search engine marketing

Welcome to the Ad Duopoly: Google and Facebook

Phillip Nones Advertising, Marketing, Marketing Communications, Social Commentary, Social Media , , , , , , ,

Unless you’ve been living under a rock, it’s pretty obvious that the advertising marketplace in America has changed radically in the past few years.

In short order, we’ve seen the largest concentration of digital advertising converge on just two players:  Google and Facebook.  In fact, according to digital advertising research firm eMarketer, those two firms alone are attracting two-thirds of all digital ad dollars in the United States.

But this development isn’t all that surprising.  The vast bulk of Google’s ad market share results from its search engine marketing platform (paid search). As for Facebook, it dominates digital display advertising not just in America, but in many other countries all over the world as well.

And both companies are the “big kahuna” players in the mobile advertising sector, too.

What’s interesting is that, despite the shortcomings that many people recognize in both types of digital advertising – banner blindness and often ill-targeted paid search results — healthy growth in both forms of advertising continues apace.

Google’s ad revenue growth has average around 20% for more than 30 straight quarters. Its growth in the third quarter of 2017 is right on pace at 22%.

For Facebook, the growth dynamics are particularly lucrative; its year-over-year ad revenue growth is pushing 50%.

Mobile ad revenues are growing even faster; they accounted for “only” $9 billion in revenues for Facebook in just the third quarter.  And just as paid search advertising revenues represent more than 90% of Google’s total company revenues, mobile advertising accounts for nearly 90% of Facebook’s overall revenues.

With so much advertising activity, one might wonder from where it’s emanating.

One answer to that question is that the “universe” of advertisers is exponentially higher than we’ve ever encountered before. With low barriers to entry and “anyone can do it” ad development tools, “Jane and John Doe” are far more likely to be advertisers in today’s world of digital marketing than was ever contemplated just a few decades ago.

To wit: Facebook estimates that its social platform has more than 6 million active advertisers participating on it at any given moment in time.  That’s the equivalent of 2% of the entire population of America.

It’s kinda true:  “We’re all advertisers now.”

Today’s Most Expensive Keywords in Search Engine Marketing

Phillip Nones Advertising, Business, Marketing, Marketing Communications, Media, Sales , , , , , , ,

I’ve blogged before about the most expensive keywords in search engine marketing. Back in 2009, it was “mesothelioma.”

Of course, that was eight years and a lifetime ago in the world of cyberspace. In the meantime, asbestos poisoning has become a much less lucrative target of ambulance-chasing attorneys looking for multi-million dollar court settlements.

Today, we have a different set of “super-competitive” keyword terms vying for the notoriety of being the “most expensive” ones out there.  And while none of them are flirting with the $100 per-click pricing that mesothelioma once commanded, the pricing is still pretty stratospheric.

According to recent research conducted by online advertising software services provider WordStream, the most expensive keyword categories in Google AdWords today are these:

  • “Business services”: $58.64 average cost-per-click
  • “Bail bonds”: $58.48
  • “Casino”: $55.48
  • “Lawyer”: $54.86
  • “Asset management”: $49.86

Generally, the reasons behind these terms and other terms being so expensive is the dynamic of the “immediacy” of the needs or challenges people are looking to solve.

Indeed, other terms that have high-end pricing include such ones as “plumber,” “termites,” and “emergency room near me.”

Amusingly, one of the most expensive keywords on Google AdWords is … “Google” itself.  That term ranks 25th on the list of the most expensive keywords.

[To see the complete listing of the 25 most expensive keywords found in WordStream’s research, click here.]

WordStream also conducted some interesting ancillary research during the same study. It analyzed the best-performing ads copy/content associated with the most expensive key words to determine which words were the most successful in driving clickthroughs.

Running this textual analysis found that the most lucrative calls-to-action included ad copy that contained the following terms:

    • Build
    • Buy
    • Click
    • Discover
    • Get
    • Learn
    • Show
    • Sign up
    • Try

Are there keyword terms in your own business category or industry that you feel are way overpriced in relation to their value they deliver for the promotional dollar? If so, which ones?

Search quality slips in people’s perceptions … or is it just that we’ve moved the goalpost?

Phillip Nones Advertising, Business, Marketing, Marketing Communications , , , , , , ,

Recently, the American Customer Satisfaction Index reported that the perceived quality of Google and other search platforms is on a downward trajectory. In particular, Google’s satisfaction score has declined two percentage points to 82 out of a possible high score of 100, according to the ACS Index.

Related to this trend, search advertising ROI is also declining. According to a report published recently by Analytic Partners, the return on investment from paid search dropped by more than 25% between 2010 and 2016.

In all likelihood, a falling ROI can be linked to lower satisfaction with search results.  But let’s look at things a little more closely.

First of all, Google’s customer satisfaction score of 82 is actually better than the 77 score it had received as recently as 2015. In any case, attaining a score of 82 out of 100 isn’t too shabby in such customer satisfaction surveys.

Moreover, Google has been in the business of search for a solid two decades now – an eternity in the world of the Internet. Google has always had a laser-focus on optimizing the quality of its search results, seeing as how search is the biggest “golden egg” revenue-generating product the company has (by far).

Obviously, Google hasn’t been out there with a static product. Far from it:  Google’s search algorithms have been steadily evolving to the degree that search results stand head-and-shoulder above where they were even five years ago.  Back then, search queries typically resulted in generic results that weren’t nearly as well-matched to the actual intent of the searcher.

That sort of improvement is no accident.

But one thing has changed pretty dramatically – the types of devices consumers are using to conduct their searches. Just a few years back, chances are someone would be using a desktop or laptop computer where viewing SERPs containing 20 results was perfectly acceptable – and even desired for quick comparison purposes.

Today, a user is far more likely to be initiating a search query from a smartphone. In that environment, searchers don’t want 20 plausible results — they want one really good one.

You could say that “back then” it was a browsing environment, whereas today it’s a task environment, which creates a different mental framework within which people receive and view the results.

So, what we really have is a product – search – that has become increasingly better over the years, but the ground has shifted in terms of customer expectations.

Simply put, people are increasingly intolerant of results that are even a little off-base from the contextual intent of their search. And then it becomes easy to “blame the messenger” for coming up short – even if that messenger is actually doing a much better job than in the past.

It’s like so much else in one’s life and career: The reward for success is … a bar that’s set even higher.

Google and the multi-billion dollar pay-per-click money tree.

Phillip Nones Advertising, Business, Marketing Communications, Media, Media Consumption, Sales, Social Commentary , , , , , , , , , , , , , , , , ,

moneyIt’s no secret that Google has been trying to diversify its revenue stream away from clickthrough advertising, which historically has accounted for the overwhelming majority of its income.

How else to explain Google’s shopping spree over the past decade, scooping up a veritable smorgasbord of industry players like these:

  • AdMob (mobile)
  • Adometry (attribution)
  • Channel Intelligence (product feeds)
  • DoubleClick (display)
  • Invite Media (programmatic creative and media buying)
  • Teracent (programmatic creative and media buying)
  • YouTube (video)
  • Wildfire (social)

So the next question is, “How much have these acquisitions and investments done to diversify Google’s sources of revenue?”

The answer:  Hardly anything.

Consider this statistic:  In 2011, nearly all of Google’s revenue came from online pay-per-click advertising, as reported by SEO firm WordStream.

Now let’s look at 2014 figures:  WordStream reports that the percentage of Google revenues from pay-per-click advertising is actually higher than in 2011, at 97%.

So much for the “diversifying effects of diversity.”

Within PPC advertising, a number of keyword terms are continuing to haul in the big bucks for Google.  A few years back, the priciest keyword term of all was mesothelioma, at more than $100 a click.

Mesothelioma continues to attract a lot of ad dollars, but it’s no longer commanding $100 a pop as it once did.  In fact, it’s no longer on the Top 10 most expensive keywords list.

That list looks like this now (in descending order of bid pricing, starting at over $50 per click and dropping to “only” around $45 for the #10 keyword):

  • Insurance
  • Loans
  • Mortgage
  • Attorney
  • Credit
  • Lawyer
  • Donate
  • Degree
  • Hosting
  • Claim

In developing the ranking, WordStream determined which keywords reside in the stratosphere by compiling data from its own large keyword dataset and the Google Keyword Tool (over a 90-day period) to determine the 10,000 most expensive keywords.

These were then organized into categories like “credit” and “insurance” by weighting the number of keywords in each category, estimating the monthly search volume as well as the average cost-per-click for each keyword.

Notice the preponderance of financial and legal terms – both of them key to sectors that attract and manage a ton of money.

The word degree is right up there, too, underscoring how important the educational complex has become to the ad business.

It must be pretty unappealing to be active in these industries and have to pony up such big dollars to participate in the pay-per-click advertising space.  But how else do we think Google racks up annual advertising revenues that are north of $32 billion?

How does the market sort out which keywords are worthy of commanding $40 or $50 per click?  Essentially, it boils down to this:  Invariably, the most expensive niches paying for the most costly keywords are ones with very high lifetime customer value – where the customer pay-off is high.

Think about it:  The amount of money an insurance company gets from an individual signing up for coverage makes the high cost-per-click rates – even at $50 a pop — worth it.

Business observers point to long-range trends that may make search engine marketing increasingly irrelevant as the growth of multichannel, multi-device marketing picks up steam.

But don’t hold your breath; Google will likely be earning billions off of pay-per-click advertising for years to come.

Optify takes the pulse of B-to-B paid search programs.

Phillip Nones Uncategorized , , , , , , , , , , , ,

Optify logoI’ve been highlighting the key findings of Optify’s annual benchmark report charting the state of B-to-B online marketing. You can read my earlier posts on major findings from Optify’s most recent benchmarking here and here.

In this post, I focus on the paid search activities of business-to-business firms.

Interestingly, Optify finds that pay-per-click programs have been undertaken by fewer firms in 2012 compared to the previous year.

And the decline isn’t tiny, either:  Some 13% fewer companies ran paid search programs in 2012 compared to 2011, based on the aggregate data Optify studied from 600+ small and medium-sized B-to-B websites.

However, those companies who did elect to run pay-per-click advertising programs in 2012 achieved decent results for their efforts.

The median company included in the Optify evaluation attracted nearly 550 visits per month via paid search, with a conversion rate just shy of 2%, or ~45 leads per month.

[For purposes of the Optify analysis, a lead is defined as the visitor taking an action such as filling out a query form.]

Leads from paid search programs represented an important segment of all leads, too – between 10% and 15% each month.

The above figures represent the median statistics compiled by Optify. It also published results for the lower 25th percentile of B-to-B firms in its study. Among these, the results aren’t nearly so robust: only around ~60 visits per month from paid search that translated into 6 leads.

Since the Optify report covers only statistics generated from visitor and lead tracking activity, it doesn’t attempt to explain the reasons behind the decrease in the proportion of B-to-B firms that are engaged in paid search programs.

But I think one plausible explanation is the steadily rising cost of clicks. They broke the $2 barrier a long time ago and see no signs of letting up. For some companies, those kinds of costs are a bridge too far.

I’ll address one final topic from the Optify report in a subsequent blog post: B-to-B social media activities. Stay tuned to see if your preconceptions about engagement levels with social media are confirmed – or not!

Click Wars Opening Round: Plaintiffs 1; Facebook 0

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I’ve blogged before about the issue of click fraud, which has many companies wondering what portion of their pay-per-click campaigns are simply wasted effort.

Until now, Google has been the biggest target of blame … but now we’re seeing Facebook in the thick of it also.

It’s only been in the past year that Facebook has made a real run for the money when it comes to paid search advertising. There are some very positive aspects to Facebook’s advertising program, which can target where ads are served based on behavioral and psychographic factors from the Facebook profiles of members and their friend networks. This is something Google has had a difficult time emulating. (Not that they haven’t been trying … which is what the new Google +1 beta offering is all about.)

But now, Facebook is the target of a lawsuit from a number of advertisers who contend that there are major discrepancies between Facebook’s click volume and the companies’ own analytics programs which suggest that the purported clickthrough activity is significantly inflated.

As an example of one company that is a party to the lawsuit, sports fan site RootZoo alleges that on a single day in June 2010, its software programs reported ~300 clicks generated by Facebook … but Facebook charged RootZoo for ~800 clicks instead.

While contesting the allegations vigorously, Facebook’s attorneys have also argued against the company having to disclose the source code or other details of how it calculates clickthrough activity, citing fears that the proprietary information could be leaked to outside parties (competitors) as well.

But that argument fell on deaf ears this past week. Instead, Facebook has been ordered by the U.S. District Court in San Jose, CA to disclose a wide range of data, including its source code for systems to identify and filter out invalid clicks.

In making this decision, Magistrate Judge Howard Lloyd stated, “The source code in this case implemented Facebook’s desired filtering, and whether that filtering [has] lived up to Facebook’s claims and contractual obligations is the issue here.”

This ruling appears to call into question the sweeping terms and conditions that Facebook advertisers are required to sign before beginning a media program. The relevant language states: “I understand that third parties may generate impressions, clicks or other actions affecting the cost of the advertising for fraudulent or improper purposes, and I accept the risk of any such impressions, clicks or other actions.”

[This isn’t the only incidence of Facebook’s broad and restrictive stipulations; another particularly obnoxious one deals with “ownership” of content posted on Facebook pages – basically, the content creator gives up all rights of control — even if the content came to Facebook through a third-party source.]

But in this particular case, evidently the terms and conditions language isn’t sweeping enough, as Judge Lloyd ruled that the plaintiffs can sue on the basis of “invalid” clicks, if not “fraudulent” ones.

Touché! Score one for the judges against the lawyers!

Of course, it’s way too soon to know how this particular case is going to play out – or whether it’ll even get to court. It’s far more likely that Facebook will settle with the plaintiffs so as not to have to disclose its source code and other “trade secrets” — the very things that cause so many marketers to see paid search advertising as a gigantic black hole of mystery that is rigged against the advertisers no matter what.

But one thing is easy to predict: This won’t be the last time the issue of pay-per-click advertising is brought before the courts. Whether the target is Facebook, Google or Bing, these skirmishes are bound to be part of the business landscape for months and years to come.

Facebook’s Hidden Bombshells

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Facebook's hidden bombshellsAs Facebook has been busily turning itself into a web powerhouse – challenging even the likes of Google for dominance – some people are beginning to question the fundamental aspects of how Facebook treats users and the content they post.

Last week I came across an interesting article by Douglas Karr, a social media consultant and author, who has spent thousands of dollars advertising on Facebook for himself and his clients. Karr summarized recent experiences he’s had with Facebook accounts that now make him extremely leery of using it as a central rather than an ancillary platform for promoting companies and their brands.

Facebook somehow became suspicious of entries posted by one of Karr’s clients. Facebook then proceeded to disable every administrator’s account that was associated with this client’s Facebook page. Because Karr was one of the administrators, this action disabled all of his Facebook pages and applications as well.

It then took a Herculean effort to repair the damage, during which time Karr learned quite a bit more about the customer service side of Facebook – if you could even call it “customer service.” Here’s how he summarizes it:

Facebook lacks a meaningful customer service process. There’s no phone number to call … or dedicated e-mail address specifically for support. So good luck trying to get any sort of satisfaction. Karr was asked to submit a form in order for his account to be turned back on. But that communication only resulted in an automated reply message to verify his identity.

In the meantime, with his accounts disabled, there was no way for Karr to log in and retrieve any of the now-hidden content.

What Karr learned is when all of what makes a Facebook presence so valuable – postings, photos, video and other content, fans, applications, etc. – goes by the boards, there’s essentially no recourse for a business.

Luckily for Karr, his account was re-enabled after a few days – with no notification from Facebook. But then he still had to republish all of the pages.

[It turns out that Karr’s client had a “friend of a friend of a friend” at Facebook who was able to pull a few strings to set things right … but how many of us should be so fortunate?]

This experience revealed another distasteful reality: The content you post on Facebook may be yours, but Facebook owns the access to it.

Yep. If you look closely at Facebook’s fine print, this is what you’ll find: “You grant us a non-exclusive, transferable, sub-licensable, royalty-free, worldwide license to use any IP content that you post on or in connection with Facebook.”

So much for keeping proprietary control over anything that may go viral and ends up on Facebook.

Karr’s word of advice for companies considering employing Facebook as their primary means of generating online traffic and revenue: “Don’t.”

Instead, he suggests adopting other tactics such as developing a blog, investing in search engine optimization and search engine marketing, using Twitter … and owning all of your content on your own domain.

That’s pretty smart advice from someone who speaks from experience.

Search Goes Global

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SEO in Different LanguagesMost companies hitched their wagon to search engine optimization long ago. That’s not surprising, because high search rankings are one of the most effective ways to get in front of customers and prospects when they’re in the mood to research and buy.

But up until recently, SEO has generally existed in the world of English. By contrast, SEO campaigns in Spanish and other languages haven’t worked so well. Despite the fact that Spanish is among the most widely spoken of languages, many Spanish-language countries have been behind the curve in Internet connectivity. And you could say the same of other languages.

But that’s not the case today. As more people overseas have become connected, the amount of content in Spanish and other foreign languages has risen dramatically.

Looking back at a bit of history, in the early-1990s essentially all of the search engines were in English only; if you wanted to conduct a web search, you had no other choice. That started to change by the mid-1990s when ~75% of all Internet searches were being conducted in English.

Fast-forward to today. According to Internet World Stats, an information resource that chronicles web usage in more than 230 countries and world regions, searches in English now account for only ~25% of all searches conducted.

Time was … search spoke English only. But the dramatic growth of Hispanic and other non-English digital markets means that companies that take the time to invest in foreign-language content and SEO initiatives will find themselves in the strongest position going forward.

It’s yet another item for the marketing department’s to-do list. Fortunately, help is available … with companies like MSEO.com and SEO Matador providing turnkey programs for implementing SEO campaigns in multiple different languages.

What’s Happening with Web Search Behaviors?

Phillip Nones Uncategorized , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Search EnginesMore than 460 million searches are performed every day on the Internet by U.S. consumers. A new report titled 2010 SERP Insights Study from Performics, an arm of Publicis Groupe, gives us interesting clues as to what’s happening in the world of web search these days.

The survey, fielded by Lancaster, PA-based ROI Research, queried 500 U.S. consumers who use a search engine at least once per week, found that people who search the Internet regularly are a persistent lot.

Nine out of ten respondents reported that they will modify their search and try again if they aren’t successful in their quest. Nearly as many will try an alternate search engine if they don’t succeed.

As for search engine preference, despite earnest efforts recently to knock Google down a notch or two, it remains fully ensconced on the top perch; three-fourths of the respondents in this survey identify Google as their primary search engine. Moreover, Google users are less likely to stray from their primary search engine and try elsewhere.

But interestingly, Google is the “search engine of choice” for seasoned searchers more than it is for newbies. The Performics study found that Google is the leading search engine for only ~57% of novice users, whereas Yahoo does much better among novices than regular users (~36% versus ~18% overall).

What about Bing? It’s continuing to look pretty weak across the board, with only ~7% preferring Bing.

The Performics 2010 study gives us a clear indication as to what searchers are typically seeking when they use search engines:

 Find a specific manufacturer or product web site: ~83%
 Gather information before making a purchase online: ~80%
 Find the best price for a product or service: ~78%
 Learn more about a product or service after seeing an ad elsewhere: ~78%
 Gather information before purchasing in-store or via a catalog: ~76%
 Find a location for purchasing a produce offline: ~74%
 Find coupons, specials, or sales: ~63%

As for what types of listings are more likely to attract clickthroughs, brand visibility on the search engine results page turns out to be more important than you might think. Here’s how respondents rated the likelihood to click on a search result:

 … If it includes the exact words searched for: ~88%
 … If it includes an image: ~53%
 … If the brand appears multiple times on the SERP: ~48%
 … If it includes a video: ~26%

The takeaway message here: Spend more energy on achieving multiple high SERP rankings than in creating catchy video content!

And what about paid or sponsored links – the program that’s contributing so much to Google’s sky-high stock price? As more searchers come to understand the difference between paid and “natural” search rankings … fewer are drawn to them. While over 90% of the respondents in this research study reported that they have ever clicked on paid sponsored listings, only about one in five of them do so on a frequent basis.

Where are Newspapers Now?

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Newspaper ad revenues continue in the doldrums.John Barlow of Barlow Research Associates, Inc. reminds me that it’s been awhile since I blogged about the dire straits of America’s newspaper industry. The twin whammies of a major economic recession along with the rapidly changing ways Americans are getting their news have hammered advertising revenues and profits, leading to organizational restructuring, bankruptcies, and more.

But with the recession bottoming out (hopefully?), there was hope that the decline in newspaper ad revenues might be arrested as well.

Well, the latest industry survey doesn’t provide much cause for celebration. A poll of ~2,700 small and mid-size businesses conducted this summer by Portland, OR-based market research firm ITZBelden and the American Press Institute finds that ~23% of these businesses plan to cut back on newspaper advertising this year.

The kicker is that these revenues are being spent, but they’re being put to use in other advertising media.

The ITZBelden survey found that a similar ~23% of companies plan to up their 2010 digital ad spending anywhere from 10% to 30%. This compares to only about 10% planning to increase their print advertising by similar proportions.

Moreover, the survey findings reveal that small and mid-size U.S. businesses have moved into digital marketing in a significant way. Not only do more than 80% of them maintain web sites, they’re active in other areas, including:

 ~45% maintain a Facebook or MySpace page
 ~23% are engaged in online couponing
 ~13% are involved with Craigslist
 ~10% are listed on Yelp! or similar user-review sites

One area which is still just a relative blip on the screen is mobile advertising, in that fewer than 4% of the respondents reported activities in that advertising category.

Where are these advertisers planning to put their promotional funds going forward? While newspapers should continue to represent around one quarter of the expenditures, various digital media expenditures will account for ~13% of the activity, making this more important than direct mail, TV and Yellow Pages advertising.

There was one bright spot for newspapers in the survey, however. Respondents expressed a mixture of confusion and bewilderment about the constantly evolving array of digital marketing communications options opening up … and they’re looking for support from media experts to guide their plans and activities.

And where do they see this expert advice coming from? Newspaper ad reps.

Perhaps the Yellow Book’s “Beyond Yellow” small business advertising campaign – you know, the one that touts not only the Yellow Pages advertising but also web development, online advertising, search marketing and mobile advertising – is onto something.