Efficient Frontier Insights

Consumers embrace frugality

Has the recession affected consumer thought patterns? To answer this question we culled over half a million search terms containing a certain modifier. For instance: Keywords containing the word cheap would include cheap flight, cheap car rental and so on. Next we aggregated the keywords into groups based on the modifier and measured their Year over Year (Q1 2009 vs Q1 2008) changes in impression volume and revenue per click ( i.e. the per click monetization change).

The conclusions are significant. In the financial vertical, keywords such as credit, lending and mortgage have seen a huge jump in impression volume while keywords containing loans have seen a drop. Interestingly while mortgage and credit monetize better now than last year, loans and lending related keywords are not performing as well. In our experience, changes in traffic patterns and behavior are closely related to changes in the economic environment. An increased number of consumers are searching for financial information but are not necessarily converting on the clicks. This is because they are not qualified as they once were (due to more stringent lending criteria) or are simply looking for information and are not interested in buying a financial product.

In the travel vertical, cheap and discount related keywords have seen big jumps in impression volume and are monetizing better. The same is not true for cruise and hotel related keywords where the revenue per click is lower than it was last year. Clearly frugality is in.

For more details, download our quarterly search engine report for Q1 2009.

Siddharth Shah

Getting Better Leads in the Finance Sector within the Current Economic Climate

The issue many companies advertising online in the finance sector have faced in the last 3 to 6 months is that they are getting ever more leads at a better CPA than ever before, but they are less profitable. How is it that companies who are always thinking about lowering their CPA and getting ever more genuine leads are now making less money than a year ago?

The reason is two-fold:

1. Leads that a year ago, and even up to 3 months ago, were being approved are not being approved now due to higher regulatory and lending standards implemented by companies facing ever more defaults.
2. People's individual credit scores and businesses industry performance have dropped dramatically over the past 12 months so they are no longer the valuable leads they once were.

So, in a marketplace that is so conducive to tracking lead costs to the penny and optimizing their account and marketing message to get more leads at lower cost, the dilemma for the online marketer becomes how to best adapt to the current economic marketplace.

If a company was to assess itself marketing wise on the criteria that was in place a year ago, they would look phenomenal. However as their finance departments are no doubt telling them, they now have to get even smarter and better with their targeting in an increasingly sophisticated marketplace.

Why Are There More Leads Today Than A Year Ago?

Efficient Frontier Search Engine Market Report 2008

If you look at the Efficient Frontier report released in January 2009 for the state of the SEM marketplace in 2008, you will see that despite the economic downturn beginning at the start of 2008, impression volume was far higher throughout the rest of the year in the finance sector.

So while advertisers were struggling to maintain their ROI and year-over-year revenue targets in 2008 due to the economic situation, it wasn't due to people spending less time searching online. In fact, while a study hasn't been fully conducted, many experts agree anecdotally that this is due to:

• Businesses requiring more capital due to less revenue as well as individuals refinancing mortgages and personal debt
• Mass lay-offs and less job safety combined with stagnant/declining household incomes, people are spending more time at home and thus online

So the resultant effect has been that businesses are getting more leads than ever before at an overall lower CPA but, because of the reasons mentioned earlier, are less profitable.

What Can A Business Do?

The answer to this question revolves around the central theme of investment in better data. The reason why we say investment is that it may require a company to financially invest in human and/or technical resources to tie their ultimate profitability metrics with their SEM clicks, spend and keywords.

Instead of optimizing a campaign to just a CPA target, a business really should be optimizing to a cost-per-revenue from funded loan target, and thus truly managing their SEM budgets and bids to this metric and not just the initial lead.

The effect of such an action may actually increase CPA back to former levels and sometimes more, but the real ROI on marketing spend can improve by 25% or more in results we have seen. In today's economy, real cash flow should be the paramount concern for a business trying to maintain profitability and ideally grow market share.

This is actually the best time to increase market share as so many competitors cut down product offerings and reduce marketing spend. As SEM spend is fully trackable, if a business is optimizing to a true dollar revenue metric they can increase spend and product offerings with the full knowledge that they are getting a healthy ROI. Then as the economy turns around they are in a far stronger position relative to their competitors.

Some secondary aspects a business can look at include:

• Demographic information of individuals they lend too
• Industry information of best clients and conversely of worst clients
• Developing industry/demographic specific LPs
• Tracking phone leads

1. Demographic Information

A business can of course best garner demographic information from their own customer database and surveys, but can also complement this with 3rd party analysis from analytics software like Google Analytics or Quantcast (below is a free Quantcast demographic insight into a domain typed into their portal).

US Demographics  

From this information a business could do a keyword generation build out for a new campaign with relevant ad copy targeted at key demographic groups.

2. Industry Information

This is a powerful way to build new campaigns and keywords to target traffic specifically to the business clients you want to attract. Take your top 10-20 industries, build out a keyword set (utilizing your key generic terms), and create custom ad copy possibly utilizing dynamic insertion to really hone in on traffic say like "convenience store business loan."

In conjunction with a targeted industry build out, you should also look at doing a negative keyword build out for traffic and industries you may not want to attract because they continue to be bad or non profitable leads.

3. Develop Landing Pages

This suggestion is just an add on to the above two tips in that serious consideration should be given to developing at least 2 or 3 landing pages for top demographic or industry targets. This is where the information, structure and even design of the landing page are pertinent to the target grouping, and not just a phrase here and there.

A landing page addressing the concerns and needs of, for example, a convenience store owner should garner you more leads and better conversion rates on the landing page (so traffic you have already paid for) for your chosen target groups.

4. Tracking Phone Leads

Many finance businesses who generate leads often give the option to the browser to either complete an online form or contact a 1-800 sales phone number. Many industry groups and demographic segments may have a preference to talking to an actual person than giving personal information online.

It is important, given that you spent money garnering this traffic and leads, that you track this accordingly. For example, the keyword "convenience store business loan" may not get any online leads and due to this you may decide to bid it down. However it may just be that those people are in mass calling into the sales line and then converting to loans later. So in fact that keyword should be bid up to get more traffic.

Summary

There are many great ways to hone the leads you are getting in today's economy to improve your ROI as we have discussed but it is more than just implantation. The SEM and bidding strategy you employ to take advantage of these ideas must be both sound and dynamic.

The best decisions a business can employ in SEM, in good times and bad, must be based on sound data in conjunction with your own business goals. Each of these strategies we outlined gives a broad scope for a business to generate more leads of better quality and actually increase their overall market share.

~ by Chris Jacob

Recession Busting SEM Tactics for the Financial/Lending Advertiser

In today's economic environment, many financial SEM advertisers are faced with the challenging task of identifying new methods to fine tune their campaigns so that they're maximizing return on ad spend (ROI) in less than ideal conditions. With drastic changes in mortgage rates, to the tightening of credit, it's becoming more and more important that advertisers are proactively deploying new tactics to help weather the storm.

The recession has definitely brought about some pretty significant changes to the search space. It's no secret that the overall health of the consumer has been hindered in the past year - increasing unemployment, declining credit scores (along with other factors) have contributed to changes in the quality of search traffic. Many lending companies for instance may have experienced an increase in application volume as a result of higher demand for credit, but in many cases the actual approval volume has been impacted negatively due to the economic factors suppressing the consumer. Its reasons such as these that call for a higher level of targeting of keywords/campaigns, greater visibility into search trends, and fine tuning of campaigns to weed out unwanted traffic.

Here are a few tips to consider when thinking about new ways to maximize quality of traffic:

Keyword trends
As a result of the changing economic environment, search behavior has evolved significantly this past year. Many cash strapped consumers are desperately searching for credit after being previously declined or having their credit line reduced. This in turn has led to spikes in search volume for terms like 'financial help' and 'bad credit loans,' just to name a few. Even if you're not bidding on these types of keywords, there’s a good chance that queries of this nature are getting mapped to more generic (expensive) keywords in your account. This calls for a regular ongoing review of search query data to identify any possible negative match candidates that can be added to improve the quality of traffic. On the flip side, if the conversion rate on these queries is positive, you may want to consider adding them as exact match in a separate campaign or ad group to more easily control and monitor performance. You can pull search query data at the account/campaign/ad group level within the Google Adwords reporting center (or utilize the Efficient Frontier reports, for existing clients). Ideally, the query report should be at the conversion level to understand how each individual query performs prior to making any adjustments to your campaigns. I recommend evaluating the query level performance based on a revenue-per-click (RPC) metric to understand how the queries perform in relation to each other.

For advertisers in the real estate space, you should be on the lookout for spikes in 'foreclosure' and 'short sale' related queries, which can possibly trigger an ad for one of your more general 'for sale' broad match keywords. Usually foreclosure/short sales aren't as lucrative from a pricing perspective, but the rise in foreclosures/short sales can mean high volume (which in turn can offset the lower average sale price). Again, being on the lookout for such queries could possibly lend itself to more precise targeting of ads, and even new opportunities. It's also worth noting that Google is doing a beta test for select advertisers to remove the 'query buckets' (IE: "30 other queries") within their search query reports, so hopefully we can expect to see data at a more granular level in the near future.

Google Insights

I also recommend utilizing the Google Insights tool to get an idea of search traffic trends and 'rising searches' which may be contributing to spikes in traffic on your broad match keywords. It's helpful to run the tool weekly on a few of your top spending keywords to get an idea of any 'up and coming' queries that may be getting broad matched to your ads. In the example above, I ran the tool for the term 'mortgage' and the phrase 'obama mortgage plan' was returned under the 'rising searches' section, so as a general best practice, it's a good idea to run a search query report and scan through the list of queries to monitor any potential buzz worthy traffic that may be coming in. This traffic may or may not be good converting, so the option to either expand your negative set, or build out your broad/exact keyword list exists. With the volatility in the financial space and the policy changes coming out of Washington, ensuring your ads aren't getting taken for a ride is essential to maintaining some level of consistency among your campaigns.

DOW (Day of Week) Trends
Another potential area of opportunity is budget allocation by DOW, according to ROI trends. The decision to shift more/less spend to specific days should be based on sufficient data (usually at least 3-6 months) and is usually best evaluated by comparing RPC across the various days. If after analyzing your data you find specific days that convert significantly better than others (20%+ variance), it may make sense to shift spend from the lower performing days to the days that perform better. This is a particularly good strategy because it doesn't necessarily require additional ad-spend; it's really about shifting spend in the most efficient manner to maximize overall return.

~ by Sean LeBlanc

Efficient Frontier Names David Karnstedt as President and CEO

"As the leading global Search Engine Marketing company, Efficient Frontier has built tremendous assets – including its technology platform, a global presence and a great team," said David Karnstedt. "I plan to build on these key assets by expanding the company’s leadership in search, diversifying into complementary product offerings and increasing its global presence. I am pleased to lead the company into its next phase of growth." - Press Release