The Google Killers

There are some interesting things happening in the search space that won’t affect marketers immediately but will eventually change the way we search online.  And changing the way we search will have profound effects on Search marketing.

Google makes over $20B a year selling ads in search results.  Each time you search Google for “Tennis Rackets” the engine will list what the Google algorithm believes is the best results then list a bunch of text ads down the right side.  Now if the search results provided exactly what you were looking for there would never be a need to click on the ads — and if you don’t click on the ads Google doesn’t make money.  Therefore, Google makes money on ads that are compelling only because the actual search results didn’t return what the searcher was looking for!

Google doesn’t make this obvious.  They play a precarious game of providing just enough quality in their returns but not enough to make the ads useless. Google is not interested in making the perfect search engine — if it did it would not have a revenue stream.

But here comes the competition.  If Google is not going to improve the competition will.  The question is will they be good enough to unseat the reining king.  It’s happened before.  Remember Alta Vista?  Here are some new engines to check out:

BING.com – this is Microsoft’s new “Decision Engine”.  It looks like a reskinned MSN to me.  What’s important here is the concept of “Decision Engine”.  This new take on search sets a new bar for Google to meet.

Hunch.com – Go check this out right now!  This new engine is actually bringing the “Decision Engine” concept to reality.   Tell the engine about yourself and get personalized results.

Wolfram Alpha – If your looking for facts this engine servers them up.  Most of my searches are looking for data points.  Something that Google is absolutely terrible at.  From now on I’m using Wolfram when I need to know the population of Ohio or how large the moon is.

This post was a bit different than normal.  There is no immediate opportunity for marketers.  But keep and eye on this space.  Search is starting to change and when it does Search Marketing will also radically change.

I wanted to link over to this article from Online Media Daily because it includes some specific numbers around an effort to tweak a paid search campaign.

The gist is that Smith Micro (makers of StuffIt and other software) worked with Digital River to tweak their SEM campaign resulting in the following:

• “logged a 23% quarter-over-quarter increase in paid search results”
• “about an 80% uptick in delivery of trial products”
• “and a 3% lift to 18% in paid search e-commerce revenue.”
• “…and a 14% increase in sales from Apple Mac users”
• “Landing the consumer on the correct page gave Smith Micro “14% of the 20% overall lift in sales”

I’ve worked with Digital River and other SEM firms to tweak key words, landing pages, offers, and copy till I was blue in the face.  It’s a tough business and to show any growth in an existing SEM campaign is notable.

What I gather from this example is that Digital River started to drive mac users to landing pages that offered mac versions of StuffIt and Smith Micro’s other applications. The increase in mac users, Apple’s market share is now at 20% in the US, propbably drove this SEM success.  It’s a good example of taking an opportunity, tweaking the delivery, and ringing out a couple more pence in sales.  Anyone in the software business should take note that Mac centric keywords and landing pages may pay off.

One last note, when I used Digital River as my SEM agency they were super secretive about the key words they bought and the return on those key words. They would only report on the aggregate number.  I hope they have since changed their policy.  If not, at the very least make sure DR reports the ROI on branded key words verse non-branded key words.  Other than that I really like the folks at DR — they are very proffesional and their annual retreat is a blast.

The reason why Google has a market cap of $100B is because the type of advertising Google sells can be measured directly to sales or sales leads. That ROI measurement comes at a premium!

You can easily create a Paid Search campaign through Google Adwords. Google provides a lot of great tools to get you started and buying ads. You buy ads by bidding on the key word. For example, you can bid $3.00 per click for the key word “Insurance”. Whenever someone searches Google (or other sites — see “Contextual” post) on the term “insurance” your ad will be displayed. If that ad gets clicked on it costs you $3.00.

By bidding a specific dollar amount you are trying to get the best possible position (most optimal position — not necessarily the top spot) in the Google return results. The position your ad gets is determined by the amount you are willing to pay per click AND the historic click through rate for that ad. For example:

Company 1 is willing to pay $3 per click for the keyword “insurance”. Over time Company 1’s ad gets a Click Through Rate (CTR) of 0.75%.

Company 2 is wiling to pay $3.50 per click for the keyword “insurance”. Over time Company 2’s ad gets a Click Through Rate (CTR) of 0.5%.

Google will put Company 1s ad above Company 2s ad even though Company 2 is paying more per click.

There are a couple other odd things about how you buy Google key words — I recommend you check out the many only resources and SEM agencies for more details. The point is, you know exactly what you are paying to get a visitor to your web site. From there you should know your web sites conversion rate. Armed with this data you can manage your key word buys to only be paying for terms that return a positive on your investment. Keep in mind, companies activity pursuing Paid Search manage hundreds to thousands of key words.

Buying keywords can get very expensive. At the time of this post the key word “insurance” is going for between $2.88 and $4.35 per click. The Google estimator predicts I would get around 30,000 clicks and it would cost me over $100,000 per day! But remember — the beauty of Paid Search is that you manage the results. If those clicks don’t turn into buyers you move onto new key words, offers, or landing pages.

I’ve had some success buying key words — a couple insights:

1. It doesn’t scale. You’ll find a mix of key words, offers, and bid amounts that provide a positive return. There is a limited amount of words that will work for you and a limited amount of visitors from those key words. Once you find what works for you simple adding new words doesn’t grow your sales.

2. Branded words perform. If you’re Pepsi Cola and buy key words with “Pepsi” in the phase those buys will provide a positive return. But would you have gotten those sales anyway from the natural search returns? When you use an agency to do your keyword buying make sure they report to you the return on branded keywords vs. non-branded words (in this example the term “Soda” is non-branded since it does not include “Pepsi”). Agencies hide the effectiveness of the overall campaign by buying heavily on branded words and then telling you how successful they have been in converting sales.

3. It’s a lot of hard work. Managing the keywords, bids, offers, landing pages, creative is a lot of work. It needs an educated dedicated resource to do it right. And keep in mind the sales funnel — you have to milk every lead. It’s not just click on buy. It’s about exposures to offer, value of offer, timing, trust, and building a relationship. The goal of a consumers first exposure to your offer is not to get them to buy — walk them through the sales funnel. Search is a tool to help you get that first impression.

SEM, CPC. Search Engine Marketing

When you buy key words through Google Adwords you can choose if your ads get displayed outside of the traditional Google search results. If you choose for you ads to display beyond the Google results they will be displayed on web sites that are part of the Google Adsense network.

In this example, ads from Google’s Adwords are displayed on CNN.com.

Anyone with a website can sign up to be a part of the Google Adsense network. And I mean anyone — and everyone trying to make a couple bucks off their web site does. That means your ads could show up on “junk” sites that don’t convert into paying customers.

SEM, CPC, Google Ad words, Paid Search

Google currently commands over 70% of all search done on the internet — so we’ll focus on the SEM opportunities Google offers.

When you “Google” the web page returns a bunch of links that the Google spider found on the web. It also returns a top link and a column of links along the right side. These are paid search results.

Anyone can buy keywords that return their advertisement in the Google results through Google Adwords.