The Market Can Never Get Too Efficient

Yahoo! announced they are launching their new Panama platform. In response, Google quietly announced they are launching a free multivariable testing program which ties in with AdWords. Each additional functionality Google can add to their ad system further solifies their market knowledge and their position as the default ad platform. If they are the default ad platform that advertisers turn to, it will mean that their ads will sell closer to their fair market prices and Google will be able to afford more distribution, both of which in turn will attract more advertisers and may price many types of ad noise out of the market. The efficiency and market position feeds into itself.

Google Outdistancing Yahoo! in Monetizing Branded SERPs

Yahoo! tends to be a bit more cautious than Google when it comes to allowing trademark related ads. That significantly suppresses their earnings because brand related search queries are often some of the most targeted, most commercial, highest converting, and most expensive keywords. Here is a snapshot of the current search results for SEO Book. Notice that the top 8 organic results link to SEO Book.com. By loosening up on subdomains (displaying them more frequently) and providing a mini site map (called Sitelinks) in the SERPs it makes it much harder for affiliates or merchants reselling a brand to get exposure through the organic search results for the core brand name.

There are two pieces to that, as well.

  1. If the top 5 or 6 search results point at the official site searchers have to scroll down quite a bit to find commercial search results outside of the core brand. Rather than scrolling they may be more likely to click an ad.

  2. If the search results look highly informational in nature (by being harder to manipulate via commercial bias, and Google over-representing the official site) then merchants are more likely to buy ads.

The brutal part with buying the ads is that sometimes Google shows 0, 1, 2, or 3 AdWords ads above the organic search results. If the organic search results are somewhat irrelevant to the commercial intent of a searcher, those few ads at the top of the search results are going to get a high clickthrough rate. If you are a merchant who is not featured at the top of the results the right rail ads will bring you relatively little exposure. Thus a bidding war occurs for those top couple ad spots, and Google can control how many ads to show above the results to maximize earnings.

If you sell an ebook like I do, it is no big deal if one day your sales are high and the next day they are garbage, but if you run a business with fixed costs, a fixed marketing budget, and many employees then you may be stuck paying whatever it takes to be at the top of the results for brands you carry. The more dependant your business is on search the more they can bleed you dry!

While I used my brand as an example in this post, this brand factor recently played a big roll for a client, who even outranks his manufacturer for their official name in some major search engines, but is forced to pay much higher AdWords rates to get any exposure on Google. If he falls out of the top couple ad slots the right rail sends us like 10% the traffic that the top ad positions do. And I am probably going to have to bid bleed about $5 a click for a while to work that client back into the rotation of the ads at the top of the search results. And then if we knock a competing site out of position that may spur on a budget bleeding bidding war. Companies with a fixed marketing budget (my client has a variable budget based on market conditions) will suffer even worse by having to overpay for traffic until they kill their budget, and then not show up the rest of the time.

If the core brand term is priced out of reach it is important to

My client dominates the long tail, but for that particular brand he carries, most of the queries are for the official brand name. As a Google share owner and owner of a strong brand, I think they are brilliant. As a marketer who has a client getting screwed by their setup, I think a bit less of them. ;)

Also worth noting that Yahoo!'s search results are moving toward a more authority based algorithm, and they are starting to double list many brand sites, so this issue will likely rise again soon enough.

Google AdWords Landing Page Quality Scores

Google AdWords updated their landing page quality scoring algorithm. I have got quite a bit of email on the issue, although people are still working through what all Google is doing.

In much the same way to how Google has clearly stated their hatred for low quality affiliate sites in the organic SERPs some of that pure hate is crossing over into their AdWords relevancy algorithms, where they are looking at the landing page quality (and other factors) and squeezing the margins on many business models. I believe if you spend huge money you probably get a bit more of a pass than smaller ad buyers, but the clear message with this update is that Google does not like noise even if you are willing to pay them for the privilege of displaying your noisy message.

Many people liked PPC because they felt it was far more stable and more predictable than SEO, but for many PPC just started to look ugly quite quickly. If you are dealing with search marketing you have to evolve with the market or die. That is true with organic search and is true with paid search.

The brutal part with this Google update is beyond providing these general guidelines they failed to define what qualities they are looking for when they test landing page quality. Some of the things Google might be looking for

  • if your AdWords ads redirect

  • your account history (are you a large reliable spender that has been spending for years? are you new to a saturated market? do you have a spotty past checkered with 20,000 unrelated keyword uploads? do your ads get a strong CTR?)
  • history of competitors with similar keyword selections
  • if your landing page links to known affiliate hubs
  • if your landing page has redirect on outbound links
  • if your landing page has many links to other sites or pages that are also advertising on the same or similar keywords
  • if your page has duplicate or limited content (or conversely if it has a huge number of links to external sites on it)
  • time on site
  • rate which people click the back button after landing on your site
  • outbound ad CTR on your landing page (especially easy if you are arbitraging AdWords to AdSense)
  • conversion rate if you use Google Checkout, Google Analytics, or the AdWords conversion tracker

Don't forget that Google not only has a huge search engine, the largest ad network, and an analytics product, but they have their toolbar on a boatload of computers and can track track track their users!

Andrew Goodman reminded advertisers that one shouldn't be too reactive to this change

As [Googler] Nick Fox suggested, there are rarely any gray areas, implying that it's generally seriously misleading ad campaigns and scam offers that are being targeted. Yes, there are landing page factors now in the mix.

But these will generally not affect accounts of long standing which have good CTR's established. You need to continue optimizing your landing pages for corporate goals and profitability, conversion rates, ROI, etc... not based on what you think it will do to your minimum bid in AdWords.

As Google Checkout and other direct merchant incentives (and affiliate disincentive) spread you have think that Google is going to make many PPC affiliate marketers cringe.

If you are already well established though this might improve your margins since it raises the barrier to entry to the AdWords market while wiping out some of the arbitrage players and some of the less sophisticated or lower budget merchants and affiliates. Some of the larger players in the space are seeing a significant rise in traffic as the squirrel population dies off.

In the same way Google trusts older websites maybe it is worth starting up an AdWords account just to learn the medium before it gets any more complex, and with any luck to build up a level of trust that can be leveraged if you ever have a sudden urge to advertise a time sensitive message down the road.

I have had a couple search marketers tell me that they have a couple high spend low maintenance PPC clients just to have the account spend necessary to have pull with the engines.

Microsoft AdCenter Dynamic Text

SER recently mentioned Microsoft AdCenter dynamic text.

Microsoft AdCenter dynamic text is similar to Google's AdWords Dynamic Keyword Insertion, but also allows you to set other variable ad copy driven off the keyword inclusion. For example:

Keyword / Dynamic text parameters
"sedans" / 5% off
"SUVs" / 7% off

When you are ready to build your ad, you will enter "All {keyword} {param2} as the ad title. When a user queries "sedans," the ad that appears will be "All sedans 5% off."

Microsoft's dynamic text also allows you to use {param1} to drive your ad URL and / or landing page.

AdCenter FAQs here.

Yahoo! Updates their PPC Ad System

It looks like Yahoo! was waiting for MSN to dump them before rolling out their new PPC product. MSN dumped them last week, and today Yahoo! is already launching their shiny new PPC system.

The new system is going to be rolled out in stages. This stage is mostly about improving the underlying data and analytics platform. On the 17th of May they intend to announce the new PPC relevancy algorithm. In the third quarter they also plan on integrating analytics that will allow you to buy and track ads on Google or MSN as well.

More news and likely a bit of discussion at TW.

MSN AdCenter Live to All

Via WMW comes news that MSN has completely dumped Yahoo! as a PPC provider and anyone can now sign up for Microsoft AdCenter.

MSN has little traffic compared to Google or Yahoo!, but has more controls than other top PPC providers. While their service is new their traffic should be cheaper than buying similar traffic from Yahoo! or Google.

Killing Google AdWords Search Arbitrage

Recently someone published a funny rant video about Google AdWords arbitrage. Google began killing off that market last July, when they started quality based minimum bids. Today Google furthered that mission, by announcing they will be showing less broad matched AdWords ads on queries they deem to be informational.

Their initial post was clear as mud, but Danny got some clarification.

With Google opening up their keyword tool and offering their search suggest service on the toolbar while killing off some of the underpriced informational query inventory many commercial terms will grow more competitive.

They are trying to keep ads as relevant as possible to prevent AdWords ad blindness.

Testing the Value of Smaller Pay Per Click Providers

Sometimes you do not even need to test a pay per click search engine to know there isn't much value there. In much the same way you can determine the quality of a directory by the sites listed there, you can also determine the (lack of) value of a PPC engine by looking at the sites listed there.

Check out these LookSmart ads:

And then look at this search result:

  • they throw tribal fusion pop up ads at site visitors.

  • they sell off target banner ads at the top of the search results.
  • they don't even have good ad placement on their own site, putting dumb banners and pop up ads front and center - making users hunt for the ads.
  • what is up with the dumb blue triangle on the left? It points at nothing.

If they sell trashy off topic ads front and center on their own site what does that do for advertiser or publisher trust in their ad network?

Dumb. Really.

They couldn't even keep Zeal, their free volunteer directory, running with their own ads OR Google's ads (due largely to ignorant ad placement / integration).

They may be able to leverage all of their content to make some sort of a content play, but they would probably gain more credibility if they stopped selling ads directly and / or got rid of pop ups and integrated the ads appropriately into their search results (ie: place off topic banners AFTER the relevant ads).

And they probably would do better in other engines if they cleaned up their URLs and page titles a bit. They probably cut off 50% to 75% of their traffic with their current URLs, page titles, spreading their content over many domains with poor internal link structure, and marking it hard to get back to the root site from some of the sub sites.

Combine that with making their own ad market less efficient due to poor ad placement of the relevant ads and scaring off visitors with pop ups and you can see how the margin based network business they are running is doing less than stellar.

It might be different if they didn't also own a search engine, but how can they be so not clued up?

Yahoo! to Ban Comparitive Search Ads

Danny points at a SEW thread noting that starting next month Yahoo! will no longer allow competing businesses to bid on trademark phrases:

"On March 1, 2006, Yahoo! Search Marketing will modify its editorial guidelines regarding the use of keywords containing trademarks. Previously, we allowed competitive advertising by allowing advertisers to bid on third-party trademarks if those advertisers offered detailed comparative information about the trademark owner's products or services in comparison to the competitive products and services that were offered or promoted on the advertiser's site.

In order to more easily deliver quality user experiences when users search on terms that are trademarks, Yahoo! Search Marketing has determined that we will no longer allow bidding on keywords containing competitor trademarks."

Trademark terms are some of the most valuable words in the search space. While this move may not be surprising given Yahoo!'s past activities, will this move cause other engines to change their policies? How will this policy effect comparison sites which offer many brands on the landing page? Is Yahoo! trying to commoditize the search marketplace to help them make more money away from search?

They still support typosquatting and cracking sites away from search, but may that be coming to an end too? The recent Perfect 10 vs Google lawsuit points to newtwork quality becoming a more important issue.

OR, Loco Broadmatch Style

Rand reports on OR being an ignored as an ad targeting word in Google AdWords.

Pretty bad deal for those using their keyword selection for regional Oregon AdWords campaigns.

I don't do as many power searches as I should, but today I noticed that when I searched for "blah" or "fla" Google ignored the boolean function until I capitalized the term. Can't they trust that a capitalized OR stands for something in the ads too?

I think Rand's post about OR is a good example of how just being around and experiencing SEO or SEM teaches you many tricks, problems and ideas that most would not naturally think of before playing around in the field.

Perhaps if Oregon becomes part of Baja Canada Google will not have to worry about this problem. If CA and WA stop working as intended then we will know Google is trying to send a hint, and adjust our ads to target Baja CA.

Google has been involved in political redistricting in the past.

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