Does Paid Search Need a Panda?
Posted on | August 25, 2011 | No Comments
In the first half of 2011, Google launched a substantial algorithm change known as ‘Farmer’ or ‘Panda’, aimed at identifying low-quality content and websites. In recent years, the ubiquity of content farms has grown. These are sites where the text may be relevant to a certain query, but fairly useless to users, with a poor user experience. These content farms are a prime example of content being written for SEO and ranking purposes, rather than actually helping the searcher.
Google calls this Panda release a ‘high quality sites algorithm’. This blog post is not about Panda, there are likely hundreds of top quality posts on this topic in the blogosphere.
What Landing Page Quality?
Paid search has its own brand of spammers, notably the affiliate marketer that bids up search queries and thus raises average cost per click and sends searchers to subpar landing pages. Interestingly, you could call affiliates a necessary evil in that companies, although not always supportive of their methodologies, still employ their services.
But, I’m not even talking about affiliates here. I’m talking about advertisers themselves, who bid on keywords and whether through a poor match type strategy or lacklustre marketing execution (or both), seem to drive searchers to the most pointless pages. Paid search ads are driven to pages that offer so little value, it is a surprise that the company is paying for the click at all.
I’m talking about pages that lack insightful information, without a clear call-to-action or poor navigation. Pages with newsletter offers, sales pitches and ‘why we’re so great’ downloads that do not give the searcher an iota of objective perspective from which to better frame their purchase decision.
Give & Take Bargain
Perhaps the worst thing about all of this, is that despite driving searchers to such uninspiring offers, companies still expect to see results and then act genuinely surprised when these do not transpire.
Back in the day when landing pages first started to make it into the paid search strategy, a targeted page was crafted to fit a searcher’s query, offer information and provide a meaningful, useful offer in exchange for the searcher’s contact information. The theory behind this balance was that a relationship of mutual benefit was being forged in which both parties benefited from the transaction. The searcher received valuable information and the company had the opportunity to continue to pursue a relationship with the searcher.
Today, however, companies seem to have lost sight of their end of the bargain. Any old offer is thrown up based on what is already in the company’s repertoire versus crafting something that will add value.
In a tight economy, with a workforce that has been cut back in many companies, perhaps resources are a factor here. If a company launched a rubbish TV campaign, the returns would be poor and hopefully executives would recognise the marketing medium’s failure because of a poor campaign rather than faulting the medium itself.
In paid search though, very often the scapegoat is the paid search agency or in-house online marketer. Somehow, paid search specialists have now become marketing consultants and brand specialists, having to advise companies on the type of offer they should use, often assisting with the content and trying to answer the question, ‘what would a searcher in this industry find useful?’
Accountability Please
Where’s the accountability? Paid search marketers are responsible for the success of the paid search campaign, but what about the company marketing managers, surely they should know what type of online assets their prospects would find useful. They should know what questions prospects ask and would like answered.
So why do they provide second rate online assets and expect a return on their investment?
Here are some tips for search pages following the Panda update. This is nothing new, we’ve heard it all before, but marketing managers would be well advised to think about these elements when designing landing page offers for paid search campaigns:
- Is it obvious what topic the page is about?
- Is the content original or is it aggregated from other sources?
- When looking objectively at the page, is the primary focus the user need or the business goal?
- Is the content on the page authoritative and valuable? Does it answer the query better than other pages on the web?
- If some of the pages on the site are very high quality and engaging, are other pages on the site not as high quality?
Can Paid Search Alone Drive Sales-Ready Leads?
Posted on | July 25, 2011 | 1 Comment
As an online marketing professional, even in 2011, I still get the sense that marketers of large organizations and business owners alike consider paid search to be the online panacea for lead generation. It is the solution for all corporate ills. It is the advertising engine that will drive registered leads, but not just any leads, sales validated opportunities that will pass through the average sales cycle and just like that, turn into a purchase.
All this from a single interaction with paid search! Miraculous!
Nevermind the Website
Setting up a paid search campaign is quite honestly the simple part, especially if an agency is engaged, this can be done with little engagement from the client. Spending marketing dollars and driving clicks is the easy part of the equation. It is much harder getting the searchers’ attention, motivating them to engage with your offering, and providing information and assets that are unique and actually useful. No… not sales collateral that has been dressed up as a whitepaper, valuable assets that will benefit the searcher.
The theory behind the paid search landing page interaction is that businesses will gain valuable personal/business contact information in exchange for equally valuable content that the searcher will download. Somewhere along the way, some businesses have forgotten to hold up their end of the bargain, driving the conversion by misrepresenting the perceived value of the download on the landing page.
Unless you’re Amazon, a conversion does not necessarily equal money in your pocket. Generating a lead and forwarding the details to sales, while giving the searcher a subpar download is not going to generate meaningful sales conversations.
Paid search is the medium that delivers content to searchers, it is the quality of the content itself that will impact marketing ROI.
Nurture, Nurture, Nuture
Businesses invest these precious dollars into the paid search marketing machine and are then dumbfounded when it spits out leads that require nurturing. We are talking about highly complex sales with ever longer sales cycles that require a formalized sales funnel as well as lead scoring and nurturing methodologies to maximise sales efficiencies and optimally ‘milk’ each lead.
According to MarketingSherpa’s 2011 B2B Marketing Benchmark Report, lengthening sales cycles are one of the top 3 challenges that B2B businesses face today. On average, 60% of B2B organizations experience a sales cycle of longer than 3 months. The length of the sales cycle varies greatly among organisations by business size, industry sector, target market and average deal size.
Paid search, though perfectly capable of driving sales ready leads, will more often than not, deliver a larger quantity of leads that will require nurturing. In order for businesses to maximise their paid search ROI, they need to take accountability for the quality of their online offers and the manner in which they engage prospects after lead acquisition.
Conversions – a function of clicks or impressions?
Posted on | May 21, 2011 | No Comments
Projecting paid search performance or PPC conversions as a function of impressions is problematic because any performance estimation, is ultimately a function of searcher behaviour.
Definition of an impression, taken from Google AdWords:
Each time someone searches on Google or the Google Network and your AdWords ad displays, it is counted as one “impression.” The “Impr” located on your reporting statistics shows the number of impressions for your ad.
However, when someone searches on Google using Google Instant, ad impressions are measured differently. When someone uses Google Instant, ad impressions are counted in these situations:
- The user begins to type a query on Google and clicks anywhere on the page (a search result, an ad, a spell correction, a related search).
- The user chooses a particular query by clicking the Search button, pressing Enter or selecting one of the predicted queries.
- The user stops typing, and the results are displayed for a minimum of three seconds.
Does an impression mean that someone actually sees the ad?
The answer here is no — just because the ad shows up on the search engine results page, does not mean that it has registered with the searcher.
If someone is using Google Instant and typing in queries, an impression may be counted when the searcher pauses for 3 seconds and then continues typing.
They may then have just glanced at the page and continued to search, potentially changing the search query to something not relevant to the product offering.
Three steps away from action
An impression is three steps away from action – first someone has to register your ad, look at it, decide to click on it and then interact with the landing page.
Without clicking and getting to the landing page, there is 0% chance of a conversion, because the person has to be physically on the landing page in order to take the desired action.
A percentage is only a number, so let us put a face on statistics
Conversion rate, is defined by conversions / clicks
Having a 1% conversion rate, means that for every hundred people that click on the ad, 1 will continue through and convert.
CTR (click through rate) is the ratio of impressions to clicks, defined by clicks / impressions
Having a 3% CTR means that for every hundred people who saw the ad, 3 will click on it
The above estimates hinge on a 100% confidence in the 1% or 3% estimate of a group of 100 people. (in a linear timeframe)
Statistically, that confidence is much lower and never 100%, so any percentage estimates will always vary, because you cannot predict human behaviour.
Using impressions to calculate conversions makes three assumptions:
1. Searcher will see the ad
2. Searcher will click on the ad
3. Searcher will convert on the landing page and take desired action
This is a statistically flawed argument because the confidence that someone will take all three actions is much lower than the assumed 1% conversion rate for someone who does click on the ad.
In fact, using the above averages, there is a 0.03% chance that someone who has not clicked the ad, will convert. Thus, the projections will be unrealistically inflated with no statistical probability that it is even possible to reach the projected conversions when calculated as a function of impressions.
A New SEMPO in 2011
Posted on | April 16, 2011 | No Comments
Can SEMPO be to Paid Search and SEO what WAA (Web Analytics Association) is to Analytics?
Perhaps that is a loaded question but SEMPO is certainly trying! With a new website launched in 2011 and a reduced membership rate of $125, SEMPO is taking strides to become more appealing to SEM practitioners.
The question that nags at me is whether today’s search marketers know what SEMPO is and if they do, do they consider it to be relevant in the search marketing industry?
I am a member of SEMPO and believe that the search marketing industry needs a strong leader, much like the role of the Web Analytics Association for analytics professionals. Whether SEMPO will be that leader is yet to be seen.
SEMPO lists a number of benefits of membership; here they are below. At the end of the day, any membership is as good as you make it by actively participating. If SEMPO can energize its existing community, make us, the current members, passionate advocates of SEMPO, that will be a massive stride in the right direction.
Expand Your Knowledge
- Receive 20 percent discounts to SEMPO Institute courses
- Participate in regular roundtables on emerging trends featuring industry leaders
- Access annual state of the market and Industry salary data research
- Access Resource Library (white papers, point of views)
- Participate in a vibrant, interactive online member community
Engage with Industry Leaders
- Attend SEMPO Members Only events at industry conferences
- Participate in committees
- Attend local Arizona events
- Participate in special interest groups
- Participate in vibrant, interactive online member community
- Network with peers on LinkedIn and Facebook
Maximize Your Career Growth
- Access salary and industry research data
- Post resume to the Career Center Marketplace
- Attend Careers in Search webinars
Grow Your Business
- Get noticed in the online Member Directory
- Participate in Speakers Bureau program
- Post open positions on the SEMPO Job Board
- Get leads through the Request Services program
Save Money
- Receive discounts to subscriptions, tools
- Receive 20-30 percent discounts to industry conferences and training programs
- Free membership in a SEMPO chapter
- Free registration at chapter events
PPC – It’s Relative
Posted on | February 14, 2011 | No Comments
It has been a while since I have tweeted, networked on LinkedIn, made updates on Facebook or, even, written a blog post. It is this last point that perturbs me most, because as I have said before, blogging every three months more closely resembles a newsletter, than it does a blog. I should either eat my hat or start writing.
No Absolutes in PPC
Sometimes I am asked questions that go something like this:
- If we double our monthly PPC budget what percentage impact will that have on conversions?
- With our current PPC spend what should our performance be and what should our conversion rate be?
Though paid search is heralded for its measurability, one element it does not share with traditional media is its predictability.
Let’s take for example running a full-page ad in a monthly magazine.
The cost is fixed; the reach (number of people reached by single is issue), circulation (number of distributed copies of a magazine) and coverage (percentage of a population group reached by a magazine) are just a handful of magazine metrics that are widely known and shared by the magazines themselves.
Based on historic performance or industry averages, your company will also have a good idea of the return to expect from the magazine advertisement. There are few variable metrics – if you increase budget, ceteris paribus, you can calculate the expected return on investment.
Unpredictable PPC
When launching a new PPC campaign, where little historic data is available it is more difficult to predict the impact of budget increases or provide a forecast of performance.
There are more variable factors in PPC that are in your control, but that also makes the performance outcome more variable. The paid search bidding model also changes the landscape because sudden moves by competitors can also disrupt forecast predictions.
When setting goals and internal benchmarks for your paid search strategy it is important to set your goals based on the relative past performance of your account. Benchmarking against best-in-class numbers may be out of reach for your PPC account in the short term and focusing on absolute numbers will distract from the positive gains you are making.
If you are posting a 1% conversion rate, it may be unrealistic to aim for 5% in the short term (because you read somewhere that this is a good number towards which to aim). Instead, what you should be looking for is a positive trend, this may be slight month-over-month (MoM) but if you are focusing on driving performance then year-over-year (YoY) metrics should show a positive trending improvement.
Your best measure of success in your PPC account is your own YoY data rather than focusing on the 800-pound gorilla in your industry that may have 10 times your budget, can outbid you and dominates the top positions for your keyword basket.
The point is, there is no magic formula to determine how much return a specific budget should yield. It is about how much the budget could yield and this in itself is an iterative process. In PPC, it’s not about good or bad, it’s about better or worse. So if you moved your conversion rate from 0.8% to 1%, you are doing better, which is good. 
If you are looking for benchmarks and are willing to spend a little bit of money, start with some quality reports from MarketingSherpa.
Optimal 2011 Marketing Budget Allocation
Posted on | November 1, 2010 | 1 Comment
This is the time of year that organizations are beginning to plan and allocate their marketing budgets for the following financial year. With Western economies climbing out of a recession, marketing executives are faced with tougher marketing allocation decisions into 2011.
Which sectors are reviving? How is the online marketing sector faring through the recession? Where should marketers invest their finite marketing dollars to get the best bang for their buck?
Online & Offline Media : Two Clear Winners
Old media is making a comeback. According to a recent article in The Economist the resurgence of the 30-second commercial has revived companies that had been in crisis. The power of the TV to monopolise attention is undiminished and with the average American spending 158 hours per month in front of the box, there is great potential to capture an audience.
Media Facts:
- In the first half of 2010, CBS turnover from ads rose from $4 billion to $4.5 billion. Shares have tripled from 2009 lows.
- Globally, the television distribution market will increase from $161 billion in 2006 to $251 billion in 2011, a 9.3% CAGR (compounded annual growth rate).
Digital marketing is unsurpassed in capturing attention at the point when customers are interested in a product. Comparison campaigns and persuasion ads to buy one product over another work very well online but this does not have the same brand building impact as TV. It is social media that poses a threat to TV as brands are built online via discussions, interaction and brand presence on these platforms.
Media Facts:
The PWC Global Entertainment and Media Outlook 2007-2011 says:
- Internet will remain the fastest-growing advertising medium, with a projected 18.3% CAGR, reaching $73 billion in 2011. By 2011, online advertising will comprise 14% of the global advertising market.
- Globally, internet advertising and access spending is expected to grow from $177 billion in 2006 to $332 billion in 2011, a 13.4% CAGR.
Making Your Marketing Dollars Work…Harder
There are multiple reports available on the market that will share advertising growth projections in both digital and offline media. This data is useful to understand the media landscape but there are a couple of factors to take into consideration when developing your organisation’s media plan:
1. One size does not fit all – akin to the social media wave, just because everyone else is doing it, does not mean you should. Marketers should take a strategic approach to their marketing spend. We challenge marketers to review their marketing budget holistically: unify offline & online.
Explore how you can leverage cross channel marketing opportunities. Integrate your TV campaign with your online advertising; take your print strategy and give it a digital spin. Remove the silos from your marketing plan.
2. Embrace media fragmentation – Consumers are adopting new forms of media engagement at a staggering rate. The growing power of mobile, apps and devices has seen the rise of a consumer expectation to be able to connect, share and consume at any time. The Internet continues to dominate as consumers expect Internet style interactivity, convenience and flexibility in their day-to-day lives.
Now is the time to be creative and reinvent the marketing wheel in your organisation. Whether your audience is B2B or B2C, it is becoming increasingly important to figure out where they ‘play’ in the digital landscape and position your organisation front and centre in the action. Be daring. Challenge the status quo – your customers already are.
Originally posted on AskEnquiro
Google: Blind to Evil?
Posted on | October 13, 2010 | 1 Comment
When Google begins to make multiple changes to its web tools and interface simultaneously, frankly, it makes me nervous. There has been a wave of activity in the last few months that has culminated in a slew of changes, launched in a very short time frame. They include:
- The ‘updated’ keyword tool was taken out of beta
- Google Instant was launched
- Search suggestion boxes became an official feature of the search interface
- Google is currently making changes to reporting in AdWords
Google: Doing Good or Evil?
At #SMX East this year, search marketers were dealt a raw hand by Google when Baris Gultekin, Group Product Manager, Google AdWords, revealed that Google has done the unthinkable. The ‘updated’ and ‘improved’ AdWords Keyword Tool will now only provide keywords that Google deems ‘commercial’. Say what?! Marty Weintraub offers excellent insight and advice on this announcement in his R.I.P Google Keyword Tool. Long Live SEO! post.
Google has taken its monopolistic power and decided to squeeze some more cash from its AdWords cash cow. So much for the power of the long tail; why give advertisers diversified keyword opportunities when you can limit the keyword set to those that will drive increased revenue for Google. Hell, let’s throw in a bidding war while we’re at it.
Exhibit A
Simple economics dictates that if you limit supply, demand will increase, thus driving up cost. Similarly, limited keyword inventory in the Google AdWords tool will result in a larger number of advertisers bidding on the same keyword baskets. In the AdWords auction, bidding environment this could spell increased bidding as advertisers vie for top positions.
If the market ‘naturally’ increases its willingness to pay for a basket of keywords, it is the ‘natural’ direction of the market determining cost rather than Google artificially raising prices.
Exhibit B
Google Instant was launched in early September 2010, ruffling the feathers of the entire search marketing industry. A wave of speculation hit the blogosphere, conference schedules were altered and slots allotted to experts, surmising the impacts Google Instant may have on paid search, SEO and searcher behaviour. A month later, the impact remains unclear, as searchers no doubt become accustomed to this new search experience. However, in paid search, impressions are on an ominous upward trajectory.
Between August and September, there have been instances of significant MoM changes in impressions. Some examples highlight this:
Word on the street says that if a certain search query is displayed in the search bar for 3 seconds, it will be recorded as an impression. The massive increase in impression count indicated above shows the significance of this.
Which leads me to Quality Score (QS). With CTR being the key influencing factor of QS, such a sharp spike in impressions may cause CTR to plummet, thus driving down QS. Suddenly, with a lower QS, advertisers will find themselves having to bid higher to maintain the same ad rank and thus ad positioning on the SERPs.
Exhibit C
That all pervasive search suggestion box in the Google search interface now takes up so much real estate on the SERP, it is difficult not to be swayed by the suggestions, let alone ignore it.
Assuming it does impact search behaviour and searchers become reliant on it to drive their searches. Google is thus ever so subtly changing how people search, manipulating them to use the queries that Google suggests.
Inevitably the advertiser follows the searcher, but in order to do so, is then forced to bid on high volume, high competition, high cost search terms.
So much for the invisible hand of the Google search engine marketplace.
Are you too nice…to your clients?
Posted on | September 27, 2010 | 3 Comments
- Do you find yourself saying yes to every client request?
- Has your project fallen out of scope?
- Is your client in the driver’s seat of the project?
- Have you outlined project limitations, or is everything fair game?
- Does your client understand what they paid for?
- Are you treated like a full time employee charged with extra work at no extra cost?
As the project manager, it is your role to successfully deliver on the project, set client expectations as well as define the limitations of project scope. Most clients will strive to push beyond the scope of the project, making it your job to draw the line in the sand. Here are some tactics to mitigate scope creep in SEM projects.
1. Education = Understanding
SEM work is time intensive, it takes hours to do a thorough keyword analysis, concerted effort to write quality & unique ad copy and even longer to do the analysis that helps you formulate the right tactics for project success. Make it clear to the client what the work involves – in PPC, success is a moving target, so even if week on week you are not delivering tangible deliverables the client needs to understand the type of work you are in fact doing. Ensure communication flow is continually open to put project priorities into perspective.
2. Spell it Out
Spend time with the client at the start of the project defining objectives, describing deliverables and the final outcome. For absolute clarity indicate what is within scope and what is out of scope – get the client to sign off on this. Clients often rush the project start date in order to see ‘real work’ being done. Do not proceed with any deliverables until the client has signed off on the strategy road map that spells out the work that will be done.
3. Balancing Act
If a client is striving to push the scope of the project and makes a request that will impact profitability and project hours, it is important to put this into perspective. Indicate that the request itself makes sense, but it raises potential risks that may be costly, both in time and money. Paint a picture of cause and effect: If you implement x, it will impact the quality of y because the time that had been dedicated to y will now have to be shifted to x.
4. Good Business is Mutually Beneficial
Even though you may try to be flexible and accommodating to meet your client’s needs, you cannot just continue to be ‘nice’ because the client will learn that they can exploit this. No matter how many systems you have in place, it is the verbal and interpersonal relationship that needs to be managed. It lies in the ability to raise a criticism while maintaining your commitment to the project and relationship. If you have reached the limit in your ability to invest in the relationship, at your cost – make your case clear to the client.
If you are delivering good work, in a client centric manner you should not be afraid to present the case for a mutually beneficial relationship. The client needs to understand that you too, are trying to run a business and only if both parties profit, will the relationship continue to make business sense.
Selling C-level Executives on Search
Posted on | September 15, 2010 | 1 Comment
Marketing managers who are responsible for a company’s online strategy continue to face vast challenges in receiving support from the executive team. Having to work much harder for fewer available dollars than their traditional offline marketing counterparts, for many managers it remains an uphill battle to get C-level executive buy-in.
Ask the Right Questions
An old English proverb goes by: Ask a silly question and you’ll get a silly answer. Much the same can be said for pitching the executive team when trying to get support for engaging an online marketing agency. At this juncture, it is critical that you remember your audience; these are people who live by the numbers, hard facts and executive summaries. Take a preemptive approach and ask yourself the questions that you could imagine the C-level posing. Allow these questions to drive your overall pitch as you build a business case for search.
- Why should we (the executives) care about search marketing?
Define the problem. Outline the big picture. Show the missed opportunity. The key here is to research your industry and hit the executives with real numbers.
Show data such as share of marketplace, overall market opportunity vs. your share of voice (SOV), show monthly searches, impressions, keyword coverage, ad coverage, what competitors are spending etc. Get the attention of the executives.
Then show a heat map to share what people are paying attention to in the search results pages. Indicate clearly where the opportunity gap lies; utilize the heat map imagery to share what people are actually interested in on a page and why it is so critical for your business to capture that online real estate.
- What do you propose we do?
Now that you have their attention, you need to put your pitch into context by helping the C-level decision makers understand that search is really a part of an integrated plan. Make sure that you connect search with traditional marketing; align and integrate with them – they have the budgets. It is important to avoid any ‘us and them’ type of language.
Marketing is marketing, whether discussing online or offline marketing, ensure that you are not isolating search but incorporating it into a holistic approach. In this way, you are aligning yourself with marketers in the company and shifting the perception that search is done by ‘IT nerds’.
Propose a pilot program with high success potential and sell them on incremental growth of the program and monetary investment.
- What is the competition doing?
C-level executives are competitive. Play on their emotions and competitive drive when sharing competitor information. Move beyond pointing out just position comparison in the SERPs; show share of voice, share of impressions, share of clicks, compare traffic volume etc.
Leverage marketplace data and tools such Compete.com to get competitive insights. If the data is compelling, this may be just the impetus you require to get sign off on the project.
- What is the value of the project?
Share the revenue opportunity – leverage charts to indicate total search demand. Describe the management system that will be used to measure visibility increases and provide a summary of ROI benefits. List the costs clearly and the associated specific benefits.
The data you present here should be compelling and begin to drive home how NOT doing search with an online vendor, is a problem.
- Why should we fund this over any other marketing project?
Loss is another emotion on which to hit. Searchers do not just search spontaneously; usually that demand is stimulated by marketing. If other marketing efforts are driving demand, failure to capitalize on the search demand is a lost opportunity. Educate senior management that not investing in the online project has opportunity costs associated.
Further questions around which to build your business case include:
- How will this help us meet our financial goals?
- How much will it cost? (Include time & resource costs)
- How long will it take?
- What are the risks?
In your presentation, remember to educate first. Address the fears and pain points. Do not act like you have all the answers because of the accountable panacea that is search marketing. Be respectful of the business experience the executives have and rather than offering a marketing solution that threatens everything they have learned in their careers, integrate the online project with the offline marketing initiatives the executives understand and support.
Originally posted on AskEnquiro
Google’s New Third Party Reporting Requirements
Posted on | September 2, 2010 | 1 Comment
As a small business, if you are spending advertising dollars online and paying an agency or some other third party provider to manage this service for you, it is only a reasonable assumption that you would know what you are spending and what you are receiving in return for that spend.
Google’s recent announcement of a change to its 3rd party reporting requirements is a strong indicator that businesses remain ignorant of the information they should be rightfully receiving from 3rd parties. Though ignorance and information asymmetry may play a role here; simple business common sense also appears to be lacking on the part of the businesses allowing themselves to transact with 3rd parties who offer close to no reporting transparency.
Google’s New Transparency Rules
To highlight the new requirements, this example has been taken directly from Google’s AdWords Help Center:
For those third parties that don’t provide any reporting today, they should, at a minimum, provide advertisers with monthly data on AdWords costs, clicks, and impressions at the account level.
In July, the AdWords account for Joe’s Plumbing accrues 1,400 clicks on 12,000 impressions for an AdWords cost of $700 (the exact amount charged by AdWords).
Joe’s Plumbing – AdWords report for July 2010
Clicks: 1,400
Impressions: 12,000
Cost: $700
There are no bells and whistles here – the 4 lines above are the absolute basic reporting that 3rd parties will be required to provide as of February 2011. One’s first reaction should be to baulk at the fact that there are in fact 3rd parties out there who make a living by literally cheating advertisers out of their money by offering no level of transparency.
Receiving basic AdWords cost data on a monthly basis at an account level only really tells you how much you spent on AdWords in a particular month. The only really useful thing that you can do with this data is make a basic calculation that may have been difficult previously if you were paying your 3rd party provider a lump sum which was then invested into AdWords at their discretion, following a ‘management fee’.
[Total Monthly Search Marketing Costs] = [Exact Monthly AdWords Cost] + [3rd Party Management Fee]
Currently, if you are not working with a transparent 3rd party, the calculation may look like this:
X = ? + ?
You may know what your total monthly search marketing cost is but if you do not know exactly how much the 3rd party is keeping in their pocket versus actually investing in your AdWords account, then it is difficult to ascertain how effective the actual AdWords investment is.
How ‘nice’ of Google to force 3rd parties to share this information with their clients, yet, one must ask, what’s in it for Google?
Google’s Magnanimity?
The simple truth is that the barriers to entry into AdWords advertising are extremely low. Anyone can set up a basic account and be spending money on AdWords within 24 hours. On the flip side, you can stop spending money on AdWords just as quickly, as it takes literally minutes to pause an account or shut it down completely. This is a business concern for Google – no business likes to see its customers walk away.
By forcing 3rd parties to disclose ‘the exact amount charged by AdWords’ Google is trying to create a distinction to the advertiser between the money actually spent on AdWords versus the total payed to the 3rd party. In this way, if the advertiser is not happy with their return on AdWords they do not immediately discount the medium as ineffective but can do the arithmetic that may indicate to them that the problem lies with their 3rd party provider.
If the 3rd party is pocketing a large percentage of the fee, the AdWords system is not to blame for an unsatisfactory return. Thus, the advertiser may opt to change the 3rd party, while still investing in AdWords. With higher advertiser retention, Google will go singing to the bank, while at the same time be the hero for forcing the ‘bad guys’ to ‘fess up and be transparent with how money is being spent for their clients.
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