Microsoft releases search research that says....

ADOTA: " Study Says Stop Sinking $$$ Into Search"

Ah crap, here we go again…
Okay, breathe.

First, if this is the way Microsoft manages the release of search information, no wonder they are a trailing third in the space. It is not that I think these numbers should be hidden, but they need more context. There are a few qualitative points to be made, then we can hit on the quantitative.

First,
“Most of the clicks to a web site came from users who had already visited”

Good. It shows a level awareness. However it does not indicate the propensity to go to the site to make a purchase at the time of intent. I can’t tell you how many times I have had clients insist that they do not need any directional advertising because “consumers already know who we are.” Yet, when we placed a bigger ad in the yellow pages, or improved their placement in search, or bought a listing in IYPs, they suddenly had a boon in “awareness”.

So,lets say you're...Microsoft. For the Office 2007 product, they have a dedicated URL that brings you to the sub-page on Microsoft.com… good move.

So, for a non-branded query for word processor, you can get this paid search ad.
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If you have “Microsoft” in front of the query, you get the same url, with greater relevancy. Different ad. If the SEM knows what they are doing, the messages are targeted to the search query.



But, what if you type in “Microsoft”?  You get the same ad.



But you also get organic listings just below this. Now, taking this article to heart, one would counsel Microsoft to stop bidding on the term “Microsoft”. However, on closer inspection, the SERPs are confusing relative to the Office 2007 product. The organic link is not sales focused and the ability to convert a search is diminished.

This whole argument goes back to a post I did months back about branded keywords. Controlling the user experience greatly increases your chances of a conversion. Simply giving up branded keyword control to organic results is a sure fire way to get the very least benefit possible from search. You can quickly take conversion from the 60% percent of visits and flush it down the drain.

Add to that one question: If 60% of the visits were driven by branded keywords and 40% by others, what do you think the 60% will do if they don’t see your name during the search? Yes, some will simply type the url into the browser. Others will very likely conduct another, broader search and pick up more of your competitors (or just click on one of the competitors in the original search who bought your term). Not being there is foolish.

Reporting like ADOTA’s on studies like these is far too shortsighted.

Like all advertising, we should look for the synergies. Two studies were released recently that speak to this. Our analytics group does regression analysis to be able to attribute the relative influence of online and off line activity. I will never be one to discount the value of the Brand. However, using the Brand as a crutch, and fall back to no search support, is ill-advised. Studies like these need to be reported with more insight and objective analysis. Sure, “Study Says Stop Sinking $$$ Into Search” is a great headline, but it is inaccurate and, frankly irresponsible.

Google, one more step removed from what it was.

To gain a top spot at Google (above the search results), you had to have a minimum quality score. Then, if your bid was high enough, you could be eligible for a top spot. While occasionally frustrating, it stuck to the core Google principle that Quality was the driver.

A Change, mentioned in more detail below, now moves the metric for being in the top spot to a minimum ranking derived from a max bid. The shift is essentially this:

Your rank was derived from your bid and quality score. Your actual CPC was based on the amount you would have to pay to keep your rank just above the next lowest ranked ad. So, as long as your rank is above the next ad down, your actual cost could be less. If you are the top ranked ad, you can bid even more, but your actual CPC should not increase unless another advertiser increases the bid or quality if their ad, thereby causing your ad CPC to go up. If they go high enough, they pass you in the ranking, and your CPC is driven by the next lowest ranked ad.
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In the example (demonstration only, not actual criteria), even though you bid $2.50, your actual cost is only $1.73, the amount needed to keep your rank just above the 2nd ranked ad. The actual CPC is even less than the next three advertisers.
 

Now, that is changing for the top spots. While you will never pay more than your max bid, Google is positioning the CPC calculation to charge you (potentially) significantly more, while justifying it by moving you from the first ad on the right side to the first ad, but on top.

They have a minimum CPC amount to make this happen, but it must be tied to a ranking score. So, now instead of insisting that an ad quality improve before moving to the top, Google is saying just stay where you are. They’ll set a minimum rank and if your ad can achieve that rank at a CPC rate somewhere less than your max bid, they’ll move you and charge you the CPC for a top spot.

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So, in the example, instead of paying $1.73 CPC, they’ll use your quality score, divide it into the minimum ranking (1.75 in this example), and calculate the needed CPC to achieve the ranking. If it is less than your bid, your CPC moves from $1.73 to $2.30 (in this example) and you get moved from the right side to the top of the page.

So, the take away, watch your effective CPC. We do not know the true ranking, or min CPC to achieve the top spot. For some folks this may well be worth the premium to move from top right to top page. For others, you’ll need to adjust bids and work on quality (a never ending challenge anyway).

I suspect that there were two drivers to this: 1) Advertisers’ frustration at not being able to move, and 2) a revenue enhancement opportunity. It is just somewhat disappointing that Google, though stating that it has to be a high quality ad, is compromising on this principle and allowing us to buy our way to the top. That’s capitalism, I guess.

Thanks Tim & Jen for showing this to me...

Search marketing, display ads, brands...and our future

I know this is old news. I’ve said it, many others have said it also. Search and display advertising work together. Search is more than just directional. It is also brand… myopically the purview of display. But it is more than just having a search campaign, and a display campaign. It is important to keep these two coordinated to ensure optimum results.

Recently, two studies were released that lends credence to the interaction of search with the brand(Enqurio), and search and display (Yahoo! / ComScore) in a synergistic lift in results. First, the Yahoo!/ ComScore study on display and search together.

What I find interesting in this study is the disparity between online metrics (lift in pages views) and off-line metrics, lift in sales ($ per purchase or incremental sales).

	Search & Display	Search	Display
Lift in In-Store Purchasers	43%	26%	6%
Lift in Pages Viewed	68%	46%	37%
Lift in $ Per Purchaser: In-Store	83%	26%	11%
Lift in Incremental In-Store Dollars	90%	43%	15%

Display and search collectively did not demonstrate synergistic impact on page views. A 46% lift from search and 37% lift in display, collectively a 68% lift. There is a redundancy in the lift. In other words, some of the page views you received would have come with either search or display alone. Unfortunately, most online marketing analysis stops at this level.

Now take a look at incremental in-store sales; whether measure in $ / purchase, or total dollars spent, there is a synergistic lift. In other words, a lift beyond simply the lift percentage of the two ad types summed. In-store total dollars lift was 43% for search and 15% percent for display when run independently. If these two were simply complementary, we would expect a total dollars spent lift of 58% when run together, (adding the two together). If they were only partially complimentary (some redundancy, as in page views), then we would expect something less than 58%.

But, that is not what happens. In the case of search + display, 43% + 15% = a 90% lift in incremental in-store dollars. This is a classic case of the value of the whole being greater than the sum of it’s parts. The other off-line metrics show similar, though not as strong, synergy between the two.

So, there are two conclusions here:
1)    Where ever possible, measure every effort / campaign all the way to the sale. Stopping short (like page views) does not tell the real story. In this case it short-changed the program, in others, it may exaggerate it’s impact. Get to the sale.
2)    As I have said, search and display work together. SEMs need to learn, understand and partner with display advertising / marketers to optimize the programs.

To provide some sense of why these two things may work together, I turned to the second study. It was done by Enqurio this past July. Simply put, brands appearing in organic and paid listings earned a considerable lift in Brand awareness. The results for branded and non branded terms directionally were the same. I’ll just briefly hit on the non-branded.

“Fuel Efficient Cars” top organic and top paid listing combined helped Honda achieve a 16% lift in un-aided brand awareness (Roughly 50% up to 66%). One would think that Honda should be at the top of everyone’s list in this category, yet they had exceptional improvement with organic and paid top spots in search. Now, before you go and get discouraged thinking you have to get top in both, either one (paid or organic) on it’s own demonstrated very good lift, with paid doing marginally better.

I always say bring it to the sale, or as close as you can. Brand recognition is great, but almost meaningless if it does not encourage purchase. The study showed an 8% lift in intent to purchase with top spot in both organic and paid. This study had to stop at intent, but it is closer, and demonstrates the benefit of search on the brand and sales.

Both studies show that search marketers need to expand. Drop the blinders, embrace search not only for its direct marketing prowess, but also it’s brand building ability. Recognize, learn and leverage the synergy between search and display. Our world has changed, you need to stay ahead of the curve to maintain the value to your company or clients.