Efficient Frontier Insights

August CPCs: Travel Heats Up

Our latest CPC numbers from August reveal that CPCs in travel are up 14.5% MoM this year. Last year CPCs in travel rose 3.3% during the same time period. This is a good sign as it indicates the sector is continuing to make a recovery.

CPCs in the other sectors are seasonally down. Automotive, Retail and Finance CPCs are 10.5%, -2.3% and -4.4% lower than last month respectively. These drops are inline with the MoM drops we saw in the same time period last year. On a YoY basis however, CPCs are up in all sectors.

Dr. Siddharth Shah
Director, Business Analytics

Yahoo/Bing Search Alliance

Today Yahoo announced more details on the upcoming transition to Bing for US and Canadian advertisers. The date for moving sponsored results to the Microsoft Adcenter platform is targeted to  start mid October with a goal of completion by the end of that month.

 

At Efficient Frontier, we are working to ensure a seamless transition for our clients. Much of the advance work requested by Yahoo to transition accounts to Adcenter will be minimal for EF platform users, as

• Clients have well structured Adcenter accounts already, and any changes or additions can be easily managed with Efficient Frontier’s Campaign Management utilities.
• Campaign budget distribution and management during the transition will be handled systematically through Efficient Frontier’s portfolio optimization process.
• Our keyword models will react quickly and automatically to changes in volume and performance, so bid and position volatility will be minimized and overall performance will be preserved as the transition occurs from Yahoo to Bing.

 

My colleague Aloke Fernandes had a timely post last week on preparation for the transition.  

 

Our partners at Microsoft and Yahoo are working diligently to make the Search Alliance happen on time. We’ll be ready well ahead of the target date, and we look forward to a profitable Q4 for our clients on the newly combined marketplace.

 

 

Anders Torgerson | VP Product Management

Summer Intern's Perspective on EF

For the past 10 summer weeks, I have had the opportunity to experience firsthand the booming search engine marketing industry as an intern at Efficient Frontier.

I consider myself pretty technologically literate as a college student; that is to say, I spend enough time on the internet that I have accounts on sites like Gmail, Facebook, and Twitter. And like so many others, I had only a vague notion of how Google makes all of its money - ads, somehow. I never thought too hard about or looked too closely at any of the "sponsored listings." Imagine my astonishment upon finding out that SEM is a $16.6 billion spending industry!

 

From Day 1 I was exposed to direct-impact client projects. EF has a great philosophy of on-the-job training, and also kindly sponsored my Google AdWords Certifications (which was the only formal studying / training I had). My experience has been extremely thorough, ranging from keyword expansions, to ad copies, to performance analyses, to client calls, to even demographic-targeting strategy in launching Facebook campaigns. The only missing aspect was bid management, but we all know that an algorithmic portfolio-theory bidding approach like EF's is the only way to go when you're managing anything more than 100 keywords!

 

I also really enjoyed the work environment; I had my share of food outings, ping pong, and free drinks + coffee on a daily basis, with larger events like the company picnic and the day-long SES San Francisco Expo. Being in the heart of Silicon Valley at the forefront of the rapidly evolving internet, next to tech companies big and small alike.. you can't help but be inspired to innovate and do great things, just as EF is doing for online marketing. It has been a truly different cultural (and weather-al) experience from Chicago where I go to school. I will definitely miss my time here at Efficient Frontier when the academic year starts.

 

Tony Yin

Intern, Account Development

Real-Time Search: New Opportunities

Yesterday’s announcement by Google about their real-time search capabilities has implications not only for consumers but for marketers. Our research into Google’s Real Time Search in SERPs has revealed a number of important trends with potential impact for marketers, including:

1. Organic search results for keywords that have real-time search results would be bumped down further by these real-time results.

2. PPC links will now compete with specially-formatted real-time results for users' attention, possibly reducing their 'stand out' factor. This would reduce the click-through rates for some keywords. Keywords that show up in real-time searches show spike in overall search volume. Thus, it would be reasonable to imply more clicks than 'expected' across the board (organic, real-time, PPC).

Short term trends aside, Google’s real time search innovation has the potential to be an exciting one for both consumers and advertisers. For marketers, Google’s real time search could offer an enticing way by which they could micro-target consumers. And for consumers, real time search adds an important aggregation point for the massively expanding real time data. However, for Google to make real time search work they will need to understand how to integrate real time feeds into core SERP results. For instance, when one searches for “Golden Gate Bridge” at 6:30 AM on Monday when traffic is terrible, the person will want real time data and photos not a history of the golden gate bridge from Wikipedia. Further, from the advertiser side, it will be important to create ads that are extremely time sensitive and relevant.

Google has made good progress on the geo-targeting side but the time sensitivity has not been fully addressed. In display exchanges, you can adjust pricing real time using RTB but such flexibility doesn’t exist in search yet. Such capabilities will have to come to real time search to make it relevant for advertisers. Advertisers will need very sophisticated platforms such as ours to be successful at this as the scalability and automation requirements will jump many fold. At Efficient Frontier, we are building several innovations around Real Time Search. For example, we are looking at time series data patterns algorithmically to identify spikes in real-time searches for keywords that our advertisers are buying on SEM. This will help us predict campaign performance with greater accuracy. Another way we are innovating is by generating new keywords for advertisers by processing tweets and real-time feeds.

Real time everything is certainly here to stay, It’s an important trend to watch for the longer term.

Preparing for the Yahoo!/Bing search alliance

Efficient Frontier has been working closely with Yahoo! and Bing in preparation for the impending integration. When Yahoo! ads begin being served from Bing, AdCenter advertisers will experience changes in traffic patterns. The traffic from the Yahoo! account will drop and migrate over to the Bing platform for the same keywords. In a sense, this will create a new marketplace as existing data on impressions, clicks and performance will not hold true as the migration occurs. All advertisers will be dealt the same hand but advertisers who are able to react quickly to the changing patterns will have advantages over those that are not.

Advertisers will also lose some of the flexibility in bidding keywords differently on Bing and Yahoo! based on performance. Now, advertisers will need to look at the performance of the combined Yahoo! / Bing traffic and decide how to bid based on performance.

Given the strong traffic modeling and predictive capabilities,  Efficient Frontier will be in a unique position to manage this transition well for our clients. The  models for each keyword will change over this period of time and our models will react quickly to these changes to make the right assessments and bids on the new combined Bing AdCenter platform.

 

As the transition occurs, marketers should make sure they are working closely with their internal and agency teams and frequently monitor the traffic and performance to make bid and budget changes for their new Bing campaigns.

Aloke Fernandes, Account Director

 

How do you know if your online marketing is driving offline sales?

Jonathan Beeston, our client service director for EMEA, has been invited to be a guest blogger on Media 360, Haymarket’s invitation-only blog that brings together leading thinkers in commercial media from agencies, media owners and brands.

In his first post for Media360, published today, Jon discusses ways that brands can measure the impact that online marketing campaigns are having on offline transactions; and how to track a customer’s journey from their first search for a product or service right through to the point of purchase.

You can read his post, here.

My Day "Channel Surfing" at SES San Francisco

Last week I had the good fortune to participate in a panel called Channel Surfing at SES.  The panel focused on the hot-button issue of generating accurate cross-channel attribution.  We had a diverse set of panelists representing ad platforms, analytics providers and media agencies.  Here are three important themes I felt emerged from the panel.

1. Diversity of Platforms: Multiple panelists talked about the significant challenge marketers face in tying together tracking across a diverse set of marketing platforms (email, search, ad serving, site analytics).  Tying together tracking is critical to enable accurate attribution.  Leaving multiple platforms in their own silo will result in duplication.

2. The Final Days of Last Click: Last click has been the dominant attribution method for digital marketers.  It's a simple solution that ignores much of the cross-channel inter-play.  Forward thinking marketers are starting to value both the first ad interaction as well as intermediate interactions.  The days of the last click getting 100% of the attribution credit are limited.

3. Internal Tensions Hamper Attribution: Many marketing teams continue to be silo'd in both budget and goals.  The result is tension around attribution between the groups that control each channel.  Team coordination and goal alignment is critical for enabling improvements in attribution.

Justin Merickel

SEM Insights for Retailers from eTail East 2010

Last week several members of the EF team attended the eTail East conference in Baltimore, MD. It was exciting to be in the presence of so many successful retailers, who shared ideas and best practices for the retail industry. The first day of the conference was dedicated to Search Engine Marketing and EF hosted round table sessions with retailers discussing strategies for effectively managing the long tail of search marketing keywords.

Managing these long tail keywords is particularly important for retailers because ads using long tail keywords (which are usually very product specific), have shown to be more effective and convert better than general ads. We've published a whitepaper on the importance of managing these product specific keywords which you can download here. One of EF’s retail clients allocated only 5-10% of their advertising budget on these product specific keywords but saw a 20% lift in overall revenue.

We've recently released Advanced Campaign Management for retailers which, in addition to many other benefits, helps with long tail management. This feature links retailers’ product inventory with their search engine marketing campaigns and automatically creates and updates SEM account structure, including keywords and ads that are specific to each product the retailer is selling. The technology automatically takes into account any changes in product such as price, stock levels, landing pages, promotional schedules, etc. and reflects these changes at the right time on the Search Engines. The whole process is touchless and repeatable, allowing retailers to scale and achieve optimal coverage of their products in their SEM campaigns.

So far, our retail clients have seen great results managing their long tail keywords through Advanced Campaign Management. One of our clients, Hotels.de, achieved a 16% higher conversion rate and a 20% increase in the average value of their bookings using our new retail specific product feature.

We enjoyed sharing our best practices and strategies with retailers at eTail East and look forward to participating in future conferences. 

Margarita Golod
Senior Product Marketing Manager

 

July CPCs: All verticals are up YoY

The latest CPC numbers from our client index show that CPCs are up YoY in all the verticals that we track. Retail fell 12% MoM. However, we  note that while Retail CPCs fell, spend rose 5% MoM.  Travel is continuing its bounce back as CPCs are still over 20% up.  Finance increased 1% MoM while automotive fell 3%. We shall report August CPCs next month which should give us a better sense of how this quarter will round out.

Dr. Siddharth Shah
Director, Business Analytics

Google Changing its EU and UK Trademark Policy

Yesterday Google announced that it will modify its Trademark policy on the 14 of September 2010. How is this likely to affect search marketers, you might ask?

What is changing in Europe?
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As of now Google has been monitoring trademarked terms so that no one apart from the brand owner could buy those terms as keywords. On the 14 of September Google will no longer monitor this.

As a result, advertisers will be able to buy their competitor's brand without having to fill in an exception request. While buying trademarked terms will be allowed, using those trademarked terms in the adcopy won't be permitted.

What is the likely effect of this change
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• Your brand CPC might increase during the first weeks. With time the Quality score should play its role and allow you to keep a fairly low CPC on your brand keywords
• Based on how appealing your competitors ads are, it might lower a little bit your CTR
• Advertisers that are not currently buying their brand will now need to buy it otherwise competitors might take sales from them

What is changing in the UK?
--------------------------
While buying trademarked terms has been possible for a year now in the UK, it was not possible to include trademarked terms in the adcopy. On the 14 of September, selected advertisers will now be able to include trademarked terms in their ads. Advertisers will only be able to do this if they have sufficient content on their site regarding the trademarked term that they want to buy.

I would encourage all search marketers to keep a close eye on their brand performance on Google before and after the 14 of September 2010. If you have any questions please feel free to send me a tweet @efrontier or @efrontier_fr

Olivier Lemaire
Account Director, France