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Google's Shrinking Ad Real Estate By Andy Taylor

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From the SMX Advanced Conference in Seattle, Washington, June 2-3, 2015. SESSION: The Mad Scientists Of Paid Search. PRESENTATION: Google's Shrinking Ad Real Estate - Given by Andy Taylor, @PronouncedAhndy - Merkle | RKG, Senior Research Analyst. #SMX #11B

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Google's Shrinking Ad Real Estate By Andy Taylor

  1. #SMX #11B @PronouncedAhndy Google’s Shrinking Ad Real Estate
  2. #SMX #11B @PronouncedAhndy Auction Recap
  3. #SMX #11B @PronouncedAhndy First Page and Top of Page Minimums ‘To be eligible for a top spot, your Ad Rank needs to meet a minimum threshold…As a result, the cost-per-click (CPC) when you appear above search results is generally greater than the minimum Ad Rank to appear beside search results.’ - Google Documentation ‘Only ads with sufficiently high rank appear at all.’ - Hal Varian Insights on the AdWords Auction
  4. #SMX #11B @PronouncedAhndy First Page and Top of Page Minimums Source: As seen on http://adwords.google.com/support/aw/bin/answer.py?hl=en&answer=87411; 10/14/2010 Explanation that has since been removed from Google documentation:
  5. #SMX #11B @PronouncedAhndy First Page Minimum 15 20 8 5 Imagine 3 Ads Get on the Page Without a First Page Minimum CPC, the Advertiser in the 3rd Position Pays Just Enough to Beat the Ad Rank of the 4th ranked Advertiser
  6. #SMX #11B @PronouncedAhndy First Page Minimum 15 20 8 5 Say Google Decides that the 3rd Ranked Advertiser Needs to Have a CPC of $0.75 to Reach the First Page With this First Page Minimum CPC, the Advertiser in the 3rd Position Has to Pay $0.75 Google First Page Min. CPC = $0.75
  7. #SMX #11B @PronouncedAhndy First Page Minimum
  8. #SMX #11B @PronouncedAhndy Top of Page Minimum 15 20 8 5 Without a Top Ad Placement Minimum CPC, the Top Advertiser Pays Just Enough to Beat the Ad Rank of the 2nd Advertiser Google First Page Min. CPC = $0.75
  9. #SMX #11B @PronouncedAhndy Top of Page Minimum 15 20 8 5 Google First Page Min. CPC = $0.75 With this Top of Page Min. CPC, the Advertiser in the 1st Position Pays $1.90 to Show Above the Organic Results Imagine a Top of Page Minimum CPC of $1.90 for the Top Advertiser Google Top of Page Min. CPC = $1.90
  10. #SMX #11B @PronouncedAhndy Top of Page Minimum
  11. #SMX #11B @PronouncedAhndy Bid Simulator Data Exposes Impact of Top of Page Minimums
  12. #SMX #11B @PronouncedAhndy An Andy with Hair Intermission…
  13. #SMX #11B @PronouncedAhndy Google Year-Over-Year Growth Google Click Growth Stalling Source: Merkle|RKG Digital Marketing Report, Q1 2015
  14. #SMX #11B @PronouncedAhndy Google Year-Over-Year Growth Source: Merkle|RKG Digital Marketing Report, Q1 2015 CPC Growth Accelerating
  15. #SMX #11B @PronouncedAhndy Seen Across the Industry Source: iProspect Quarterly Report: Paid Search Trends, 2015 Q1
  16. #SMX #11B @PronouncedAhndy Firefox Deal Moved Some Search Share, but Not Much… Source: Merkle|RKG Digital Marketing Report, Q1 2015
  17. #SMX #11B @PronouncedAhndy Google.com Impressions in Decline Source: Merkle|RKG Digital Marketing Report, Q1 2015
  18. #SMX #11B @PronouncedAhndy Impressions Still Down Taking PLAs Into Account Source: Merkle|RKG Digital Marketing Report, Q1 2015
  19. #SMX #11B @PronouncedAhndy First Page Minimums On the Rise Source: Merkle|RKG Digital Marketing Report, Q1 2015
  20. #SMX #11B @PronouncedAhndy Competition Does Play a Role in First Page Minimums
  21. #SMX #11B @PronouncedAhndy Average Ad Position Improving Source: Merkle|RKG Digital Marketing Report, Q1 2015
  22. #SMX #11B @PronouncedAhndy Putting It All Together
  23. #SMX #11B @PronouncedAhndy Organic Traffic Growing Source: Merkle|RKG Digital Marketing Report, Q1 2015
  24. #SMX #11B @PronouncedAhndy MozCast Google SERP Feature Graph December, 2013 Source: https://moz.com/blog/mozcast-feature-graph- tracking-googles-landscape
  25. #SMX #11B @PronouncedAhndy MozCast Google SERP Feature Graph May, 2015 Source: http://mozcast.com/features
  26. #SMX #11B @PronouncedAhndy MozCast Google SERP Feature Graph 2013 2015 77.9% 53.4% 20.8% 13.5% 60.3% 46% 17.2% 10% Ad Placement
  27. #SMX #11B @PronouncedAhndy Two-Sided Market Implications Users Google Advertisers
  28. #SMX #11B @PronouncedAhndy Users Users are Shown Fewer Ads to Choose From This could be good or bad depending on the user and instance BUT Google has LOTS of data to determine which users want ads and which don’t
  29. #SMX #11B @PronouncedAhndy Google Google Revenue Still Going Up Source: Merkle|RKG Digital Marketing Report, Q1 2015
  30. #SMX #11B @PronouncedAhndy Advertisers 1) Reassess Goals, Budgets and Expectations Past Performance May Not Provide a Good Benchmark for Future Growth Source: Merkle|RKG Digital Marketing Report, Q1 2015
  31. #SMX #11B @PronouncedAhndy Advertisers Bing Ads Clicks Becoming Relatively Cheaper 1) Reassess Goals, Budgets and Expectations Source: Merkle|RKG Digital Marketing Report, Q1 2015
  32. #SMX #11B @PronouncedAhndy Advertisers 2) SEO is absolutely, definitely ~ probably ~ not dead. Source: Merkle|RKG Digital Marketing Report, Q1 2015
  33. #SMX #11B @PronouncedAhndy Advertisers 3) Remember - The auction is Google’s game.
  34. #SMX #11B @PronouncedAhndy THANK YOU! Andy Taylor Merkle|RKG dtaylor@merkleinc.com Thank you, Seattle!

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