Posts Tagged ‘sem’

Back from SMX East …. and a Few Other Things

September 29, 2011

I was at SMX East very briefly. I sandwiched in a 36-hour stint in The Big Apple in between a family mini-vacation in La Jolla (sweet!) and a trip to Chile to work with our development team down there – very nice place, Chile – never been there before. SMX was great as usual, as I got to catch up with some old friends as well as make some new ones. Shout out to Frank Grasso (new friend) and Mark Knowles (old friend) – we had a great time one evening at Ramblas tapas bar in the West Village.

I had the privilege of speaking on two panels with some really great folks, and I think the audience was pretty into it. They asked a lot of thoughtful and sophisticated questions. When I got back, I wrote a piece on Search Engine Land that recaps the two panels. As always I welcome any critique or criticism on these two topics – I always tell folks that I’m passionate about this stuff and I could go on and on for hours talking about it. Look me up, people!

My 2010 Holiday Search Marketing Wishlist

December 14, 2010

The end of the year always brings with it reflection of the good and the bad, the satisfaction of accomplishments and the yearning to do more. I got to thinking about all the great things the search marketing industry has given me, and all the things yet to come…..

Ah, the holiday season. Creative refreshes, keyword expansions, bidding up to capture all those credit card-wielding customers. As yet another action-packed holiday season descends upon us, while we light the menorah again and again, exchange gifts and happily hang delicate decorations on the tree, as we make lists and check them twice, I’m want to reflect on my own wishes for the industry I’ve grown to love over the past decade.

Here is my search marketing wishlist for the holidays this year:

Better SEM Planning Tools – I know, I know. SEM planning is tricky – inventory changes, markets shift, competition escalates, blah blah blah. While there are some crude public tools out there for planning, I wouldn’t want to take any of their data to the bank in Q4. Then again, perhaps the problem lies not in planning tools, but rather in planning cycles. The fact that right now I’m in the middle of the 2010 shopping season and I’m putting together a plan for the 2011 shopping season means that I’ll never get it right. I’ve written in the past (and talk all the time) about how to put processes in place to account for the inherent uncertainty of paid search, but let’s face it, in large companies there is a premium on certainty, a rare commodity in search marketing. Santa, baby, bring me some planning tools!

Actionable Attribution Management – I’ve spent a good deal of time writing about Attribution Management and the related challenges and opportunities. I still believe this is one of the Next Big Things for online marketers and I know that we, as an industry, will figure out how to make it work and integrate it into our marketing workflow. In the meantime, however, I will continue to shout about how we’re still in the dark on attribution management. We don’t even have a hint at the standards and conventions that will allow us to speak a common language when it comes to this up-and-coming marketing discipline, and until we do we’re pretty much just spinning our wheels. Come on, people – take the plunge and let’s get going!

Holiday Bidding Algorithms – Last year was the first holiday season where we used automated bidding algorithms on some of our in-house retail-focused paid search campaigns. Boy, was that ever exciting! We learned a lot about how to (and how not to) build an algorithm that could react to a rapidly-shifting market like Q4 retail, and I think we’re a lot better off this year as a result — but we’ll know much better in a couple of weeks. One of the keys we found, not surprisingly, is that a much shorter time horizon needs to be used in making bidding decisions in a rapidly shifting marketplace. Also, historical (year over year) data can come into play to help predict when marketplace shifts will happen. Above all, bidding automatons, make sure you have methods in place to measure the success of your bidding strategy.

More Bing Traffic – I love the quality of traffic I get in the new Unified Marketplace (Bing + Yahoo!, managed through adCenter). My feeling is that as advertisers get more adept at using adCenter, we’ll get better at optimizing the combined Bing and Yahoo traffic to get the most value out of the Unified Marketplace.

Standards, Standards, Standards – OK, we’ve been doing this search marketing thing for a while now, and we still don’t have any real standards in our industry. Am I the only one who is bothered by that? Big Ups to Google for their adwords certification program, but outside of that it’s still like the wild west out here. On the technical side of the house, the search engines give us API access but there is no formal training, nor is there a blueprint for success on how to use them. Every new large advertiser or tools provider has to reinvent the wheel to figure out how to execute on efficient API management. We could really use an open source or pre-defined set of standards or best practices on how to optimize API calls or data storage for different types of web server or firmware configurations. And what about the marketing side of the house? I’d love to have some consensus around benchmarks for metrics like CTR by position, conversion rates for different kinds of businesses, CTRs and CPCs for brand keywords, etc.

More Innovative Ad Products – I simply adore retargeting and behavioral targeting. But with the rapid ascent of search marketing over the past five or six years, the display advertising industry has taken a back seat, relatively speaking. The fact that inventory supply now generally exceeds advertiser demand hasn’t helped. And now that search marketing has matured so incredibly quickly and competition has reached feeding-frenzy levels, there is a renewed focus on display inventory and how to make it more valuable for advertisers. Ad networks and exchanges have pushed this evolution along by offering CPA and CPC buys, and it helps that more publishers are offering retargeting. So, what’s next? I’ve run into a few companies that are doing some super smart work around automating display optimization at the placement- and creative-level on specific networks. There’s lots of opportunity here, as efficiency makes a big difference. I think the next step will be taking such ideas and optimizing across networks, and soon, hopefully, across search and display.

That should just about cover everything I want this holiday season. Oh, and if somehow the San Diego Chargers can miraculously make the playoffs this year, that’d be just swell. Hey, a guy can wish, can’t he? Happy Holidays!

Next-level Optimization: Measuring Success

November 17, 2010

Measuring the success of our optimization efforts turned out to be harder than any of us initially thought. It occurred to me that since my situation is anything but unique, it might make sense to write about it. Hopefully others have had similar experiences and we can raise awareness on this rather new topic…

You’ve made the case for advanced optimization, implemented loads of slick technology, and deployed across some or all of your paid search programs. Did you do the right thing? Did you make more money? If so, how much more?

To answer the question ‘did I make more money’ implies a baseline. Trouble is, you don’t really have one. What you’re really asking is ‘did I make more money than I would have otherwise’, and it’s hard to tell with paid search, because the market is inherently dynamic, as are the programs we manage in these markets. This makes benchmarking really tough, and scientific testing nearly impossible.

What you need here is a way to (somewhat) objectively measure success, a methodology not only that people can agree upon, but also one where execution is manageable. Let’s look at a few ideas that might work for you, starting from the simplest and moving toward the more complex:

Trending Success Metrics Over Time.

Look at trends in revenue, profit, ROI, whatever matters to you most from week to week, month to month, etc. Look at overall program performance before you started optimizing, and over time as optimization took over. You just might find out that ROI has increased steadily quarter over quarter, for instance. This approach is relatively easy, and works fine in a steady-state environment, but if you’re subject to seasonality or a shifting market it may not work for you. For example, your optimization efforts may look like a home run in a booming economy or a high season, and conversely you might be inclined to run back to your cube and update your resume if you’re trending results in a low season or a rough economy. What if this method doesn’t give you any conclusive results?

Comparing Paid Search to Your Overall Business

If seasonality or macroeconomic trends are clouding your view of campaign performance, try comparing your results to those of your business as a whole. This may give you the baseline you need, particularly if your paid search campaign is in a somewhat mature state. For example, if your company saw ten percent earnings growth and your SEM profit increased by twenty percent over the same period, you may be able to claim ten percent growth attributed to paid search. That’s not bad for a day’s work, assuming the lift in profit is more than you paid for optimization. But what if your paid search program is on a totally different trajectory than your overall business?

Cohort Analysis

If the first two methods don’t work for whatever reason, here’s another way to look at it. You probably have parts of your portfolio that are managed by automated algorithms, and portions that aren’t. Try looking at these parts separately to understand what happened. Select a cohort of keywords that was managed by each method, and analyze what happened over time. You’ll need to account for seasonality, so ideally look at year-over-year comparisons, or if you don’t have that long a timeline, try to normalize for the seasonality with historical data (try to figure out how much your paid search business as a whole changes with the season). Then, look at the performance of each cohort and compare. For example, if you’re managing through an economic downturn and you see a downward trend in cohort A, but cohort B shows a flat trend line, even though you’re not seeing growth in cohort B you may conclude that it’s doing better by comparison, and you can now quantify the ‘growth’ or ‘lift’.

As I hint at above, once you understand your lift or growth from advanced optimization, you will want to calculate your ROI on the optimization effort as a whole. Particularly if you’re in a big company, you should always be able to hold your projects up against any other effort your company could otherwise use the money to pursue. If you can show that you increased profit by a million dollars at, say, a fifty percent ROI, odds are good that your management will be asking you if you can do more optimization projects, thereby eliminating the need for you to rush back to your cube and update that resume.

Again, I think the key here is to find a method that you and your management can agree upon and a process that is manageable. And once you do, you’ll be well served to have the data and analyses in your hip pocket well before anyone comes asking for them.

Next-Level Optimization Part 2: Beyond Paid Search

October 19, 2010

I had to wait on this one until our Q3 earnings release – otherwise it would have gone live yesterday. I’m getting more structure around my thoughts on Next-Level Optimization – here’s how it goes:

How do I know if my media mix is optimized?

If I had another dollar, in which channel would I spend it, and why?

Am I giving search marketing too much credit? Not enough credit?

At SMX East in New York last week there was quite a buzz about attribution management, which I though played right into my column for this month.

Last month we took a look at next-level optimization for paid search, identifying some ways to leverage targeting options and automated algorithms to ensure your paid search campaigns are well optimized. Now its time to take a look outside the friendly confines of paid search programs and see what it takes to up-level your optimization efforts by considering media other than paid search.

Don’t Panic, It’s Organic

First up is the most obvious media channel, paid search’s benevolent brother, organic search. A few months ago I took a look at a framework through which we could better understand the interaction between paid and organic search. In that post we tried to answer the specific question: If I rank #1 organically for my brand term, why should I be buying it through paid search? It turns out this approach applies beyond just brand terms.  There are many ways in which your paid search campaigns can inform your SEO, and vice versa. As an example, we sometimes comb our referral logs for organic search keywords as a source of paid search keyword growth. Conversely, if we see a paid search term driving volume with solid performance, we may choose to build content around that keyword for SEO. Going back to our previous question, you can always test the effect on your SEO of buying a head keyword using the framework we built last time around – the most important thing to remember here is to try to use a common analytics platform on which to build your analyses. Remember that different platforms will often provide very divergent data points, and thus comparing data from disparate platforms will often provide useless if not misleading data.

One Step Beyond

Outside of paid and organic search, there is a whole sub-industry developing as we speak around attribution analysis and management, and media mix modeling. I wrote a column about it several months ago where we looked at a three-phased approach to attribution management. Companies are lining up to try to tackle these issues, but doing so requires a level of integration not easily achieved in the world in which I operate. There is a very fundamental issue that normally gets in the way of doing good work on this front, which is that most companies are unable to track all their media with a common technology platform. More and more websites are beginning to see the importance of this, are taking note and making changes, but with many large companies there is still a significant analytical void to be filled. The fact remains that in order to conduct meaningful analyses, you need good web analytics. By ‘good’ I mean that you should have a single source of truth for all media, built on solid technology (whether in-house or outsourced), with the ability to track all the way up to the impression level (this is normally not available with search, as the engines generally do not support third-party ad serving, but if you can get this at least for display advertising, you’re well ahead of the game).

Be Responsible

As I mentioned in my previous column on attribution management, there are three important phases: business intelligence, statistical modeling, and actionable outcomes. And while I do believe that as a marketer your responsibility is to fully engage in every phase of this process, as someone who has been in search marketing for more than a decade I don’t recommend doing any of this on your own. There are a handful of qualified companies specializing in this business and you can bet there will be many more popping up in the near future. But to pretend that as an above-average marketer you can effectively determine how to assign credit across media channels is absolutely irresponsible. It’s like giving me the keys to a Formula One racecar and saying ‘well, you have a driver’s license, you can figure it out’. Don’t do it. What you should do is research vendors in this space and spend your time making sure you can put the necessary pieces together to make a tight business case internally. Ask vendor candidates for case studies that show lift in profit, revenue, or other important metrics. Get your analytics in shape. Understand your own business better. Only then can you effectively put a plan into place that will drive business success through next-level optimization.

Sell, Sell, Sell

OK, so now you have everything set up for success. Your analytics platform is robust and unified. You’ve RFPed some vendors, made a business case for attribution management, maybe you even have a vendor selected and have a purchase order open. Congratulations! Now you have one more critical step to take, and its time to put your sales hat on. In one large company where I have worked, we developed a very sophisticated attribution model in which we had a high level of confidence. The problem we then faced was that we couldn’t effectively sell it around the organization. There were two main reasons for this. First, the complexity of the model made it difficult for people to understand  – this is serious math, and frankly people aren’t going to get it. Second, and perhaps most significantly, attribution management means taking credit away from one channel and giving it to another. (The scary truth is that in most scenarios we will be taking credit away from search and moving it up the stack to other events such as display impressions or email). This literally means that search (or other) marketers stand to lose credit, and therefore budget, by engaging in next-level attribution management strategies. This will inevitably cause friction and impede your progress.

What’s a marketer to do? As far as selling the complexity of the attribution model, that’s one of the reasons you’ve outsourced the project. Place the burden of proof squarely on the shoulders of the vendor – don’t bear this cross yourself.  Call the engagement a ‘pilot’ if you need to – if it doesn’t work, you can always terminate the relationship, right? As far as the other question – the part where you’re stealing budget from other (or your own) channels, the way to overcome this is to have a higher-level ally or sponsor in your organization who sits on top of all the marketing channels. If you CMO or SVP believes that attribution management will benefit the company, that may be all the air cover you’ll need.

The path to next-level optimization through attribution management is a long and winding road. Take your time pre-selling the concepts to upper management, and focus on finding the right outsource partner. If you can do that, you’ll find that navigating this tricky path isn’t so tough after all.

Optimizing Your Search and Affiliate Marketing Mix

May 3, 2010

The other day I was thinking about all the silly things I’ve heard search marketers say about affiliate marketing:

“We’re losing control of our brand because of our affiliate marketing channel”

“Affiliates are cannibalizing our direct SEM/SEO efforts”

“We’re bidding against our affiliates on keywords and it’s driving up our CPCs”

Nonsense. If this is happening to you, it’s your own fault, not the fault of your affiliate channel. Marketers who think that affiliate marketing and search marketing can’t peacefully co-exist are kidding themselves and need to be stopped. Believe me. As I’m telling you this, I’m a search marketer, not an affiliate marketing manager. At Yahoo!, I have a counterpart in our group that runs the affiliate marketing channel. We maintain very close communication and we are able to cooperate to maximize value to the company by finding the right balance between affiliate and SEM programs.

Protect Your Brand

Search marketers will often say that you shouldn’t run affiliate programs because your brand will be damaged by affiliates. That’s a cop-out. Yes, you should be very concerned about protecting your brand. To do otherwise would be irresponsible. But to suggest that you will lose control of your brand by having other marketers drive sales for you is insulting to those of us who understand the business. To be sure, don’t let these guys run willy nilly with their SEM campaigns. Be smart about it and keep them in check. You control the creative, you control the messaging, you control the offers, and for paid search you control the keyword portfolio and the linking strategy.

Synergy, Not Cannibalization

In our ‘orders’ businesses for example, where we’re bringing people in to subscribe to various paid Yahoo! services, affiliate marketing helps us increase our order volume in a profitable way. In these businesses, we do need to monitor affiliates’ SEM behavior quite closely. We maintain and update our policies on a regular basis.  In some programs we allow affiliates to bid on our brand terms, and in others we prohibit it. Our decisions are driven by whichever route we think will drive the most profit to the company without sacrificing our brand value.

Increase CTR, not CPC

As stated above, direct linking is another tactic that should be managed carefully. As we know, for a given advertiser domain, most search engines will only allow one advertiser to show on a given SRP. So why not maintain a policy that prohibits affiliates from direct linking at all? Because doing so can significantly reduce affiliates’ conversion rates, in turn cutting the order volume they can drive to your business. Exceptions to this rule are the ‘comparison sites’ many affiliates maintain that promote various competitive services. In cases like this, no direct linking is required. Instead, you’ll want to negotiate terms with your affiliate that will favor placement of your offer over those of your competitors. The beauty of this scenario is that when the ‘comparison site’ affiliate is not direct linking to your site, you can essentially get multiple listings on the same SRP, thereby increasing your effective CTR across multiple sites. But what about when affiliates are direct linking? Aren’t you then bidding for the same real estate? In effect, yes. But remember that affiliate marketers are crazy about efficiency, so if they’re out bidding you for a keyword, chances are it’s worth more to them and should perform better for your company.

Policy, Policy, Policy

So what are the best practices for affiliate/SEM policies? As usual, it depends on your business. Try starting with some simple easy-to-manage policies and go from there. Don’t overthink it. Disallow brand terms and direct linking, for example, but be as aggressive as you can on your rate card to attract quality affiliates. Then, if you’re not getting the traction you need with the larger affiliates, selectively tweak your affiliates’ SEM policies as needed.  Keywords and direct links can act as currency in negotiations with affiliates. A word of caution: don’t publicly change your policies or rate card too frequently. Affiliates are human beings (as opposed to keywords), and if you jerk them around by changing policies and rate cards too often they’ll simply go away. You don’t want that.

Outside of policies and rate cards, there are also some situations where affiliate marketing can naturally complement SEM in a synergistic way. In one of our programs, for example, we have an affiliate partner that specializes in buying and optimizing traffic content networks. By contrast, our in-house SEM campaigns are mostly focused on keyword-driven search, so in this case there is no discussion of overlap, cannibalism, or other scary-sounding marketing buzzwords.

A Note On SEO

Many affiliates engage heavily in SEO to drive traffic to the offers they represent. In most cases this is fine. Where you need to be careful is where an affiliate might set up a microsite specifically to drive traffic exclusively to your offer. This can still work, because in many cases it’s going to be better to have an extra algo result on the SRP (see above), but if you’re going to allow this keep in mind a couple of guiding principles. First, you should be doing a better job of SEO than your affiliates, at least on your brand terms. If not, there is some reputation risk here – it doesn’t look good for affiliates to be outranking you in algo results. As well, you should enforce the same brand guidelines you would for paid search. It’s your brand, and it’s your job to protect it. A logical policy in this regard is to insist that all copy (and meta tags) related to your offers are subject to your approval.

So the next time you hear a marketer yammering on about how affiliates are ruining their campaigns, go ahead and set them straight. Tell them Dave from Yahoo! says you should be able to get along just fine with your affiliate brethren, and if you can’t, then you’re not doing a very good job.

Actionable Attribution Analysis: A Three-Phased Approach

March 11, 2010

“Last-click attribution is dead!”

“Media-mix modeling is the key to marketing success!”

“Without an accurate attribution model you’re throwing away your marketing dollars!!”

With SMX West in town last week the halls were echoing with passionate cries about attribution analysis. It seemed as if all topics (other than the Yahoo-Microsoft search deal) had taken a back seat for a moment, and suddenly the most important thing to consider was attribution analysis, specifically whether or not you are giving too much credit to SEM and not enough to other media.

Believe me, I share people’s enthusiasm on the topic. It’s clearly one of the next big online marketing problems to solve. And despite the fact that moving away from last-click attribution toward a more elegant and accurate attribution model can really only serve to divert budget away from SEM and toward other channels, I do think it’s the right thing to do. But after talking to as many people as I could, gathering my own data and soliciting opinions, I’m convinced that we are a still a long way from being any good at this at all.

Currently there appear to be two basic types of approaches, both of which seem to me to be fatally flawed.

One approach I see in the market, offered by various otherwise credible services, has the advertiser entering percentages into boxes on a screen, assigning portions of the conversion value to different marketing channels – 25% for SEM, 35% for display, 15% for email, and so on. As a large advertiser myself, I can safely say that this approach gives someone like me entirely too much credit as a sophisticated marketer. I don’t know anyone who has a good enough grasp on their business and the implications of attribution analysis to make an intelligent decision in this type of situation. No knock on my fellow advertisers, but seriously, this is way out of our league. Even so, a Google representative stated during a panel I was moderating, that they intend only on providing attribution-related data, placing the burden of analysis on the advertiser.

The other approach I see emerging is a black-box math-based approach. This is more likely to be done in-house by large advertisers, using statistical and predictive modeling to simulate different attribution models, and mapping their outcomes to business metrics like profit, revenue or ROI. While I do think there is significant value in doing the hard math and understanding these problems from a statistical point of view, this methodology tends to be short-sighted. I don’t believe there is a one-size-fits-all approach to attribution analysis where you simply dump your marketing data in, and out magically pops an attribution model that maximizes profit, for example. It’s just not that generic of a problem.

It’s easy for me to sit back and criticize the status quo – so why not offer some solutions, you say? Well, here goes: I envision a three-phased approach that takes some elements of the existing practices, then combines and expands upon them to provide a more complete, appropriate solution for each advertiser.

The first phase involves smart people talking to each other. Revolutionary, no? We need an attribution specialist to lead off this effort by conducting a fairly exhaustive analysis of the advertisers’ business and online marketing programs. Starting with business goals and product adoption cycle, to conversion window analysis, on to a channel-by-channel audit of on- and off-line marketing. The purpose of this consulting and analysis is to provide the proper inputs into phase two.

Phase two is the super-math modeling I describe above. With the proper inputs as they relate to an advertiser’s business and its metrics, statistical modeling is needed to predict all possible outcomes and understand which model will best support the advertiser’s business goals.

Finally, phase three makes all of this actionable. We need a way to pluck the wisdom out of phase two and apply it directly to actual media channels the advertiser is running. Ideally we’ll find a way to automate this or at least automate the recommendations, which can then by easily implemented into the media buys themselves.

But before any of us sprint into the world of attribution analysis and media mix modeling, let’s step back and take a long look in the mirror: I don’t know of a way to realistically pull any of this off if an advertiser doesn’t have a common tracking/analytics system for all marketing channels. So before we start hiring expensive analysts, consultants and statisticians, let’s be sure to clean our own houses and get our own data in order. Standardize your analytics and measurement on a single platform so you can compare ‘apples to apples’. Then you can start to focus on the fun stuff.

Bidding Strategies for a Complex SEM Landscape

March 11, 2010

If you’re managing multiple SEM programs across a broad landscape of web assets, as more and more of us are, it’s important to realize that when it comes to managing keywords and their bids, it’s not one-size-fits-all.  In this reality of diverse business goals and revenue models, marketers looking for a singular approach to SEM program management will be sorely disappointed.Bidding Strategies

In the past I’ve talked about the fact that at Yahoo!, we have many different properties (think Yahoo! Personals, Yahoo! Sports, Yahoo! Shopping, etc.), and each of these properties has a business that’s unique in it’s own way. Some properties are supported primarily by display media (Sports, Finance, News, etc.). In others, users can subscribe to services (web hosting, merchant solutions). Yet other properties list products sold by other vendors e.g. Shopping and Travel. Since each of these businesses has a different way of making money, for each property we need a unique way of defining the value that a user can bring to the company. On this topic of customer valuation, I went into much deeper detail a while back.

But what about SEM campaign management? How do you manage different SEM programs for a diverse set of businesses? It turns out that each type of business requires a unique approach to SEM program management, particularly as it relates to keywords, targets, and bidding. Let’s look at the following 3 examples I pulled straight out of the trenches:

Keeping it Simple

For our branding campaign, as I wrote a few months ago, our goal was to deepen engagement with the Yahoo! Brand and Products. We were able to track and measure engagement through a proxy of web events to which we assigned points to define relative value. In executing against this goal, we (with the help of our Agency) managed to a cost per point or cost per value model on a keyword-by-keyword basis. We did this on a fairly manual basis, as the keyword set was finite and manageable, and performance was fairly stable. This is the simplest of examples I can provide from purely a bid management perspective.

The Tail Wagging the Head

In our orders-based businesses, where we’re driving users toward a common conversion point such as a subscription or sale, we (again, with Agency assistance) use a somewhat more complex management strategy that is now gaining traction in the industry, though we’ve been employing it for some time. We try to break up our keyword portfolio into the smallest possible discrete datapoints that we can, while maintaining a sufficient quantity performance data for bidding purposes. For example, a high-volume keyword such as ‘dating’ gets broken down into bits that look like ‘dating on exact match in Chicago during nighttime hours with a value-focused call-to-action ad’, and so on. Bids can then be managed on these micro-units so the campaign can be optimized to a level of efficiency not possible when managing solely at the keyword level.

Kicking It Up a Notch

For our listings properties, where users come in, research products and services then leave, the model is completely different. For one thing, our revenue is mostly earned in-session (as opposed to a 30-day conversion window, for example. To make matters more complex, we have keywords of every type that number in the millions. High volume, seasonal, long tail, you name it. In order to get the most out of these programs, we must deploy multiple management strategies within a single program. For head or high-volume keywords, we can employ automated bid management algorithms to optimize to a desired business metric – revenue, profit, ROI, etc. For other keywords we need to take a more rules-based approach. For example, we may want to take all the keywords that fit a certain profile – ranks on the 2nd page, has above 100% ROI, etc. and perform calculated bid management techniques – bid a percentage of revenue or profit, increase bids by 20%, bid to higher position, etc. As if that weren’t enough to worry about, for seasonal and other reasons, at any given time we have a large number of keywords that aren’t getting any impressions at all. In cases like this we periodically ‘re-activate’ keywords and try to bid them back to profitability once again (it’s assumed that we bid them down to inactivity at some point because they weren’t profitable). This takes a measured, rule-based approach to qualify and bid systematically to ensure the best chance at regaining profitability.

As you can see, as the landscape across which you’re managing SEM campaigns becomes increasingly varied, the more complex and custom your approach to search marketing will need to be. It’s only when you can match your businesses one-to-one with uniquely suitable approaches that you’ll be able to bring your ad spend to a truly optimized level.

Paid and Organic Search: Lift, Cannibalism, or Both?

March 9, 2010

‘Why are we buying our brand keyword when we already rank #1 in the organic results?’ ‘Why are we paying for traffic if we’re already getting it for free??’ It turns out that the question isn’t whether or not you should be buying your brand keywords. The question is how much should you be willing to pay for that ad, and what should it say

For search marketers like me (and probably you), the question of the paid/organic dynamic has been around for years. So why is there such an amazing dearth of good information on this topic? Why isn’t there any kind of industry-accepted framework with which to address the age-old question?

I believe that the reason for this is that the conversation around the interaction between paid and organic search has historically been sorely lacking any good data. As a result, we get stuck talking about opinions and assumptions, and we typically don’t come to any meaningful conclusions. I am grateful that at this point in my career, I am surrounded by savvy marketers who understand how search results pages (SRPs) work. They understand that the SRP is a complex landscape, that each link has its own clickthrough rate (CTR), and that any link’s CTR is affected by the other links with which it shares the SRP. This is the path to meaningful dialogue on the subject, so I encourage everyone to get intimately familiar with the data around the paid/organic dynamic.

So how do we look at the data in a way that can help us understand this phenomenon? First let’s get a few ground rules straight:

  1. What keywords are we really talking about? Those that match exactly with your brand name or branded product name, where there is generally no competition. So if you are the Acme Widget Company we would be talking about keywords like ‘acme’ and potentially ‘acme widget’.
  2. What are we actually trying to compare? Ultimately we want to compare two different conditions: a) a SRP where the organic link for brand kw is ranked #1 with no PPC ad (and no competitors’ ads) present and b) a SRP where the organic link for a brand kw is ranked #1 with a #1 rank PPC ad (and no competitors’ ads)
  3. What phenomena are we trying to measure? In the above cases there are two things that normally happen. I call them cannibalization and lift. ‘Lift’ is the net amount of traffic that is added to the mix by virtue of the PPC ad. Cannibalization is the portion of PPC ad traffic that comes at the expense of the organic link. If you can quantify cannibalization and lift in any situation, you can then begin to think intelligently about what to do.

One thing we need to also acknowledge is the fact that the many variables affecting paid and organic search traffic – search volume, page layout, keyword bids and rankings – prevent us from doing any rigorous scientific testing around the paid/organic dynamic. It’s simply impossible to isolate all the variables necessary to completely understand what’s going on. However, there are some terrific ways that you can at least gather some meaningful data that can be interpreted and analyzed, and from which we can actually draw very useful and actionable conclusions.

Next, let’s agree on a few basic principles:

  1. Internet (and search) traffic patterns move in weekly cycles
  2. Search volume is affected by seasonality, media, and other factors
  3. You’ll want to ‘test’ in a period of minimum volatility (avoid holidays and seasonal peaks and dips if possible)

Now, consider the following approaches to gather the data required to quantify cannibalization and lift:

  1. On/off weekly: Pause your paid ads for one week and then resume. This is the simplest approach and takes the least amount of time. If you have more time, try alternating weeks as long as you need.
  2. On/off daily: For a two week period, alternate pausing and activating your paid ads on consecutive days. Why two weeks? This is the minimum duration required to get both ‘on’ and ‘off’ data for each day of the week.

These are just examples. Use your imagination to design something more elegant if you have more time or budget.

Now What?

Now, you need to gather your data and estimate your lift and cannibalization. The incredibly tricky (and potentially inaccurate) part of this is trying to establish a baseline for organic traffic. Naturally, you will want to use the organic traffic during ‘off’ periods as a baseline, but what about the ‘on’ periods? What would the organic traffic have been without the paid ads present? For this you will need a third data point. Either use averages of organic traffic during ‘off’ periods that bookend an ‘on’ period, or if you have access to data like search volume for a given keyword, you can use this trend to estimate what your organic baseline should be.

The key here is to come up with an approximation for cannibalization and lift. It doesn’t have to be perfect, because you’re going to use this data to determine, based on your business goals, what you should be willing to pay for a click on your PPC ad. Here’s an example:

Let’s use a day’s worth of data, and suppose we determine that our organic baseline traffic is 100 clicks. When we add a PPC ad, that ad provides us with 100 clicks, but when we do so, our total organic+paid total is only 180 clicks. That means that of the 100 PPC clicks we bought, 80 were ‘lift’, and the other 20 were ‘cannibalization’. Then, all other things being equal, you should discount your maximum allowable CPC on your brand keyword by 20% to account for the cannibalization, and adjust your bids accordingly. Make sense?

Now let’s look at the extremes. If your PPC traffic is 100% lift, then you can confidently say that buying your brand terms is absolutely justified, and you have the data to prove it. What, then, if all your PPC traffic is cannibalized organic traffic? If that’s the case, then you had better have an incredibly good reason for paying for the PPC ads. One reason might be that you want to put a differentiated message in front of people, a message that’s not reflected in your organic link. Possible reasons for this might be a brand re-launch or a strategic event like an important product launch or corporate milestone.

This may sound complicated, but I can assure you it’s both do-able and worthwhile. I just completed a study for one of our keywords and I can tell you that I am ecstatic about the results. I can’t wait to share them around the company! Good Luck!

Yahoo Reveals SEM of Re-Brand

November 20, 2009

The good folks at WebProNews made time for me last week at PubCon to talk about our brand re-launch. Good stuff, Mike…

more about “Yahoo Reveals SEM of Re-Brand“, posted with vodpod

 


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