’s pages, and then analyzes its ad inventory–PPC ads and associated keywords–and displays ads that best match the content of the site pages. ADSDAQ’s matching software works differently. It matches advertiser-specified categories with pages within its content network, freeing the advertiser from trying to intuitively decide on keywords that describe such pages. The advertiser gets matched with site visitors who are interested in the relevant ads. The potential customer sees ads that relate to the interests that drew them to the site in the first place. Site owners earn revenue that supports their ability to continue to publish valuable content.

Then why the perception problem with content-based advertising performance? The first reason is the “last click attribution” obsession. Advertisers place undue importance on the last click before purchase and that obsession often unfairly credits search engine keywords. Compare it to driving down a busy highway lined with billboards. A billboard for a steak restaurant at the beginning of the trip may start the attraction toward the restaurant. A billboard in the middle may push a customer to want to learn more about its menu. Another one may close the deal in the customer’s mind. The last one may rate a call for a reservation. All the ads are valuable, but the last one gets all the credit.

In the best cases, advertisers have traditionally had to settle for the fact that ad response rates–click-through-rates (CTRs) or the ratio of clicks to impressions–have usually been much lower than those they get from search advertising. Even worse, conversion rates for content advertising, the percentage of content-ad-generated site visitors who buy or submit a lead form, are traditionally lower. There are three main reasons for this difference.

First, since content ads are ancillary to website content, the ads are not actively read as frequently as search ads. At worst, they’re considered to be annoying distractions. Second, the software that matches Google keyword/ad group combinations to website page content is difficult to control–meaning it sometimes does a poor job of putting together ads with related content. Third, by default, search and content campaigns are “lumped together” in the web interface advertisers use to control and manage ad campaigns. Advertisers must take extra steps to separate the two. So the default campaign settings force advertisers to use a common interface to manage and report on the two very different campaign types, making it difficult to see and control what’s working and what’s not.

The net result: Many companies pour money into advertising that, in aggregate, results in relatively poor results–especially in terms of ROI. Some advertisers even conclude PPC simply can’t work for them, never realizing that search advertising may work well for them, but their content advertising is bleeding so much money in click charges that they deem the whole effort is unprofitable. That’s why content campaigns should be run separately from search campaigns. And the truth is that if it is properly understood and managed, content advertising can deliver excellent results. It can be close or equal to the CTRs and conversion rates obtainable via search advertising.

There’s another under-appreciated but significant positive effect of advertising on content networks. Even though a smaller proportion of content network impressions and clicks may turn into sales, those impressions help introduce and reinforce the advertiser’s brand. In effect, content network advertising can increase the number of people who click on search ads, since they’re familiar with the brand name via content ads. Site visitors that arrive via clicking on a content ad may not convert on the first visit, but some come back to the site later and convert.

Smart marketers who employ multiple off-line and online advertising tactics know that the whole effort should be viewed as a “portfolio approach.” In other words, no single tactic should be viewed in isolation of the others. For example, an e-mail campaign may result in a visitor to a site who doesn’t convert on the first visit–but converts later after viewing a content ad that reinforces the positive impression of the original visit.

Unfortunately, few tools exist for detecting this effect and, at least as important, apportioning a value to the pre-conversion actions. It’s not tracked and reported by almost all of the website analytics packages and conversion-tracking software, including the tracking mechanisms used by Google, Yahoo and Microsoft in their PPC systems. It’s one of the secrets of search engine marketing.

The Secrets of Content
Content-based advertising is the future of Internet advertising, as evidenced by Google’s data, which shows advertisers continue to spend on search and contextual advertising and untargeted vendors are seeing a downward trend. According to Google, its content network consists of several hundred thousand sites, whose aggregate site visitors comprise nearly 80 percent of all Internet users in the U.S. The proportion is even higher outside the U.S. For example, Google’s German content network reaches 89 percent of all German Internet users.

The ADSDAQ Exchange launched in 2005. As of May 2008, the ADSDAQ Exchange ranked among the top 20 ad-supported properties, according to comScore Media Metrix, and reached more than 115 million monthly unique visitors each month. To give you some idea of how big that number is, consider that Google (with YouTube and Blogger.com) counted 149 million unique visitors in December 2008, according to comScore. The ADSDAQ Exchange serves impressions from more than 400 advertisers, including nine out of the top 10 marketing organizations, and more than 9,000 publishers.

The infrastructure is also clearly laid out by each company. According to Google’s site:

The technology that drives AdWords contextual advertising comes from Google’s award-winning search and page-ranking technology. Google continually scans the millions of pages from the Content Network to look for relevant matches with your keywords and other campaign data. When we find a match, your ad becomes eligible to run on that page. Google’s extensive web search and linguistic processing technology can decipher the meaning of virtually any Content Network page to ensure we’re showing the most relevant ads. Then, we match ads that are precisely targeted to the content page based on the associated keywords. For example, if someone visits a web page on astronomy, he/she would be served Google AdWords ads for telescopes. Contextual Advertising benefits web users by linking content with relevant products and services. This is great for Google advertisers like you, because you can now reach more prospective customers on more places on the web.

Sounds great, right? You supply the keywords, and Google places your ads on just the pages where your target audience “hangs out,” waiting and eager to visit your website. But in reality, targeting ads to the right site pages requires techniques and best practices that aren’t intuitively obvious to advertisers used to targeting ads to search results pages.

Google links content to products and services. ADSDAQ advertisers target their ads by choosing categories of web pages where they want ads to appear. It has developed and implemented next-generation algorithms that result in connections between content, advertising and users (potential customers.) The system assigns a definition to each web page in the exchange in real time. Then, it matches that definition to a category selected by an advertiser.

For both advertisers and publishers, it’s essential to make the most accurate match. Ad page context is used to identify the most accurate category and derive the most relevant match between web page and advertiser. With content, it is not about a single keyword; it’s about the category of all the keywords on a targeted web page. Let’s illustrate this with the following example, viewed from both sides of the content-based advertising approach:

A new resort in St. Lucia has an international budget that needs to stretch across North America, the EU and Asia. It decides to spend the bulk of the budget on Internet advertising. If it buys the keywords, “St. Lucia,” “Caribbean vacation,” and “tropical resorts,” its ad and link to its website will come up only if those keywords are entered. And the only reason they would be entered is if a potential customer is gathering information for a trip. That customer has already traveled a long way down the sales funnel.

If the St. Lucia resort uses the ADSDAQ approach, it will start by choosing the categories it wants to appear in, not the keywords. If it decides it can generate the highest volume of valuable customers from travel content pages, that category is easy to find and the proper ad pages will be selected. The resort can then show ads on all travel pages including business sites that have travel pages, and even investment advice sites that list timeshares at resorts. The category approach, connecting to relevant ad pages, can catch customers earlier in the sales funnel.

With this approach, the system can learn to categorize automatically with no human management. The algorithms open up billions of pages of ad inventory in highly targeted, niche categories. This guarantees that ads will appear in appropriate context and on brand-safe content that supports the brand message. Valuable customers will share information about key issues, products and services, and they are influenced by many sources of information as well as many categories of information.

Content sources are expanding exponentially. For performance advertisers, getting their offers in front of the right audience allows them to meet their performance metrics.

David Szetela is the CEO and founder of Clix Marketing, an online marketing firm specializing in paid search. He can be reached at david@clixmarketing.com. To order Customers Now, please
visit amazon.com.

April 2010 – Feature: Using PPC to Reach the Long Tail

For Certain Retailers, Leveraging “Tail Terms” Can Be An Effective Driver of Conversion and ROI.

By Matt Lawson

Online retailers often scratch their heads when thinking about how to successfully market their “long-tail” products. They may have thousands of different products in their inventory they’d like to sell via the Internet, but they aren’t sure how to go about it profitably.

The long tail refers to the process of selling a large number of unique items in relatively small quantities to a distributed base of individuals. In other words, a thousand different people buy a thousand different widgets, instead of the traditional mass-marketing concept of a thousand people buying a single style of widget. The Internet–and search engines in particular–have made long-tail strategies more accessible to retailers, with customers using the Internet to search for the unique products they’re looking to buy, and retailers leveraging online transactions to automate sales.

One of the secrets to successful long-tail selling, of course, is paid search marketing–it only makes sense: if customers can’t find your long-tail products, they won’t buy them. But just how to effectively manage a long-tail paid search marketing program is a matter of confusion among many online retailers.

Paid Search Drives the Long Tail
The long tail of paid search consists of the large number of keywords–called “tail terms”–available for purchase via search engines that individually deliver little traffic, but in the aggregate have the potential to be an important source of clicks and conversions. Tail terms are typically keyword phrases that consist of multiple words, which often include specific product names, color and size combinations or other product attributes. Compare, for example, a head term like “rain boots” that is searched on thousands of times per day and delivers a standard click-through rate of two percent to your website, versus a tail term like “size 11 yellow rubber-lined children’s rain boots” that gets far fewer searches, but a much higher click-through rate, because those that do search that term are ready to buy that specific product.

Long-tail proponents say tail terms deliver outstanding marketing ROI. This stems from the fact that tail terms often cost less than popular head terms because they aren’t searched for with the same frequency. Long-tail detractors, on the other hand, claim these terms have limited benefit, can’t be addressed cost-effectively or–even worse–that long-tail strategies can drag down campaign quality scores. Both views are valid, but the truth is, long-tail paid-search marketing–like any other marketing initiative–is only valuable if you base your program on clear business goals, manage it effectively and continually measure the impact to fine-tune future keyword buys.

For some retailers, bidding on and managing a small set of tail-term keywords is the right approach. If you have a limited number of products, operate in a smaller number of markets, or if your primary campaign goals are focused on branding, there may not be many tail terms associated with your offerings. On the other hand, retailers with catalogs that have millions of SKUs or companies with highly seasonal or dynamic inventory may find it very useful to implement a long-tail strategy for generating keywords to associate with their products.

Building a Long-Tail Strategy
Expanding your paid-search marketing program to include hundreds of thousands–or even millions–of tail terms doesn’t happen without cost or effort. To begin, evaluate the data you have available in-house which can be applied to a long-tail campaign. Do you have a product catalog? If so, how clean is the data in that catalog? How many attributes do your products have that could factor into tail terms? Being able to harvest the long tail at scale requires having a large and clean data set for building out new campaigns and keywords. If your company needs to undergo a sizeable data clean-up effort before embarking on a long-tail strategy, you will need to factor this into your costs.

Once you have a clean data set in place, the key to cost effectively implementing a long-tail strategy is automation. Tackling the long tail of search without software is at best challenging and at worst disastrous, depending on the size of your product catalog. Paid-search management software helps marketers automate campaign creation and management through data feeds. Make sure the software you choose allows you not only to upload, format and publish feed-based keyword ads, but also to perform analysis at scale across millions of tail terms on an ongoing basis.

Retailers that decide to take the long-tail plunge can get ahead of the competition by following a few simple strategies:

Clean Up Your Data – When you scale a paid-search program to hundreds of thousands or millions of keywords, it’s not possible to review your ads using human editors. As a result, it’s important to focus on data quality up front. Make sure that data feeds are well structured and that the data is from a reliable source. This will prevent inappropriate words and landing pages from finding their way into campaigns. When you build out your keywords and creative, make sure to perform checks to avoid inserting terms that use special characters or break character limits imposed by the search engines.

Test Everything - Because long-tail terms receive very few clicks, it’s tough to effectively test keywords, creative and landing pages for a single product. To get an accurate picture of whether your tail terms are delivering the ROI you want, scale your tests to thousands of products and terms. For example, if you are testing a creative, try multiple versions of the same ad where you dynamically insert either a price or color across hundreds of campaigns and ad groups. Assign segments for color and price to each of these creatives in your analytics platform, so you can perform cross-campaign analysis of performance.

Bid Wisely – Sparse data in the long tail makes traditional rules-based bidding ineffective. Because individual terms have little click and conversion data history, it’s not possible to accurately estimate a bid based on past performance of the tail term alone. Applying a portfolio approach to bidding allows you to leverage data across related keywords to properly estimate the correct bids for tail terms. Using a bidding platform that supports portfolio-based bidding is critical to success with long-tail strategies. When applying a portfolio approach, watch out for tools that require a learning period. Using test bids to zero in on the right spend levels can be costly and clunky in a long-tail setting, since you are potentially talking about millions of keywords.

Consider Margin and Inventory Data – It’s important to make small tweaks to your tail terms as your inventory shifts. Clearly, when a product is out of stock, it’s no longer appropriate to run paid-search ads for it on Google. Make sure you are able to automatically pause or bid down keyword terms based on the availability of the products that were used to generate the terms. Additionally, if you are able to incorporate product cost or net margin data into conversion statistics, it will result in a more accurate picture of keyword value. You can then leverage this knowledge to improve bids to hit overall ROI targets much more easily.

The long tail is more than just a theory or a concept -it’s a sound marketing strategy that can work to drive increased conversions and improved ROI for many retailers. By following these few simple search marketing tips, you could be well on your way toward tapping into your own long tail of paid search.

Matt Lawson is director of marketing at Marin Software, a leading provider of enterprise-class PPC management applications. He can be reached at mlawson@marinsoftware.com.

March 2010 – Feature: Build an Effective PPC Keyword Database–In Four Steps!

Properly Structured, a Keyword Database–Unlike a Mere Keyword List–Organizes More Keywords and Can Easily Identify Those Most Relevant and Valuable For Any Campaign.

By Larry Kim

Most search marketers are still building pay-per-click campaigns from keyword lists, a practice that isn’t doing their business any favors. Even if you’re a master of Excel, a spreadsheet is an inefficient and outdated way to manage keywords for PPC, leading to time and money wasted.

The keyword database is a totally different approach to PPC keyword research, and has many advantages over a keyword list:

• It’s private and proprietary, unlike lists generated by third-party tools;
• It’s easier to organize and manage than a static spreadsheet, supporting smart relationships among data sets;
• It’s easier to update, encouraging expansion over time so your campaigns can grow;
• It’s actionable, so you don’t just analyze your keywords, you take steps to get better results; and
• It’s collaborative, so multiple members of your team can work simultaneously toward a common goal.

Essentially, a keyword database is a flexible infrastructure that enables you to work with many more keywords, keep them organized and quickly determine which pockets of keywords are most relevant and valuable. It’s basically a ready-made PPC campaign structure.

Though it’s something of a paradigm shift, building a keyword database isn’t unduly difficult, and you’ll find that as your campaigns scale, it’s much faster and easier to keep things running smoothly. Here’s the basic process in four steps.

Step 1: Start Finding Your Keywords
The most important part of a keyword database is, obviously, the keywords themselves. To build a comprehensive, up-to-date database, it’s vital to look at keyword discovery as an ongoing process rather than a one-time event. Ideally, this will entail aggregating keywords from these multiple sources over time:

Public keyword tools – Web-based keyword suggestion tools are most useful when your site is relatively new or when you’re branching into new areas; they can also be helpful for competitive research. These tools, for the most part, show you the popular, high-traffic keywords related to a given topic.

Just remember that overall popularity doesn’t guarantee relevance to your audience, so you’ll need to prove out these suggestions in your campaigns.

Historical site logs - Your website’s server logs are a terrific source of keyword data, and are often underused. These logs contain a record of the real search phrases that people have used to find your site. Combining this private data with public keyword suggestions will give you a much more complete picture of the terminology your visitors and prospective customers are using.

Web analytics - This is where the “up-to-date” part comes in. The keyword reports in your analytics application provide you with a continuous stream of new keywords. Take advantage of those insights! Incorporate these new keywords into your research.

Search query reports - Likewise, stay on top of the search query reports in AdWords Editor. These tell you the actual search queries that have triggered your ads (and they may surprise you).

Pooling these sources will give you a personalized database that is highly relevant to your business–far more so than a purchased keyword list or a static spreadsheet of generic results from a keyword tool. And keeping your research up-to-date with traffic stats (the number of visitors driven to your site by each keyword) and associated goal data (sales and other conversions triggered by each keyword) will allow you to see which keywords and types of keywords really work for you–regardless of what’s most popular according to Google or Wordtracker. Those highly effective keywords are obviously the ones that are going to drive the most value in your pay-per-click campaigns.

Step 2: Group and Organize Your Keywords
Better keyword research is the first step toward more profitable PPC campaigns, but to reap the full benefits of your research, it’s crucial to group and organize those keywords based on semantic relevance. Beyond simply making your life easier, segmenting your database into small, manageable groups of closely related keywords will improve your SEM campaigns in a number of ways:

Better landing pages - It’s easier to write specific, informative web copy around tightly knit keyword groups, and your landing pages will have better chances of ranking high in the SERPS.

Better text ads - Similarly, it’s much easier to write relevant, compelling ad text around close-knit ad groups. Your keyword group structure will translate into your Google AdWords ad groups.

More clicks and conversions - More specific, relevant web pages and ads target a more qualified audience, so they’re more clickable and ultimately result in more sales.

Increased Quality Score - High click-through rates and demonstrated relevance contribute to a higher Quality Score, so you’ll pay less for better ad positions and more qualified impressions.

Especially as your campaigns scale–and as you delve into the long tail–keyword grouping becomes an indispensable tool for PPC management. So how do you actually do it? That’s an article of its own, but here are some quick tips for organizing keywords into a logical taxonomy:

Start with large, top-level groups – Top-level keyword groups for businesses are usually built around a product or service you provide–typically one word and a noun, like “coffee” or “landscaping.”

Segment your top-level groups into narrower subgroups - Second-level groups often include a modifier that specifies the offering in question (e.g., “Colombian coffee”). Continue to segment as needed so your keyword groups are small, targeted and easily manageable.

Finally, you’ll also want to make use of keyword grouping tools when you need a little help (like WordStream’s Free Keyword Grouper). This makes quick work of what would otherwise be a cumbersome manual process.

Once your database is organized into a meaningful structure, everything else you do for PPC–from incorporating new keywords to writing ads to managing bids–will be easier to manage.

Step 3: Discover Negative Keywords and Eliminate Waste
Better keyword research helps you identify opportunities–namely, pockets of related keywords that represent potential profit. But to keep your return on investment from PPC high, you also need to identify waste. Most likely, a significant percentage of your daily AdWords spend is wasted on keywords that match your ads but aren’t really relevant.

Say you’re running a paid search campaign for a computer supply store, and you have an ad set to trigger on “monitor”-related search queries. Using the broad match option is a great way to capture traffic from long-tail keywords you might not think of on your own, like “best price on flat-screen monitors.” But you definitely don’t want your ad to match for irrelevant phrases like “baby monitors” and “hall monitor”–those useless impressions will quickly drag down your click-through rate and Quality Score, driving PPC costs up.

Your budget will go a lot farther–ratcheting up ROI–if you make use of negative keywords. Here are four ways to find negative keywords:

Generic negative keyword lists - Pre-assembled lists of negative keywords are a way to get started on building a list. The downside lies in the term “generic.” Generic negative keywords may not apply to your specific niche. In addition, many potential negative keywords are likely to be missing.

Keyword research - You can find negative keywords while you’re conducting regular keyword research; just keep your eyes open for keyword suggestions that aren’t relevant to your business. For example, in WordStream’s free keyword tool, one of the top keyword suggestions for “monitor” is “heart monitor.”

Search query reports – A third way to find negative keywords is to look at your search query reports in AdWords. This report shows you the actual search queries that are triggering your PPC ads (as well as the match type, number of impressions, number of clicks, CTR and other relevant information). It’s a good idea to comb through these regularly and eliminate any irrelevant keywords from your ad groups. This method is more thorough than the above options, because it’s based on real data from your own PPC account.

Your organic log files - Your own log files are an excellent source of potential negative keywords. These files keep a record of every phrase that drives a visitor from a search engine to your site. There’s one main advantage to this method of negative keyword discovery over search query reports: You can catch negative keywords before they trigger your ads. (And as a best practice, you should eliminate irrelevant keywords from your organic keyword research as well.)

At this point you’ll have a highly organized and streamlined keyword database, which takes care of most of the work entailed in creating high-performance PPC campaigns.

Step 4: Create Strong, Targeted Text Ads
Now that you’ve segmented your database into small, clean, tightly related groups, the next step is to write text ads for each group. Because your ad groups are already highly targeted, it should be relatively easy to write strong, targeted ads.

Here are some tips for writing PPC ad copy that works:

• Include the most value-driving keywords from the group, whenever possible, in the title, text and display URL of the ad. This increases its relevance and clickability;
• Be specific – know which segment of your audience you’re targeting ahead of time. (Again, your keyword group structure should make this simple.);
• Write multiple ads for each ad group for testing purposes, between three and five ads. Google will cycle the ads and you can see which one performs best and then use that ad going forward. Pay attention to what kind of language works with your audience; and
• Be sure to include a call to action so people know what you want them to do. (You’ve heard the line “Don’t make me think,” right?)

In addition, it’s important that your ads are demonstrably relevant to their associated landing pages. Don’t write a targeted ad about a niche product and send visitors to your home page. This too affects your Quality Score.

Maintain Your Gains
Remember, one of the benefits of a keyword database is the ability to grow your campaigns without losing control of your keywords. So once your database and your campaigns are in place, keep monitoring, keep testing and keep tweaking to improve results. And keep discovering keywords! When your customers type something into a search box, they’re revealing their habits and their needs. Listen and learn from them, and put that knowledge back into your campaigns.

Larry Kim is founder and VP of marketing and products at Wordstream, a provider of keyword management solutions for PPC and SEO. He can be reached at lkim@wordstream.com.

January 2010 – Online Insights: Viewpoint

Use Display Ads To Get More Out of Search

If you’re advertising online, you’re probably paying for search clicks that don’t convert and display ads that don’t drive sales. To solve both of these problems, find a way to make your search and display ads work better together.

I’m speaking specifically of search retargeting. Here’s how it works: after users search for a term that’s relevant to your business, they arrive at your site. But many searchers leave before ever converting. Historically, these visitors would have represented wasted clicks–end of story. But with retargeting, advertisers can drop a tracking cookie on the visitor’s computer and use this cookie to follow that visitor across the Internet. Consequently, advertisers can re-ignite the conversation with these former visitors, drawing them back to the advertiser’s site to finally drive a conversion.

This process increases the possibility that a conversion from a previously lost or abandoned click will occur. It also means driving display ad spend toward users who–through their search activity–have declared themselves as being interested in the kinds of things your company sells.

In addition to the ad agencies that offer retargeting services of various kinds, a number of ad networks offer systems with similar functionality. For example, Yahoo’s Smart Ads system dynamically targets ad offers to Yahoo users based on the activities they’ve performed across the entire Yahoo network.

So, for instance, a user who lives in Los Angeles, plays poker in Yahoo games, reads about poker in Yahoo sports and searches for flights to Las Vegas, is quite likely to be more than a casual Las Vegas searcher–he or she is probably a very serious candidate for receiving ads for flights to Sin City.

Yahoo might serve this user ads with special offers on Los Angeles to Las Vegas flights and these ads might appear anywhere on the Yahoo network.

While different vendors offer different flavors of search retargeting, the common thread is clear: web users spend their lives across the entire Internet. To target them best and to make sure advertisers stay engaged with them, advertisers need to maintain conversations with them across as much of the web as possible–through display, search and the many consumer touchpoints that lie in between.

Mark Simon is vice president, industry relations at Didit, a digital ad firm specializing in search marketing and targeted display ads. He can be reached at mark.simon@didit.com.