Yahoo! Putting the Last Knife in the Auction System

To most Americans, Adam Smith is the pioneer of the economic standard (even though he was a Scot). He was ahead of his time in recommending, on a backdrop of colonial independence that there should be less government intervention in the modern economy; and that a free market system would not only sustain itself, but also provide the best economic return. In other words, a consistence transparency and competitive environment would keep costs in check. A competitive environment stops any one person from demanding too high of a price, and knowing what your competition is willing to charge/pay keeps you competitive. Everything is in balance an equilibrium.

However, for Search Engines, who make there money based largely on Cost per Click - having a high level of transparency isn't profitable. Google makes unbelievable returns because knowing the competitive landscape for sponsored campaigns is difficult at best. Marketers can only really speculate on bid prices (besides that isn't the only factor in Google's algorithm that determines CPC) for certain positions. The result is highly relevant results (I would like to believe this) - as Marketers focus on messaging and landing page content to vie for the best SERP position. However, the one obvious result of all this activity is that the CPC for any one keyword is not as controllable in Google as it is in Yahoo! - you cannot buy a position, you cannot instantly see that a keyword is too costly for you to enter the competitive fray, and you cannot instantly see the competitive opportunities / advantageous points of entry. (But I suppose that is why people hire firms like ours.)

The Yahoo! Panama update has been talked about incessantly. We all knew it was coming down the pipe, and although some of the features I am actually quite excited about (like the innovation of tracking keyword/click assists) - I am least excited about the movement form concrete numbers to a Google type estimate. And yet, this is the first across the board change; meaning that even if you haven't upgraded to the new interface, as of next month you will no longer get the "Top-5 Max Bids","Position" or "Your Cost" columns in the Yahoo! sponsored interface. Instead, you will get ranges and estimates.




What are the Real Implications?

For a lot of sponsored strategists running campaigns in Yahoo!, the best bidding strategy was something called "bidding the gap/Gap Surfing." This was when you could see that there was a gap between first and second position's bids (for example) that made owning the position possible. For example, let's say the top bid was $1.00 and the second bid was $0.10; by bidding $0.99 you could buy the second position for a CPC of $0.11 (because of Yahoo!'s "penny more" rule). With this change, the transparency needed to bid the gap no longer exists. You cannot buy a position any more for the least amount of money. If all you have are estimates, you have to incrementally increase your bid price for best position. What is the result? Overall, the CPC for everybody will go up, as those competitors with the deepest pockets throw more money into the pot for the same market share.

The only person that really benefits here is Yahoo!, as profits will grow.

Whether or not you think this will get more relevant sponsored results in the Yahoo! SERP is a question of whether or not you think the market itself is the best regulator. Most businessmen think that the market does a pretty fine job of regulating itself, but then there always seems to be an ENRON in the midst. However, on the flip side, how often does eBay or Amazon take the number one spot in Google's SERP? That isn't highly relevant either.

The New Concern

Google's keyword tool currently provides ranges, not numbers when helping marketers determine the best keyword to optimize content for or build a sponsored campaign around. The only caveat is that Google doesn't provide a baseline for those range graphs. According to the graphs, "Business" has a slightly higher search volume than "EDI" - unlikely!


As well, we have no idea what number the graph is representational of... is a full graph equal to 1 million searches or 5? Yahoo!, on the other hand provides real numbers - a quantifiable metric to calculate opportunities. In addition, Yahoo! provides real bid costs so you can correlate volume and cost to make the right strategic decision. Now that they are moving to estimates and the "view bids" option will no longer be available - how right will our decisions be tomorrow?

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Life Events Spark Purchase Behaviors

It is an oft understood maxim amongst marketers that the key to effective marketing is having your brand linked to a life event; because for whatever reason, as consumers, we tend to get itchy in our wallets when our lives suddenly change. For whatever reason, over the course of history, we have associated purchases with celebrations, gifts mark the change in relationships, education, personal growth, or even age. For instance, Dell has been very effective at targeting that 18 year old college applicant niche, becoming the brand that is widely associated with given your children a leg up in their post-secondary pursuits. But the ads aren't targeted to the kids, because what college student has money for anything other than beer; the ads are targeted to the parents, whose discretionary income is just beginning to be tapped by their begging child in residence.

According to BIGresearch, certain media channels are more effective at reaching a particular audience across all major product areas. namely, Internet Advertising is particularly influential in major purchases (home, electronics, insurance, & automobiles) during such life stages as getting married, starting college, getting divorced, expecting a child, and retiring.

It is the longer consideration phase purchases that seem to be more highly influenced by Internet Advertising - why? - research. Believe it or not, consumers are actually shifting away from direct competitive shopping to going through the entire decision making process online and either purchasing off of a website, or going to the local store to buy. Marketing today isn't about getting people in the door, marketing today, whether B2C or B2B, is about qualifying leads - pushing/coaching an audience right to the cash register.

So what the implications of this research on the B2B market?

It begs the questions... how much do you know your audience? Are their certain events that spark consideration in your particular product/service offering? Are you messaging in order to resonate with those events? Are you leveraging that behavior pattern to push/coach your audience to the cash register - so to speak?

With one such client, we tested this very scenario of associating keywords with consideration stages and events, changing the ad and landing page messaging to reflect these associations, and keeping the ad visibility and positioning the same. The results were an increase in CTR of nearly 30% and a 47% increase in conversions. However, each page had a unique CTA, and the conversions were lead generations, not completed sales - the consideration phase for the client is about six months so we still have yet to see the actual impact on sales, but the increases are promising.

The Takeaways

1. Prioritize the various events that spark consideration in your product/service
2. Associate and build out your keywords to resonate with these events/behaviors
3. Target your messaging to these events/behaviors
4. Create unique calls to action on unique landing pages
5. Don't try to create one page that has messaging for multiple audience behaviors/considerations - instead, create targeted messaging for each niche that resonates with the audience - it may be a little more work upfront, but eventually those pages will also rank organically for the same keyword-consideration associations, and the leads will roll in.
   

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Impact of Search on Offline Purchases

Having recovered from the Thanksgiving weekend, I am throwing myself back into work... slowly at first, but I should pick up steam in time for my Christmas vacation - winter efficiency is what management calls it (it is its own line item on the year-end financials).

However, as I read throw the litany of emails in my inbox, I noticed a press release for ROI Research's latest study: Quantifying the Offline Impact of Search.

Too often we lament the difficulty in being able to actually draw a correlative link between offline purchases and online search. Instinctively, we know that there exists a connection between Brand and search, and that that relationship must carry over into the offline environment. As well, we know there must be activity that carries forward in those long consideration phases, where repeat searches are a flurry and prospects double up on both online and offline activity. However, there really hasn't been much conclusive evidence to reinforce what we know must be true - why? Honestly, because the Internet allows for a certain threshold of anonymity, one that no good marketer willingly wants to cross, but that makes causal relationships difficult to prove. This is why any research that somehow gets us a little closer to confirming our instincts is very exciting - at least to me (and hopefully to you as well, otherwise, why are you still reading?)

Even though the data is based on the results of a web survey, which at the best of times is a flawed process due to sample bias - you only get responses from those with a vested interest in the results or from either end of the sample spectrum... so angry or so happy that they have to fill out the survey. You never get a real or completely accurate representation of a population when you "ask" people their opinions or actions. Still, this is an inherent flaw in all survey testing, and should in no way undervalue ROI Research's findings as unique and leading edge - why? Because at least they had the foresight to have "historical purchase data appended from the client's customer transactions database."

The Findings

1. In this category, for every $1 dollar spent online, the average search-user spends $2.56 offline. This shows that Search has the ability to influence an incremental 3 times the dollar value of e-commerce transactions by reaching consumers who shop in traditional channels. Interestingly, the factor was even higher for existing client customers with a ratio of 3.37x spent offline vs. online.

2. Frequent searching correlates with higher spending. Those who search up to 10 times annually spend an average of $1,789 online while those who searched 31+ times spent an average of $2,943 online. Similarly in off-line transactions, those who search 10 or fewer times spend an average of $2,219 through retail locations, while those who search 31+ times spend an average of $3,839.

3. Search influences 20-30% of purchases made at retail locations.

4. By indexing the influence on purchase of Search we are able to quantify the amount of money spent as a result of Search. For the client's Online Purchasers, 48% of money spent online and 34% of money spent at retail locations can be attributed to Search. Among general consumers, Search accounts for 49% of online purchases and 42% of retail purchases.

Applications

According to Brand Marketers, paid search is the most effective marketing tactic, and ROI Research's findings show that there is a definite lift in offline purchase behavior from search. But it is important that search resonate and be driven by your target market. Later today (maybe tomorrow), I want to write on the effect of environmental shifts on purchase behavior as it pertains to paid search - there are some interesting new findings here as well. But in the meantime, know that there is a positive correlation between paid search and offline purchasing.

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Usability and Page Momentum

I just finished reading Engagement vs. Recall - Small Eye-Tracking Usability Study, a blog post by Cory Bates about a test he ran comparing a text page to a graphics page. If you have the time, I strongly recommend giving it a read, if only, to reinforce the idea that best practices really only apply to "best practice audiences." In other words, as Cory has said, each page on a website has a unique momentum that should always be considered when designing or redesigning a website.

I've written a few posts about conversion paths and ideal conversion scenarios, always emphasizing that it is key to understand your target first - you don't build a house without first looking at the community, your needs, and the local contractors. What was especially interesting in Cory's post was the confidence level from subjects in the graphical test group - it seems that people respond stronger to images than just words.

Resonating with your target audience should be the primary focus of any online activity; this is the horse that will always pull the revenue cart. Whether that resonance is achieved purely through written content or graphics is a decision that needs to be made with a firm understanding of your unique target audience as well as an understanding of your own websites momentum.

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Widgets for B2B

What is a Widget?

Widgets are applications that can be downloaded onto users' desktops, or inserted into their personal web pages, blogs or social-network profiles.

Users can pull content from a variety of sources - eliminating their need to visit multiple websites to gather information.

Widgets can serve as highly targeted branding and direct marketing tools, even though most programs range from games and jokes to utilities such as search tools, calculators and maps. Moreover, these personalized tools are helping marketers reach an ever growing community of users who want updated information on goods and services they are interested in. But B2B is slow to take up the opportunities, of building brand awareness through indirect "sponsorship" of useful tools that their target market would be interested in having.

Traditional B2B marketing has always involved branded gifts - pens, calculators, calendars; anything to get the business name in the office and periphery of influencers or purchasers. However, online B2B marketers have not readily adopted the inherent opportunities in widgets.

Look to the Consumer Market

Companies are using adverwidgets to enhance users' daily lives. For example, the Acura RDX Traffic Widget on Yahoo! Widgets shows traffic incidents and road construction that can be customized to a users' area. I have my Google homepage set-up with a widget to give me a video feed of last night's Daily Show - not necessarily enhancing my life, but making the daily grind a little more bearable.

Amazon.com offers widgets that turn users' websites into mini-shopping portals, providing shoppers with a more convenient way to comparison shop without having to visit multiple sites.

B2B Opportunities

Why can't widgets be used as a mutant way to linkbait, leveraging shared markets with clients to build brand awareness? Imagine an EDI news ticker on the bottom of your client's website, or something more creative: "EDI Warrior," a game built around the premise of one masked marauder working to create a fail safe world where everybody could communicate, regardless of language and position in the supply chain. (I don't think the game actually exists, but such creativity drove Livevault to hire John Cleese and build leads by 300%.)

Start looking at the brand association and building opportunities of widgets - they may not be a good fit for every company, but a little lateral thinking could make them right for your company and build you a very strong competitive advantage.

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Online Advertising Surpasses $4 Billion

Yesterday, the IAB and PricewaterhouseCooper announced the estimated online advertising revenues for Q3 2006. Overall, the $4.2 billion figure is a 33% gain over last year.

"The consistent growth of online advertising is a clear indication that marketers continue to embrace the true power of Interactive Advertising," said Sheryl Draizen, SVP, General Manager, IAB. "Marketers are experiencing how this medium enhances their ability to target and engage the audience that matters to their brand and then measure its effectiveness in ways no other medium provides."

Q3 marks the single largest revenue producing quarter ever, and puts online advertising revenue on par for its biggest year. Consummer and Business' medium preference is shifting towards the online environment, as traditional collateral and sales processes are becoming less and less effective.

Overall, this growth is following the trend of where consumers are spending their media time, in addition to the unique ability of online advertising to effectively target and monitor ad campaigns, while having direct links to ROI.

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Thank-You

Yesterday I stood before a cenotaph to give thanks in memory to those past, and those present. In such times as these, no matter what your political stance, I do not think that you can ever be unappreciative or ungrateful for all those that have gone into both dark and dangerous places to protect all those in need.

To all of those impacted by war, who have served... thank-you, and be safe.

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Adwords Customer Service

Ordinarily Google is exceptionally good at supporting Adwords advertisers - other than the mild irritation with their prescribed bulk template and the unique keyword row, I have never had a problem with their service. However, the new quality score and budgeting upgrades are leaving a little to be desired.

First, one client of ours was charged 5 times their daily budget on a Friday and due to the spend, the ads were shut down for the remainder of the weekend. Why? Because technical support doesn't work the weekends.

And again, this Saturday a similar event occurred, this time with a different client. As a result, I had to create temporary campaigns (duplicates) to run this weekend until I can get tech support to reconcile their errors. Perhaps I will get them on the phone before they even read my twenty or so emails - I know that some people there will be inundated because they gave me personal emails for contacting them.

Nobody expects perfection in business - it doesn't happen, no matter how hard we strive, but we do expect support while trying to make it a reality.

Business doesn't sleep on the weekend... influencers take their purchasing decisions home, hiding in their office - playing catch-up from the week that didn't quite go as planned - because in a nutshell, that is business in the modern age.

Google is slowly beginning to lapse into a sheltered gluttony from being on top too long. I know they give us warning of upgrades and being locked out of the interface. I also know that errors arise, and even the mighty Google is not infallible. But the fact of the matter is that we are always trying to connect with our customers, always trying to match intent with content, and this means always being accessible. It also means that no matter how much any one business is spending on Adwords, Google has a duty to ensure that the best service is available at all times.

If my target market is working on a Sunday, then I have to work on a Sunday... and in order to be effective, I need all my resources available on a Sunday too.

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Enquiro Eye Tracking White Paper

Enquiro released a new whitepaper today comparing user interactions in MSN, Yahoo! and Google.

Our original study used eye tracking technology to quantify what user interactions with the Google search results page looked like. The results were the "Golden Triangle" image which has been discussed extensively. Of course, because the scope of the original study was restricted to Google, that left one big question: What about the other engines? This new study from Enquiro not only answers that question but attempts to explain some of the differences in search behaviors noticed on Yahoo! and MSN search results pages.

Perhaps the most interesting finding is the effect of percieved relevance on search behavior, particularly in the interaction with sponsored listings. However, the whitepaper also covers:

• How We Scan a Listing
• Semantic Mapping
• Information Scent
• Thin Slicing
• Banner Blindness
• Growth of Navigational Search
• Impact of Bolded Search Queries and Icons
• Perceived Relevancy
• Golden Section Theory
• Portal Entry Success
• Interactions with Top Sponsored
• Interactions with Side Sponsored
• Interactions with Top Organic
• Interactions with Bottom Organic
• Interactions with Vertical Results

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Google's View of a Copyright and Robots

Google has taken a firm stance today against the proposed changes to the Australia's copyright laws that could allow for legal action against search engines for caching and indexing.

"Given the vast size of the Internet, it is impossible for a search engine to contact personally each owner of a web page to determine whether the owner desires its web page to be searched, indexed or cached," Google said today.

However, this debate is not new - currently, Google is already in a legal dispute with Agence France-Presse, who have complained that the Internet giant had used their material without permission or compensation - and how many legal actions are being filed in back rooms after the YouTube merger (according to Andy Beal, the threat is not immenint, it is certain)?

Google is forever at the beating end of the copyright stick - more so it seems than any other search engine, but you can chalk that up entirely to the fact that when Google is mentioned ears start to prick up - that and the fact that Google shares are four times the trading value of their nearest competitor. But I do not want to paint them out as being the poor "stepchild" and play out the Google maxim of "don't shoot the messenger." However, who is inevitably responsible for this failure to recognize original content?

It seems to me like everybody wants to be in the search engines, my entire industry is built around trying to satisfy that need, then how can the search engine be culpable for making copywritten material accessible. They aren't using it, they aren't accessing (really); they are just making it easier for people to see it and access it.

Isn't it the responsibility of the provider to make sure they have the proper measures in place to make sure these type of "invasions" do not happen; whether that be a robots.txt file or some other measure. Rather than look at like Google is the thief and the publisher just happened to accidentally leave his/her keys in the ignition; think of it like Google as the road. Sure the thief/user couldn't have stolen the car without a road to drive on, or the keys - but surely the road is no more to blame than the dimwitted owner.

I think Google has actually taken a good step in being proactive and opening up some used-to-be difficult to manage communication channels with its Digital Millennium Copyright Act and its revisions to Webmaster Central - teaching publishers how to protect content effectively. Maybe they could be more proactive and help to guide legislation that could possibly work and make it easier for publishers to attack infringing users without crossing that anonymity threshold that I so strongly defend when I am surfing the Internet.

Without a doubt, Australia's new legislation has not been designed to work at first pass, but don't think for a second that this doesn't mean that legislation is needed in the near future, and that legislation is coming. Almost every countries copyright acts are outdated and do not consider the transmission of information via the Internet - this will change; however, in the interim, learn how to protect your content from the threat of copyright infringement. It is far better to spend money proactively and today, then to fight a long and oft unsuccessful lawsuit for years to come.

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Changes to AdSense Network Coming

Yesterday, the Inside AdWords blog announced that Google will be "improv[ing] the quality of [its] users' experience when they visit an advertiser's landing page" by enforcing the same Quality Score for Adwords into contextually-targeted ads.

Andrew C., product marketing manager for Ads Quality initiatives says, " First, we'll begin incorporating landing page quality into the Quality Score for your contextually-targeted ads, using the same evaluation process as we do for ads showing on Google.com and the search network. Advertisers who may be providing a poor experience on their site will notice that their traffic across the content network decreases as a result of this change. Second, we're improving our algorithm for evaluating landing page quality and incorporating landing page content retrieved by the AdWords system."

The goal is to create a stronger user experience, not only with the ads themselves, but once the user clicks through to the website as well, because, obviously, if users have a rewarding experience then they are more likely to click on contextual ads in later instances as well.

However, it is important to acknowledge that "while one's landing page quality is directly correlated with the minimum bid required for one's ads to run, it does not affect your ads position (or 'rank', as it is often referred to) at all. However, since there is no minimum bid requirement for contextually-targeted ads, low quality landing pages will result in the need to bid higher to compete in the auction, which could also impact your position on pages in the network."

In the B2B market, it is now more important than ever to ensure that landing pages our built for the specific needs of your target market, that the content is specific and engaging, and that the conversion path is clearly laid out to create the best user experience. There is no cookie cutter way to create the perfect landing page, not for the search engines or for users; however, if you have to pick one audience to optimize your pages for - I'd go for the user and not the engine.

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Never One to Follow the Standard Path

Google is expected to announce today that it will be running a test for some of its major advertisers to supply ads for up to 50 American Newspapers (NY Times, Washington Post, and Chicago Tribune to name a few) - expect this to move forward for all advertisers in the very near future.

Far be it for Google to follow the traditional pathway... instead, opting to take their very successful ad strategies offline to try and resurrect the dying newspaper industry. The same industry that is avidly trying to scale back content for every revenue generating/advertising opportunity possible.

The program, which Google is expected to formally announce today, will mark Google's first real foray into the sale and placement of advertising into traditional print mediums - they have already successfully implemented radio ads.

The system will work similarly to Google's Ad Sense that sells advertising space on thousands of Web sites via an online auction system. Small businesses then pay for these ads normally in the tens of dollars rather than the tens of thousands, which begs the question of content. Is Google just taking over the classifieds?

Not really, imagine relevant "Google ads" dynamically generated and placed within article frames. For instance, a small text ad for "Forensic Accountants" in an article about Enron sentences being handed out. It is already happening in the online side of many newspapers, it only seems like an obvious progression to put it into the actual print medium.

Tracking conversions may prove to be a real problem; instead, this should be looked at as a branding exercise with some real demographic targeting capabilities. In other words, a way for smaller businesses to target tech influencers for example, in select urban locations without having to spend those massive capital costs associated with ad space on B4 of the Tribune (carrying costs of thousands/day).

As well, there will be no CPC - it has to be CPM (traditional model), but it may just be the lifeline the newspaper industry needs to continue on in the new millennium. Besides, the Times already implemented photos instead of those line pictures; they even brought in some color to select bylines....

It only makes sense that if newspapers want to recapture the audience that they have lost to online content generators that they should resolve themselves to look and feel like those particular competitors.


News readers have changed their behaviour with the onset of the Internet, they scan, the fixate on anchor points, and they are blind to non-relevant ads - perhaps we can see the new Citizen Cane saying "Googlebud" instead in the remake..... But honestly, the impact is not that consequential, so long as Doonesbury is still on D12, I'm happy.

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Targeting Qualified Leads

I was reading Brian Carroll's blog posts today, he always provides some very useful insight into B2B lead generation.

Today his post was a commentary on Mac McIntosh's (covering his bases as both a Scotsman and Irishman) October 30th article for Multichannel Merchant, "Targeting Your B2B Lead Generation" - if you haven't read the article, do, and quickly implement its recommendations as fast as you can. McIntoshes article isn't revolutionary, but it does hammer home how customer centrism needs to be an integral part of any businesses core philosophy, and how understanding your current customer can help you to define the opportunities for and needs of future customers. - It may not be rocket science, but oddly enough, it isn't universally applied.

Why not?

Maybe B2B marketers spend too much time forecasting and thinking days out to bring business decisions back to what they already know to be true. In other words, your best resource for information about growing your customer base and increasing sales is your current customer base. Find out what makes them unique and what makes your product/service especially unique at satisfying their needs - then leverage that information. You will probably find that customers have more in common with each other at their root, and that it is more a concern of growing your market share and perception. After all, every one of your prospects should have something in common that can always define them as a particular market segment - the need for your service/product.

McIntosh's Insight

In McIntosh's article he talks about using geography to target leads. Marketers have always done this, sending out mailers to specific zip codes, pricing based on shipping routes, etc, but very few bother to apply this rule to online marketing. Too often we confuse trying to build awareness and increase market reach with supplying sales with real and qualified leads - that's why most B2B marketers never explore the value of geo-targeted sponsored campaigns.

Geo-Targeted Campaigns

Every search engine, well most of them anyways, has the ability to geo-target through its sponsored search interface, but very few marketers make use of it. Consider the impact of being able to target messaging and content by regional qualifiers, without having to limit your search volume potential by bidding on a query string with a city or state in the keyphrase. In other words, why bid on "Chicago EDI Consultant"? How often does a prospect actually search with a regional qualifier - not often. You can capture more prospects by bidding on "EDI Consultant" and establishing your regional parameters to the metropolitan Chicago area. In fact, if you do a little homework up front, you can use you current sponsored campaign to target within a few blocks radius.

(Ever notice how similar companies tend to be located in the same industrial park, or how similar manufacturers are all within the same region. Vicinity to steel and rubber manufacturing made Detroit the automotive city - so why not do some homework and target your sponsored campaign to select regions to maximize the return and qualify your leads.)

What if you are trying to land one particular prospect? What if you dream of landing that big whale? You can utilize geo-targeting and have your ads appear only for the area of that prospect's corporate office - for a wider and broader variety of keywords - if you only pay for clicks, isn't it better to segment your market prior to that click?

Sponsored search advertising should always be about getting the message to the right people in as much as it is about getting the right message out there.

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