Efficient Frontier Insights

Insights from OMMA Behavioral Conference on Display Marketing

Several members of the EF team attended the OMMA Behavioral Conference in San Francisco last week. The focus of the conference was to explore how behavioral targeting has changed from simply targeting audiences by the Web pages they have recently viewed to utilizing targeting data from multiple sources such as social networks, site and search re-targeting, and various third party data providers. Because there are so many targeting channels, attributing conversion to the appropriate source has become very difficult for advertisers. The difficulty of attribution modeling quickly became a hot topic at the conference.

Abhishek Pani, our Director of Research & Quantitative Marketing, discussed a new attribution framework in his presentation titled “Evaluating the Marginal Value of Display”.  Optimal budget allocation across channels is the fundamental problem that advertisers want to solve but given the lack of proper attribution models, they are forced to rely on simple heuristics to allocate revenues. Current attribution offerings in the industry ignore important variables such as the effect of time and cross channel demand elasticity (change in demand in channel A that results from a small change in spend in channel B). Incorrect attribution will result in sub-optimal budget allocation and lower the return on advertising investment. Because our platform manages across all channels of advertising (search, display, and soon social), we are able to measure, experiment, and build very accurate allocation models based on marginal contributions of each channel.  Abhishek discussed our modeling strategy in greater detail during his presentation.

If you are new to the world of behavioral targeting for display marketing, the conference panelists unanimously suggested that you start with a retargeting strategy.  You can retarget the users that have previously visited your site and you can retarget users that have previously clicked on your ads from your search marketing campaigns. Retargeting allows advertisers to target users that have previously shown the intent to convert and is known to have a solid impact on conversion rates.  Site and search retargeting functionality is available in our platform.

 If you’d like a copy of Abhishek’s presentation, please send us a tweet @efrontier.

Margarita Golod
Senior Product Marketing Manager

The Subtle Science of Bidding (Part 2):

In my recent SearchEngineLand “Analyze This” column, I discuss the Subtle Science of Bidding (Part 2); this time for brand keywords. In this post, I discuss some special considerations that come up when managing branded keywords that are often bid at or close to average position 1. I have shown that contrary to popular belief, a "bid high and forget" type strategy is not a good way to manage brand keywords. Good bid management of brand keywords requires an active sophisticated approach.
 
Some key takeaway points from my article:
 
(1) Bid management for brand keywords is complicated. Due to the subtleties involved one needs a very sophisticated approach to managing brand keywords.
 
(2) An off-hand approach to brand keyword bid management will not work. The traditional brand bid management strategy of biding all brand keywords very high can be very detrimental. Smart brand keyword management requires a highly accurate and precise bidding strategy—just as with non-branded keywords.
 
(3) Position 1.0 is usually very expensive. The commonly held notion is that average position 1.0 and 1.2 are very similar. This is simply wrong. The search engines will charge you a much higher CPC if you want to be seen at position 1 all day. Almost always, its better to be at position 1.05—or somewhere lower than position 1.0.
 
This is part 2 of my "subtleties of bid management" series. I will be concluding this series in my final post next month where I will talk about "Second Order effects" of bidding.
 

Dr. Siddharth  Shah
Director, Business Analytics

Stranded tourists, strikes and budgets

The news this week that 16,000 British tourists have been left stranded after the collapse of travel company Goldtrail Travel, is yet another example of the increasing unpredictability of the travel industry.  Now that the dust had settled, literally, on the chaos that the Icelandic volcano “Mount Unpronounceable” caused, and while BA and the unions continue to circle each other round the negotiating table it is a good time for online travel advertisers to plan how to protect revenue during the next crisis.

For example, travel brands in a position to offer last minute flights or hotel accommodation to those stranded need to act quickly to be found by passengers searching the Internet for their travel options. The cost of advertising against key search terms will change (during the ash cloud crisis it rose as demand swelled, yet conversion rates decreased) and advertisers must be able to change their search strategy, quickly.

     Increased demand for flights during ash cloud crisis 

Those advertisers that rely on dynamic auction marketplaces for paid search or display will need to be able to respond to the dramatic change in demand and price that travel crises cause.

Travel marketers should consider the following when planning:

• Automate bidding using the portfolio method. In a fast-changing environment, manual/rules-based processes are too slow to be effective.
• Understand the importance of using recent data to plan effective search marketing in a crisis 
• Understand search trends: for example, during the ash cloud, there was a huge increase in ‘non-related’ search terms, such as flight cancellations. Including more negative terms into a search campaign could increase conversion rates in this instance

Understand how to respond during a crisis:

• Understand consumer behaviour online during a crisis; and don’t just latch onto the crisis by paying for key words that are overpriced and irrelevant (such as ‘strikes’ or ‘ash cloud’)
• Ensure landing pages are relevant to new keywords, or the click-through cost will be extortionate, and bounce rate high  
• Pay more but not too much for key words
• Respond effectively to the longer-term new opportunities that crisis brings – such as domestic holidays – rather than just focusing on the short-term

Merinda Peppard - Global Marketing Manager

Efficient Frontier Maximizes Hotel.de’s Efficiency

InternetRetailer.com recently published an article on our Advanced Campaign Management tool and how one of our clients, hotel.de, has utilized this tool to achieve a significant lift in campaign performance.

Specific ads that include pricing and are targeted to inventory, such as hotel rooms, are very effective in increasing conversion rates and thus return on investment.  However, manually updating campaigns, ad groups, and ad copy for each change in inventory and price is very hard. Hotel.de experienced this first hand. They found that manually turning ads on or off based on hotel availability was time consuming and ineffective.

To solve this problem, hotel.de connected a feed of their internal hotel database to the Efficient Frontier platform. Now, any change in the hotel.de internal database is automatically reflected in the ads dynamically created by the advanced campaign management tool. As a result, ads always include the most up to date and specific hotel information.  Hotel.de's conversion rates have increased by 16% and sales are up by 20%.

For more info, please see the article here: Internet Retailer.

Margarita Golod
Senior Product Marketing Manager

Efficient Frontier Releases UK Search Engine Performance Report

In addition to the US Search Engine Performance Report released this week, Efficient Frontier has once again released its sister publication, the UK Search Engine Performance Report. The analysis is taken from a fixed sample of large scale UK search engine advertisers across the finance, travel, retail, entertainment and telecommunications sectors. The UK sample saw signs of growth in the  search marketing sector in Q2 2010, but also cost-per-click rates still down on last year.
 
Search spend by the UK sample grew by 10 per cent over the last 12 months, and managed to remain flat over Q2 which is typically seasonally low. CPC rates are still significantly reduced from the same period last year by up to 20 per cent. Interestingly, for the first time in five quarters, all the major search engines saw a slight increase in CPC rates in Q2 over Q1 (between three and eight percent).
 
If the UK follows the pattern set by the US over the last six months, this could indicate a bottoming out of search engine cost drops and the market deflation of the last year. The US saw consumer demand rise, followed by advertiser demand, which pushed up CPC costs and search spend in Q2 this year.
 
We are predicting a cautious 10 to 15 per cent growth this year in UK search spend as the European economy remains fragile.

For more details about Q2 2010 and our outlook, download the entire report here.

Merinda Peppard -  Global Marketing Manger

Q2 2010: SEM Spend Growth Accelerates, Exceeding Expectations

We just released our Q2 2010 US Search Engine Performance Report in which we analyze another quarter of double digit growth for the Search Engine Marketing industry.  According to our data, year on year (YoY) spend growth was 24% and 9.7% quarter on quarter (QoQ).  This growth is partly due to a recovery in Cost Per Click (CPC) prices which rose across all of the major search engines. Overall, return on investment (ROI) in search was up 4% YoY and was 10.6% higher than last quarter.

Among the four sectors (retail, travel, auto, and finance), the retail sector leads the recovery with 38% growth in spend YoY and 16% growth QoQ, a pace that far exceeds the typical modest quarterly rise in Q2.  Retail CPCs continue to grow at 18% YoY and 17% QoQ, indicating a growing aggressiveness on the part of advertisers in this sector.  Consumers are also playing their part in driving the recovery with impression volume up 65% YoY, signaling continued consumer interest in online shopping.

Our search engine specific analysis shows that Bing continues to grow its market share at Yahoo!’s expense. The YoY spend share gain for Bing is 56% and YoY click share gain is 36%. Meanwhile, Yahoo! continues to lose market share: Yahoo!’s Q2 2010 numbers represent a 12% YoY spend share loss and a 9% YoY click share loss.  Google’s market share has grown slightly in Q2, with both spend share and click share up to 75.6%.

Our outlook for Q3 2010 is cautiously optimistic. The last two quarters have shown strong growth in terms of SEM spend (20% YoY in Q1 and 24% YoY in Q2) and we expect the positive trends to continue for the second half of the year.  CPCs continue to make a strong recovery, indicating growing demand and larger advertising budgets, which should continue to contribute to the expected growth in the coming quarters. However, weakness in the European economy might negatively affect Q3, so we remain cautious as we keep our SEM growth expectations in the 15-20% range.

For more details about Q2 2010 and our outlook, download the entire report here: http://www.efrontier.com/research/search-engine-report/Q2-2010

Margarita Golod
Senior Product Marketing Manager

June 2010 CPCs: Robust CPCs round out Q2

CPCs in June generally showed an upward trend as Auto, Finance and Retail sectors increased 13%,6% and 7% respectively. While Travel CPCs declined slightly, they are still up on a YoY basis.

As we crunch the numbers for our US quarterly report we are seeing very positive trends both on a quarterly and a YoY basis. We look forward to sharing our analysis with you when we release our report next week. Stay tuned !

Dr. Siddharth Shah,
Director, Business Analytics

Efficient Frontier Master Classes - Online Marketing Show

The dynamic nature of online marketing was never more prevalent than at the Marketing Week Live and Online Marketing Show events held in London last week.

The trade show floor was swarming with brands seeking to evolve their strategies to keep up with the fast moving marketplace.  The team at Efficient Frontier hosted two full days of master classes covering best practices, trends and future advancements in search marketing and beyond.

During the show, more than 300 visitors attended the Efficient Frontier Master Class Theatre and stopped by the booth to get tactical advice on how to increase their online performance marketing effectiveness.
 
For those of you who missed the show and would like to view the presentations, please email me and I will be happy to forward them on. Here is a summary of the master classes we presented.

Search Meet Display – Display Meet Search
Jonathan Beeston, European Client Services Director, Efficient Frontier
 
Case Study: A practical guide to tracking offline conversions effectively
Robert Levetsky, Senior Account Manager, Efficient Frontier
 
Case Study: How to distinguish new customers vs existing customers in your paid search campaigns
Jimmy Felstead, Account Manager, Efficient Frontier
Sheila Pen, Account Manager, Efficient Frontier
 
Top Tips for Mobile Search
Charlotte Rogers, UK Client Services Director
 
Getting the most out of Search Engine tools
Phil Dance, Client Development Manager
 
Inside PPC Campaign Management
Mark Nall, Business Development Director, Efficient Frontier

Merinda Peppard - Global Marketing Manager