SEM Training: Do You Make These 14 Common SEM Errors?

There are a lot of parallels between Google AdWords and SEO, and a lot of the beginner mistakes are the same for both traffic acquisition strategies. I figured it would be worth outlining some of the most common ones to help save you money on your search engine marketing campaigns.

  1. Weak Domain Name
  2. All Search Traffic Driven to Homepage
  3. No Link Building
  4. All Links to the Homepage
  5. No Link Anchor Text Variation
  6. No Focus on Quality
  7. Lacking On Page Optimization
  8. No Site Structure
  9. Site With No Value Add
  10. Competitive Saturated Market With Inadequate Budget
  11. Picking a Market for 1
  12. Pick a Market Which Does Not Monetize
  13. Over-Aggressive Monetization From Day 1
  14. What Other Common SEM Errors do You See?

1. Weak Domain Name

Google AdWords

When I interviewed Perry Marshall about AdWords he recommended split testing URLs because the URL can and does have a major impact on your ad clickthrough rate.

Since Google factors click-through rate (CTR) into their quality scores, anything that influences CTR influences your click prices. And while competitors can and will steal your AdWords ad copy, they CAN'T steal your domain name.


There are many potential errors that can be made with domain names. Two of the more common errors are creating a domain name that is impossible to remember and creating a name that restricts expansion.


Some people feel the need to limit their domain name budget to $10, but it is a foolish strategy. Almost every piece of marketing you do will be influenced by your domain name. Your domain name has limited recurring costs associated with it, but can represent a huge recurring market advantage or disadvantage. Yeah for, and boo for

  1. If you are using Google AdWords for a new product or a non-branded product then test clickthrough rates across multiple domain names.
  2. Make sure your domain name allows you to expand as needed. This is sorta an error I made early on with this site...I had no idea how successful the site would become when I started it and did not anticipate us creating the #1 SEO training program back when I thought of selling an ebook.
  3. Avoid names that are impossible to remember. If you intend to create something that is easy to market online and offline then your domain name must pass the phone test, which typically means avoiding hyphens & numbers. This is especially true if you are trying to build a big brand.
  4. If you feel your company may expand internationally it is best to buy any matching domain extensions where you might intend to eventually do business.
  5. Exact match domain names can create a big SEO advantage if you can afford them - since some engines may give them a relevancy boost and your domain name influences the anchor text people use when they link at your website.

2. All Search Traffic Driven to Homepage

Google AdWords

1 page can only be relevant for a certain sector of search queries. In an efficient market anyone who directs all traffic to the homepage will lose a lot of money.

Every additional click you force users to make has some amount of slippage. When using Google AdWords / pay per click marketing a small change in conversion rates can be the difference between sustained profits and sustained losses.


It is sorta impossible to make a page "optimized" for hundreds or thousands of popular keywords because eventually after you add enough different keywords in the page copy it ends up reading bad and it harms conversion rates.

With SEO efforts mis-directing traffic is not as obvious as it is with AdWords because you don't have to pay for every click. But giving users an irrelevant experience still means you are throwing money away and only operating at a fraction of your potential.


With the prevalence of Google (and web search in general) every page of your site is the front door. We navigate via search. So map out keywords against URLs and try to offer the most relevant user experience whenever possible.

Observe how we map out core keywords, variations, and modifiers.

Some Google AdWords advertisers take perceived relevancy one step further and use the search query to help define the page content through the use of keyword insertion into their page copy and/or altering the page based on geographic information based on your computer's IP address.

3. No Link Building

Google AdWords

The equivalent of links to AdWords is keywords in your AdWords account. If you only advertise on 1 or 2 keywords you miss out on a large stream of relevant traffic.


If you build it they will come is simply not true in the search game. If it was easy to rank for competitive keywords without links then few companies would buy AdWords ads. You can't typically rank a new site until you have some level of awareness. Search engines follow people. Links are seen as votes of trust.


With AdWords, don't just bid on 1 keyword. Look for additional relevant variations that make sense. If you don't mind splashing out $50 you can also look at what competing sites are advertising on using SEM Rush, Keyword Spy, SpyFu, and/or KeyCompete. There are so many new tools popping up in this market segment that I have not had the time to review them all.

For SEO, download SEO for Firefox and the SEO Toolbar and look at how many links competing sites have and how many domain names those links come from. You will likely need to build some number of links in the range of what competing sites have (from a similar set of sites) to rank. Today is the perfect day to start building links. And yesterday was even better. ;)

4. All Links to the Homepage

Google AdWords

Since you are buying the links from the search engines based on keyword, this problem would be corrected by solving issue #2.


A variation of the above thinking. Most quality sites have useful content somewhere that people link to editorially. If all your links point at the homepage then that means you are not using anchor text from external links to boost your internal page ranks. In most markets that creates a big loss considering that some of those pages would get a lot of traffic with just a few more deep links which would yield higher rankings.


Search is a winner take most market. Analyze your traffic patterns, rankings, and target keywords to ensure you are promoting key pages. Look at top competing sites and keyword ranking values to gain additional insights.

Create linkworthy content that people would want to link at and push market it. The objective (vs self-interested) viewpoint here is "if you did not own your site what is unique about it that would make you want to visit it every week and/or recommend it to a friend?"

5. No Link Anchor Text Variation (or AdWords Ad Copy Variation)

Google AdWords

You shouldn't use the exact same ad copy on all of your keywords. You should segment it out by trying to understand user demand and create compelling advertising text that is relevant to the search query, relevant to the user demand, and relevant to your landing page. If you use a single generic boilerplate ad copy you are loosing a lot of money because your ad will not look as relevant as some of the top competing ads.


When people link to things naturally there tends to be some variation involved. If all your inbound links say "my keywords" then that can look suspicious...particularly if you are buying lots of links.


With AdWords, at a minimum you would want to use dynamic keyword insertion. But if you sell a lot of different products then you should try to find a way to match up small groups of relevant keywords against a set of ad copy. Make your core keywords stand out on their own, and be willing to be somewhat less descriptive with low search volume backfill keywords.

With SEO you should try to mix up your link anchor text when you are manually building links. If you create original compelling content that people want to link at (and push market it to the right audience) then that will also pull in natural anchor text.

6. No Focus on Quality

Google AdWords

Some advertisers are compelled to go after "cheap" clicks. But some of the more expensive keywords are expensive because they are associated with significant and valuable consumer demand.


Google algorithms estimate the probability of a new site being quality or low quality. If you start off with 2,000+ "free" directory links you align your site with sites that are often of lower quality. Similarly, if you try to promote watered down or average content then few people will be receptive to those efforts.


There is nothing wrong with buying cheap traffic, but make sure you track the business value you get from that traffic. If you buy "cheap" traffic from 3rd tier ad networks and/or keywords without any commercial intent those will not build your business anywhere near as well as developing a solid traffic stream from valuable industry keywords on leading search engines.

Start your link building efforts with quality links first. As your site gets more trusted you can fill in some lower quality links as well, but you don't want to do it first, and you don't want to do it in bulk.

When you decide to do push marketing for link building make sure the content you are promoting is unique, original, useful, compelling, & citation-worthy.

7. Lacking On Page Optimization

Google AdWords

Quality user experience and usability are crucial to converting well. When users come from search to your site they are switching channels. The more cues you can give them that they are in the right place (like relevant page headings + navigation) the higher your conversion rates and visitor value should be.


For really competitive queries links are crucial, but you can rank for many less competitive keywords and keyword variations without lots of links (because there is much less competition for those keywords). And even if you have lots of links, it is still typically hard to rank for keyword phrases that are not in your page copy.


With Google AdWords you can reach many of the stray searchers by using a combination of phrase match and broad match, and then using negative match to filter out irrelevant searches.

For every person searching for "seo" or "sem" there are probably 10 people searching for more obscure queries like "how do I promote my business on Google?" You can see how our page about link building ranks for hundreds of related keywords.

This is probably the single most powerful graphic explaination of why having lots of useful on-page content:

With SEO you can reach a lot of the searchers by using alternate word forms, alternate word orders, related phrases, and keyword modifiers in your content.

8. No Site Structure

Google AdWords

If your AdWords ad campaigns are not well organized then you are likely losing money. A strong site structure also helps ensure that your AdWords account has a strong structure, which can aid profitability.


If your site is not structured well then...

  • navigation will likely be hard or confusing
  • some of your key pages may not get much of your link authority
  • some of your unimportant pages may accumulate a lot of your link authority


Most successful websites have a structure in which key pages which are mapped out against user demand and search volume.

  • Create separate AdWords campaigns based on goals. Perhaps you can have campaigns for brand related searches, seasonal offers, public relations, campaigns that are based on ROI metrics, and even backfill campaigns like misspellings.
  • Some content management systems (CMS) have major errors with duplicate content and site structure issues. A review of that topic is beyond the scope of this article, but search for the name of the CMS and SEO prior to implementing it to verify there are no serious issues and/or that there are easy fixes on the market.
  • Set up site categories and sub-categories that are aligned against the keywords people use to search for your products and services.
  • If you blog (or publish content regularly) reference older related materials when relevant.
  • If your content is in a database you can use automated contextual links to help fix some site structural issues and redistribute PageRank down toward lower pages in your site structure.

9. Site With No Value Add

Google AdWords

If your site does not add much value it can be quite hard to sustain profit margins in the AdWords market. Affiliates routinely copy the work of each other and drive up click prices, which kills profit margins.


My very first profitable website was a no value add website that I got some spammy links for. The site did make thousands of dollars in affiliate commissions (a gift from God at the time), but that income was only made ***because*** I was a bad speller and misspelled some casino brand names back before search engines integrated spell correcting aggressivley. Such a site would simply go nowhere today.

Google often considers sites without value add to be unneeded duplication and/or spam. If you ever get a chance to read some of the Google Remote Quality Rater Documents you can see what Google believes is associated with "value add."


  • In competitive AdWords markets competing businesses are forced to keep improving their business processes and efficiencies to be able to afford increasing bids from competing businesses.
  • If you have a lower lifetime customer value than competing businesses you may eventually be driven out of the market.
  • With some seedy affiliate offers in many cases the only people with sustained profit margins are basically those who are surprisingly sleazier than the rest of the market or those who are barely breaking even themselves, but are using their blog to build a downstream of followers that they get commissions from.
  • Some (perhaps most?) affiliate networks ***will*** shave your commissions AND steal your keyword list if you send them the data.
  • If you don't have a value add and want to play catch up in a competitive SEO market you need to have some sort of competitive advantage (be it nepotism, domain name, market experience, etc.).
  • Making paid things freely available, creating useful software or tools, and having deeper & better editorial are 3 great ways to add value and win marketshare.

10. Competitive Saturated Market With Inadequate Budget

Google AdWords

In some markets it is hard to compete buying traffic without having a strong brand. If Geico pays Google $30 a click, but only pays affiliates $10 per lead then there is no way an affiliate can compete against Geico on the core industry keywords like auto insurance.


Want to rank for hotels and insurance? Me too. But I am uncertain if I have the resources to do it from scratch in a lasting manner given the algorithmic trends promoting well branded business and how corporations are increasing their SEO budgets.


  • Have big ideas, but set reasonable goals, and measure progress.
  • Do the math in advanced to estimate how much you can afford to pay for a click.
  • Pick and chose your spots in the Google AdWords market. If after you do significant testing and optimization a word is still losing money consider dropping it.
  • Try to pick a market position you feel you can dominate. The #20 result for "insurance" produces traffic worth ~ $0. The #2 or #3 result for "pet insurance" yields much more.
  • Make at least 1 incremental improvement to your web business everyday.
  • Aggressively re-invest early profits into growing your website and building a moat.

11. Picking a Market for 1

Google AdWords & SEO

If there is no demand for an idea then it is quite hard to create demand through search engine marketing. Search engine marketing works best when it captures existing demand.


  • Keyword research tools can give you estimates of search volume.
  • Since AdWords is so much quicker and easier to test than building a full site and implementing an SEO campaign, you can use AdWords to test market demand and interest for an offer before spending money building and marketing a full website.
  • It can be good to be out front of trends (as one of the easiest ways to win a market is to be the first person in it), but just as easily you can go after an established high money market with your own original spin or angle.

12. Pick a Market Which Does Not Monetize

Google AdWords

If similar competing business models have much higher visitor value you may have to change your business model to compete. Some low earning business models might simply be precluded from participating in the AdWords market in a meaningful way.


There is nothing wrong with building a site about a topic you are passionate about and interested in without knowing how well it will monetize, but if you are trying to build a business you should pick something with a high enough visitor value to create enough profit potential to make it worth the time and money investment.


If you are planning on participating in the AdWords market, but have a low margin business then you should look for ways to increase profit margins, customer order size, and lifetime customer value.

If you run an editorial site it can be a good idea to under-monetize off the start to build market momentum without people viewing you as a competitor, but it can be hard to bolt on a business model if you have spent a lot of time servicing the wrong market segments.

13. Over-Aggressive Monetization From Day 1

Google AdWords

If you are buying traffic there is no problem with trying to monetize it. But most website visitors will not convert.


Sell in line text links & have pop ups? Is ever other post an affiliate link? If so, why would anyone want to subscribe to an ad stream when there are many useful alternatives to look at?


  • Since most website visitors will not convert to paying customers on the first visit, you should look to establish a relationship with them by giving them a free offer and/or some reason to come back to your website. You can see the offer we make at the bottom of our pages and on our join now page.
  • Existing leading trusted sites that have built up a following benefit from cumulative advantage. If your site is brand new and driven by editorial content it is a good idea to give away more value than you capture. Under-monetize until you build enough market momentum to make your rankings stick even when you do monetize.
  • Consider monetizing some areas of your site more aggressively while not monetizing other sectors of your site, but instead using them for public relations and link building.

14. What Other Common SEM Errors do You See?

Has Yahoo! Search Marketing Lost Their Minds?

Imagine selling web traffic as a commodity in a blind auction, while touting its value based on the traffic being targeted, relevant, precise, and trackable. Then imagine taking away the default keyword tool on the internet that has been written about in thousands of marketing books, ebooks, and web pages - and replacing it with nothing. Then imagine signing up some seedy publishing partners that run clickbots against your highest value keywords, and giving them the lion's share of the click "value" on those keywords. Then imagine not making it easy for advertisers to opt out of that "traffic." Then imagine editing your advertisers accounts without their permission to alter ad text and keywords, and only informing some of them about the changes sometime after they take place...with 1 in 5 rejecting the changes!

So inefficient and sloppy. They can call that account optimization, but only in an Orwellian sense. Why not give advertisers the tools to do optimization themselves?

Google offers about a half-dozen public keyword tools, makes it easy to filter out bad traffic, has way more volume, offers enterprise level analytics for free, and does not edit your keywords and ad copy against your permission. Is it any wonder Yahoo! managed to lose hundreds of millions of dollars last quarter, while Google keeps exceeding market expectations - even during a recession?

I just hope that when Yahoo! gets bought out by Microsoft that they keep Site Explorer around for us SEOs, and don't do us as poorly as they did their advertisers. ;)

[update: Danny Sullivan also covered this issue.]

The Return of Garbitrage (Click Arbitrage SEM)

Recently one of our AdSense sites had a lot of poor ads on it that we filtered out, but it is hard to keep up with all the new ones. Some of them are so bad that you know they are junk just by looking at the URL.

Danny recently highlighted how is becoming a big arbitrage play, but I am seeing lots of arbitrage ads from smaller advertisers as well...ones that would have been filtered out of Google a year or two ago (unbranded sites, cheesy universal subdomains, subdomains of subdomains, .info thin content sites, sites which act as a portal that link to domain lander pages that use a 0 for the o in the domain name, Overture feed sites, adsense sites with robotic content, etc etc etc) are now showing up for many Google searches. Google has begun running their own arbitrage ads for things like credit cards and car insurance. Some people have even noticed graphical ads selling people and sites distributing spyware.

To appreciate how bad this is here are a couple examples...

  • On one major keyword I saw all but one ad being from an unbranded thin arbitrage site.
  • On one search I clicked from Google into an arbitrage site that lists links to niche domains with domain holder pages. On those domains there were Overture advertiser links. I clicked one of those and ended up on a site that was a thin crappy AdSense arbitrage site. That AdSense ad I clicked on landed me on another domain lander page powered by Overture. That domain lander page had ads on it for the domain name I just came from...and then I fully appreciated the absurdity of it all!

I could make a video showing examples, but did not want to out people. I just find it lame that Google polices organic results so aggressively and then let their ad network devolve this far this fast. They were pretty strong 6 months ago.

I suspect that Google is trying to goose revenues for this quarter (or is trying to use the downturn to be aggressive with experimentation). I can't think of any other reasons why they would have done such a major retracement on their quality score algorithm and click arbitrage front. Essentially they are paying people to generate garbage AND eat up a lot of their revenue while providing zero value in the transactions.

Have you been seeing a sharp rise in garbitrage?

Chitika - the 5th Search Engine?

I recently had an email chat with Alden DoRosario from Chitika about the recent rapid growth of their ad network. They have been aggressively signing up bloggers and other independent publishers, and are now getting over 2 billion monthly impressions, with their behaviorally targeted Premium ads getting hundreds of millions of monthly search driven impressions, putting their search distribution network on par with

How their premium ad network works is they target the ads to be relevant to search query that sent traffic to the publisher's site, thus even if the ads are not shown on a search page they still are seen by searchers right after they search and click through to the site.

Alden gave me a link for a $75 bonus code for any publisher that makes $75 in commissions before the end of October. Publishers are paid 60% of the ad click value, with the house getting 40%. I just added their ads to my mom's weight loss blog. It looks like their ad network is not quite as deep as Google's but they do well for higher volume search queries.

Most search engines are a backbone for an ad network, but it is hard to build query volume for a new search engine. Just look at how few people have used Wikia Search in spite of endless hype. Wikia Search got a couple million lifetime searches whereas Chitika gets billions of monthly ad impressions.

Most people do not feel they have a search problem, but many publishers feel their content could be monetized better. If you didn't have huge search distribution how would you create a search ad network? If an ad network grows big enough do you think they could do it the other way around, using their ad network distribution as a backbone to start a search engine?

Disclaimer: The free $75 bonus is an affiliate link, but when I chatted with Chitika I pushed hard to get publishers the best payout bonus and longest payout bonus period possible rather than focusing on trying to maximize my commissions.

By 2009 Will PPC = AdWords? As Keywords & Industries Evolve...

I created a new training module talking about how language in new industries changes over time, how you can track change, and how you can take advantage of structural changes. I made the first 1/3 of it freely available, but the action items are for subscribers only.

I am still trying to figure out how to balance creating premium members only content and publish many posts to the blog. Which of the following ideas do you like best?

  • make one out of every few freely available forever
  • make a portion freely available forever
  • make new content freely available in its entirety and then make it exclusive after a week or some other period of time

Yahoo! Inks Ad Syndication Deal With Google

The WSJ reported that Google and Yahoo! have inked a non-exclusive ad deal

Yahoo said it will display some ads sold by Google in an agreement estimated to generate $800 million in annual revenue. In the first 12 months following implementation, Yahoo expects the deal to generate an estimated $250 million to $450 million in incremental operating cash flow.

Both companies have agreed to "delay implementing the deal for up to three and a half months while regulators review it." The deal can be terminated at any point in time, but if it is terminated within 24 months Yahoo! will owe Google $250 million.

The partnership is only for the US and Canadian markets, but expands beyond Yahoo!'s search results into Yahoo! content ads and even the syndicated Yahoo! Publisher Network. Given Yahoo!'s poor ad relevancy and that they are reselling Google ads, how will the Yahoo! Publisher Network ever gain marketshare from AdSense?

Beyond the incremental revenue stream, this also gives Google another opportunity to spy on web users who use their largest competitor - allowing Google to get a better view of the average web user and making it easier for Google to clone and beat Yahoo! in any market where Yahoo! leads.

Here is Google's take, and the full Yahoo! press release is below

Yahoo! to Strengthen Competitive Position in Online Advertising Through Non-Exclusive Agreement With Google
Thursday June 12, 6:16 pm ET

Agreement Advances Yahoo!'s Open Strategy; Enhances Ability to Compete in Converging Search and Display Marketplace

SUNNYVALE, Calif.--(BUSINESS WIRE)--Yahoo! Inc. (Nasdaq:YHOO), a leading global Internet company, announced today that it has reached an agreement with Google Inc. that will enhance its ability to compete in the converging search and display marketplace, advancing the company’s open strategy. The agreement enables Yahoo! to run ads supplied by Google alongside Yahoo!’s search results and on some of its web properties in the United States and Canada. The agreement is non-exclusive, giving Yahoo! the ability to display paid search results from Google, other third parties, and Yahoo!’s own Panama marketplace.

Under the terms of the agreement, Yahoo! will select the search term queries for which – and the pages on which – Yahoo! may offer Google paid search results. Yahoo! will define its users’ experience and will determine the number and placement of the results provided by Google and the mix of paid results provided by Panama, Google or other providers. The agreement applies to paid search and content match and does not apply to algorithmic search. The agreement also applies to current partners in Yahoo’s publisher network.

Yahoo! CEO and co-founder Jerry Yang said, “We believe that the convergence of search and display is the next major development in the evolution of the rapidly changing online advertising industry. Our strategies are specifically designed to capitalize on this convergence -- and this agreement helps us move them forward in a significant way. It also represents an important next step in our open strategy, building on the progress we have already made in advancing a more open marketplace.”

“This agreement provides a source of funds to both deliver financial value to stockholders from search monetization and to invest in our broader strategy to transform display advertising and advance our starting point objectives with users,” said Yahoo! President Sue Decker. “It enhances competition by promoting our ability to compete in the marketplace where we are especially well positioned: in the convergence of search and display.”

Agreement Provides Attractive Economics and Enhances Search Monetization

Yahoo! believes that this agreement will enable the Company to better monetize Yahoo!’s search inventory in the United States and Canada. At current monetization rates, this is an approximately $800 million annual revenue opportunity. In the first 12 months following implementation, Yahoo! expects the agreement to generate an estimated $250 million to $450 million in incremental operating cash flow.

The agreement will enhance Yahoo!’s ability to achieve its goal to grow operating cash flow significantly, while at the same time providing flexibility to continue to invest in ongoing initiatives such as algorithmic search innovation and search and display advertising platforms. It gives Yahoo! complete flexibility to continue to use its Panama paid search results.

Significant Benefits Will Flow to Users, Advertisers, Publishers and Employees

Users will also benefit from Yahoo!’s ability to invest incremental operating cash flow in ongoing improvements to its search services, building upon recent major innovations such as Search Assist and SearchMonkey. Advertisers will continue to benefit from multiple marketplace alternatives including Panama, Google and others. Publishers will benefit from a winning combination of distribution, monetization and services to help them grow their businesses. The financial benefits will enable Yahoo! to broaden the scope of its investments and initiatives, enhancing Yahoo!’s ability to offer attractive career opportunities to its employees.

Terms of the Agreement

The agreement will enable Yahoo! to run ads supplied by Google's AdSense™ for Search and AdSense™ for Content services next to Yahoo!’s internally generated paid search and algorithmic search results. Yahoo may also run Google-supplied ads on non-search Yahoo web properties, as well as on current members of its partner network. The agreement has a term of up to ten years: a four-year initial term and two, three-year renewals at Yahoo!’s option. It applies to Yahoo!’s operations in the U.S. and Canada only. Advertisers will continue to pay Yahoo! directly for clicks served by Yahoo! from Yahoo!’s Panama and Content Match marketplaces. Advertisers will pay Google directly for each click on Google paid search results appearing on Yahoo! owned and operated network or certain affiliate sites. Google will share a percentage of such revenue with Yahoo!.

In addition, Yahoo! and Google agreed to enable interoperability between their respective instant messaging services, bringing easier and broader communication to users.

The agreement allows either party to terminate the agreement in the event of a change in control of either party. The agreement also requires Yahoo! to pay a termination fee if the agreement is terminated as a result of a change in control that occurs within 24 months. The termination fee is $250 million, subject to reduction by 50 percent of revenues earned by Google under the agreement.

Although Google and Yahoo! are not required to receive regulatory approval of the deal before implementing it, the companies have voluntarily agreed to delay implementation for up to three and a half months while the U.S. Department of Justice reviews the arrangement.

Goldman, Sachs & Co., Lehman Brothers and Moelis & Company are acting as financial advisors to Yahoo!. Skadden, Arps, Slate, Meagher & Flom LLP is acting as legal advisor to Yahoo!, and Munger Tolles & Olson LLP is acting as counsel to the outside directors of Yahoo!.

Yahoo! will host a conference call to discuss the agreement with Google at 6:30 p.m. Eastern Time today. To listen to the call live, please dial 877-391-6847 (reservation number 70308474#). A live audiocast of the conference call can be accessed through the Company's Investor Relations website at In addition, an archive of the audiocast can be accessed through the same link. An audio replay of the call will be available following the conference call by calling 888-286-8010 (reservation number 84138579).

Microsoft Announces Engagement Mapping Ad Technology

AdWords has become a black box beyond the means of many small advertisers. To help some advertisers automate their accounts tools like free conversion tracking and CPA based bidding have came about. But all the tools that help enhance the perceived value of search ads and the value of conversions does nothing for brand ads or the other ads people see before searching and buying.

Content ads, which were relatively expensive when AdSense first came out, have seen their price drop over the years as

  • advertisers adjusted content bids downward
  • smart pricing reduces prices (again, again, and again)
  • quality scores that drives out arbitrage ads
  • the clickable region has got smaller

The value of many publishing based business models has aggressively eroded as

  • publishing markets get saturated
  • AdSense has replaced direct ad sales for many sites
  • Google keeps discounting the price (and perceived value) of non-search ads
  • Google's search based ads get conversion credit for demand created by other ads

Google claims their success is just because they are simply better than the competition and they have been doing search longer (that second claim is untrue - Yahoo! owns Inktomi and AltaVista, which have both been doing search longer than Google). The truth is they have a huge advantage in network effects, have advertising believe that their inventory is worth more than it is, and that other online ads are worth less than they are. It is going to be hard to create a viable competitor unless the metrics for measuring value are changed.

Microsoft's answer to this is called Engagement Mapping, yet another black box, but one that aims to share part of the ad credit with display ads (clicked or not) instead of tying most of the ad value to the search based conversion. Publishers would clearly benefit from this, but if it is hard to get advertisers to buy AdSense ads on Google (where Google essentially giving away the ads) how hard will it be to get advertisers to buy in on this? Perhaps big brands will use it, but smaller companies will not be interested.

If Microsoft does not own a big piece of the search market, another big hurdle is how will they advertisers trust this model without giving Microsoft their analytics data?

How might this pricing model change online publishing (for better or worse)?

Tracking Bogus Google AdWords Conversions

I recently bought a few AdWords ads for Microsoft adCenter's affiliate program. These links were direct affiliate links that headed directly to Microsoft - the searcher never touched my site.

Compare the following 3 AdWords ad campaigns

The first campaign is a strategic one, where I do not mind losing money if it increases usage, which may lead to more links (and better organic rankings) over time. But that second campaign, with a similar number of clicks, never even touches my site and still has a baseline conversion rate and conversion cost similar to the strategic ad group.

Truth be told those conversion sample sizes are so small that it is hard to draw concrete evidence from them, but if I was telling myself that some of the ad sales caused by that strategic ad campaign help subsidize at least some of the cost, then I might be operating under a false pretense. Some of those conversions may have happened anyway.

That third ad campaign consists largely of brand related keywords and a few other somewhat related terms. Notice how the conversion rate is higher. Microsoft recently published research that brand related search terms tend to convert better than twice as well as non-brand terms.

Why is this important? As Google controls an increasing large piece of the online advertiser pie, if you use their analytics, many of those conversions THEY track are falsely tied to their ads. They would have happened even if you were not buying AdWords ads. As far as brand related conversions go, conversions tied to brand phrases typically are not incremental, which means those would have happened even if you were not buying AdWords ads.

You can use direct conversions as a proxy for the value of advertisements, but if you have a large ad campaign and a well known brand, you are likely buying brand exposure more than direct conversions, even if you control your spend on using a CPA metric.

Your Laziness: Why I Love SEO So Much More Than PPC

Laziness is Beyond Your Control

Everyone, at least on some levels, is lazy. I work my ass off, but am still lazy about doing things I do not enjoy doing. If my wife asks me to wash the dishes the hand of God strikes upon me a mean streak of laziness. It is outside my control, I swear ;)

Right now I am trying to write a sales letter, which has made me lazy, and instead made me want to write this post.

Laziness Leads to Productivity Gains

I don't like having to think some things through too much if they can be automated. And so tools like keyword list generators are made.

I recently found a sweet affiliate program in a field where no other affiliates existed. For the right keywords, click value was about $12 a click, and I was paying like 60 cents a click. With under an hour of work, I made hundreds of dollars in daily profit with virtually no effort.

Find Something You Love And Make it Your Own

I just logged in today and saw that my conversion stats dropped to virtually nothing over the past couple days. Odd. So then I searched, and like 10 affiliates (or, more likely, 1 competing affiliate 10 times) launched ads showing for many of the keywords I bid on, with many of them stealing my exact ad copy - word for word. They loved my ad copy and made it their own.

Slimming Profit Margins

Bidding Wars Reduce Profits

So what is the solution? Maybe I increase my bids again. But then they will increase their bids again. A bigger and bigger piece of the profits get shipped to Google, while these clowns and I eventually compete for crumbs. One of the reasons Google does not care if others steal your ad copy (or all the content on your website) is because at the end of the day they know it erodes the value of copyright and creates a bidding war that deposits more money in their bank account.

Quick Paydays

PPC affiliate marketing and arbitrage works that way, where you find a payday, hold it for a few weeks or a few months, then someone competes and the profit margins drop, unless you have a higher visitor value it keeps costing you more time to make less, until the opportunity cost exceeds your profit potential, and then you are off hunting for the next big idea. Competitive forces make it hard for this strategy to build long-term value unless you are operating in a small market or are using a technique that is pretty dirty.

Super Affiliate Secrets

One of my friend that was doing well with PPC affiliate stuff got up to about $1,000 a day of profit for an affiliate network. He ran it for about a year, then his affiliate network decided that they would find something they love and make it their own - they cloned his account and he is now making $0 for uncovering all the great keywords for them.

If you don't own the supply chain or have a distribution chain that is hard to replicate your competitors consist of

  • other affiliates
  • the search engines
  • quality scores and algorithmic changes
  • the companies you affiliate with
  • anyone else interested in the keyword you are buying

SEO Loves Your Profit Margins

This is why I like SEO so much more than PPC. Most people are too lazy to spend years researching their topic, years building a brand, years building links, and years building social and customer relationships. We are afraid of failure, afraid of success, and afraid that we are investing too much in one place. But, if someone sees me ranking in the organic results they can't just clone it unless they know SEO well, and are committed for the long haul. In many cases, knowing SEO well means having capital, time, passion, and a lot of marketing knowledge.

Emotionally Engaged Brand Evangelists

Off the top of your head, how many people or brands in the SEO space can you think of? How many give you some sort of emotional response? How many helped you change your life for the better? Even in some of the most competitive and most saturated marketplaces there is not much real competition.

Thanks for the Laziness, PPC Affiliate Dude!

SEO separates out real businesses from 95% of the people buying PPC ads. The guy stealing ad copy is too lazy to compete at that level. I'll enjoy the logarithmic growth in profits (which have been at least doubling every year) while he keeps stealing table-scraps from Google and other affiliates until his accounts get banned.

Find Something You Love And Make it Your Own!

Microsoft AdCenter Affiliate Ad

I put a Microsoft AdCenter affiliate ad in the sidebar of the blog.

I generally do not like putting too many ads on this site, but...

  • their traffic converts well because it is such a clean source (no dirty clickfarm syndication partners)
  • I recently fell in love with Microsoft's Ad Intelligence tool. If you have not tried it yet I urge you to try it. This post and this video offer a review of some of the features
  • $50 in free clicks is a great offer for search marketers who have yet to try Microsoft's ad platform
  • I think the web is healthier if Google has some competition, and Yahoo no longer attempts to compete

Are you against affiliate ads? Have you tried AdCenter or the Ad Intelligence tool yet?