Thursday, August 27, 2009 Digital Marketing Insight

I am excited to let you know that today we launch, a new site that delivers digital marketing insight and resources to help marketing executives lead in the digital age.

Online marketing has become strategic to CMOs. As Omniture has expanded its Online Marketing Suite, we have become more and more involved in “big picture” conversations with C-Level executives about their strategy to move from traditional forms of marketing such as TV, radio and print to digital marketing.

I hope Searchquant readers will find to be a valuable resource to them going forward, and one you'll visit regularly.

Monday, August 24, 2009

Important YoY & multi-year trends in search & online marketing

I read a study published recently by SEM firm Engine Ready, and which looks at key statistics across paid and organic search, direct site traffic and referral traffic. The data's very interesting, but what's most illuminating is comparing the data to an earlier version the firm put out Jan 2008. NOTE: the recent study's data is based on data for 26 retailers taken from 7/1/08-6/30/09, while for the earlier study 27 retail advertisers' data was aggregated over a 2-year period 2006-2007. 21 of the 26 advertisers in the most recent study were also in the previous study.

1) Conversion rates (CR) have improved mostly in direct access and referral site visitation, and least in paid and organic search. This helps explain why growth in search CPC's has stalled;
2) Retail consumers increasingly know where they want to go, and use search less and less to get there (proportionally speaking);
3) The conversion rate disparity between direct and referral site visitors, on the one hand, and paid and organic search visitors on the other hand, has grown significantly;
4) AOV used to vary widely by traffic source, but has largely consolidated to a multi-channel average

Advertiser Strategy implications:
1) Advertisers testing & targeting efforts should be particularly focused on paid & organic search traffic, as CR has been most stagnant in search;
2) Multichannel attribution measurement is the key opportunity for revenue and marketing gains from CMO orgs, as it alone will allow for a conscious, strategic shift from dependency on lower value, recurring cost paid search channels over to higher value, higher growth direct & referral traffic sources;
3) Brand advertising - social media, search and offline - and with a strong set of visitor engagement metrics is a must to drive growth in the fastest-growing and most profitable traffic segments - direct and referral traffic. Waiting at the bottom of the sales funnel - paid search - for customers is a recipe for disaster;
4) Understanding and optimizing to Lifetime Value is critical, as AOV is a less and less movable needle. LTV, multichannel measurement & optimization go hand in hand.

Kudos to Engine Ready for putting together such interesting data.

Friday, August 21, 2009

My WebAnalyticsWorld Interview

For those interested, here's a link to an interview I did with prolific analytics blogger Manoj Jasra of Web Analytics World last week at SES San Jose. In it we talk about Omniture's SearchCenter product and the importance of the rest of Omniture's platform to our SEM clients.

Friday, August 07, 2009

SES SJ: (S)omone (E)xamine (S)trategies

I don’t know about you, but I dislike the word ’strategy’. It’s right up there with ’skill sets’, ‘engagement’, ’synergies’ and ‘leverage’, words businesses often use to invoke and associate with the idea of higher thought. With Search Engine Strategies San Jose, the world’s largest search marketing conference upon us next week it occurs to me that the show has devolved to tactics, not strategy - and that needs to change.

The tactics used to successfully attack paid and organic search *are* important, but can I please get a ‘whoop whoop!’ from attendees who will high-step it out of *any* session whose panelists talk about keyword generation, campaign structuring and ROI-based management as if those were strategies and not just tactics we’ve all learned about, implemented and lived by since the Long Tail was 100 keywords?

Strategies are overall plans to win the battle before it is fought, and tactics are the activities we engage in to implement our strategy.

Panelists, vendors, consultants and engine folk, let’s admit it - in our haste to secure our piece of this rapidly expanding pie, we have turned this conference and others like it into a glorified feeding frenzy where insiders position tactics as unique insight, features as solutions and experience as vision.

Strategy really matters now. Like you, your competitors have learned the tactics and implemented them. They too have seen the growth, the ROI and the measurability of search - and they want more just as badly as you do. Sheer effort still distinguishes some from others, but that same sheer effort eventually takes a 40% pay raise from a competitor, leveling the playing field right quick.

The engine duopoly, meanwhile, is wringing more money out of advertisers by pushing gratuitous, default campaign settings, silo’d SEM mindsets and self-serving system optimizations. It’s no wonder most advertisers are seeing diminishing returns.

And last, the SEM vendors, oh the SEM vendors. They've scored easy VC money with visions of a $100M+ exit, and then thrust features that only serve to guide advertisers down a path of strategic myopia. Have you met many SEM vendors who want you to invest towards becoming an effective multi-channel marketer? Do they entice you with Google Maps mashups, no-work-required deployment pipedreams and avoidance of the API costs you will soon bear? Do they want you to play a defensive Quality Score game rather than a multichannel offense?

Omniture, a firm whose SEM stance even I once scorned, has arrived with a strategy and accompanying technologies and services that can inform and enable your own strategy.

Omniture will be discussing search engine Strategies next week. In our view, the Internet is not just a marketing channel. It has become an enabler for a business strategy that consists of:

1) measuring customer acquisition and conversion;
2) using information to inform automated optimization;
3) extending the view of the customer across channels on and off-line and despite multiple 3rd-party apps; and
4) applying new insights to optimize your business based on a complete view of all customer interactions

Come join us next week at the sessions Ron Belanger and I will participate in - or at our booth - and we’ll look forward to talking… Strategy with you.

Monday, August 03, 2009

Google's Bid S[t]imulator

It's been 6 years now that I've been on the sales side of hundreds of SEM discussions with advertisers and agencies, with much of that time spent discussing the importance of instrumenting SEM campaigns so that the all-important data (Green Gold as we call it here at Omniture) can be captured and used to optimize to business goals. As a third party vendor who must add value to clients' SEM campaigns to justify fees, our interests are fully aligned with the ad spender.

In an interesting twist, however, Google's now offering the Bid Simulator, a tool that purports to simulate traffic levels at various CPC's the advertiser could choose. This is interesting for a number of reasons:

Data Accuracy: those who've been in SEM for some time know full well that Google's primary attempt at estimation - Traffic Estimator - has been so far off from actual traffic levels advertisers see as to be laughable. Now, though, Google's offering - for free (Warning, Warning, Warning) - to help advertisers see how much more traffic they could get if they would just try the [mostly higher] CPC's Google suggests.

Motive: searchers increasingly know where they're trying to go, and thus reliance on paid ads to get there has leveled off. For proof of this one need look no further than Google's latest financial results, which showed negative sequential click volume growth. Were it not for miraculously higher CPCs, GOOG would be, well, just GOO. Most industry watchers can't explain the rise in CPCs for the simple reason that the economy still stinks, and CPC's tend to track to ROI. So how did Google get 5% growth in CPC's in Q2? Part of it was changes in exchange rates, but part of it was, as Google execs said on their earnings call [I paraphrase here] "Over a dozen ads quality improvements that had higher than usual impact."

Did you notice the quality of ads improving? I sure didn't, and so I'm left wondering if ads quality improvement means improvement for Google itself in the form of higher CPCs despite flattish ROI.

And so back to the Bid Simulator; advertisers & agencies who are trying it are most typically seeing Google suggest bids that are so far above the campaigns' optimal settings as to be laughable (see this SEW Forums thread).

Given Google's historic inaccuracy when it comes to advertiser-specific traffic estimation, coupled with the fact that Google's under duress to buck the economic winds flailing their business, I suggest advertisers think of this new feature as the Bid Stimulator, and treat it accordingly.

[9/1/09 note: someone came to my blog after searching for 'Google Bid Stimulator' just now. Freudian slip, me thinks.]

Saturday, August 01, 2009

Did proper nouns all of a sudden become low-quality?

A small but noticeable group of SEM experts have noticed that Google's AdWords system has recently lowered the Quality Score for many of the proper nouns they buy. Forum discussion on Webmasterworld is here.

First Google opens up trademark bidding to boost otherwise flagging revenues, and now all of a sudden they're deeming proper nouns lower quality (and thus lower Quality Score) for which there was no change in landing page. This can mean one of two things IMO:

1) Google has identified a keyword sector that will bear higher CPC's and is inflicting them;
2) Someone at Google thinks proper nouns are worth more because they're, well, proper

Either way, I see hot burning coals under the feet of proper nouns, while adjectives, predicates, adverbs and conjunctions go untouched...

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