Convince and Convert Blog: Where Social Media and Email Collide

Times are tough.

But one area that is ready to soar is pay-per-click search marketing (PPC). That most measurable and controllable of digital marketing opportunities, PPC looks like a no-brainer in this economy.

Have you called a newspaper lately and asked them if they’ll charge you per phone call generated? Even with ad sales down 14% year over year, they won’t do it. 

Thus, with the holiday season approaching and a flinty consumer base not exactly killing themselves to buy the latest electronics or must-have toy (it’s Foreclosure Elmo), PPC looks like a no-lose proposition for retailers and e-tailers.

PPC - The Rich are Going to Get Richer

With PPC spend already up 52% in Q1 2008 versus 2007, the number of PPC advertisers and the money they’re going to throw at clicks is about to get insane. The competition for clicks, leads and sales in the 4th Quarter is going to be fierce, and I suspect there will be some “make us #1 no matter what” money in the game as casual PPC advertisers pull money from TV and print. 

It’s going to require exceptionally smart bidding (think day-parting) and a serious commitment to landing page testing to succeed. 

The problem is, this huge thirst for clicks is going to drive average cost per click through the ceiling. Google is already substantially most expensive on a per click basis than is Yahoo or MSN. Further, according to Efficient Frontier and their excellent Q2 search engine report (PDF) Google is getting $1.10 of each new dollar of PPC spend (Yahoo is minus 9 cents, and Microsoft is minus 1 cent). 

PPC - The Rich Are Then Going to Get Poor

The price of a click on Google is going to go WAAAY up over the holidays. So much so that ROI on those clicks will inevitably diminish, especially with consumers in “I think I’ll go to the Hickory Farms store in the mall and have 11 free samples and call it lunch” mode. 

At the end of January, hundreds of thousands of PPC advertisers will look at their reports (especially Google) and say “this isn’t worth it anymore.” 

February 1 will be the day the music died for PPC, and a long period of very modest growth will ensue as newcomers adopt a “we tried that back in 2008 and it almost broke us” mentality. 

Get yourself a killer test plan, a shot of Jim Beam (hat tip to Jason Falls) and manage client (and your own) PPC expectations. It’s going to be quite a ride. 

 

 

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Thanks to everyone for participating in my “Are you man enough to write a PPC ad about a woman VP” contest. Many excellent entries (see original post). Here are the results:

McCain is 72 years old 
Avg US life expectancy is 78 years 
Is Palin qualified? Read This 
DailyKos.com   1.31% Click-through rate      

 

Sarah Palin’s Secrets 
What the GOP doesn’t want you to 
know about McCain’s running mate 
sify.com 

2.66% CTR

 

Sarah Palin Revealed 
What makes her so special and 
why the Democrats should worry 
johnmccain.com 

3.62% CTR

 

Who is Sarah Palin? 
Exclusive stories, photos and more 
on the Vice Presidential candidate 
newsminer.com 

4.89% CTR!!!

 

Congratulations to Russ Hollmann (@hollmann) for winning the PPC Contest. He gets $200 from yours truly. 

Thoughts on the Outcome

I’ve been looking at the results and thinking about why Russ won and what we can learn from this contest. I’ve learned 5 lessons from this experience.

1. Mindset of searchers. Interestingly, Google took 3+ days to approve the ads. A call to tech support couldn’t even resolve it. Amazingly, they began running immediately after Palin finished her convention speech (insert conspiracy theory here).

Consequently, once the ads finally went live, I suspect there were more pro-Palin searchers than anti-Palin searchers, hurting the CTR of the lefty-slanted ad candidates.

On a similar conspiracy-scented note, the ads were set to run evenly for testing purposes. However, Google served 175% more of the pro-Palin or neutral ads than they did the negative ones. Hmmm.

2. URLs matter. I forgot that I had to put “real” URLs on the ads - not like the old days when you could do whatever you wanted. Thus, instead of having the same URL for each ad, I had to have the actual URL of the news story to which I linked. See above. For some, DailyKos is Kryptonite. The JohnMcCain.com URL may have been interpreted as less than objective (shocking, I know). The sify.com URL seems mysterious. Newsminer.com sounds objective and “newsie”. That may have helped Russ’ entry.

3. Don’t minimize your audience. Of all the finalists, the winner was the most even-handed. The other ads were clearly more appealing to one side or the other, which may have truncated their appeal commensurately. If you’re running a PPC campaign and are looking to maximize clicks, it may not work as well to take a strong stand in the ad itself - wait for the landing page.

4. Specific promises. In comparison to the other finalists, Russ’ entry promised stories, photos and more. I have seen through 15 years of Internet marketing experience that when you tell people exactly what they will get when they click, they are more likely to take you up on that offer.

5. Use of impact words. While all of the finalists used turns of phrase to make their ads interesting and engaging, Russ’ inclusion of “exclusive” may have helped win the contest. Given that by the time these ads launched, pretty much everyone not in prison knew at least something about Sarah Palin, the appeal of “exclusive” information may have been extremely intriguing.

How do you interpret these results? Add a comment

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Are You Man Enough to Write a Great PPC Ad About a Woman VP?

I’m using the puzzling choice of Sarah Palin as McCain’s VP pick to engage in a crowd-sourced search marketing experiment. Namely, who among you can write the most effective Google PPC ad featuring her?

The winner will receive $200 cash from the gilded vaults of Convince & Convert, as well as big-time bragging rights throughout Twitter, the Blogosphere, and maybe even among real people. 

The Rules

• Enter this scintillating contest by adding your best effort to the Comments of this post (see below).
• One entry per person please. Honor system.
• All entries are due by 6pm Pacific, 9pm Eastern time on Monday, September 1. This gives you something to do over your Labor Day weekend.
• The top 4 semi-finalists will be selected by me. I may throw open voting on Twitter if we have some close calls.
• I will create and launch a PPC campaign on Google next week and will run the semi-finalists as an A/B/C/D test. Bid amounts will be the same for all ads, etc. Search terms will be “Sarah Palin” and “Palin” - broad match
• The winning ad will be the one with the highest average click through rate, and will be announced next Friday-ish, September 6.
• Winner will receive $200 cash, check, or PayPal from me, and the opportunity to write a guest post on Convince & Convert about their winning technique.

Remember…

Google Adwords allows 25 characters (including spaces and punctuation) in the headline, and 35 characters for each of the two body copy lines. Please format your entry as:
Headline
Line 1
Line 2

…in the comments section. Don’t worry about a URL. I’ll make something up.

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AdWeek ran an interesting story a few days ago about Google’s foray into television advertising. As I’ve been saying for years, Google’s ultimate plan is to be the middle-man for all advertising, everywhere. 

There are clearly inefficiencies in the buying and selling of traditional media. It requires multiple phone calls and emails and spread sheets. Why? Because sellers of media will not make their inventory and their pricing transparent, believing (perhaps correctly) that to do so will result in lower prices.

The Internet Puts People Out of Business

Let’s see if there are other industries that were based in large measure on a slow, inefficient buying process with a lack of transparency. How about travel agents, financial agents, and insurance agents?

The Web does a lot of things well, but its long-term legacies will be instant knowledge and the creation of efficient markets in either broad (amazon, ebay) or targeted (expedia, eTrade, Geico) categories.

Google Has Chosen Advertising as Its Market

To me, the agency community seems frighteningly slow to realize that Google is looking to take away all agency services that are not strategic and creative, and replace them with Google-owned software. Google Ad Planner. Google Analytics. Google Web Optimizer. And now Google Radio, Print, and TV ad insertions. ALL of these are services that agencies could charge for as recently as 30 days ago in some cases. 

TV is the Final Frontier for Google

There are 2 components to Google’s TV strategy that if successful, will put a ton of broadcast media reps (buyers and sellers) on the street.

First, Google wants to deliver their menagerie of hundreds of thousands of advertisers directly to TV networks - and especially local stations. Imagine if your local CBS affiliate only needed 1 salesperson instead of 7 because most ads were bought direct through a Google interface. That’s the plan. 

Second, Google wants to deliver precise, real-time results tracking for television. They want to do away with Nielsen and all forms of panel and meter measurement. Already, Google is serving ads in the EchoStar satellite network, and providing second by second data on which ads are watched, skipped, paused, etc. They then combine data from online marketing and print and radio campaigns to provide advertisers with a comprehensive report on which media tactics and which creative executions are driving sales. 

Are there any clients out there that might want to know precisely how their TV fares versus their radio and print? Ummm, yes. 

Old Media is Denying Their Own Peril

What’s equally amazing and aggravating in the AdWeek article are the quotes from all manner of old guard TV folks and their hand maidens. They point to the newish effort by cable companies to join forces to provide the type of online marketplace and measurability for TV that Google is offering. The problem is, it doesn’t matter how great Project Canoe is (which is literally what it is code named - so much for futuristic nomenclature) - they have a grand total of zero advertisers on board. Whereas, Google has hundreds of thousands of marketers logging into their system every day. 

Ultimately, efficient markets will win. It’s as inexorable as water flowing to a point of least resistance. Even Forrester is ignoring the eventuality of Google getting a major foothold in the traditional media buying space, as analyst David Graves was quoted “It seems that the television establishment, both buyers and sellers, are likely to want to buy it person to person.” Not for long, and when Google opens up the billions of dollars in spot TV revenue pent up in the mouse clicks of their PPC user base, watch how fast those “face to face” advocates start learning how to buy and sell remotely.

 

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In a sign that major advertising agencies are continuing to recognize the long-term profitability of search marketing, Publicis Groupe bought Performics from Google today.

One of the largest search marketing agencies, Performics will join Digitas and other Publicis entities as part of VivaKi Nerve Center (no, I am not making this up) the new strategic collective cobbled together to serve Publicis clients world-wide.

3 Reasons Why Publicis Bought Performics

1. Search marketing is entirely mainstream now, and represents a “must do” tactic for essentially every Publicis client

2. Search marketing is projected to grow (by JupiterMedia) at a minimum of 12% annually through 2012, and there’s not many other marketing tactics (maybe social media and mobile) that are likely to achieve that level of compound growth

3. Search marketing is a “forever” tactic. Once you start, you can’t just stop doing it, because all that hard work will be washed away quickly. Thus, search marketing for major brands can be a $1-3 million per year, every year service fee, with extraordinarily high profit margins of 25% plus.

Note that Publicis has stated that they want 25% of their overall revenue to come from digital by 2012, and this acquisition will help make that a reality. There’s not that many serious search marketing agencies that have the scale necessary to fit in with Publicis, it’s still a very fragmented market, so the Performics acquisition makes sense.

Plus, Google and Publicis have a long-standing cross-functional relationship, including sharing of executives and intellectual property. 

Interesting that many smaller, traditional agencies totally eschew search marketing as “too complex” and “not worth it”. I wonder if this acquisition will change some minds in that regard?

Why Google Sold Performics

It always seemed a bit strange for Google to own a search marketing services company. Performics was acquired as part of Google’s purchase of display ad network pioneer DoubleClick. The DoubleClick purchase was strategically imperative to close the gap between Google and Yahoo! in the display ad business, but the Performics search and affiliate program unit was always an extra appendage. 

Rumors about Google selling off the search marketing component of Performics were confirmed on the Google Blog in April of this year. 

Certainly, it’s a conflict of interest to have Google own a huge search marketing company, when they are the dominant vendor/partner of that company, and their ownership of Performics surely made iCrossing, Did-It, and other large search firms nervous. 

But ultimately, Google got rid of Performics because they learned what they needed to learn about how search firms work, and they got out. I predict that you’ll see a whole new suite of paid search tools from Google, based on their learnings from Performics. That’s the Google way. They bought Urchin, looked inside its guts, and PRESTO you get Google Analytics. 

 

What do you think about this deal? Does it portend a new round of acquisitions by traditional agencies, scooping up search marketers? Is iCrossing the next to sell? Or is it just one company trying to make a splash to drive awareness of the VivaKi Nerve Center? Also, if you can coherently describe what a VivaKi Nerve Center is, please leave a comment! 

 

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Google announced on Friday via one of their blogs that they have added 3 new features to Ad Planner. 

(note: for more about Ad Planner, and Google’s long-term plan to totally change the ad agency business, read this post from Convince & Convert’s greatest hits)

Impressive that Google has made pretty significant upgrades to Ad Planner only a month after launch, and the new features make it an even more useful tool for ad agency Internet advertising buyers.

• They’ve added more detail on sites, including a lot of stickiness metrics like time spent, total views, and average visits per visitor. This really helps understanding the potential engagement level of sie visitors.
• If you already have sites that you know you need to include in your plan (either they’re must buys, or you’re already running them, etc.) you can just type them in, rather than having to search for them in the Ad Planner interface. 
• Visual indicator that the site is in the plan. This is a helpful step, as it displays an icon next to sites you’ve already included so that you don’t add the same site multiple times. Nice usability touch.

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In a LOOOOONG overdue move that provides some much-needed transparency to the PPC business, Google has added search volume data to their keyword research tool. 

This means that when you use Google to research potential search terms for your clients’ pay-per-click campaign, Google will actually give you an idea of how many people actually search for that term each month. Useful data when you determine that only 2 people per month search for “heirloom cucumbers kansas” so perhaps that phrase shouldn’t be the cornerstone of your search marketing efforts.

If you’re not involved with PPC on a daily basis, you may be thinking “well of course they would tell you how many people search for each phrase, how else could you even figure out which phrases to bid on?” Welcome to Planet Google, where information is doled out in maddeningly small and disconnected doses like plot points on Lost.

It is of course ridiculous that this data was not provided historically, especially since GoTo/Overture/Yahoo showed search volume from the beginning, and they pioneered PPC, not Google. But, Google’s moxy to hide a critical piece of marketing information has been a boon for search agencies and consultants, who use third party tools like WordTracker (a nice little company that is probably stocking smelling salts in the cafeteria after this announcement) to find this data for clients. 

While this announcement may seem out of left field, I see it as another move in a series designed to disintermediate agencies and move small and medium sized advertisers into the hands of Google directly. Google Analytics makes having a Web analytics consultant less necessary for some. Google’s Ad Planner makes an online media consultant less necessary for some. Google’s TV Ads and Radio Ads services make a traditional media consultant less necessary for some. 

Trouble for Agencies, but an Opportunity

Ultimately, it appears Google’s desired end game is for all small and medium sized advertisers to conduct all marketing transactions directly with Google, leaving agencies to deal with the big clients. For advertising agencies, this is both troubling, and an opportunity. If Google makes the marketing and advertising business as transparent as travel planning and stock purchases, the only agencies that will be able to survive are those that can add real value in messaging, creative, and integrating data into actionable tactics.

The transactional components of the advertising agency model like media placement, and the other services like Web analytics that are based on access to data will evaporate. Agencies must commit to being thinkers, rather than doers to succeed in this environment. Setting up a PPC campaign won’t cut it much longer. Managing a PPC campaign with rigorous testing that incorporates insights from offline tactics will be the level of expertise required for an agency to charge for search marketing - and that day will be here quickly.

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