Why is 88% of online search dollars spent on paid search when 85% of online audience ignores it?
I have actually never seen those numbers before, but it is very hard to calculate the actual money being spent on SEO and very easy to calculate the amount of dollars being put towards paid search advertising. In my experience, that number seems to be quite a bit low for SEO when you think about the internal resources that go into the design, architecture, content, and meta content for a website, all at least partially designed to drive better positioning in the search engines. Add in all of the tools, consulting, etc that marketers are leveraging, I would imagine that it adds up to a lot more than 12% of spending to drive search results. I think the challenge in comparing those numbers is that paid search is a straight media buy (easily quantifiable) while there's really no media buy in SEO (especially now that Yahoo killed Paid Inclusion).
Now to the next question on the value of paid search relative to the cost. It is well known that only 15-20% of all search clicks go to the paid search results, but there is definitely some nuance in those numbers as well. Over 50% of the queries on the major search engines have no paid results associated because the queries do not have a relevant ad associated. Therefore, on the queries for which advertisers' offers are relevant to a user that number is a lot higher — i.e. paid search ads are a lot more useful to the consumer than that number quoted would indicate. Consumers have been trained to ignore what is not useful to them and most online advertisers have been trained to place media dollars where they see real return (paid search has historically been one of those places).
This is why Google has continued to be attractive to both users and advertisers and is still growing in both core search revenues and core search users. If that balance is ever upset, one or both of those parties will start to defect, but that doesn't seem to be the case yet.
Why is 88% of online search dollars spent on paid search when 85% of online audience ignores it?
Answer to Is it worth using Bing’s Adcenter for paid search, in addition to Google Adwords. Is it true that Adcenter CPC is very high?
With the alliance between Bing/Yahoo and share at ~25%, AdCenter is difficult to ignore as a source of high quality traffic and we have seen some incredibly positive results for our clients since the merger of the two marketplaces. There are a number of things to note when jumping into this marketplace as AdCenter is quite a bit different from AdWords:
1) Distribution of Ads — both AdWords and AdCenter have search networks beyond their O&O where your ads can be distributed. Google O&O is massive so you should still get a large percentage of your traffic from Google.com when opting into the search network. On AdCenter, that’s often not the case so advertisers should be careful to note where their ads are being served out on the network and use distribution controls to drive better performance. Generally, the Bing/Yahoo O&O performs better than Google O&O for search advertisers but the opposite can be said for the networks.
2) CPCs – the question above asks about high CPCs on AdCenter. This is not necessarily the case. When launching campaigns on AdCenter it is important to note that Bing takes a pretty aggressive approach to filtering that sometimes makes it difficult for new advertisers/ads to be served without bidding higher CPCs. Once this threshold is met and it is determined that there is high relevance of keyword-ad-landing page, AdCenter actually has quite a bit more whitespaces with less competition as Google and we have seen many examples where our clients pay 50% of the CPC vs. AdWords on this exact same keyword.
3) Fine Grained Control – There are a number of things that you can do on Google to control the targeting and distribution of your ads that AdCenter is still developing on their end. The most important is ad optimization — Google will optimize all of your ads to the highest performer (by CTR) while AdCenter is just starting to do this with limited distribution at this point. AdWords also enables more keyword negatives and distribution controls which helps manage quality and performance of campaigns a little more tightly.
4) Match Types (especially broad match) – Adwords matches your keywords more broadly than AdCenter when keywords are set to broad match, which if you have time/resources to develop great keyword sets should not matter too much, but if you are looking to get a lot of traffic quickly with a few keywords and use the engines to help discover new ones, that will be a more challenging proposition on AdCenter. Building larger keyword lists set to more restrictive match types like Phrase/Exact will help you meet volume goals on AdCenter more easily.
There are obviously a ton of other differences but I think these are some keys to help you get started. My advice would be not to shy away from this robust and potentially high performing traffic source.
Our answer to How do you set-up and scale Adwords Campaigns for 10000 to 100000 products?
Its do-able with strong tools and strategy, but you have to be incredibly careful when creating campaigns of this magnitude from a set of product data, as there are a number of mistakes that can be made that can irreparably harm the quality score for your AdWords account.
Some of the major challenges that you’ll face:
- Ensuring that your data for building the campaign is of adequate quality to generate good keywords and ads. Product titles are often messy and too specific, leading to keywords that don’t get very much traffic and ads that have to use non-specific default text because of character restrictions. Product categories make very poor keywords because they tend to be very general so running a product specific ad against these terms will affect Quality Score in a negative way
- Massive duplication of keywords — product data is at the individual SKU level and most retailers will have many SKUs that match a specific query, even a particularly specific one like ‘size 6 Jimmy Choo boots’ — if I have 10 different pairs, each in a number of different colors, widths, etc, would all pairs get that keyword? If not, how do I decide?
- Account scalability issues — in the tools mentioned in above responses, 100k products corresponds to 100k ad groups which starts to push account size limits in the major engines and could slow down any changes to these accounts via API or AdWords Editor. Without a good strategy for managing the size of these product driven campaigns it is very easy to run afoul of Google and make it more challenging to do other tasks in your accounts.
- Managing frequent changes to the product data — while it is resource intensive to build this campaign once without proper tools, it is prohibitive to actively manage changes to this data without them. Inaccuracies in pricing and product availability in paid search ads can impact relationships with your customers if they find those ads to be misleading — additionally you can increase your bounce rate which plays heavily into your quality score. To do this right, you need to ensure that you have the ability to update keywords, ads, and landing pages as your product data changes.
All that said, having your search campaigns effectively merchandise your entire product catalog is a winning strategy in search. You just need to be sure that you understand the potential pitfalls, and are leveraging scalable tools to handle the complexities mentioned above (as well as some others…).
Our company, DataPop, deals with these challenges every day via our technology and I’d happy to discuss in more detail if interested.
How do you set-up and scale Adwords Campaigns for 10000 to 100000 products?
Examining adCenter QBR (Quality Score)
We’re back. We have heard from our readers that they would like to see more original content and we are obliging. Moving forward, TWIR will focus primarily on what we know best – Search – and aim to push the Search Marketing conversation forward by examining big questions in the marketplace. As always, thanks for reading.
Understanding adCenter QBR (Quality Score)
With the recent Microsoft – Yahoo! Search alliance, adCenter is now monetizing approximately 20-25% of search share – up from less than 10% pre-merger. While Google AdWords still has a dominant search share, adCenter now presents meaningful source of volume. Understanding and optimizing adCenter performance now presents an opportunity to substantially impact your overall search ROI.
The importance of Quality Score in determining AdWords rank and CPC is well known but for all the blog posts and message board discussion, the actual calculation remains a black box. That said, Google does outline the core components of the QS formula, and, more importantly, exposes QS to advertisers thereby allowing them to measure the effectiveness of their optimization efforts in the context of the AdWords marketplace.
While Microsoft acknowledges that relevance is a factor in determining your ad position, it does not expose a Quality Score or other measure of relevance to advertisers. Anecdotally, we know (or think we know) Quality-Based Ranking (QBR), as it is known in adCenter, is designed to assess the quality and relevance of the ad and landing page to the query. We have heard in conversations that adCenter pays particular mind to the post-click landing page experience in addition to assessing the following:
• Bidded keywords
• Ad copy: Ad titles, text, and display URLs
• User experience
Generally, these seem to be very similar to the principals that determine AdWords QS but we have seen time and again that an equivalent campaign will perform dramatically differently on AdWords vs adCenter.
In Practice
We have observed some interesting trends when comparing our clients’ adCenter vs AdWords performance on campaigns with very similar (if not exact) KW-Ad-Landing Page combinations and bidding strategies. Specifically we have seen similar first page positions and lower CPC s on adCenter even though CTR is (in some cases dramatically) lower than on AdWords. Certainly this could be a function of the dynamics of the marketplaces (AdWords has a much wider advertiser base), search network distribution or both.
It can be incredibly challenging to design a controlled test between adCenter & AdWords to understand how specific optimization techniques impact performance differently. However, structuring an experiment to understand how the respective platforms react to equivalent campaigns and post-launch optimization efforts should provide some interesting directional information on how campaign attributes are judged in the context of the marketplaces.
Check back in the coming week/s as we explore methodologies and structures for experiments to better understand the nuances of managing adCenter campaigns for relevance.
Thanks!
The TWIR Team.
Congrats to our UTR Ticket Winner!
We have a winner in our contest and award our ticket to Under the Radar to Jonathan Rossi for his concise but insightful answer below:
What makes an ad relevant is when it connects and engages with the intended audience. This begs the question: so what actually is meant by *connects* and *engages*?
When communicating a message, be that in product marketing or even politics, one connects with the intended audience when there is a genuine understanding of what your customers (or voters) care about. This will require, of course, learning about your customers so that the ad, amid all the noise and information saturation, conveys a message that demonstrates that you (as the communicator) understand your audience. When there is a connection, there is engagement. This, IMHO, will result in an ad that is relevant to the intended, targeted demographic base.
As we’ve been speaking about on this blog for months, what resonates is what sells, and without an understanding of the intended audience (sometimes and audience of one, like in search) a marketer can’t begin to craft an engaging and relevant message. Congrats, Jonathan and we’ll see you at the conference!
The TWIR Team
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