Fortunately, there are some easy wins. And Adchemy’s here to help you out.

Join us for our webinar: “To Grow or Not to Grow? The Top 5 Opportunities for Online Retail SEM Campaigns in 2012″

Thi Thumasathit, VP of Marketing and New Business at Adchemy, will discuss strategies SEMs can follow to win more customers and increase profitability during 2012, including:

• Fully exploiting all distribution sources
• Capturing more consumers
• Restructuring campaigns to improve relevance

When: Thursday, February 23rd 10pm PST

Register Now!

• Google has released a small business-friendly version of AdWords (AdWords Express), created free telephone support in about 70 countries, launched a Mobile Site Builder to build simple sites, partnered with American Express on a “Get Your Business Online” campaign in 20 countries, and launched click-to-call phone extensions.
• Bing and Yahoo! Search offer “extensive programs to work with local partners”
• Facebook continues to build out new ad units and placements that small businesses have started to take advantage of

Having more SMB advertisers obviously improves Revenue per Search for web-based queries on the major search engines. SMB advertisers, however, are limited by their ability to geo target their paid search campaigns.  The query either needs to have a geography stated explicitly in the query — e.g., “shoes Des Moines” — or the advertiser needs to depend on imperfect geo-targeting based on IP address.  As such, it often doesn’t make sense for a local SMB to bid on a head term like “shoes.”

Mobile changes everything for SMB advertisers.  Geography no longer needs to be queried explicitly — all queries issued from a mobile device that has location services turned on will have a precise geo associated with them.  Geo then becomes an implicit intent instead of an explicit intent — someone searching for “shoes” in Des Moines is probably much more likely to respond to ad from a shoe store in the immediate vicinity.

The result is a win-win-win situation for everyone:  the consumer benefits from a better online experience; SMBs have much larger addressable market; and publishers who are able to infer implicit geographic intents will have more advertisers and higher Revenue per Search or Revenue per Impression.

Every day, more and more queries are issued from a mobile device. As a result, SMBs who are not actively marketing themselves via paid search marketing should start — otherwise, they’ll be missing out on  consumers in their neighborhood who are looking for the exact products or services that they sell.

… And then I started to think about all the ads I play whack-a-mole to avoid on Words with Friends.

While the advent of ad supported content will not (and should not) stop, I would like to offer some advice to all the marketers (retailers especially) out there: maximize spend on mobile search and local search before making significant investments in sponsoring/advertising on mobile content. I hope this is a no-brainer, but eMarketer’s predictions could throw marketers off the trail of truly valuable interactions: those that are rich in expressions of consumer intent.

Whack-a-Mole, Elaborated

When I’m playing Words with Friends (which is more often than I’d like to admit), I don’t care to learn about healthcare, the latest Charlize Theron indie flick, or even Zynga’s other games. What I want to do is play a game. These ad-supported games and content are not offering me anything of value and are not relevant (with one exception which I will reveal later). If I’m like other consumers, these ad dollars are largely wasted. If marketers want to chalk up these ads to building brand and awareness, I guess that’s their prerogative.

However, I conduct a lot of mobile searches too:  using Bing mobile (I like the pretty pictures) or other apps, I’m always looking for something to eat, something to drink, some new music to listen to, or the best deal on a Le Creuset Dutch oven. The restaurants, bars, and retailers (Le Creuset now on sale at Bloomingdale’s!) that can serve me ads during these searches are MUCH more likely to see my business, either online or in-store.

Why? Because ads served at the time of query are more relevant and valuable to me (and consumers in general), which makes them more valuable for the advertiser. These ads are not interruptions in my experience, but a valuable provider of information. These ads help me achieve my objective; they are aligned with my intent.

Get ‘em While They’re Hot

The early adopters in advertising technology usually enjoy a lengthy amount of time where there isn’t much competition, so market share and revenue generated by new channels can be high. With the big search publishers releasing new tools for mobile and local search advertising, NOW is the time to be investing in mobile search advertising to take advantage of lighter competition.

The only exception to my suggestion depends on the answer to this question advertisers should ask themselves: “Is this sponsorship or ad placement relevant to the consumer’s expressed intent?” If the answer is yes, buy away. The best ad placement I’ve seen on my iPhone was a Bing search app ad while playing Words with Friends. The ad was an interactive memory game, which fit my mood and intent to be playing games at the time. The result? I downloaded the Bing app and use it regularly (instead of the Google mobile app).

But does Google really need to look out for Facebook?  Does the rise of social advertising imply the impending decline of paid search advertising? Is it all a zero sum game across different online advertising channels?

To each of these questions, we think the answer is “No.”

Facebook is, indeed, an online advertising juggernaut — it has had terrific user and revenue growth. It’s an extremely sticky application.  And, of course, Facebook knows a lot more about its users than the average web site. Facebook will undoubtedly have a massive IPO in May, and social advertising both on and off Facebook will continue to grow.

Whether or not the rise in Facebook advertising revenue will come at the cost of at Google’s Adwords revenue comes down to one word:  intent.

What’s the typical intent of the average Facebook user? It’s a one-to-many way to stay in touch with friends and family — to see and/or post photos and status updates. For many, it’s also a way to play games like Farmville and Mafia Wars. Or, as Betty White said while hosting Saturday Night Live, “…It sounds like a huge waste of time.”

Staying in touch with friends and family and playing games certainly generates a massive number of page views.  Indeed, those page views represent a massive advertising opportunity.

The value of any online impression, however, is driven by the consumer intent (or lack thereof)associated with that impression. As such, the value of a Facebook impression will never be in the same ballpark as the value of a Google impression — when the consumer is actively searching for something.

Facebook is primarily an opportunity to improve awareness and build brand across a large audience base, and to increase engagement among customers. It’s not (yet) an opportunity to meet consumers who are actively searching and are in-market for a product, service, or information.

The vast majority of Facebook impressions will continue to have a fundamentally different intent than Google impressions.  As such, marketers should grow their social/Facebook advertising in conjunction with growing their paid search advertising, but not as a replacement for paid search advertising.

Intent-based Search

Adchemy’s Thi Thumasathit participated on a panel discussing interest- and intent-based search. The subject matter seemed to be an enigma to many present, but the key take-away (at least from Adchemy’s perspective) was not lost on the audience: focusing on intent beyond keywords – for the search industry as a whole – will lead to growth. Fellow panelist Lori Weiman from The Search Monitor pointed out a Hitwise study that 50% of queries aren’t monetized – a huge opportunity for campaign expansion.

We even got kudos for our demo! Check out the streaming video of the panel and some highlights from the Twitter feed regarding the panel below:

Link to video: http://www.ustream.tv/recorded/19010249

Some of the conference attendees chimed in via Twitter:

The panel had challenges and questions from the crowd, and the panel itself even recognized the challenge: shifting focus away from keywords to “intent” is both an enormous opportunity and major paradigm shift for almost any SEM.

Anything But Search?

Taking the whole conference into account – from panel to panel, and discussion to discussion – it became clear that discussions wouldn’t, couldn’t and shouldn’t be limited to SEM and SEO. The playing field is shifting and considerations like mobile, social, and “apps” are changing how we look at search. As retargeting has blurred the performance rift between search and display, cross-channel attribution will lead to a blurring of lines between job descriptions: today’s SEMs might become more broadly-focused “performance marketers” in the future.

These conversations weren’t a diversion from search, but following the evolution of the industry itself. Aaron Goldman’s “buzz list” on MediaPost is a very accurate portrayal of the focus of discussions, down to the inclusion of whiskey (Bourye).

Among my personal highlights (besides rocking out to an 80′s cover band’s version of Devo’s “Uncontrollable Urge”):

• Marty Weintraub’s keynote “Mining Jewels Hidden Deep In Social Media and Search History” was drinking from the fire hose in terms of information per second. There were many, many tactical gems on how to use available search and social data to inform your advertising campaigns and even community management.
• Aaron Goldman’s panel on “The Perfect Search Engine” really got into the minds of the conference attendees, showing what they want from search engines – both as consumers, and as advertising campaign managers and optimizers.
• As the fill-in host of the “New Search Ad Formats and Technology: Voice Search, Video, Mobile” roundtable, I learned from advertisers like Travelocity and others how to view mobile (it’s a device containing many channels all its own: mobile banners, mobile search, mobile social, etc.).
• Google’s session on mobile was particularly enlightening:
  • “Building 4-screen strategies is the future”
  • 10% of black friday sales we’re driven by mobile searches
  • 34% of people are spending more time on tablets than on TV
  • Finally, the panel on how social media data can influence search results relayed news that has rippled through the industry all week: Google+ activity will influence search rankings.

As search evolves – for consumers, advertisers, and publishers – the conversations at conferences like Search Insider Summit will evolve too. The exciting thing to think is that the ongoing dialogue isn’t separate from the evolution, but part of it!

Certainly, online advertising drives offline sales, and ongoing studies that better measure and quantify this impact will help maximize online advertising dollars.

This study above is great, but it also illustrates how the paid search industry is limiting itself by merely using keywords.  Yes, every coupon could be tracked back to an individual keyword.  But what if that keyword did not have sufficient click or coupon redemption volume to be statistically significant?  Presumably, the coupon redemption data could be aggregated by ad group as well.  But what if many ad groups didn’t have statistically significant data?  Then the data could be aggregated at a campaign level.

The problem is, retailers don’t manage their businesses thinking by keyword, ad group, and campaigns — retailers think in terms of products and categories.  By conforming data collection to keywords, ad groups, and campaigns, retailers may miss important insights that might actually change how they market.  For example, higher “touch and feel” products might require a lower coupon discount to drive people into stores; different types of coupons (e.g., “buy one, get one free” vs. “50% off”) might work better for some product categories versus others.

The question becomes, how do retailers gain this level insight if everything is captured on at the keyword level?

We think the answer lies in understanding the underlying consumer intent of each keyword. Rather than having keywords be self-contained units of marketing, each keyword contains a combination of intents. Intents contained within keywords naturally create relationships and commonalities between keywords.  These relationships become useful tools for organizing keywords (e.g., “all of these keywords are part of our men’s athletic shoe category”).  Moreover, the intents become highways for borrowing data across common keywords.  This borrowing of data can help generate better insights for retailers to manage their businesses.  Not just their keywords. 

eMarketer published another trend piece last week affirming its stance on the stagnation of search. While the focus of the infographic is on the wild growth in video, any SEM will quickly notice the dismal predictions for search advertising:

How is it possible that growth in paid search — where advertisers interact directly with consumers based on active intent — could  slow to a rate lower than Classifieds and directories, or be “lapped” in growth by content placements like Video and Sponsorships?!?

Simply put, complacency with existing methods (and their limitations) have taken its toll on search, and the advertising industry at large seems to expect diminishing returns from a channel they see as tapped-out and mature.

Reality Check: Proving eMarketer Wrong

Even though a bleak picture has been painted, the jig isn’t necessarily up for paid search.  The technology industry has been vocal about where search is headed , proving eMarketer’s estimations could be wrong. A recent article on Forbes.com put it best: “The [search] sector as a whole remains in its infancy”.

Another aspect to consider is that eMarketer assumes the search industry will be static.  On the contrary, we can expect a lot of change from disruptive technology. As mentioned before, new developments in consumer search experience are creating challenges and opportunities for advertisers: Siri as well as mobile devices and apps that can be used to search for food, lodging, entertainment, or the best prices on products using a barcode scanner.

Keyword-based search advertising is limiting enough when you are only considering text queries. Consider the newest (and future) forms of search, and keywords quickly start to become an inappropriate unit of currency. New technology will have to marry data from keyword search campaigns to these new expressions of consumer intent.

Of course, paid search was not left out! Among many other sessions, Adchemy’s own Dan Morrison fought through sickness (think chicken soup, solitary confinement and bed rest, antibiotics, and Emergen-C) to present at the “Tools of the Trade for Paid Search” session on Thursday, November 17^th:

The Tools of the Trade for Paid Search
The competition is fierce in paid search! From small in-house accounts to ones with millions of keywords, it’s the NEW advances in SEM technology that might just make the difference between success and failure. Are there tools you could be using right now to help double your conversions, lower your costs, or save your team hours of time every week? At this panel, top paid search tool vendors will showcase their latest features in bid management, campaign workflow efficiencies, and reveal what the future holds for the industry.

Attendees of the session walked away with an arsenal of tools – both free and premium – that can be used to improve the research, planning, management, and analysis of paid search campaigns. Morrison also took a few moments to speak about the future of search: a focus on consumer intent beyond keywords.

SES Chicago: The Future of Search is Intent

Dan Morrison wasn’t the only person to mention “intent” as the key to SEM at SES Chicago. During the “Future of Search” keynote panel on Thursday morning, ample time was spent on identifying consumer intent, and how advertisers will need to focus on intent, not keywords, as technology, devices and consumer behavior evolves.

Dana Todd, VP of Performance Innovation at Performics, spoke the most about intent, saying that Siri is the most notable – but not only – way in which search is moving away from keywords towards intent: applications like bar code scanners, and social/mobile sites apps like Yelp and Shazam signal consumer intent, and online advertisers will have to evolve to serve relevant ads to these types of search.

More IT investment, more competition and higher CPCs might all sound like bad news to the average online retailer.  I, however, think this is good news for the entire online industry — and especially for the paid search industry.  Why?

Imagine the opposite — imagine a world where online retailers are not making significant IT investment in their online stores. What kind of online world would we live in? More website crashes. More broken site links. More broken shopping carts. More items with out-of-date prices. More “oops, the item you just put in your shopping cart is currently out of stock, please make another selection.”

Basically, we’d have, on average, a significantly worse online user experience.

Bad online retail user experience is not just a minor inconveniences. If it happens again and again, it changes consumer behavior and drives consumers offline rather than online, severely limiting not only the entire ecommerce ecosystem, but the entire paid search ecosystem and the broader online advertising ecosystem as well.

And that would be bad news.

At the end of the day, technology creates economic efficiency.  Retailers invest in online retail IT not just to keep up with the Jones’ or because they are purely altruistic in nature and they “care” about creating a better online user experience.  They know that a better online user experience results in higher conversion, and higher conversion rates allow them to be more competitive, bid higher on keywords and increase SEM budgets.

Investment in technology doesn’t create unnecessary competition and inflation.  Investment in technology helps the digital world achieve its full potential, especially vis-a-vis the offline, non-digital world.

Adchemy is sponsoring a live webcast on Thursday, December 1 at 1 PM ET (10 AM PT) that will explore strategies for growing your SEM campaign in 2012.  Joseph Kerschbaum, Vice President at Clix Marketing, a PPC agency, will be delivering the webcast.

Register Now