SEM

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?

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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.

Google’s Instant Search: Instant Irritation?

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Google's Instant Search is a Non-StarterHow many of you have been noodling around with Google’s new Instant Search functionality since its unveiling earlier this month? I’ve spent the better part of a week working with it, trying hard to keep a “completely open mind” as to its benefits.

I’ve finally came to the conclusion that … I can’t stand it. I’m a pretty fast typist, and generally know what I’m searching for. I really don’t need Google “pre-anticipating” search results for me, and find the constantly jumping search results window extremely off-putting to the point of distraction.

I gave Instant Search a full week … and couldn’t take it anymore. I’ve now elected to turn it off completely.

Wondering if I was the only one with this view … it certainly didn’t take long to find out that there are a great many people out there who feel the same way. You can use Google search (either the “instant” or “traditional” will do fine) to find any number of blog posts and user comments about Google Instant Search that are just one notch shy of mutinous — and hardly genteel in their choice of language. (A few examples can be found here and here and here.)

If the comments by disgruntled users are to be believed, Bing/MSN may find itself with a nice little bump in search volume market share by the end of September.

And if that actually happens, Google Instant might die a quiet death – which wouldn’t be the first time Google laid an egg in its “throw-everything-against-the-wall-and-see-what-sticks” approach to product development.

But if Google Instant does gain traction … there are some negative implications for search marketers as well. Many companies seek to structure their online marketing campaigns by determining the optimal amount of spending on search advertising, display ads and social media. The key to success in this endeavor is undertaking a process that examines the millions of cookies and billions of clicks that are made by web users, along with factoring in other elements like geographic location and time of day.

All of this information is weighed against the cost of various ads and the likelihood of success as they are served to the user. That’s determined by running regular models of millions of keywords and word combinations, judging the relative costs to determine the optimum frequency. For some of the most aggressive marketers, these models are run once or twice daily.

The advent of Google’s Instant Search scrambles all of that, because it makes the process even faster and more hectic than before. As those of you who have experimented with Instant Search know, you start seeing “suggested” search results with just the first one or two keystrokes … and those choices continue to change with each new keystroke made or movement of the cursor down the list of Google’s suggestions. For marketers, the result is a lot more velocity on the ad side – and more price changes.

As proof of this, within the first few days of Instant Search’s launch, sites that Instant Search recommends after the first one or two letters are typed into the search box – “Mapquest,” “Ticketmaster” and “Pandora” are three useful examples – were experiencing significant increases in traffic, whereas their hapless competitors were not.

If that’s what is happening with the big boys, where does this put smaller businesses? The answer is obvious: They’re going to get squeezed big-time … and as a result, their search advertising costs are going nowhere but up.

Mighty sporting of you, Google.

$100 cost-per-click on Google AdWords? It’s already here.

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How much is one clickthrough to your web site worth? If you’re a legal firm specializing in bringing mesothelioma cases to court, it turns out it’s worth a lot.

In fact, the search term “mesothelioma” was the highest-priced keyword in the U.S. during the third quarter of 2009. That’s according to a recently-released AdGooroo Search Engine Advertising report.

Just how expensive? For Google’s AdWords program, the highest price paid for a #1 ranking on that search term was a whopping $99.44 per click. (Over at Yahoo, the high figure for this paid search term was a little less rich: $60.68 per click.)

One wonders how many times the advertisers have actually had to pay out this king’s ransom. Whether it’s for a few or many clicks, it’s clear that some legal firms recognize a highly lucrative revenue opportunity in filing mesothelioma lawsuits related to asbestos and lung cancer.

Interestingly, the highest paid search term in Bing’s paid search program isn’t “mesothelioma,” but rather “auto insurance comparison.” At $55.20 per click, the dollars aren’t as high, but it would seem like the potential payoff isn’t nearly as great, either. After all, there’s a pretty big difference between a multi-million dollar legal verdict and the value of an automotive insurance policy.

But beyond the eyebrow-raising stats of these extreme examples, the larger issue is how much more costly search advertising has become in recent times. A few short years ago, it was common to talk about search terms costing an advertiser 50 cents or $1.00 per click. Now, those same terms are far more likely to cost $2.50 or more.

Google, being the 500-pound gorilla in search engine marketing (SEM), has certainly contributed to the price inflation. That’s one reason why many are rooting for alternative search options like Bing to succeed (dream on).

More fundamental to the increase in keyword click pricing is the realization that advertising to people at the precise time they’re searching for particular goods and services is a far more effective way to engage customers and prospects and drive actual sales.

And that’s even more the case compared to trying to get their attention or otherwise “intrude” on them when they’re online for other purposes. The abysmal clickthrough rates experienced for banner advertising bear this out.

But paying $100 per clickthrough? That does seem excessive – even for ambulance-chasing lawyers!

Click fraud: How much is really out there?

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One of the knocks against pay-per-click advertising is concern about fraudulent clicks being made on online ads that cost advertisers money and drain their account budgets needlessly. And while Google, Yahoo and various online publishers have long held that their SEM operations can detect patterns of fraud and then credit-adjust advertisers’ accounts accordingly, that hasn’t mollified the skeptics at all.

And now SEM critics have new ammunition in the form of two click fraud reports issued in July by Anchor Intelligence and Click Forensics, two of the industry’s leading traffic auditing and traffic quality management firms. Researchers at both companies have discovered that “scripted” programs that click on ads increased in volume during the second quarter of 2009.

Click Forensics estimates that the overall average click fraud rate was nearly 13% over the quarterly period. According to the firm, this also included an ominous rise in “collusion fraud” on advertising networks. That’s when publishers rotate IP addresses (botnets) to click on ads on their own sites to generate inflated commissions from unprotected ad networks. Many ad networks have difficulty differentiating these attacks from valid clicks.

Based on these results, Click Forensics estimates that the amount of money lost yearly due to click fraud exceeds $4 billion. And while a large chunk of those dollars are presumably reimbursed to advertisers in the form of discounts or rebates, it is impossible to know what portion that amount actually represents because SEM program providers don’t share that information with the outside world.

Anchor Intelligence reported even higher rates of attempted click fraud during the second quarter 2009: nearly 23%.

Where are the nefarious attacks coming from? Richard Sim, Anchor Intelligence’s vice president of product marketing, says, “Vietnam stands out in terms of the fraud as a percentage of all traffic. Nearly one out of every two clicks from Vietnam was registered as click fraud.” That’s nearly double the rate of attempted click fraud found by Anchor Intelligence for the next highest ranked countries – Canada at ~28% and the U.S. at ~26%.

What this says is that click fraud is very much with us, despite all of the best efforts that go into trying to root it out. This should be taken into consideration by advertisers when planning and executing an online advertising program. And it wouldn’t be a bad idea to factor in a 15% or 20% “degradation” factor on all advertising goals and results when evaluating clickthrough rates and calculating ROI.

The good news is that, even with this reduction factor applied, when you compare search engine advertising against alternative forms of promotion, it’s still one of the better buys in the business.

Searching for effective lead generation and conversion.

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In the current business climate, companies are relying more than ever on new sales opportunities to replace business that has been lost with current customers. And it’s pretty clear by now that “search” has emerged as the form of online promotion that generates the best lead generation and conversion results — outstripping other e-promotional tactics such as online display advertising and newsletter sponsorships.

This isn’t surprising, of course. Search advertising captures the interest of online viewers precisely when they’re in “search mode” for specific products and services, rather than when they’re just surfing the ‘net for news and updates.

(In fact, some advertisers have come to believe that even print advertising outperforms online display advertising. That’s because readers are more likely to browse all the way through print publications. Compare that to visiting informational web sites where viewers are far more prone to selectively pick and choose the pages that they open. A well-placed display ad on a “new technology news” page, for example, might be invisible to the vast majority of viewers who come to the home page and then decide to click through to only one or two additional pages on the site.)

But back to search. Many advertisers wonder which is most effective: gaining high “natural search” rankings that occur based on the content of the web site, or opting for pay-per-click search listings such as Google’s AdWords program with their entries on the right side of the screen.

As it turns out, both tactics have their pluses.

In fact, a new year-long study that ended June 30, 2009 of more than 25 e-tail web sites by Engine Ready, Inc., a search engine software development firm, found that visitors who clicked through to the sites from paid search ads were ~50% more likely to make a purchase, compared to visitors who came to the same sites via clicking on a natural search link.

Specifically, Engine Ready discovered that the conversion rate from pay-per-click links measured 2.03%, while the conversion rate was only 1.26% from organic search clickthroughs.

On the other hand, various research studies conducted over the past few years demonstrate the clear popularity of natural search listings over paid search listings. It’s been shown pretty consistently that around two thirds of total clicks are made on natural search listings, compared to just one-third on pay-per-click listings.

So the key takeaway is that any marketing program worth its salt incorporates search marketing as a key component. And in most cases, that effort should encompass search engine optimization for natural search rankings along with a pay-per-click advertising program.

More Action on the Search Engine Front

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Bing logo designWolfram Alpha logoDespite the fact that Google has proven itself to be all but immune from threats posed by competing search engines, hope springs eternal. Within the past couple weeks alone, two new challengers have emerged, accompanied by much fanfare in the business press.

Microsoft takes yet another swipe at Google with its new Bing search engine. Based on an earlier one called “Kumo,” some industry observers — though not all — believe it is a pretty good competitor. Reviewers are particularly pleased with the presentation of refined versions of search queries. Bing also features a rollover display of each link’s content, allowing you to see how useful it will be before clicking through to the site.

The search engine also appears to index more recent “breaking news” items, whereas with Google, those results are not shown unless you click through to Google News — an extra step.

The big question is whether Bing will be able to wean web users away from their habit of searching on Google as their default choice. Certainly, Microsoft is putting some serious promotional dollars behind the launch — upwards of $100 million according to Advertising Age magazine. But based on the tea leaves, a wholesale change in search behavior seems unlikely. Search habits aren’t going to change dramatically unless there is a dramatic improvement in the effectiveness and speed of search activity. Fom what we see of Bing so far, we’re talking about improvements nibbling around on the margin rather than big sweeping change.

But “big sweeping change” just might be the recipe for Wolfram/Alpha, the other new entrant in the search engine sweepstakes. That’s because W/A isn’t actually a search engine in the classsic sense. Instead, its developers refer to it as a “computational knowledge engine” that uses complex algorithms to search databases to come up with answers to questions, rather than presenting a list of sources where the answer might be found. It can report some really cool factual results just based on the user typing in, for example, a date range, several city names, or an animal species.

The key difference between Wolfram/Alpha and Google is that W/A does not index web pages. Instead, it draws answers from a wide range of information-packed databases. So if you want to know the number and magnitude of hurricanes hitting North America in the past 15 years, you’ll get a specific answer rather than being presented with a series of web links wherein you might find the answer to be hiding.

Some observers see the potential for W/A and Google to team up rather than compete against one another. After all, what they do isn’t directly competitive, but in more respects complementary. And in an interesting twist, it turns out that Stephen Wolfram, the ~50-year-old computer scientist and developer who created the software platform upon which W/A is based (called “Mathematica”), once supervised a summer intern by the name of Sergey Brin — who would go on to develop Google with partner Larry Page.

Sergey and Stephen teaming up once again would be quite the coincidence … or would it really?