The Evolution of Paid Search

The Evolution of Paid Search
Spotting & Staying Ahead of the Trend
Matt Lawson
VP of Marketing
Marin Software

About Marin
The leading platform for managing
search, display, and social

The Leader In Paid Search Applications
But online still represents less than 15% of total advertising spend.

Advertisers spend 3x more on traditional media than the internet
(Yet consumers spend an equal amount of time on each.)

Online Ad Spend Can Double
% of Time Spent in Media vs. % of Advertising Spending, USA 2009
~$50BN Global Opportunity
% of Total Consumption
Note: Time spent data per NA Technographics (2009), ad spend data per VSS, Internet advertising opportunity assumes online ad spend share matches time spent share, per Yahoo!. Source: Yahoo! Investor Day, 5/10; Morgan Stanley.

About Marin Software
Spend is rising faster than query volume, putting pressure on costs-per-click

The Search Marketer’s Dilemma
Increase spend while maintaining a constant ROI
This Creates a Problem for Search Engines
How to increasing volume without increasing click costs?
9

How are Search Engines responding?
Inventory (Improve Performance)
Consumers(Expand Query Volume)
Advertisers (Incentivize Efficiency)

The Impact of Google Instant on Paid Search

What is Google Instant?
12

Instant Represented a Paradigm Shift
Increased volumes & lower per click costs.

Instant Changed Consumer Behavior
Users complete searches with fewer words.

Smart Advertisers Were Rewarded
Instant allows advertisers to better capitalize on narrow match types.

The Impact of Google Instant
Engines (More Clicks)
Consumers(More searches)
Advertisers (Lower Cost Per Click)

The Yahoo-Bing Search Alliance
17

More Volume with Less Effort
4.4B
Monthly Searches
2.6B
Monthly Searches
1.8B
Monthly Searches
154M Unique Searchers
28.6% Share
16.9% Share
11.7% Share
U.S. data shown
Source: comScore Media Metrix March 2010
18

Market Share Impact
The alliance resulted in increased impressions and clicks at a lower overall cost to advertisers.
19

Favorable Cost Conditions
Post-transition advertisers saw improved cost-per-click
20

A Favorable Performance Environment
Resulting in higher conversion rates, at lower cost per acquisition

The Impact of the Search Alliance
Engines (More Clicks)
Consumers(?)
Advertisers (Increased Performance)

Incentivizing Advertisers

Quality as the Key Driver of ROI
"Quality Score helps ensure that only the most relevant ads appear to users.
The AdWords system works best for everybody -- advertisers, users, publishers, and Google -- when the ads we display match our users' needs as closely as possible…
…In general, the higher your Quality Score, the lower your costs and the better your ad position.”
-- adwords.google.com

Large Advertisers Realizing Efficiency Gains
25

Trends by Match Types
Click-through rates on exact match have improved…
…while cost-per-click on exact match have declined.
26

Resulting in a Shift by Advertisers
Advertisers increased their % of clicks on exact match by 7% last year, lowering costs.
27

The Impact of Quality Score Changes
Engines (More clicks)
Consumers(Relevant ads)
Advertisers (Increased efficiency)

Anticipate changes in volume

Don’t Limit Spend On Top Performing Campaigns
31

32
Get More Impressions with Accelerated Delivery

Capitalize on Search Engine Innovation

Review & Maintain Engine Parity
CAMPAIGN A
CAMPAIGN A
Group
A
Group
B
Group
A
Group
B
KW KWKWKWKWKWKWKWKWKWKWKW KW KWKWKWKW
KW KWKWKWKWKWKWKW
KW KWKWKW KW KWKWKWKW
KW KWKWKWKWKWKWKWKWKWKW
KW KWKWKWKWKW
KW KWKWKWKWKW
VS.
Group
C
Group
D
Group
C
KW KWKWKWKWKWKWKWKWKWKWKWKWKW
KW KWKWKWKWKWKWKWKW KW KWKWKW
KW KWKW
KW KW
Maximize coverage in AdCenter, and benchmark spend levels against the competition.
34

Use Keywordless Ads to Mine the Tail

Actively Manage Quality
The search marketers goal is to tighten connections between search query, keyword, and ad copy.
Keyword Selection
Copy
Testing
Campaign
Structure

Shape Traffic to Favor Exact Terms

Increase Relevance with Tight Ad Groups

How Will Engines Shape the Future?

Matt Lawson
mlawson@marinsoftware.com
Download the Advanced Search Tips Whitepaper at www.marinsoftware.com!

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