Category Archives: SEM

Friday’s Fodder Folder Clear Out

After almost 2 months of blogging, I’m started to get a system. Usually, when I see items of interest come through my inbox or have interesting conversations, I file them away for a future blog post in a folder called Blog Fodder. Well, the folder is overflowing, and I don’t have time to do full posts, but I did want to pass them along, so I’m cleaning house today.

More Search Research

The Daves (Williams and Berkowitz) and the rest of the gang over at 360i and SearchIgnite released a study looking at the value of multiple clicks on a search ad. This is an interesting indicator of the complexity of the search interaction in a purchase life cycle, something that needs a lot more light shone upon it. I remember Greg Sterling and I talking at one point at a SES session about the messy and twisting nature of a consumer’s online path in a purchase cycle. I’m happy to say that research companies are starting to focus on this Gordian knot (and I’m pretty sure it wasn’t named after me).

ComScore is one of those jumping on board with a recently announced study to look at the influence of online research on offline purchase. The value here is huge, just never quantified that well (or at all) and the ComScore study should be a step in the right direction. I’m hoping to chat with VP James Lamberti more about the study next week. If I’m able, I’ll drop a few tidbits about what they’re looking at.

OMD and Yahoo also released a study looking at this, called the Long and Winding Road. Speaking of Greg Sterling, he’s got a look at the study on his blog, with links to the press release and a few columns. Not sure how publicly available the study is. If you’re interested, perhaps contact your friendly neighborhood Yahoo rep. Fascinating reading!

The Bulls of SEM

Sapna Satagopan from JupiterResearch is bullish on the future of SEM, saying as the number and size of companies moving into search continues to increase, it will drive SEM outsourcing. At first glance, this seems to contradict the findings from the annual SEMPO survey, which indicates that more companies are bringing this in house. Steven Rappaport, a writer who’s currently working on an online advertising field guide for ARF, asked about this in a conversation this week. I explained that the two seeming different viewpoints are two stages in the same cycle. As companies dedicate more attention and budget to search, they do want to gain control in-house, so they are looking for search expertise to bring on board. While these new “directors of search” oversee search activities, they look for experts in specific areas to outsource to. It’s not really efficient for companies to set up an entire search marketing division in-house, and many companies realize this after going down this road for awhile.

Long Tail and other Musings

Cory Treffiletti wrote a column on the Long Tail model of business that has been exploited expertly by Amazon, eMusic, iTunes and the king of long tails, eBay. This is an idea I’ll have to come back to, as it has fascinating implications for retail. But until then, consider, an internet etail model doesn’t have any of the physical limitations of a traditional store. With virtual inventory, provided by direct suppliers, the store, or site, simply acts as the connector. And with expert use of search, the primary connection vehicle, it becomes possible for an online story to carry everything, but with the inventory infinitely segmentable. This brings about the idea of a mega-online shopping site, which is close to what eBay and Amazon have become. Tie this in with smarter shopping search tools and the social networking WOM power of a MySpace, and you’ve got a convergence model that’s mind blowing in its implications.

Tom Hespos takes a stab at a favorite subject of mine, the transference of control over brand messaging from the advertiser to the consumer.

Welcome to the Search Marketing Sweat Shop

First published May 25, 2006 in Mediapost’s Search Insider

In the latest Business Week, buried on page 70, there’s a story about outsourcing in search marketing. The story is titled “Life on the Web’s Factory Floor,” and it’s about the thriving business in assembling search marketing ads.

From the description, it sounds like search marketing is nothing more than a big Scrabble game. You throw a bunch of combinations of words up in the air, see how they land. and cut and paste them into your ads. In fact, in the story a search marketing specialist is defined as someone who “types phrases to drive ad traffic.” One gets the mental image of the proverbial room full of monkeys sitting at typewriters. At least the writer, Burt Helm, called the process “slightly creative.”

R-E-S-P-E-C-T: Find out what it means to SEM…

I admit there are companies, some thriving, who take this sweat-shop approach to search marketing. But every time I see the mainstream press reduce my passion to this elemental level, I die a little bit inside. I’m already having enough trouble explaining what I do for a living. Just this past weekend, I was trying to explain to an importer/exporter the rapid growth in search marketing, and what I did most days between 7 a.m. and 6 p.m. He had no idea the search marketing industry existed, and when I told him it was a $7 billion dollar a year industry (just guessing at where we’ll be this year) I could see the question in his eyes. “How the hell can $7 billion change hands in an industry that doesn’t seem to be based on anything?” I’ve been struggling with this attitude for years now, and had finally thought that I was past it. But in one short weekend, with the help of a two-page story in Business Week, I’m right back where I started.

Perhaps the problem is that most users’ touch point with search seems so simple. I type in words, I see words come back–and not a lot of them, either. Most messages are 15 to 20 words at most. How hard can it be? It’s this prevailing attitude that has made search the bastard child of the online ad space. We get no respect. From the outside, it seems like anyone with an IQ topping 60 could market this way. So agencies launch search divisions. Large companies find people that seem to have no pressing items on their to-do lists and make them the new director of search marketing. Everyone throws their hat in the ever increasing search marketing ring.

HELP, I need somebody (preferably a search marketer)…

As an aside, I always find it enlightening to sit at a table during lunch at a Search Engine Strategies show where I don’t know anyone. As introductions are made around the table, you can bet you’ll flush one of these newly minted search marketers out of the crowd. The story is usually the same–the boss thought it would be good to come to the show and “get up to speed.” They look at you with hapless confusion, shell-shocked with the sheer amount of data to digest. Four days, four tracks crammed with information. That’s well over 100 sessions and 400 individual presentations, all dealing with some nuance of search marketing. Before the show, these people thought they had search pretty much pegged. At best, they thought they’d pick up a hint or two. They come back from the show realizing they’ve just jumped into labyrinth of arcane knowledge and tactical expertise.

I Fall to Pieces…

It’s the sheer volume of minutiae in search marketing that makes it such a daunting proposition. I’ve been immersed in it for over 10 years now and I can tell you, there’s no way one person can stay on top of it. That used to be possible, but it’s not today. Even Danny Sullivan and Chris Sherman can’t keep up, and they work unbelievable hours to try.

Search is advancing on all fronts at once. You’ve got Google, Yahoo and MSN trying to gobble up new online territory at a frightening pace. You’ve got new players like MySpace emerging (for the first time, ComScore has included MySpace in its search share numbers). You’ve got new ways of using search, for broadband, on mobile devices and for finding local advertisers. And on top of that, we’re just starting to understand how, when and why consumers use search. I remember once in high school chemistry a classmate spilled a bunch of mercury on a workbench top. A hundred little globs of quicksilver scattered everywhere, proving impossible to round up and contain. That’s what search is like, multiplied by a factor of 100.

It’s Only Words, and Words Are All I Have…

I suppose when you pick search apart at the single message level, it can look pretty simple compared to other channels. Consider the time required to put together one message for one key phrase, compared to what it takes to put together a television ad.

We know that there’s this whole sexy industry behind television ads, with actors, special effects, huge buys and (sometimes) brilliant brand strategies. Now that’s something to admire. They’re like little tiny movies, and we all love movies. But a search ad is, well, just a few words thrown together. What we forget is that every key phrase is its own campaign, infinitely controllable and measurable. For the big search advertisers, that can mean millions of individual campaigns. We buy customers by the penny, building business click by click in a grueling marketing marathon.

There are a lot of moving parts to each of those campaigns, including page placement, maximum bids, messaging, landing page performance and other conversion factors. We obsess over numbers, fine-tuning each campaign to provide maximum performance–or at least, that’s what search marketing should be. It’s this incredible granularity that makes search such a challenge to execute properly.

Search is not easy. Given the choice, I think it would be far easier to consolidate your marketing strategy into a few television ads that are measured on an ephemeral “brand lift” metric, rather then fragment it into millions of individual campaigns, each measured down to the click.

I realize there’s a paradox here. I know it’s this incredible amount of detail that gives rise to the web factories that Burt Helm talks about in Business Week. There’s a lot of heavy lifting to be done. But don’t discount the entire industry by simplifying it down to a room full of people throwing words together. That’s one rather unfortunate aspect of an incredibly dynamic marketing channel. “Typing phrases to drive ad traffic.” Give me a break!

Search Supercharges Ad Platforms but What’s In It for the User?

Seems like all the innovation lately with the search engines has been in rolling out sophisticated ad targeting platforms. Yahoo’s the latest to blow their horn about their own back end (and I realize that paints an ugly picture).

I’m a search marketer, and I love the advances that are being made in being able to target geographically, demographically and behaviorally, but I can’t help but think, “Who are we targeting?”. While the engines try to woo advertisers with better tools, what good is it doing if their market share is dwindling because they’re not giving the user a reason to use the engine?

I have not seen a significant improvement to the every day search user experience from any of the big 3 in years. One may argue that if you take advantage of search history or other enhancements that have debuted in beta, it offers more value to the searcher. But that does nothing for the vast majority of searches that happen every day on Google, Yahoo and MSN. Nobody has upped the ante. Ask is the only engine I’ve seen that made some significant changes on the interface (more about that later today).

As a search marketer, it’s all about market share. It takes time to target and strategically plan a campaign, and while the new platforms offer some impressive capabilities, they also add time required to manage them. Am I going to use that time to target 11% of the search market, 23%  or 50%? It just makes sense to use your time where it gets you the biggest return.

A word of advice. Worry about getting the users first, then worry about the tools to target them.

Yahoo’s Keyword Selector Tool Broken?

Quick question. Is anybody else getting really strange results out of the Keyword Selector Tool at Yahoo? I just did a search for Los Angeles, and apparently all people are searching for are cars. These were the results I got:

Searches done in April 2006
Count Search Term
 350883  toyota los angeles
 333459  honda los angeles
 280591  bmw los angeles
 279022  chevrolet los angeles
 238133  ford los angeles
 226776  mercedes benz los angeles
 181748  nissan los angeles

Either everyone in Los Angeles is buying a new car, which could be, or the inventory tool needs a complete engine rebuild. Just wondering if anyone can shed a little light on this.

Did a quick check on Google based on keyword popularity and here’s what this tool gave me as the top variations:

los angeles, los angeles hotels, los angeles ca, los angeles california

That seems to make more sense

Tivo Now in the Search Game

This just in: Tivo is going to let viewers search for the advertising content they’re interested in!

Brilliant! Imagine, letting consumers chose to look for product information when they’re actually interested in it. I think this has far reaching implications. Imagine if we could do something similar with websites..some sort of thing where we could search through all the content on the web so if there was a product we were interested in, we could find the right site. We could call it a…search engine!

But seriously, there is one quote from the story that reinforces everything I’ve been saying about search:

Users will be able to search through ad and product information spots ranging in length from 1 to 60 minutes from five different ad categories like finance, travel, and lifestyle.

See the word “search”? That’s the key. Consumer control absolutely requires search. Whether video search is done through Tivo or a search engine (and search engines will win this battle) the act of searching is the important thing. It’s that simple, fundamental concept that will power the entire future of marketing. It’s the connection that makes everything else possible.

Another interesting tidbit was the major brands jumping on this “brand”wagon. It was probably an easy sell, unlike search branding has been. But then, search isn’t nearly as sexy as being able to tap into a new generation of ad zappers.

Relevancy Rules in Sponsored Search Ads

First published May 4, 2006 in Mediapost’s Search Insider

Let me quote some rather startling numbers to you from a recent eye tracking study we did. In the study, we examined where people first looked on a search results page, where they first scanned a listing, and where they eventually clicked.

First of all, we gave participants a number of different scenarios that involved looking to a search engine to help them make a purchase. We used Google, Yahoo and MSN in the study. In all cases, on all 3 engines, the vast majority of people first glanced at the top- sponsored listings. In eye tracking parlance, we call this a fixation, or a momentary pause of the eye. On Yahoo, 84 percent of the first fixations were on the top sponsored listings when they appeared, on Google it was 81 percent, and on MSN it was 87 percent. So, almost nine out of every 10 people start looking at the search results page by at least glancing at the top sponsored listings

The next thing we measured was active scanning. This is where participants started reading a listing. On Google and Yahoo, there was strong correlation with the first fixation point, with 79 percent of the first reading activity on top sponsored for Yahoo, and 71 percent for Google. MSN was another story. While 87 percent of participants first glanced at the top sponsored ads, only 55 percent started reading there. Almost 32 percent of our participants immediately relocated past the sponsored ads.

Finally, we recorded where the eventual clicks happened. In Google’s case, 26 percent of the clicks happened in the top sponsored ads, with Yahoo it was 30 percent, and MSN came in with 17 percent click through on top sponsored.

Here’s what we took from the numbers. On Google, although over 80 percent of searchers started in the top sponsored, only 26 percent found something relevant and compelling enough to click on, and remember, these were commercial, product oriented searches. On Yahoo, 84 percent started in top sponsored, but in Yahoo’s case, about 30 percent stuck around and clicked an ad. And with MSN, something entirely different was going on. It seems that MSN users have a bad case of banner blindness when it comes to top sponsored ads.

Scanning Follows Relevancy

The reason top sponsored ads are effective is because they’re placed in the highest traffic portion of the page. We orient ourselves in the page on the upper left. Our destination is the top organic ad. Top sponsored ads are placed in the middle of the most popular real estate on the SERP. This is shown by the high percentage of fixations that happen in this section.

But our interactions with the SERP are not all about position. We can, very quickly, determine if what’s there is relevant to what we’re looking for. We quickly scan titles to see if the ads presented match our intent. And when I say quickly, I’m talking fractions of a second. We start picking up relevancy without even having to read the listings by determining scent. If the listing has “scent” and it’s a good match, we’ll not only hang around and start scanning the listing, we may even click on it. Otherwise, we do what we intended to do in the first place and skip down to the organic listings. That’s what’s happening on Google and Yahoo. MSN is another story.

The MSN Two-Step

During the study period, MSN was in experimentation mode. It was in the process of dropping Yahoo ads from the top listing and substituting its own advertising, which in most cases wasn’t keyword-driven to the same extent that the Yahoo ads were. This usually meant that the “scent” or relevancy match wasn’t as great. When this happened, we saw almost immediate relocation down to organic results. Users could determine the existence, or in this case, absence of scent in a fraction of a second and relocated down. In effect, it was an example of banner blindness, where they were determining that the top sponsored results weren’t relevant.

The lesson from this for the search engines is that you can’t take position for granted. You have to deliver with relevancy and the greater the relevancy, or at least, the perceived relevancy, the better those top sponsored ads will perform.

Yahoo’s Relevancy Capitulation

Yahoo has learned this over time. In the beginning days of GoTo/Overture/Yahoo, position was determined solely by bidding. When Google came on the scene, it offered a blended approach, where click-through rates also helped determine position. The theory was, the higher the click-through rate, the greater the relevancy.

Yahoo has recently announced integrating click through rates and relevancy into the sponsored positioning algorithm as well. This is the beginning. Soon, message and landing page relevancy will also be factored into the position equation.

When it comes to capturing a searcher’s click, you have to deliver relevancy. It’s not all about position–and this fact will become more true in the future, not less.

Targeting Your Search Campaign: Seeking 42-Year-Old Female In Kalamazoo

First published December 8, 2005 in Mediapost’s Search Insider

Search marketers love granularity in campaign management. Correction: we love the results of granularity. That’s an important distinction. Do search marketers want to spend 98 percent of their remaining time on earth manually tweaking a 50,000-keyphrase campaign? Not me. But we also don’t want to set on the broad match “auto pilot” and let the campaign fly itself. In a marketing channel as measurable as search is, we can’t get the highly optimized success rates we’re looking for unless we roll up our sleeves and get dirty.

So here we sit, awash in spreadsheets and rule-based bid management tools, with metric acronyms (ROI, CPA, ROAS) up to our earlobes, wading through a tsunami of numbers, hoping at the end of it all that there will be a bottom-line result that brings a smile to our client’s face. Some are born to numbers, and some of us have numbers thrust upon us.

Search marketing by the numbers. So, at Chicago’s SES show, it was with interest that I sat in on the session where Jed Nahum from MSN adCenter provided a peek at his company’s new demographic targeting tools. Suddenly, search marketers have a whole new level of complexity to deal with. It’s not enough that we do keyword by keyword management. It’s not enough that we have to watch our competitors’ bids, the time of day, and the day of week. Throw geo-targeting into the mix for good measure. If you’re lucky enough to be included in MSN’s beta, you can now target by age and gender.

As panelist Kevin Lee from Did-It pointed out, if you took full advantage of all the permutations and combinations, you would end up with somewhere around 7,500 possible campaigns, per keyword! The arithmetically challenged amongst us in the audience felt the anxiety pangs in our chest.

It all depends on how you look at it. Numbers like this can be daunting to crunch, if you look at the entire universe. But the whole point of targeting is not to reach everyone; it’s to reach the right person, at the right time. If you start from the potential customer and work backwards, targeting provides a level of power unavailable before. It just depends on your perspective. If you’re looking at the work involved to manage a 50,000-keyphrase campaign, additional targeting options can look like a colossal pain in the butt. If you’re looking at the optimum way to reach that ideal customer, it will be your best friend.

The prerequisite here is getting to know ideal customers, intimately. Know who they are and what their intent is. Know where they live and where they work. Know what they’re looking for when they use a search engine and how they’ll search for it. And most importantly, know what they’re looking for when they end up on your site. If you have firm answers for all these questions, you’ll love the new targeting features that MSN is making available, because they will provide the shortest possible path to your best prospects.

Targeting in action. Kevin Lee added more sage advice: you always want to buy your best clicks first. The eye tracking research undertaken by Did-It, Enquiro and EyeTools showed that top sponsored positions deliver substantially higher visibility and click-throughs than do the side sponsored positions. You’re looking at a visibility multiple of 3X to 4X, and a similar boost in click-throughs. But for competitive words, those positions come at a premium that may be beyond the reach of many advertisers. Now, if you can boost your bids for your carefully selected prime segments through pinpoint targeting, you can gain those top spots for just the right prospects, and then drop out of the top for less desirable segments.

You can’t target everyone… yet. Obviously, MSN can’t deliver targeted search ads to every user of MSN Search. To enable age and gender demographic targeting, users have to volunteer some information about themselves, either through signing up for a Hotmail account, a MSN Passport or some other Microsoft account. Nahum was pushed for what percentage of MSN’s user base this might be. His answer was a coy “larger than you might think.” While the transparency of the answer wasn’t what the audience was looking for, moderator Danny Sullivan made this salient observation: “Look, compared to the targeting you can do through television or almost any other medium, this is a quantum leap forward.” Hard to argue that one.

Get used to it. In the recent full speed game of one-upmanship that the search engines are playing, it won’t be long before Google and Yahoo! have introduced their own targeting tools. This will be the new reality of search marketing. It’s somewhat ironic that a marketing channel that took off because of its self-service simplicity is now becoming one of the most complex media-buying challenges in advertising today. But with complexity comes power, and there may be no channel available to marketers today that’s more powerful than search.

Confessions of an Eye Tracking Junkie

Originally published July 21, 2005 in Mediapost’s Search Insider

You know how fires, the ocean, and computer progress bars are mesmerizing? You can sit for hours, watching the constant motion. Next thing you know, you wake up from the reverie and realize that everybody has abandoned you, assuming you’ve passed into a catatonic state.

After looking at hundreds of eye tracking sessions for our most recent whitepaper, I can add eye tracking results to the list. For someone as obsessed with search user behavior as I am, this was a pure jolt of addiction-inducing visual stimuli. Why did they look there? Why didn’t they click? Are they going to scroll down? Wait for it… wait for it… ahh… they did!

It may not be hang gliding or rock climbing, but for me, this is life on the edge. I know, my wife thinks I’m pathetic too.

48 X 2 X 5 = Search Geek Nirvana.

We had 48 people, with 2 eyes each (Greek mythological creatures weren’t included in this particular sample), work their way through 5 separate scenarios using Google. I apologize to the MSN’s, Yahoo!’s, and other engines of the world, but we had to reduce scope somewhere. Your turn’s coming.

Needless to say, we had a lot of sessions to look at. And not once did it get boring. It was fascinating to watch how people navigated a search page.

A lot of detail came out of the study. The whitepaper sits at about 106 pages. But I can share a few of the interesting ones with you.

Google’s Prime Real Estate: The Golden Triangle By now, most people reading this column have probably heard about Google’s Golden Triangle. It represents the region of the most intense scanning and clicking activity. It starts in the upper left corner in the top sponsored ads and extends down to the top four or five organic results. It ends at the bottom of the results visible without scrolling. The Golden Triangle is seen by 80 to 100 percent of the visitors to the page. By contrast, listings below the fold and the side sponsored ads are seen by only 10 to 50 percent of visitors.

Going Sponsored? Stay on Top Top sponsored ads outperformed side sponsored ads in every category. They enjoyed twice the visibility (80 to 100 percent of participants who saw top sponsored versus 10 to 50 percent who saw side sponsored) and click throughs (almost 12 percent versus 5 percent of all clicks) of the side sponsored ads. And people found what they were looking for. In terms of stated satisfaction with the results found after clicking through to a site, the top sponsored ads performed better than any of the listings on the page.

More on Those Eye Catching Top Ads Few of us go to a search engine looking for paid results. But the fact is, they catch a lot of eyes on our way to the organic results. The more that appear on top of those top organic results, the greater the chance that we’ll be spending at least a few seconds looking there. When both sponsored ads and OneBox results (the news, shopping, or local results that appear above the top organic ads in Google) showed up, 70 percent looked at the top sponsored ads first. In some cases, it was just a split second glance (called a fixation point in the study) and then the person quickly moved down to the organic listings before they started to read the listings. This happened in about 12 percent of the cases. But the fact remains, 58 percent of the participants stuck around in these top listings and spent a few seconds scanning them. So, in many cases, this represents your first chance to intercept a prospect.

Anatomy of a Scan Pattern Across all sessions we analyzed in the study, about 30 percent of searchers started scanning in the top sponsored ads, 15 percent in OneBox results, and 50 percent in top organic results. Remember, top sponsored ads and OneBox results don’t appear for every search. It seems that everyone’s intention is to move down to the organic results, but about 14 percent of the time (on first visits to a search results page) searchers click on either a top sponsored link or OneBox results before they get there.

Search Decisions in the Blink of an Eye We don’t spend a lot of time on a search results page. Participants spent an average of about 6.5 seconds on the results page. In that time, they scanned just under four listings before they clicked on one. In most cases, we scan listings rather than read them, and if we do read, it’s usually only the title.

Me, Myself, and Eye For anyone remotely interested in how people move their way through a search page, eye tracking provides some fascinating and compelling insights. You have a record of every eye movement and split-second stop. In many cases, the participant themselves would be surprised to see the places their eyes stopped on the way to the eventual click through. It provides an unequaled visual record of a search page interaction. But be warned, side effects may include the inability to communicate with co-workers and spouses, a glassy haze over your eyes, increased pulse rates when examining aggregate heat maps, and missed wedding anniversaries. So please, proceed with caution.

Hello, my name is Gord, and I love looking at eye-tracking results.

Search’s Multiplier Effect: The Hidden Value of SEM

First published May 12, 2005 in Mediapost’s Search Insider

Television is toying around with a new pricing model. From now on, you’ll only be charged for the television ads that prompt you to actually take action. If you choose not to visit a place of business or eventually buy something, the advertiser won’t be charged for that ad. If successful in television, the same pricing model will likely be used in all forms of advertising, including newspaper ads, magazine, and radio.

Yeah… right!

One of the paradoxes of search is that the pricing model described above, which is relatively unique to search, has proven to be a blessing and a curse. The idea of paying just for your performing ads and the accountability that it brings has fueled search’s meteoric rise as a marketing channel. Its appeal has been particularly popular with direct marketers, where every single advertising expense is measured against the return it can bring. For these marketers, a pure performance-based pricing model was a gift from on high.

But in adopting this pricing model, search has also done itself a disservice. By not putting any value on the ads not clicked on, search has implied that these ads are worthless. But as more research comes out showing that search’s role in a customer’s buying decision is much more complex and long-term than we thought, it’s beginning to appear that the unclicked search ad could be the bargain of the century. Because search, my friends, does build awareness and those ads do have value.

The Role of Search in the Buying Cycle I’ve talked about where search is typically used by a prospective customer often enough. Research conducted by comScore has shown that potential customers can launch anywhere from two to six related searches in the 12 weeks preceding a purchase. That means two to six interactions with a number of search results pages. Combine that with our own eye-tracking research that shows that the top region of the search results page (referred to in our study as Google’s Golden Triangle) has 100 percent visibility. This includes top sponsored ads and the top three or four organic ads. So, every eyeball for that search will see an ad in this prime real estate. But the advertiser only pays if the ad is clicked. We know that proportionately, only about 15 to 20 percent of the clicks will happen in these top sponsored locations on Google.

So let’s put some real numbers to this and try to get some sense of the value provided. Let’s assume you’re bidding for a term that will get 50,000 searches in a month. You bid enough to capture the top sponsored spot. Your per-click bid price is $1.50. And, we’ll estimate that you capture about 7 percent of all the clicks on the page. One last assumption: Every search does not result in a click-through. So let’s say that 15 percent of the searchers will not find anything on the page worth clicking, and they’ll either relaunch the search or click-through to the second page.

So, in a month, given the above assumptions, you would get 2,975 visitors at a cost of $4,462.50. But you’ve also had your ad seen by 47,025 other people, for free! True, these visitors didn’t click-through to your site… this time. But remember, chances are they’ll be coming back to a search engine and launching a related search at least one more time in the buying process. If your ad comes up again, the reinforced brand recognition might prompt a click-through during this second session.

We Have to Measure the Full Value of Search Search marketers are fond of saying that search is the most measurableof marketing channels, and that’s true, up to a point. I believe one ofthe reasons we don’t give search full value is that we’re not always measuring the right things. How do you measure the value of a split-second glance at a brand name in a search listing? How do you assign a value to the cumulative impact of seeing the same site appear in four or five different searches? I know these things have value, but I’m not sure how to measure it.

We’re very good at measuring the easy conversions. We can track back from a purchase or the submission of a quote request form to see which listing on which engine generated this lead. But we’re not good at measuring subtleties and nuances. It’s difficult to assign values todifferent patterns of site-side user behavior. It requires a conversion-tracking mechanism that extends into every aspect of the business to track offline purchases that are generated by online research activities. And theonline analytics industry is just beginning to grapple with the challenge of getting a more balanced picture of true-visitor value.

The role of search in a customer research session is much more complex than we ever imagined. As we do more research, we’ll get more clarity in regards to how search helps influence buying decisions and the nature of a customer’s cognitive interaction with the search results. As we find these answers,we’ll get better at assigning value to our search advertising, whether the ad is clicked on or not. But until then, recognize that it has a value and enjoy the free ride!

 

Rashtchy’s Golden Search turns Platinum

First published on Feb 3, 2005 in Mediapost’s Search Insider

On November 9, 2004, Piper Jaffray analyst Safa Rashtchy dropped a bombshell on a small handful of people at the New York Ad:Tech show. He doubled his search revenue projections for the next five years. And, he bumped these projections less than two years after they originally came out.

Back then, Rashtchy’s $7 billion by 2007 revenue projection was quoted everywhere. You couldn’t turn around without seeing a reference to these amazing growth predictions. And now, he nonchalantly walked up to the podium and said search revenue in 2007 will be more like $13.5 billion! I was sitting in the audience and my jaw dropped.

But a strange thing happened this time. Nobody seemed to care. In preparing for this column, I scoured the Internet for any mention of Rashtchy’s exciting announcement. I found nothing. While it’s not surprising that the announcement missed the mainstream press, I can’t believe our own industry didn’t pick up on it. I finally had to resort to contacting Rashtchy’s team and getting a copy of his presentation.

In the process, I asked Rashtchy why the announcement didn’t seem to gain attention. His response indicates that the lack of attention means search is now accepted with more credibility: “I think search is now accepted as a big business. You have a $60 billion company on the market doing only search, so people are saying that with these valuations, we expect that you will up your estimates significantly.”

Sorry Rashtchy, Better Late than Never…. I think the readers of this column would be well served to get the high points of Rashtchy’s announcement, so let me share them with you.

First of all, the growth numbers. In March 2003, Rashtchy estimated that worldwide search revenues would hit $7 billion by 2007. Just a few months later he was quoted as saying that these numbers are likely too conservative. With last November’s presentation, he had the opportunity to bump those numbers up.

Rashtchy now feels we’ll not only hit that target, but surpass the 2007 – $7 billion mark this year. Next year, he predicts search revenues to top $10 billion, and then hit $13.5 billion in 2007, $16.2 billion in 2008, $19.8 billion in 2009 and top $23 billion in 2010.

Factors of Growth Rashtchy feels there are a number of revenue drivers fueling the growth: • The increasing use of search by big business

  • A second wave of small business just discovering search
  • The international growth of search
  • Discovery of the branding value of search
  • The growth of contextual search, with local search perhaps poised to take over

 

In addition, he sees four immediate and fundamental drivers of search growth. He collectively refers to them as T.C.P.C.

Traffic – More people doing more searches, especially commercial searches Coverage – Expansion of keyword baskets, monetizing more search terms Price – Increasing prices per click Conversion – As we get better at converting clicks to buyers, advertisers are willing to bid more

Local Search Rashtchy feels that local search could become a significant driver of new search revenue. I know there are mixed opinions about this (I for one agree with Rashtchy on this one and have said so in previous columns), but I think the salient point here is that local search, if successful, dramatically increases the market size for Google and Overture.

It takes search from a global consumer activity and brings it back home. It ties the Internet much closer to our day-to-day shopping activities. It will take a few years for local search to make much of a difference in overall search revenues, but once felt, the impact will be significant.

Search Efficiency – It Still Can’t be Beat In comparing methods for customer acquisition, search still comes out far ahead. Piper Jaffray estimates the average customer acquisition cost for search to be between $7 and $10, compared to $15 and $25 for Yellow Pages, $40 to 80 for e-mail and $60 to 80 for direct mail. Search is growing because it works.

Bottom Line Rashtchy summed up with five conclusions that state the future potential of search in no uncertain terms: – Search is likely to become the most successful marketing method for all businesses

  • Local search is a huge force that could change the dynamics of search for online-only merchants, putting them at a big disadvantage
  • Concepts like broad match could make search an effective soft sell, suggestive advertising mechanism
  • Merchants should focus on customer conversion and extending the customer life cycles
  • Search providers should focus more on merchant conversion rates and offer lower charges for broad match and contextual search. They should also focus heavily on local and international expansion.