Look out, Google?

Daniel Frankel of PaidContent.org recently noted that, during Q4 of 2011, Facebook’s share of the overall online advertising market was 2.7 percent, and, during 2012, its share might rise to 5 percent.  “Look out, Google,” Mr. Frankel warns.

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.

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Search Insider Summit Recap: The Future of Advertising from 9,000 Feet

During the first week in December, a hundred-or-so digital ad industry leaders climbed their way to Park City, Utah for MediaPost’s Search Insider Summit to discuss strategies and tactics for search engine marketing and optimization, and the future in store for search. Upon arrival, it was hard to tell if attendees needed to acclimate to the inflow of information, the cocktail receptions, or the altitude -- probably a little of each.

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:

  • @EvanHovorkaEvan Hovorka: @Adchemy does a topshelf demo for anyone like me that needed vissuals to see this strategy in action. #mpsis
  • @ioninteractive ion interactive: Excellent advice RT @ion_poodle #mpsiscraft keywords by aligning advertisers intent with consumers intent @adchemy
  • @groupmsearch GroupM Search: ”Intent based search marketing = focusing on underlying intent instead of indiv. keywords for more manageable/scalable campaigns. #mpsis

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!

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Which Intents Drive In-Store Sales?

Last week, Laurie Sullivan wrote about a 2 year study that has found that for every $1 of ecommerce revenue from paid search ads, marketers generate another $6 of in-store revenue.  The study attributed in-store sales to individual keywords by presenting users with an in-store coupon that could be tracked back to the bidded keyword.

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.  ;)

Posted in Abstraction Layer, Keyword Complexity, Search Intent Marketing | Leave a comment

eMarketer Predictions Gloomy for Paid Search Growth

Months ago, we wrote about how there was something inherently wrong with search advertising and referenced an eMarketer infographic to illustrate our point: search advertising technology is in need of serious innovation if it is to remain dominant over — or competitive with — other channels. Since that post in July, recent changes in search — like the introduction of Siri, the voice-operated search platform on the new iPhone 4s, and other mobile apps — will further challenge search to evolve, both for consumers and advertisers.

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.

Posted in Economics of Search, Search Engine Marketing | Leave a comment

SES Chicago in Review

The ballots have been cast and the results are in: SES Chicago 2011 was the best ever! The conference boasted record-high attendance and the Twittersphere and blogs were active and very positive. No longer an event focused solely on search, SES conferences offer attendees valuable strategies and tactics for Facebook, Twitter, LinkedIn, and SEO.

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 17th:

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.

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More Online Retail IT Investment and Higher CPCs: Bad News or Good News for Online Retailers?

Yesterday, Laurie Sullivan of MediaPost  reported that SEM budgets, CPCs, and click-thru rates are significantly up this holiday season over last year, and that higher CPCs may in fact be due to increased competition and investments in online retail IT.

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.

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How to Grow Your SEM Campaigns in 2012: Live Webcast

Now that 2011 is almost over, it’s never too early to start thinking about your SEM campaigns for 2012. How can be sure to achieve your growth goals?  Is it possible to squeeze even more ROI out of your campaigns? And what can you do to maximize the effectiveness of your SEM team?

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

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Adchemy’s Holiday Gift to SEMs

Last week, Adchemy released an intent map to help retail search engine marketers build out campaigns to sell tablet computers during the holiday season: with 700K+ keywords in 26K+ tightly-themed ad groups, the intent map covered popular manufacturers and models of tablets (iPads, Kindles, etc.) with a variety of holiday search terms (Black Friday, Cyber Monday, Christmas, etc.)

Thi Thumasathit, Adchemy’s VP of New Business,  put the intent map together in a matter of hours – a feat that would take any SEM several weeks. The intent map is available for free download, and a recorded webcast demo of how the Adchemy IntentMap™ technology works is live too:

-          Download the Holiday Tablet Keywords

-          Watch the Adchemy IntentMap Demo Webcast

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Murthy Nukala on Vator.tv

Adchemy’s founder and CEO Murthy Nukala sat down with Bambi Francisco from Vator.tv – one of the largest business networks dedicated to entrepreneurship – to discuss the company’s recent investment round, an expanded partnership with Microsoft Advertising, and the technology and culture propelling the company to the forefront of intent-based advertising.

http://www.mevio.com/episode/302113/murthy-nukala-ceo-and-founder-adchemy

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The Holiday Shopping Season is Upon Us – Take Cover(age)

Internet Retailer recently posted results from an annual holiday survey conducted by consulting firm (and our partner and investor) Accenture. While lukewarm growth is expected in the face of turbulent times, almost two-thirds of consumers are expected to shop online – up about 30% over last year. With so many more people searching for gifts online, will retailers be able to fully capitalize on this trend and create even more profitable paid search campaigns? That depends…

SEMs: Naughty or Nice?

For retailers, the search engines are of utmost importance to the holiday shopping season: consumers will carry out their entire purchase process – from awareness to research, to making a final purchase – with a search engine guiding the way. It’s up to search engine marketers to ensure that their campaigns maximize exposure for all products in a retailer’s catalog. So who’s been acting naughty or nice?

In a perfect world, a “nice” SEM would create seasonal, holiday-focused campaigns with millions of long-tail keywords.  All of these keywords would be arranged into tightly-themed ad groups, and each ad group would contain highly  relevant ad copy, allowing for the most profitable paid search campaigns possible. But SEMs don’t have the time, resources, or tools to create these campaigns. They’re not “naughty” by nature – they have limited time and resources available, and, because more keywords create more work, , they heavily rely on broad-match to hit the largest possible audience with the least amount of effort.

The result? They get the job done, but campaigns with more exact match keywords and more relevant ads could have put a lot more presents under consumers’ trees.

The Adchemy IntentMap™ platform gives retailers the tools to be “nice” – moving beyond keywords to radically simplify their search engine marketing campaigns with profitable coverage for their products.

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