Search Advertising

White Paper Search The Search Advertising Paper Every Online Marketer Must Read Adapting to New Search Advertising Strategies in a Changing Marketplace

W h i T E PA P E R The Search Advertising Paper Every Online Marketer Must Read Table of Contents Executive Summary 3 Emerging Challenges in Search Advertising 3 Why Search Advertising Programmes are at Risk 4 Limitations of Standalone PPC Management Tools 4 A ‘Critical Disconnect’ between Capabilities and Objectives 5 CMO Council 5 Strategies and Tactics for Search Advertising Success 5 The Time is Right for Platform-Based Online Marketing 5 1. Expanding and Optimising Keyword Bidding Strategies 6 2. Ensuring Continuity Throughout the Conversion Cycle 6 3. Thinking Outside the Keyword Box 6 4. Maintaining Keyword Bids for Acquisition, Persuasion and Conversion 7 5. Evaluating Search Advertising Performance in the Right Context 7 The Coremetrics Approach to Search Advertising 7 Key Capabilities of Coremetrics Search™ 8 Conclusion 9 Coremetrics Copyrighted. All trademarks belong to their respective holders. All Rights Reserved. 2

W h i T E PA P E R The Search Advertising Paper Every Online Marketer Must Read Executive Summary Emerging Challenges in Search Advertising The return on advertising spend (ROAS) from search Given the positive returns that many companies have advertising is typically the highest in all of marketing. enjoyed from search advertising, it is no surprise that Search advertising accounts for 61 per cent of all on- in 2010 this online channel accounts for an estimated line marketing investment in the US, analysts report. 61 per cent of all online marketing expenditure in the And double-digit growth is forecast for the next five US, according to a report by independent research years as consumers and marketers continue to move firm, Forrester Research, inc..1 Some 80 per cent from print, TV, radio, direct mail and other traditional of companies use search advertising, and this is channels towards an increasingly rich and sophisti- expected to grow at a compound rate of 15 per cent cated digital experience. per year to $32 billion by 2014, Forrester predicts. Given the proven success of search advertising, you But continuing to reap rewards from search adver- can pretty much set it, forget it, and reap the re- tising is not a certainty. As the search advertising wards, correct? market evolves and grows more complex, marketers need to understand and adapt to such challenges as: Not quite. After years of frenetic growth, search advertisers face emerging challenges that are reshap- ing the search advertising landscape. Many search • Keyword bid inflation. Cost-per-click (CPC) advertising programmes are at risk of collapsing, rates are rising in line with growing search with standalone, limited-scope solutions. Many are volumes, forcing advertisers to explore less already witnessing diminishing returns as search expensive keywords or revise bidding practices, advertising costs soar, complexity and competition as high CPC costs take a chunk out of margins intensify and effectiveness declines. and ROi. • Keyword complexity and limitations. This paper examines the changing dynamics of Marketers struggle to understand keyword search advertising and how marketers can adapt the performance and may lack the tools to track technological and organisational structures behind which terms trigger customer conversion, as search advertising to stay on an upward growth opposed to acquisition and persuasion. Growth curve. it provides practical, how-to guidance that can in the number of keywords (into the hundreds of help your organisation enhance its search advertis- thousands and even millions) exacerbates the ing practice and more closely align it with your overall complexity problem. online marketing program to realise such benefits as: • Growth in social media. Marketers need to balance search advertising against the use of • increased web site sales and conversions fast-growing social media, in which friends are • The ability to look deep into campaign perfor- becoming the new search and recommendation mance across marketing channels engine and effective brand presence on social • The identification of weaknesses and growth sites can attract young and trendy consumers. opportunities Social media advertising expenditure growth in • Greater customer loyalty and brand experience the US will outpace search advertising by 34 per cent to 15 per cent on a compound annual basis over the next five years, Forrester’s report states. • Mobile marketing momentum. Search advertisers are challenged to adapt to a spike in mobile device usage as consumers increasingly use handheld technology to search the web and make purchases. 1 Forrester Research, inc. ‘US interactive Marketing Forecast, 2009 to 2014’, July 2009. Coremetrics Copyrighted. All trademarks belong to their respective holders. All Rights Reserved. 3

W h i T E PA P E R The Search Advertising Paper Every Online Marketer Must Read • The quality scoring twist. Search advertis- As an island unto itself, search advertising tends to ers need to constantly assess and adjust the measure click-through traffic and conversions in a variables for the quality scoring formulae used vacuum. The programme is blind to the movements by major search engines. These variables (in- of visitors and customers across other channels, cluding ad content, landing-page relevance, and such as display ads, natural searches, emails, affiliate click-through rates)—together with bid levels—all web sites and social media. Moreover, there is no affect ad position, but how exactly the formulae easy way for marketing leadership to measure the work is not entirely known. effectiveness of its groups and channels against each other, properly attribute conversion credit, and make What was once fairly straightforward is now complex. informed decisions about media mixes and budget Marketers need to decisively address these challeng- allocation. es or risk having their search advertising programmes become victims of their own success. Limitations of Standalone PPC Management Tools The typical standalone PPC management tool is lim- But many search advertising solutions and pro- ited in scope. it is often deployed to meet the tactical grammes are ill-suited to adapt to these changes. search advertising objectives of immediate revenue or For some advertisers, consistent ROAS has led to catching up with competitors. Little thought is given a false sense of security. For others, weaknesses in to what the long-term strategy should be and to the the organisational and technological infrastructures level of interoperability with other marketing optimisa- underpinning search advertising present barriers to tion solutions that need to be in place to support that continued growth. strategy. Why Search Advertising Programmes are at Risk Today, standalone PPC management tools fail to enable a cohesive, relevant customer experience across Two of the greatest weaknesses in search advertising all marketing touch-points. programmes are the isolation of search practitioners from their online marketing peers and the use of Both search advertising isolation and standalone standalone PPC management tools. PPC management tools introduce the risk of sole reliance on last-click attribution. This outmoded at- Too many marketing organisational charts draw tribution model refers to instances such as when a boundaries—not potential synergies—between customer discovers a product via search advertising search advertising and other online marketing units. and supplies her email address while on the adver- Search advertising often has its own operating objec- tiser’s website. When she later receives a marketing tives and distinct metrics by which its performance is email, she returns and makes a purchase. Stand- measured, as do other marketing groups. alone PPC management tools—blind to other chan- Consequently, search advertising managers do not nels—will attribute full credit for the sale to the search adequately collaborate with their peers responsible keyword, even though it should share credit with the for email marketing, on-site searches, search engine email campaign. optimisation or display advertising. it is rarer still for intelligent marketers recognise the flaws in relying them to be working with the merchandisers who solely on a last-click attribution model. Coremetrics’ own the products—and often the product landing research has found that, on average, customers inter- pages—that search advertising managers put into act with online brands 5.5 times before a conversion their campaigns. takes place. These interactions may be via search Search advertising managers who do not collabo- advertising, a display ad on a third-party website, rate with merchandisers run the risk of over-bidding email or social media. Alternatively, they may not buy on low margin products and under-bidding on high online at all, but in high street shops or by phone. margin ones, as well as experiencing high bounce rates on sub-optimised landing pages which reduce paid search quality scores and thereby unnecessarily inflate bid costs. Coremetrics Copyrighted. All trademarks belong to their respective holders. All Rights Reserved. 4

W h i T E PA P E R The Search Advertising Paper Every Online Marketer Must Read The limitations of standalone PPC management tools Strategies and Tactics for Search Advertising can also compromise marketers’ ability to cost- Success effectively retarget visitors. For example, a marketer how tailored is your search advertising programme may find that an expensive keyword is driving healthy to the needs and characteristics of your target audi- traffic to his website but not resulting in an accept- ence? able number of high-margin conversions. if his PPC management tool is its own silo, he has no easy way Does the programme and its technology enable you to retarget these prospects via more cost-effective to deliver to the customer a relevant and engaging and personalised campaigns, such as targeted search advertising experience that seamlessly inte- emails or targeted display ads. grates with other customer touch-points and marketing initiatives? integrating search advertising with the overall market- A ‘Critical Disconnect’ Between Capabilities and ing programme demands that you put the customer Objectives at the centre of the programme. This may require a Despite the shortcomings of single-purpose tools, re-examination of organisational philosophy, structure many marketers persist in their use. This results in and business practices. it demands collaboration a ‘critical disconnect’ between their technological across groups and the breaking down of marketing capabilities and business objectives, according to a silos to focus on: study by the CMO Council.2 • Understanding the full customer life-cycle across all channels ‘Marketers’… investment plans in simple, task- • Measuring how customers are influenced by dif- specific marketing software applications, and ferent marketing campaigns lack of spend on more comprehensive operational and data management systems, suggest • Determining the factors most critical in customer a critical disconnect in how they hope to achieve acquisition, persuasion and conversion executive goals.’ if you can answer these questions, you can better meet customer expectations for relevant and reward- CMO Council ing engagement with your brand. And when you serve the customer better, you serve the business ‘When it comes to investment in marketing automa- better. tion, tactical capabilities and point solutions domi- nate’, the CMO Council study said. ‘Marketers’… The Time is Right for Platform-Based Marketing investment plans in simple, task-specific marketing software applications, and lack of spend on more You cannot put the customer at the centre of the comprehensive operational and data management programme if you use standalone PPC management systems, suggest a critical disconnect in how they tools for search advertising, as well as for email mar- hope to achieve executive goals.’ keting, display advertising and product recommendations. An integrated platform is needed to drive all if unaddressed, search advertising isolation and your online marketing efforts in order to correct the standalone PPC tools can lead online marketers to: weaknesses that result from search advertising isolation and the limitations of standalone PPC systems. • Overspend on unprofitable keywords A platform is designed to facilitate performance mea- • Waste search money on unsuitable prospects surement and campaign optimisation across multiple • Miss opportunities to engage larger audiences channels, campaigns and customer segments, and and increase turnover promote collaboration between different marketing groups. • inaccurately assess how searches influence customer acquisition, persuasion, and conversion 2 CMO Council, ‘Marketing Outlook 2009,’ March 2009. Coremetrics Copyrighted. All trademarks belong to their respective holders. All Rights Reserved. 5

W h i T E PA P E R The Search Advertising Paper Every Online Marketer Must Read Yet in its study, the CMO Council found a baffling As a search advertising practitioner, you should reach unwillingness among marketing executives to col- out to your merchandising team to procure this data laborate more closely with line-of-business execu- and funnel it into your PPC management solution. As tives and the iT function upon which online marketing noted earlier, collaboration is a hallmark of successful depends. Only 9 per cent of respondents in a CMO online marketing and you may want to talk to other Council survey said they were looking to work more marketing groups about the landing pages, too, as closely with the CiO and iT department. Just 8.2 per we will see below. cent planned to build new links with line-of-business executives.3 2. Ensuring Continuity Throughout the Conversion Cycle Collaboration is imperative. Breaking the silo that inconsistent messages across the conversion cycle surrounds search advertising and dissolving barriers can cause a customer to abandon your website and between online marketing units is essential if organi- convert somewhere else. Search queries, ads and sations are going to move towards an optimised landing pages must match in terms of content and marketing programme. offer. Extraneous or discrepant information on a land- With a collaborative approach that aims to tighten ing page or unappealing creative content can derail interoperability between online marketing groups, you the conversion. are better able to cultivate and execute key strategies Search advertisers, however, do not always own the and tactics to enhance search advertising and the landing pages. These pages may have been devel- overall marketing programme, including: oped by the merchandising department or another group. Search advertising practitioners can benefit 1. Expanding and optimising keyword bidding by reaching out to web-page owners and working strategies collaboratively to ensure the pages are optimised for 2. Ensuring continuity across the conversion cycle search advertising campaigns. The same exercise 3. Thinking outside the keyword box can be applied to transaction pages – such as shop- 4. Maintaining keyword bids for acquisition, per- ping baskets – as well. suasion and conversion Landing-page optimisation is likely to enhance your 5. Evaluating search advertising performance in search engine quality score, which helps reduce CPC the right context rates needed to maintain the same ad position. 3. Thinking Outside of the Keyword Box 1. Expanding and Optimising Keyword Bidding Basic keyword recommendations come in two variet- Strategies ies—terms popular on search engines and terms You can fine tune search advertising performance by that your competitors bid on. Whilst recommended basing keyword bids on merchandising product data keywords cannot be ignored, intelligent market- such as profit margin, cost of goods sold, inventory ers augment them with natural, on-site and original levels and so on. This data can provide additional search queries. and valuable dimensions beyond the simple sales volumes that often justify a keyword bid. With an integrated marketing optimisation platform that can look into the performance of multiple chan- For instance, by importing profit margin data, you nels, you can track how natural, on-site and original could make a data-based decision to bid higher on search queries perform in driving customer visits, the keyword ‘Persian rug’ because that product line behaviour and conversions on your web site. Such offers higher margins. You might stop bidding on keywords are already proven winners for your busi- ‘doormat’ because of a lack of product inventory. ness—the trick is to identify them and bid on them Tracking and adapting keyword bidding to inventory effectively. levels helps to ensure you are able to fulfill orders, reduce web site abandonment and maintain a high level of customer satisfaction. 3 CMO Council, ‘Marketing Outlook 2009,’ March 2009. Coremetrics Copyrighted. All trademarks belong to their respective holders. All Rights Reserved. 6

W h i T E PA P E R The Search Advertising Paper Every Online Marketer Must Read Such proven keyword recommendations can be allows you to identify strengths and weaknesses and especially valuable in devising long-tail search terms, adapt to seasonality, geography and other macro- which are typically less expensive than shorter ge- level conditions. neric terms—for instance, ‘10MP digital camera silver’ is better than simply ‘digital camera’. Look to natural The Coremetrics Approach to Search Advertising and on-site search keywords to enhance the reach of Coremetrics Search™ is a PPC management solu- your search advertising program and avoid following tion that improves top-line business results, reduces unproven keyword recommendations that can poten- operational costs and demonstrates return on PPC tially reduce your ROAS. investments. This software-as-a-service (SaaS) solu- 4. Maintaining Keyword Bids for Acquisition, Persua- tion enables data-driven decision-making, stream- sion, and Conversion lines workflow across multiple search engines and helps optimise spend on visitor acquisition, conver- Earlier we saw the dangers of limiting the scope of sion and retention goals and dozens of other metrics. attention to last-click attribution. Over-reliance on conversion-driving keywords may limit the program’s Coremetrics Search is part of the Coremetrics Con- reach and ability to acquire and persuade new tinuous Optimisation Platform, an integrated online searchers who are not ready to make a transaction. marketing solution featuring management and mea- it is important, therefore, to analyse keyword perfor- surement applications for email marketing, display mance using multiple attribution windows opened advertising and product recommendations, as well as side by side, so that you can track keywords across robust analytics, reporting and benchmarking against the conversion cycle. These windows should reflect competitors and within industries. different attribution logic, such as first-click, average The platform is powered by Coremetrics Lifetime clicks, last-click and custom (weighted) click attribu- individual Visitor Experience (LiVE) Profiles, which tion. track every activity of online visitors over time to Beyond reporting, you should utilise multiple at- supply rich, historical data sets on which to develop tribution windows in your automated bid rules. With targeted, relevant campaigns. Clients rely on Core- this capability, your PPC management solution can metrics Search to: automatically modify keyword bids to meet customer acquisition, persuasion and conversion objectives. • Develop and optimise search advertising cam- Automated bid rules that lack robust attribution ca- paigns on Google, Yahoo!, and Microsoft pabilities will be limited to same-session or last-click • Optimise the performance of automated bid performance data. rules using attributed, cross-session metrics 5. Evaluating Search Advertising Performance in the • Understand how search advertising meets visi- Right Context tor acquisition, conversion and retention goals The performance of search advertising programmes • increase quality scores and reduce CPC by in- should be evaluated not only against stated goals, tegrating search advertising efforts with landing- but also against the performance of other channels. page testing partners With a platform-based solution, you gain a panoramic • Gain new insights into search advertising per- view of performance across all channels. For search formance with advanced segmentation and rich advertising, cross-channel data comparisons can metrics help expose the interplay between different channels • increase the reach of search advertising with and their relative impact on customer acquisition, keyword expansion based on natural and on- persuasion and conversion. site queries Moreover, your search advertising programme should • Reduce search advertising costs by retarget- be benchmarked against the performance of peers ing expensive prospects through Coremetrics and competitors, as well as against the industry LiVEmail™ and Coremetrics AdTarget™ overall. This type of broad, industry-scale analysis Coremetrics Copyrighted. All trademarks belong to their respective holders. All Rights Reserved. 7

W h i T E PA P E R The Search Advertising Paper Every Online Marketer Must Read Customise dashboards in Coremetrics Search to aggregate key information into digestible views. Quickly identify undesirable trends or favourable conditions. Key Capabilities of Coremetrics Search • Automated bid management. Use bid rules wizards, portfolio management and day parting • Fast and scalable interface. Manage large capabilities and performance alerts to optimise sets of elements and complex campaigns with a performance with sophisticated automation that flexible user interface. increase productivity with supports and enhances primary PPC tactics. simplified tasks, multi-metric reporting and a • Product data imports. Calculate true ROi, avoid faster response time. overbidding on unprofitable terms and react to low • Search engine integration. increase produc- inventory situations by importing business data tivity and effectiveness by managing Google, such as margin, cost of goods sold, inventory and Yahoo! and Microsoft accounts with a single more. console. • Customisable dashboards. Quickly identify • Campaign, ad, keyword and landing-page undesirable trends or favourable conditions with management. identify top-and bottom-per- dashboards that aggregate key information into formers and make instant adjustments using digestible views. campaign cloning, keyword suggestions, keyword zoom, landing-page analysis, bulk edit and create, geo-targeting, advanced filtering and Google quality score. Coremetrics Copyrighted. All trademarks belong to their respective holders. All Rights Reserved. 8

W h i T E PA P E R The Search Advertising Paper Every Online Marketer Must Read Conclusion About Coremetrics As companies continue to invest in search adver- Coremetrics is the leader in marketing optimisation. tising, they must continuously increase their pro- its products help businesses relentlessly optimise gramme’s reach whilst maintaining adequate ROAS. their marketing programmes to make the best offer, With continued evolution of the search advertising every time, anywhere, automatically. More than 2,100 market and its attendant challenges, this becomes a online brands globally use Coremetrics’ Software question of choosing the right strategy and the right as a Service (SaaS) to optimise their online market- solution. ing. Coremetrics’ integrated marketing optimisation solutions include real-time personalised recommen- Putting the customer at the centre of your search dations, email targeting, display ad targeting across advertising programme is a virtually guaranteed way leading ad networks, and search engine bid manage- to energise the program and better align it with your ment. The company’s solutions are delivered on the overall marketing strategy. A well-executed strategy only online analytics platform designed to anticipate that aims to enhance the customer experience with the needs of every customer, automate marketing de- search advertising and across all your channels will cisions in real time, and syndicate information across translate into deeper customer engagement and all customer channels. better acquisition, conversion and retention. This strategy depends on breaking down marketing silos The company is privately held with funding from Ac- with an enterprise-level online marketing platform cel Partners, FTV Capital, highland Capital Partners, that integrates search advertising management with and W Capital Partners, and is headquartered in San robust analytics and companion marketing solutions. Mateo, California and EMEA headquarters in Slough, UK. To learn more about Coremetrics, visit http://www.coremetrics.co.uk, email europe@coremetrics.com or call +44 (0)20 3393 3450. Coremetrics has strongly supported online privacy since its inception. To learn more,visit, http://www.coremetrics.co.uk/company/ privacy.php Corporate Headquarters Coremetrics Europe Ltd. Coremetrics Australia Coremetrics, Inc. Wellington house and New Zealand 1840 Gateway Drive 20 Queensmere Level 27, 101 Collins Street San Mateo, California 94404 Slough Melbourne Vic 3000 USA Berkshire SL1 1DB Australia Tel: +1 650 762 1400 UK Tel: (AUS) 1800 69 CORE info@coremetrics.com Tel: +44 (0) 20 3393 3450 (NZ): 0800 69 CORE www.coremetrics.com europe@coremetrics.com (Other) +61 (0)3 9653 7397 www.coremetrics.co.uk asiapac@coremetrics.com www.coremetrics.com.au Coremetrics Copyrighted. All trademarks belong to their respective holders. All Rights Reserved. 5290UK

Search Advertising

by Akvile Pareigyte on May 13, 2010

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Search Advertising — Document Transcript