Category Archives: PPC

Is Yahoo! Hurting Bing PPC?

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In 2010, Yahoo! and Bing rolled out their Search Alliance, in a bid to compete with Google search and tackle the market leader with a joint counter strategy.

According to the Microsoft Transition Center, the transition is complete and ready for advertisers to take full advantage of the offering:

The transition of Yahoo! Search ad serving to Microsoft Advertising adCenter is now complete in the United States and Canada. Your Microsoft adCenter ads can now reach 166 million unique searchers using Microsoft and Yahoo! sites (including Yahoo! Search, Bing, and partners), providing a sizable volume of 6 billion monthly searches.1

Your ads are now reaching customers on Yahoo! Search and Bing. As more and more Yahoo! advertisers join the auction, it’s important to actively monitor your campaign performance. Take an active role in monitoring and modifying your campaigns to achieve optimal performance results on Yahoo! Search and Bing.

Microsoft AdCenter – A History

Prior to the Search Alliance with Yahoo!, Bing was reliable. Advertisers could not find the same volume on Bing that is available on Google, but the cost-per-click was more than halved, CTR was strong and conversion rates were often higher than that on Google.

What you had, was a low volume model that delivered quality results. On Bing you would spend between a third to half of your Google budget so the investment was more modest, but it was a solid investment that yielded returns.

In the last 12 – 14 months the PPC experience has changed on Microsoft AdCenter. Perhaps other advertisers have had more positive results and this is by all accounts a personal summary, but here are some of the things that seem to have gone bad on Bing.

1. Can Bing / Yahoo! PPC traffic be tracked separately?
Every advertiser obviously wants to know what they are paying for and where their ad is going to be advertised. When you advertise on Google and do not opt in partners, you know that your ad will appear on the Google search engine results page.

Not on Bing and Yahoo! This is probably one of the most contended elements of the Search Alliance, by advertisers and search marketers alike. When you advertise via Microsoft AdCenter, your ad could appear on both the Bing and the Yahoo! search engine, yet you cannot actually control where the ads are being served or see this break out in any reports.

An advertiser asked this question directly on the Microsoft Advertising Forum:

Advertiser: Now that Bing is displaying results for both Yahoo and Bing it would be worthwhile to know which search engine was producing more quality traffic i.e. are searchers on Yahoo responding better to my ads than those on Bing or vice versa.  Is there anyway to tell if my leads are coming from results displayed on Yahoo or Bing?

Microsoft Advertising: At this time we do not have a way to track Yahoo and Bing traffic separately within adCenter. Also, there is only the option to separate search syndicated traffic and search traffic but no way to have either Bing or Yahoo ads display in a particular campaign.

2. Customer Service is Lacking
We know that generally speaking, customer service with the engines is directly proportional to PPC spend. Having said that, in the last year, Bing reps have taken a disproportionately long time to respond to emails, if at all. We’re talking 3-4 month response times here after multiple follow ups. Perhaps the advertisers are in too low a spending band to receive top tier customer service, but the drop in service has certainly been palpable since the Search Alliance.

3. A Captcha Nightmare
This concern is one of the most troubling as it impacts the advertiser experience and lead quality. This has occurred with more than one advertiser, where spam form entries occur in high volume. This is computer-generated spam as the entries do not make any sense and unfortunately only occurs when the Bing campaign is live. Even a spammer would make more of an effort compared to the computer generated inputs.

What’s Next for Bing?

I read an interesting article on Search Engine Land that discusses what Bing & AdCenter can put on the table for enterprise advertisers.

The question I have is where does Yahoo! fit into the picture for Bing? It is clearly the weak link in the Search Alliance. After the firing of CEO Carol Bartz in September 2011, the company is still floundering. Today, Yahoo! is an afterthought in most minds and the only thing the Search Alliance really did was to completely erase Yahoo! from the search engine playing field. The question now is whether Yahoo! can drive Bing forward or is it baggage that Bing would be wise to let go of?

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Can Paid Search Alone Drive Sales-Ready Leads?

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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.

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Conversions – a function of clicks or impressions?

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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.

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PPC – It’s Relative

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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.

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Google’s New Third Party Reporting Requirements

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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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