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IN THE APRIL ISSUE...
DIGESTING GOOGLE'S NEW PPA ADVERTISING PRODUCT
Michael Arrington, TechCrunch , 3/21/07
Google announced the testing of a new pay-per-action, or PPA, advertising product today. It’s important for a number of reasons, not the least of which is the fact that Google controls so much of the online advertising market that just about anything they do in advertising has real consequences around the Internet.
Background
Until now, Google has primarily sold cost-per-click, or CPC ads. Advertisers pay a fee when someone on Google or a Google partner site clicks on the ad and is delivered to a web page designated by the advertiser. Advertisers like this because they only pay when a potential customer is in their hands. They don’t like it because of click fraud - publishers and advertiser competitors have an incentive to click those ads and generate revenue (or just cost to the advertiser). Since Google has a short term financial incentive to actually promote click fraud, there’s been a lot of debate around the subject over the years.
PPA advertising is meant to mitigate the risks of click fraud. Now the advertiser pays only if a customer has been delivered to a website and takes a further action, such as buying a product or filling out a web form.
Like CPC ads, PPA advertising wasn’t invented by Google. Search engine Snap has been selling ads this way for some time, for example. Another startup, Turn, is also in this business. As are others.
PPA requires an additional level of complexity in the ad network as well. Previously, Google delivered a user to a website, and sent a bill for the click. Now, Google needs to verify that an “action” has occurred by receiving confirmation back from the advertiser.
The advertiser will of course have an incentive not to confirm the action, but Google will be able to easily adjust for this. Like CPC ads, PPA ads will be ranked by profitability to Google. Google need only calculate the average value of a click to a PPA advertiser, and those ads can then be ranked by profitability. CPC and PPA ads could even be mixed, although Google isn’t doing that yet.
Consequences
This won’t affect big advertisers much, because they already track ROI on CPC advertising very closely. For smaller advertisers though, click fraud can wreak havoc. The ability to largely filter out click fraud will help them track ROI much more closely that they previously could. This will be a big help for them.
Affiliate marketing networks like Commission Junction and LinkShare are screwed. These networks also operate on a cost-per-action basis, mostly with online retailers. Even though some of them have scale, they will not have the ability to compete with Google on sheer size of network. Advertisers flock to volume, which drives average pricing up. When prices increase, publishers flock to the new platform because they’ll earn more. Look for serious publisher leakage from the big affiliate networks over time as this new product scales up. If you want to argue this point, note what happened to the stock price of Commission Junction’s parent company, ValueClick, today. And that’s even though the market has largely adjusted for this news already - this move to add PPA ads has been rumored for some time.
This should be good for Google’s overall market share and long term revenue growth. Anything that drives fraud out of the network will get advertisers to actually spend more money, not less, as their ROIs increase.
And Yahoo is now in the unenviable position of playing follow the leader again, even as they catch their breath from the massive Panama release earlier this year.
Oh Yeah, Google Also Released…
Google also announced a new “text link format” ad unit today. This was mentioned in the fourth paragraph of the blog post (not exactly highlighted), and is also discussed in the PPA product FAQs:
"What is the text link format for pay-per-action ads?
Text links are hyperlinked brief text descriptions that take on the characteristics
of a publisher’s page. Publishers can place them in line with other
text to better blend the ad and promote your product.
"For example, you might see the following text link embedded in a publisher’s recommendatory text: “Widgets are fun! I encourage all my friends to Buy a high-quality widget today.” (Mousing over the link will display “Ads by Google” to identify these as pay-per-action ads).
"Though the maximum length of a text link is 90 characters, we’ve found that shorter links perform better because they allow the publisher use the link in more places on her/his site and in different context. The maximum length is 90 characters but less than 5 words is best. Even better, just use your brand name to offer maximum flexibility to the publisher.
"No longer will Google ads need to be confined to their own space on the site - publishers can subtly embed ads right into hyperlinks within the main content of the site itself (see second paragraph of quote above). Other companies already do this, but Google has never tread into the “advertorial” space before."
They’ve crossed a hazy ethical line here. If this product was announced on its own, it would be heavily debated by the blogs and press. But by burying it in other, bigger news, they’ve mostly avoided the critical analysis that this actually deserves.
TRAVELOCITY: NON-BRANDED TERMS CONVERT NEARLY 25% BUT "ASSISTS" MIGHT BE LESS THAN ASSUMED
Danny Sullivan, Search Engine Land, 03/26/07
Earlier this month, Travelocity's chief marketing officer Jeffrey Glueck generated a bit of a stir in the search marketing world after giving a speech saying his company found only 4 percent of non-branded search terms brought in bookings. Problem is, Glueck now says those figures weren't reported correctly. As it turns out, nearly 25 percent of Travelocity's conversions come from non-branded terms. But the big "assist" that non-branded terms are sometimes said to give to branded terms wasn't happening for Travelocity. It might happen for others, but Glueck's main challenge is for marketers to better measure assists and know for themselves.
"I think search marketing is a fantastic channel. My plea is for companies to get more precise about measuring it, to bid smarter. Because if they don't, they can lose their shirts," he said in a comment left about his speech at Search Engine Land, where people have been discussing it. Glueck also clarified more about the study, which I'll dive into below.
Glueck had spoken about Travelocity's study at an IAB conference earlier this month. Why a Strong Brand Is a Search Marketer's Best Asset from AdAge was the original coverage from that, reporting:
[Glueck] tracked Travelocity's visitors coming from paid search and found that 65% of people only interacted with paid search once, via a single keyword. He found 27% interacted with paid search multiple times -- but just searched repeatedly on the same term. Only 8% searched multiple times with different terms.
The final findings? Only 2% of paid-search conversions fall into the category where the searcher originally clicked on a nonbranded term only to click and convert on a branded term at a later date. Travelocity now credits nonbrand phrases as being responsible for only 4% of each booking attributed to branded search.
"For us, we can take a loss on nonbranded terms like 'Hawaii vacation' -- but not much of a loss," Mr. Glueck said. Ultimately, he said, it is a "profound mistake by all of us to think we've figured out how to measure ROI on search. We're in stage one."
We mentioned the AdAge story on Search Engine Land, which generated a series of comments, the latest from Glueck himself. He noted:
There were several inaccuracies and mis-quotes in the original AdAge article, and AdAge has been kind enough to issue a correction.
The AdAge correction clarifies:
This story incorrectly implied that nonbranded keywords convert only 4% of searches. It should have stated nonbranded keywords are responsible for only 4% of the profits from branded paid keywords. Of the bookings on Travelocity attributed to search, about 80% are attributed to branded terms. Of that 80%, 4% should be credited to earlier clicks on nonbrand terms. Mr. Glueck also cited a Nielsen NetRatings study, and it should be noted the study, published in November 2005, specifically addressed travel-related searches in Google and Yahoo. The study found 47% were composed of 100 terms, and most of those were brand terms.
To spell it out further, Travelocity is saying that 20 percent of its bookings come from non-branded terms. Of the other 80 percent, where Travelocity buys a branded term, 4 percent of those get an "assist" or a click that converts after someone made an earlier visit via a non-branded term. For example, someone might have done a generic travel search, then later searched for a specific travel brand and made a booking. The branded search gets the credit for the sale, but a non-branded term helped.
So non-branded terms are important. On their own, generating 20 percent of conversions is significant. Add in the assists, and you get to 24 percent of conversions happening from non-branded terms. But still, I think many assume non-branded terms generate more than a 4 percent assist rate when it comes to helping branded terms to convert.
Indeed, search marketers often talk about a "search funnel" that happens. Someone searches for "new york" when thinking about traveling there. Then they get more specific -- "new york hotels" -- when they decide to stay. Then they get brand specific, "new york hilton," when they've found a specific place they want to say. The searches go from wide (the top of the funnel) to narrow (the spout of the funnel).
Q&A: Travelocity's Chief Marketing Officer Explains Why Brand Terms Are Better from AdAge is a follow-up article with Glueck that gets into this more, done with Glueck after his speech. Is the funnel real?
We then studied whether people are starting on a nonbrand term like Hawaii vacation deals and, through multiple searches on a search engine, narrowing down to their favorite brands through multiple paid clicks and then, in some magical way, always going to the brand name and clicking on the paid link before buying. That is the funnel theory. If that were the majority of purchases, then the portfolio theory would make sense. We'd be OK to lose money on Hawaii vacation deals and make money on branded search terms.
This January we got the first detailed web analytics study from Travelocity.com about multiple clicks. Last-click measurement is very popular, and it's what has for the last few years allowed search engines to say they're the most measurable form of media in history. Travelocity's point was that you should do the research on your own brand and nonbrand click behavior and don't let brand profits fool you into overbidding on nonbrand terms. ... Every advertiser sets their own threshold based on their conversion and profit level. We weren't saying search wasn't measurable. We're saying advertisers should get more sophisticated and accurate about how they measure it.
About 4% of the bookings that occurred on brand terms should actually be credited to an earlier search on a generic term like Hawaii vacation. That 4% was less than the 12% that other companies had reported in a 360i study last year. Every company will have a different number, but the point is, we didn't see any evidence that the funnel theory was the majority of bookings. Most people who bought with us only clicked one paid search ad in the 45 days before booking. About 76% of bookings from search were based on a brand search. ... Thanks to that 4% funnel, we could lose a couple dollars on each booking from nonbrand phrases and still feel good about our spend.
All of these figures apply to Travelocity in a given period of time. Other marketers should do their own research in the same way. You have to calculate an accurate "assist percentage" for your business. Every business is different. ... Small companies without a strong brand will probably gain more exposure through generic searches. But they still have to do the math and decide if they're getting profitable business or not.
Overall, interesting findings, and it's hard to disagree that anyone should take a close look at how their own site is converting. Some may find the funnel effect is stronger; others might find they are more like Travelocity and want to take a harder look at their purchases.
As I said, Glueck's comments sparked some reaction on Search Engine Land. Here's a close-up on his replies to some questions raised (see our original article to view all the comments on the story):
1) I never said that buying non-brand search terms was a waste of time, or that it's impossible to measure. Far from it. At Travelocity we spend half our marketing budget in online and search. My point was that search marketers should get more precise about calculating "assist" percentages, and more accurate in their ROI methods. As the comment from SearchQuant agrees above, I was simply saying that assist percentages only modified our ROI by a few percentage points-- same as SearchQuant calculates.
2) We calculated that 4% of brand bookings should be attributed to earlier nonbrand clicks. Based on better "assist" measurement, we think non-brand terms drive about 24% of our search bookings, rather than the 20% indicated by last click measurement. Every SEM campaign will be different, so you have to calculate your own figures. I was very clear everyone should do their own research, depending on their own unique situation. AdAge misunderstood the 4% assist and jumped to the conclusion that 96% of bookings were from brand terms, but the math is closer to 76%.
2) The Nielsen NetRatings study I cited was for the TRAVEL category, not the whole internet. It indicated 47% of all searches came from 100 terms, the majority of which were brands.
3) On the comment by Mr.Greitzer in regards to natural SEO, I would simply say that thanks to click tracking, buyers who come back to a site thanks to SEO links would still be attributed to the original paid CPC click (within a long lookback window), so the problem is not in natural clicks being missed, but rather that last click tracking has problems with multiple paid clicks.
4) As to the comment by DanielR that my October 2006 speech at Shop.org was a change in tune, that's an easy misunderstanding as well. In that speech, I cited the authors of a 360i published study which looked at a large number of large etailers (not including Travelocity) and noted that 12% of their brand profits should be attributed to earlier nonbrand clicks. I invited the audience to do their own studies on their own circumstances. Travelocity upgraded its web analytics to VisualSciences and we finally in 2007 were able to do our own study on clickstream for the first time, and that's where the 4% figure emerged. Every company will be different.
Regardless of whether the assist is 4% or 12%, that's a long way from the funnel/clickstream theory that the majority of generic term searchers come back via brand terms to buy. That was my key point, and it remained unchanged. There is some lift/assist, absolutely, just not a huge one.
5) As to the comments that focusing on landing page optimization and conversion is the key to making paid search work, I couldn't agree more. I think we're a strong site-- or we wouldn't sell over $10B of travel a year--but we absolutely can get better. And that will help our non-brand profits.
6) As to the comment above that offline marketing is completely unmeasurable, I respectfully disagree. Those who heard my speech know that I emphasized multivariate regression models across all channels. My point is that nearly ALL marketing is measurable over the long term, and that unified models will actually measure MORE ACCURATELY than click tracking in some sense, because they get at the inter-relationships between TV and Radio and search.
In sum, I
think search marketing is a fantastic channel. My plea is for companies
to get more precise about measuring it, to bid smarter. Because if they
don't, they can lose their shirts. And I suppose, I have a second plea:
To read my comments in the proper context.
YAHOO! REMOVES CATEGORY (DIRECTORY) LINKS FROM UNDER SEARCH RESULTS
RustyBrick, Search Engine Roundtable 03/26/07
David at Search Engine Roundtable Forums reports that Yahoo! has removed the directory (category) links from within the search results (directly under each search result.
A search on google at Yahoo! Search confirms this to be true. In the past the results looked like:
Notice the category link, which links the search result directly to the category it belongs to within the Yahoo! Directory. Now that seems to be gone for all searches I tested.
Same with a search on search engine roundtable:
Old Result:
New Result:
I tried several different searches that I knew returned the category link within the listings, and all are gone. I do not know if this is on purpose, or if this is just a Yahoo! test.
BLINKX LAUNCHES VIDEO SEO WIKI
March 2007
From the BlinkxWiki:
In March 2007, video search engine, blinkx, wanted to help online video users and publishers have equal opportunity in the representation of their content. This wiki of blinkx’s knowledge on video and video SEO was shared, seeded and also launched as a whitepaper.
As this wiki is now open to public input, the views and content do not necessarily represent those of blinkx.
Contents
* 1 Introduction
o 1.1 Search Engine Optimization
o 1.2 The growth of online video
o 1.3 What is Video Search Engine Optimization?
* 2 Background
o 2.1 The online video market today
o 2.2 Understanding the Online Video marketplace
o 2.3 Why Video SEO matters: the value of Web video
o 2.4 What is video search and how does it work?
* 3 Video SEO
o 3.1 How to present your video for SEO
o 3.2 What to avoid
o 3.3 Where to submit videos: sharing sites and search engines
* 4 External links