Paid Search Receiving its Due? – Part I
Posted on | February 3, 2010 | No Comments
Gone are the days when PPC was new, sexy and could do no wrong – in the wake of a crippling recession that continues to hold us in its grip in 2010, even online marketing programs are under greater scrutiny.
Clients are asking more tricky questions about their paid search programs in order to evaluate their performance. They are tinkering with sales data and trying to make the right attribution calls. The client is becoming more sophisticated and agencies need the intellectual property and arsenal to be able to provide the answer even before the question is posed.
But, are clients asking the right questions and drawing the right conclusions? Or, are they beating to death an excellent marketing medium by over-analysing data incorrectly and making bad business calls as a result, such as dropping PPC spend or pulling out altogether?
There are a number of factors, if not measured / addressed properly, which will significantly skew paid search results. We will explore four of these factors in this two-part post:
1. Measuring Full Customer Value – When you get a paid search driven purchase, are you fully measuring the value of that purchase or are you selling PPC short? Beyond the immediate short-term benefit of a sale, there are long- term benefits that should not be overlooked:
- Customer Lifetime Value: If you make monthly recurring revenue from a client, this should be factored into the sale and attributed to paid search. Certainly, recurring revenue will be a factor of attrition rate but perhaps estimate your average attrition rate and calculate the real lifetime value of a sale rather than just the initial value of the purchase. This will provide you with a much more accurate picture of sales margin.
Furthermore, depending on the type of business in which you operate, you may accrue the value of repeat purchases. If you run a solid business and happy customers return, the long term value of the paid search driven sale may far exceed the marketing cost to capture that initial sale.
- Customer Referral Value: WOM (word-of-mouth) and direct referrals are incredibly valuable given their credibility. This is ‘free’ marketing that should not be overlooked!
2. Is Sales Tracking Fully Functional? Ironic, that with paid search the costs are completely transparent – we see all the costs incurred, but we don’t always see all the sales generated by PPC. This is for a plethora of reasons, some of which are simpler to solve than others:
Tracking code is incorrectly set up or the javascript is located in the footer so if a content heavy, image laden page takes a long time to load, the searcher may already have jumped to the next page before the tracking parameters have kicked in to record the searcher on that page. Searchers disable cookies making cookie tracking redundant or they use one machine for the initial search, only to make the purchase from another machine, at work, with a completely different IP address and a new cookie to track. Or if the cookie window is not long enough, the searcher comes back, via an organic click so the sale is not correctly attributed to PPC. The reasons are many, they are diverse and sometimes complicated – but it is important to know about them and try to fix them in order to minimise that margin of error.
In the next post we’ll dive a little bit more deeply into understanding cookie windows and multi-channel attribution.
Google 0 vs. China 1
Posted on | January 26, 2010 | 1 Comment
Google has a “new approach to China” as David Drummond, the company’s chief legal officer put it on January 12 on Google’s official blog. The post quite directly points a finger at China as the source of a “highly sophisticated and targeted attack on our corporate infrastructure originating from China”. The primary goal of this attack is believed to have been to attain access to Gmail accounts of Chinese human rights activists. Why did Google share this information? To cite the post: “this information goes to the heart of a much bigger global debate about freedom of speech…”
‘Don’t be Evil’ Now?
Four years ago when Google entered the Chinese market, a post on the company’s official blog implored to us to understand that Google’s “continued engagement with China is the best (perhaps only) way for Google to help bring the tremendous benefits of universal information access to all our users there.”
Then it was all about working alongside the mighty Chinese dragon for the greater good of Google’s mission to “organize the world’s information and make it universally useful and accessible.” Perhaps it is worth noting that when Google entered the Chinese market in January 2006, world economic growth forecasts were looking rosy on the back of world growth rate of 4 percent in 2005.
In 2010, after trudging through a miserable 2009, growth is expected to be sluggish at best while the world economy continues to dig itself out of what the IMF has called “the most severe recession since World War II.” Perhaps Google has found a convenient excuse to exit a market in which the costs have been rather significant and the return lower than expected.
Perhaps upon entering the heavily censored Chinese Internet market in 2006, Google had not quite anticipated the resolute strength of a Communist run power. History has taught us that Western charm alone cannot bring down the Iron Curtain.
Then there are market realities such as Baidu, the Beijing based, locally run search engine in China that dominates the Internet market. As at Q2 2009, Baidu held 61.6% of the market, followed by Google China with a share of 29.1%. The other engines were but a blip on the radar with Yahoo China holding 5.6%.
Certainly, one cannot discount the challenges of operating in such a controlled and censored environment particularly in the online market, which thrives upon speed, openness and freedom of expression. China doesn’t make it easy for foreign companies to operate on its turf, but it was never was going to make it easy. China did not create any misconceptions, perhaps it was gallant Google that spoke too soon when they said: “We’re in this for the long haul.”
What’s the Point of PPC?
Posted on | January 18, 2010 | No Comments
Perhaps shocking but true, is the fact that there are still brand / lead generation / marketing managers out there who have allocated a marketing budget to PPC spend, but they do not quite grasp its purpose. What seems to happen is that upper management has experience with the PPC medium and they understand the need to include it in the marketing mix. The message is thus communicated and the worker bees implement as instructed.
The Agency Experience
Imagine now that the marketing manager in question is tasked with working with a search marketing agency who is to manage the PPC strategy. If the marketing manager does not understand the purpose of PPC this creates a number of challenges in effectively working together:
- Goals & KPIs: It is difficult to tie a KPI to a marketing function that is not understood. Furthermore, unrealistic expectations may be created: if a realistic cost-per-conversion is $1,000 but the marketing manager arbitrarily sets $500 as the goal, they are setting up the agency to fail. Before business goals can be tied back to PPC, it is important to understand the role that PPC is expected to play relative to other marketing mediums. Reasonable expectations need to be created so that PPC is not treated as the online marketing panacea only to be dumped later when it fails to meet the unattainable success.
- Internal Infrastructure for Success: A significant challenge lies in working with a company / department that does not possess the internal infrastructure to measure the success of the PPC efforts. For example, if the agency is tasked with driving conversions from a landing page and number of conversions is a measured KPI at the end of the month, then it is essential that the marketing manager is able to provide feedback on the value of those conversions. Without this information, how is the agency to measure the value of their approach if they cannot ascertain whether conversions are driving sales?
- (They think) PPC is Not Working: Often, it appears that PPC is not given the credit that it is due because of a lack of understanding and poor tracking of revenue attribution. When the client sees that the PPC cost is rising but sales directly from the PPC click are low, they immediately assume that the expenditure is lost. Little thought is given to the fact that PPC may have been the searcher’s first click, but the sale came with the third click, pending further research and after an organic search for the brand name.
The branding effect of PPC is a value that appears to be frequently overlooked. There seems to be this unrealistic expectation that a PPC click (thus incurred cost) should result in some form of sale or conversion, and be directly attributable to that conversion. That would be ideal – in a perfect world. Perhaps the organic click was a result of the searcher seeing the PPC ad but choosing to click instead in the natural search results. Even though this human behaviour cannot be tracked, ultimately PPC deserves the credit.
Whenever starting to work with a client on a PPC project it is important to gauge their understanding of PPC in the marketing mix. By educating clients, right from the onset, this will create a much more productive and pleasant working relationship for both parties because the project is built on delivering realistic expectations. Do not assume that even though a PPC budget has been allocated, the person managing that budget is convinced of the necessity of that expenditure. You’d be surprised at how quickly that budget could dry up if expectations are not aligned.
Narcissism Reigns in 2009
Posted on | January 11, 2010 | No Comments
Our lives are now deeply entrenched in the online world, with the proliferation of smart phones, laptops and Wi-Fi access at our fingertips it is nowadays rare not to be connected. These days, the irony is that if you want to escape from all this connectivity you actually have to make a concerted effort to ‘disconnect’. With cellphone roaming, skipping the country to go on holiday is no longer a guaranteed reprieve from the online obsession – unless of course, you are ‘lucky’ enough to be headed to a 3rd world refuge, where Wi-Fi is not ubiquitous, you still have to pay for an Internet connection and your phone cannot pick up a signal. What is interesting to know, amidst this online activity, is what we’re actually doing in that vast space of the World Wide Web.
The answer, provided by Experian Hitwise, is not a surprise, why, we are engaging, connecting, sharing, uploading photos, expressing excitement, frustration, disdain and in the latest craze even updating our friends, and friends of friends of the colour or our underwear. That’s right, we’re ‘Facebooking’, jumping on ‘FB’ because the most searched term in 2009 was Facebook.

Surprising, I think not. It is our portal to our friends, our uninterrupted monologue as we share what is happening in our own lives while absorbing the events of those around us. From engagements, births to wedding photos, it all happens on Facebook. We are more connected and more involved with people that we might never have spoken to again, but on Facebook we can now track whom old highschool friends are dating and quite actively track the dating successes & failures of those who are still playing the field.
Facebook will no doubt continue to be important in 2010. I only hope that as we dive further into the digital world, we do not completely forget that there is interaction beyond the digital screen.
SEMPO – From Greatness to Mediocrity?
Posted on | October 31, 2009 | No Comments
Did you know that within the search marketing industry, there exists a professional non-profit organization built to provide a foundation for industry growth through fostering awareness, providing education, promoting the industry, generating research and creating a better understanding of search and its role in marketing?
No? Well, there is: SEMPO – Search Engine Marketing Professional Organization.
Maybe as a first phase, SEMPO should focus on ‘fostering awareness’ of its own existence and promoting itself in the search industry.
In 2003 perhaps, when the search marketing industry was fledgling, barely in existence and Google started to gain some traction, SEMPO came galloping in, the valiant arbiter in a lawless, unchartered online world.
Suddenly there was a professional institution that stood for the search marketer – creating credibility where mostly business was done in dark waters. In the world of black hat, cloaking and doorway pages, there was little to define the ‘white hat’ marketer.
The SEMPO logo was the sign of a professional elite that stood for ethical search marketing and upholding the integrity of the field. Brandishing the SEMPO logo was a sign of a safe haven for hundreds of businesses that tried in vain to navigate these murky online SEO waters.
What happened to SEMPO as a professional organization? For an organization that calls itself ‘international’, its 700 strong membership base is modest at most if not rather embarrassing.
What went wrong?
This is not something that an impartial observer can hope to answer, but it certainly seems that in the tempestuous evolution that has swept the search marketing industry in the last few years, SEMPO lost sight of what it wanted to be. In this struggle, without a clear goal or direction, the organization has continued to trudge along, but perhaps rather aimlessly.
Even the SEMPO website looks rather tired and outdated. One could say that SEMPO has completely missed the boat on Web2.0 and could do with a significant revamp of the site. Even the case studies section seems to have hit a standstill with the archive only going as far back at October 2005!
What about a blog? Twitter? Real-time updates? Interactivity?
It all just feels a little bit stale, which is sad, depressing in a way. How is it that the organization purporting to be the official representative of one of the most exciting, fast moving and evolving industries in the world, can be getting it so wrong?
The irony lies in the fact that it is some of the best of the best in search, who came together to start SEMPO. Has all this amalgamated greatness resulted in a formula that produces mediocrity?
PPC Branded Sales Down?
Posted on | October 25, 2009 | No Comments
PPC driven year-over-year branded sales are down – so the first natural recourse is to find someone to blame. Logical deduction would have it that it is the fault of whoever is managing the PPC campaign, because surely, if the PPC campaign was driving strong branded sales last year, well then, what has changed this year to lower those sales figures? Surely, it should just be identified and fixed.
This is, unfortunately, not quite that simple. It is difficult to exert a great measure of control over branded sales online – certainly, a branded PPC campaign can facilitate branded sales but it cannot be managed in the way that the competitive landscape is managed within non-branded terms.
Whether people are actually searching under a branded term is a function of the strength of the brand, word-of-mouth and offline brand building marketing efforts designed to drive branded online traffic. The branded PPC campaign may have been built, but certainly it does not mean they will come and it is not the role of the branded terms online to make them come.
Not PPC?! Who’s the Culprit?
There could be a number of contributing factors to lower PPC branded sales. You should explore as deeply as you can to determine the most logical answer to your particular business scenario.
- Cannibalism: If you have affiliates, this would be the first place to take a careful dive and investigate whether affiliate sales have gone up while branded sales are down. As much as affiliates are commissioned to in the long term increase your business profits, affiliates are known to employ a number of less favourable tactics to increase their own sales and resultant commissions.
Are affiliates advertising under your brand name, mimicking your ad copy and even the look & feel of your site? If they are sneaky and advertising directly against you or outside of the hours on which you advertise under the brand name – this could well increase affiliate sales at the expense of your own.
It could also be another factor – if organic site sales are up on branded terms, then that’s a good thing – you’re saving money on PPC costs and getting more sales organically.
- Offline Marketing is Down: If you’re not doing the same types of things that you were doing last year in other marketing channels this will have a very real affect on your branded PPC sales. Even if you cut those catalogue mail-outs by a few 1000 or cut a radio advertising segment, this could significantly impact your PPC sales. Fact is, the act of searching online is an intent driven activity. If people are not aware of your brand and not thinking about it – then, they’re not searching for it either.
- Worldwide Economic Recession: If Average Order Value (AOV) has dropped, year-over-year, it may just be a sign of the times that your customers are making fewer orders at lower values that previously. There’s not much you can do about that.
- Competitors Outdoing You: If a close competitor has ramped up their offline marketing efforts or is offering a significant promotion – this could very well be pulling away sales from your brand. You need to monitor competitor activity in order to be to retaliate accordingly.
Most of the factors that could contribute to lower PPC branded sales have very little to do with the actual PPC campaign itself. This is why you cannot manage a PPC campaign in a silo, you need to be aware of not only micro environmental factors but also the greater macro economy.
Search Marketers – Too Generalist?
Posted on | October 12, 2009 | No Comments
In the last few years the online marketing field has grown to become more sophisticated, in line with the increasing demands of more knowledgeable clients and the constant evolution of the search industry. They say that the only constant in search is change’. They are right. A few years ago, it was more than feasible for a search marketer to be a generalist in SEO and PPC who dabbles in web analytics. But today, online marketing has expanded to include social media marketing (SMM), Web Analytics is a job title in itself and both SEO and PPC have grown to include a vast range of methodologies and analyses specific to each field.
Today, dynamic websites quickly become monoliths with 100s of pages compared to the traditionally static 5-10 page site. Dynamic is the new status quo, which makes SEO more tactically challenging. As businesses begin to grasp the significance of attribution, search marketing is being recognised as a channel in the marketing mix, rather than being just an independent online cash cow whose relative role is not measured among the other marketing activities.
Employers Playing Catch-up
However it does not appear that most companies who hire internal search marketers recognise the rapid, dynamic evolution of the field. Most search marketing job descriptions appear to be written for the generalist, who is capable of dabbling in it all, but mastering little.
Social Media, Pay Per Click, SEO and Web Analytics are job titles in themselves. If working for a small business, certainly, one person can man the fort on all these elements, but with varying interest and competence in each. What is concerning is that businesses expect both experience and expertise in each of the above specialisations without in fact acknowledging that each is in itself a specialisation. Being a generalist does not breed expertise in any of them.
Job Descriptions Wooing Search Marketing Candidates
One recent job description listed the following required skills:
- Google Analytics
- Google AdWords
- Alexa
- Facebook for business
- Twitter for business
- SEOBacklinks
- Meta tags
- Directory listings
- Blogging
- PR
- Copywriting
- Website HTML + coding
- Design skills in Photoshop
The salary? No specifics were given, but the word ‘underpaid’ was utilised.
Today’s search marketers need to be analysts, writers, coders, designers, tacticians, marketers and strategists. Yet as the search marketing field continues to evolve, can this generalist approach be maintained while delivering quality search expertise?
I do not believe it can. Businesses need to start recognising the broad expansion of Internet marketing and start making hiring decisions accordingly or the average search marketer will continue to know a few things about everything without ever becoming an expert in a chosen online field.
Going Off Track, Hurts You & Your Clients
Posted on | September 25, 2009 | No Comments
Sitting at the first Manic Street Preachers concert in Vancouver in 10 years, I began musing about all the people who came to the show so many years on, to show their continuing support of the band. We waited in line for the doors to open, then we waited for another two hours until 10pm for the band to get on stage, but when they started playing, it was a new flavour and it took many a song before any of the 90s classics were sung. This got me thinking.
Over the 10 year absence on the Vancouver stage, the band would not doubt have gone through an evolution. This is to be expected, but if their performance was so foreign to what they used to be, is that not forgetting about the people who supported them all those years ago? How many people walked out of that concert feeling bittersweet, going home to play some of those old records because their expectations were not met?
One for All, All for Me?
Remember those first few major clients that catapulted your company in the right direction with that major case study that featured your strengths or the solid reviews that drove more business?
How often in business are those first clients put into the legacy client pile and considered ‘small’, whereas once they were ‘the client to please’? I guess the key question here becomes whether your company is to your legacy clients what it once was or are they scratching their heads wondering whatever happened to that company they supported in the early days?
The same can be said for employees. Companies that uphold core values that have been developed upon fundamental principles are rare. Having said that, employees that work towards a common goal in which they believe, are arguably just as rare. Today it seems that to an increasingly large number of people, a job is just that, a job, work, a daily grind.
Are you recognising the people in your organisation that continue to oil the cogs and keep the machine running smoothly? Too quickly do we forget how intricately our success is interwoven with the support of our clients; the demand for our service offering and the service delivered by the people who deal directly with our clients. This can be said of a rock band that relies on its fans, as much as it applies to a company whose offering is built on the collective intellectual property of the people who work there.
So, no matter how much your company evolves and grows over the years, do not lose sight of the type of company you strove to be to your clients and your employees in those early days, when you had everything to lose. Financial success has this tendency to take the ‘we’ out of the achievement and focus solely on the ‘I’. Well, you didn’t get to the top alone and the faster you recognise this, the sooner you will be a better company, boss or colleague to the people around you.
Breaking the Search Marketing Silo
Posted on | September 17, 2009 | No Comments
In 1886 John Wanamaker coined the phrase that would define traditional marketing:
“I know that 50% of my advertising is wasted…
…I just don’t know which half!”
Then in 2000, search marketing made its official debut with the launch of Google AdWords. This redefined the marketing game, as Pay-per-Click (PPC) gave rise to a measurable form of consumer-initiated pull marketing. Not only was the consumer driving the interaction with the advertiser but also each level of the online touch point was highly measurable. Oh, and it was cheap. Back in the day when AdWords hit the market it was dirt-cheap with bids starting at 0.05 cents. This ability to so precisely target a market, deliver a highly relevant ad message initiated by the ad target and then accurately measure the resultant interactivity was to the traditional marketing world a panacea to all those campaigns that had previously gone into the 50/50 pool.
So what did traditional marketing do? It gave search marketing its own budget, its own department, its own staff and they watched with glee as their cash cow grew. Slowly, as the years rolled by, search marketing continued to outgrow all other forms of marketing, bringing in ROAS and ROI figures with which traditional marketing could not hope to compete. This continued to make search marketing more independent, more isolated, more siloed.
Online marketing also evolved and what may initially have started with banner advertising and PPC expanded to user-generated content, online video, blogging, social networks, podcasts, widgets and mobile marketing, just to highlight a few. Thus, increasingly, ‘search marketing’ did its own thing while ‘traditional marketing’ continued business as usual.
Old Barriers Meet New Barriers
The rocky relationship between sales and marketing has been well documented in the last decade. BusinessWeek online describes this in an aptly titled article - Sales and Marketing: Lost in a Thorny Forest The title follows to say: Our survey is in, and its picture of divided and dysfunctional efforts to achieve cooperation is fascinating, surprising and – a little sad
The almost rehearsed divisions between sales and marketing attitudes unfold:
Marketers see themselves as vastly underappreciated, and they regard sales teams as self-serving and short-sighted. Meanwhile, sales teams see themselves as indispensable, and they look upon marketers as ivory-tower strategists out of touch with the real world’s pressing demand of generating revenue.
Diagrammatically we can illustrate the sales & marketing relationship as follows:

The clashes are frequent, barriers to communication are embedded in the misconceptions held by each party and attempts to communicate often result in miscommunication, even open altercations. But while sales & marketing battles it out, what is happening to search marketing?
While in traditional marketing there is a fundamental understanding of integrated marketing communication, there appears to be a significant disconnect in integration between traditional marketing channels and search marketing. The examples vary, from a company advertising an online promotion omitting to place their website address in the TV ad, to no mention being made in online promotions of offers redeemable offline. Sometimes the online messaging diverges so greatly from the offline offer that it becomes difficult to recognise that it is the same brand being represented. A significant benefit of search marketing is the opportunity to track offline & online interaction and the ability to see the resultant website traffic just after a direct mail piece or e-mail campaign has been implemented. However, cross-channel communication is required to reap these benefits.
As much as sales & traditional marketing have a feisty relationship, at least there is one to speak of! Between traditional marketing and search marketing there appears to be very little interaction. A potential illustration of this relationship is represented below:
Where sales and traditional marketing may make some headway, search marketing is completely out of the loop. Often it appears that search marketing and traditional marketing efforts are run by different departments and different people that barely know of the others’ existence.
What people seem to have forgotten is that ’search marketing’ is in fact another form of marketing – it is an additional channel to the existing ‘offline’ marketing repertoire of print, TV, radio, outdoor etc. Search marketing should then be integrated into the offline channels much in the same way that these offline channels are integrated with one another. So, instead of creating another division, it might be wiser for marketing to reign in the search marketing team and create in them an ally against those pesky sales people.
How Important is this ‘Twitter’?
Posted on | September 6, 2009 | No Comments
Remember when all your friends were jumping on the Facebook bandwagon but you resolutely held your ground until the nagging became unbearable? With a sense of resignation and personal betrayal for losing the battle, you joined the hordes of millions and decided to “re-befriend” the long lost friends of school with whom you have had absolutely zero contact for years, in order not to look like the only loser on Facebook with 5 friends.
Time has passed and you’ve made your peace with Facebook only for yet another social media networking tool to hit the market. This one’s called Twitter and it has been around for a while. It has reached the point of popular adoption, with a growth rate of over 1,382% between February 2008 – February 2009.
This time, it’s not really about your friends but rather the act of ‘following’ people, some of whom you have met but the majority of which who are industry thought leaders, celebrities or quite simply complete strangers. So, you ‘follow’ these people and in the interim read their 140 character messages that appear in real-time, whilst sharing your own 140 character tips, thoughts, news, gems of wisdom, arbitrary daily occurrences, personal schedule, interesting links, emotions, traffic reports, industry events etc. all in the hope that someone will ‘follow’ you. Again, ‘less is more’ is not a common mantra seen on Twitter. One of the goals appears to be to collect ‘followers’ and if you’re Ashton Kutcher, once you reach a million followers, Oprah will cover the story. So, as you can see, this ‘followers’ thing is a pretty big deal.
So, do you really need to be on Twitter?
It’s All Relative
If you work for Zappos, Twitter is fairly paramount, given CEO Tony Hsieh has revolutionised the manner in which a CEO of a prominent online company interacts with his audience.
On the other hand, if you work in a specialised field, for example as a geophysicist, the networking circle is so narrow that online interaction itself is scarce and beyond this, the highly technical nature of the field, including the jargon-loaded terminology does not lend itself to a social networking environment. Allow me to demonstrate a potential Tweet:
“Made progress on p-wave anisotropic measurements of the Cascadian subduction zone at the transition from the lithosphere to the astenosphere”
Moving right along.
The line becomes a little bit blurry when in a position of dependence, for example the job hunt. It is difficult to ascertain how the hiring company shall perceive the use of Twitter by the potential candidate. This, at the commencement of the recruiting process will depend entirely on the HR Director. If interested in social media networking, a candidate’s presence on Twitter may be an unwritten prerequisite in successfully proceeding to the next stage of the hiring process. However, if the HR Director falls into a more traditional realm in which social media remains a subject that is being tentatively explored, then an active Twitter profile may go unrecognised.
On a side note, if you are in job hunt mode, and are looking to secure a position that in some form or manner involves an understanding of the online marketing industry, you should utilise the social media platforms that are causing a stir in the online market – Twitter being one of them.
If the words ‘social media’ fall anywhere in your job title, it would be advisable to Tweet and perhaps write something insightful for your clients, rather than just sharing news on the shoes you purchased or the restaurant you are currently frequenting – unless your clients are supposed to meet you there!
So, if you think that Twitter is just pointless babble and have no desire to join the noise, do not feel pressured to do so. Having said that, it is difficult to derive value from something that you have not yet tried yourself, so before making any hasty conclusions, the only way to answer ‘To Tweet or not to Tweet?’ is to jump on and give it a shot. Unless you’re a geophysicist, of course.
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