1. The Business of Search
An Insider Perspective on the Search
Engine Business and How This Shapes
Our Approach

2. Disclaimer
All figures shown with source credits are drawn
from publicly available sources.
All non-credited data is assumed, based on
similar published sources and managed client
data, and is purely for illustrative purposes
only.
@NicholaStott

3. We’re Going To Cover...
• Why Me?
• Search Business Metrics
• Which Metrics Matter Most?
– Coverage
– CPC
– CTR
• The Page One Objective
@NicholaStott

4. About Nichola
• Founded theMediaFlow 2009
• Yahoo! UK head of search partners
• Insight to global search metrics
• Managed Guardian, ITV, Orange, EU domain,
EU arbitrage etc
• Traffic Quality and Pricing Discounts rep
@NicholaStott

5. The Business of Search
Search Business Metrics

6. Search Business Metrics
• Searches
• Coverage
• CPC
• CTR
@NicholaStott

7. Search Business Metrics
@NicholaStott
???

8. Search Business Metrics
S x Cov x CPC x CTR = $$$$$$$$$$$$$$$$$$$$
@NicholaStott
1000
= RPM

9. Search Business Metrics
1M x 85% x 0.18 x 15% = £22,950 /RPM - £22.95
If this figure were exact...
“Google Sites Accounts for Two-Thirds of 131 Billion
Searches Conducted Worldwide in December”
Comscore Global Search Market Growth Report – 2009
@NicholaStott

10. Search Business Metrics
UK December 2009 = 6,245,000,000*
Google share = 90%
/1000 = 5,620,500
x RPM (£22.95)
= £128,990,475
* Comscore Global Search Market Growth Report – 2009
@NicholaStott

11. Search Business Metrics
@NicholaStott
GBP to USD 31 day average December 09 – 1.62388
www.oanda.com
= $209,465,052.54
Google Q4 Earnings 2009

12. Search Business Metrics
@NicholaStott
October 2009 November 2009 December 2009
$281,267,473.73 $281,267,473.73 $209,465,052.54

13. Search Business Metrics
@NicholaStott
Which metrics matter most? Which do search
engines want to grow?

14. The Business of Search
Which Metrics Matter Most?

15. Coverage
Coverage? Imagine a 6% increase...
1M x 90% x 0.18 x 15% = £24,300
RPM = £24.30
Would it happen like this?...
@NicholaStott

16. Search Business Metrics
@NicholaStott

17. Coverage
@NicholaStott
Additional 6% of covered terms @ 0.05p
1M x 90% x 0.1722 x 15% = £23,247
RPM = £23.24
Would it happen like this?...

18. Coverage
@NicholaStott
Additional 6% of covered terms @ 1% CTR
1M x 90% x 0.1722p x 14.01% = £21,712.70
RPM = £21.71
Worse than when we started at £22.95!

19. The Business of Search
Which Metric Matter Most?
CPC?

20. CPC
CPC? Imagine a 6% increase...
1M x 85% x 0.1908 x 15% = £24,327
RPM = £24.33
Would it happen like this?...
@NicholaStott

21. CPC
CPC controlled by...
Macro-economic factors
Smart Pricing
@NicholaStott

22. CPC
@NicholaStott

23. CPC
CPC up 6%, CTR down 1%
1M x 85% x 0.1908 x 14% = £22,705.20
RPM = £22.70
Back to square one...
@NicholaStott

24. The Business of Search
Which Metrics Matter Most?
CTR?

25. CTR
@NicholaStott

26. CTR
How can we improve CTR without compromising
UX/SX?
• Improve match technologies
• Reduce search abandonment rate
• Improve total result relevance
Shift the distribution of all CTR activity to P1
@NicholaStott

27. The Business of Search
The Page One Objective

28. The Page One Objective
1M x 85% x 0.225p x 15.5% = £29,643.75
RPM = £29.64
@NicholaStott

29. The Page One Objective
@NicholaStott
New SERP with greater
universal content focus
Mayday, Mayday!
“Yes it has effected the long
tail, on poorer quality sites”
“Yes it is a quality win”
“Yes it passed all the tests”
(@54 secs)
Google Instant - more
impressions, more relevant,
more 1st page action

30. The Business of Search
Final Point – Just for Fun...

31. Google Q4 UK Revenue 2010
UK Searches 6,245BN (35% YoY on 2008)
Up 25% YoY = 7806BN
Google 90% = 7025BN
@RPM £29.64 = £208,221,000
GBP – USD 30 day average (Sept) = 1.55576
$323,941,902.96
October, November up 25.5% on December ($406,547,088.21)
= $1,137,036,079.38
@NicholaStott