Efficient Frontier Insights

Happy Holidays & Stay Tuned!

As 2010 draws to a close, we have been finalizing some details on a very exciting project. We have commissioned a study conducted by one of the world’s leading research companies to create a thought leadership paper about how technology can help interactive marketers better integrate their Search and Display Media.

We will be pleased to publish this report soon in the new year so be sure to stay tuned to our blog for its release.

In the meantime, we wish you all the best for the holiday season!

Merinda Peppard - Global Marketing Manager

 

The Evolution of Efficient Frontier: Adding Display and Social to Our Cross-Channel Marketing Platform

This has been a very exciting year for Efficient Frontier. Our rapid platform development from 2009 continued into 2010 as we hit some important milestones in the evolution of our cross-channel marketing platform.  The major product highlights include:

Display
We’ve integrated with the leading ad exchanges including Google AdX and RightMedia and fully developed our DSP campaign management functionality.  We applied our patented modeling and optimization algorithms from Search to Display. Finally, we have enabled Real Time Bidding.

Social Media
Facebook has proven to be a popular marketing channel for advertisers and our platform is now able to manage and optimize Facebook ads through our integration with the Facebook API. We rolled out full campaign management, modeling, and automated bid optimization for the Facebook marketplace.

Search Engine Marketing
We continued to innovate in the SEM space. This year, we introduced Advanced Campaign Management functionality to provide transformation of product inventory data feeds into Search Engine campaigns, ad groups, keywords, and creative as well as status management based on inventory levels. We also released the Organic Search Term Report.

The Benefits of Integrated Cross-Channel Management
Our platform is now able to manage Search, Display, and Social Media together, and we have developed important features which allow marketers to optimize and report on their advertising across those channels. Some of these optimization features include Spend Recommendation which automatically suggest the most optimal advertising budget allocation across channels and Cross Channel Reporting which allows advertisers to view the interaction and overlap of Search, Display, and Facebook advertising.

Our evolution into a true Cross Channel Platform was accomplished through the hard work of our employees and the loyalty of our customers.  We are very proud to be the first platform integrating search, display, and social campaign management and optimization into a single platform.   In 2011 our focus will be on performance and scale: we will continue adding new marketing channels, media inventory, and platform features to help advertisers be more efficient and effective.

Margarita Golod
Senior Product Marketing Manager

Trends for 2011: What to Expect and What to Do

In my final SearchEngineLand "Analyze This" column of 2010, I wanted to make sure that I addressed what is likely on the minds of many marketers.  What will 2011 bring?   

 You can read my full analysis here but my top trend predictions include:

Trend #1: CPCs Will Continue To Increase By 12-15% Per Year

Trend #2: Cross Channel Optimization Will Become More Important Than Ever

Trend #3: Bing Will Continue To Gain Marketshare After A Short-Term Marketshare Loss

Trend #4: A Smarter, Bargain-Centric Customer

Trend #5: Mobile Will Finally Take Off

So this begs the question, what should marketers do to anticipate these trends? Here are some recommendations.

Plan for an increasingly competitive marketplace. While CPCs are increasing, and thereby affecting the bottom line, consumers are looking for a better deal thereby pressuring the top line. In the face of this increasingly competitive marketplace, it is important like never before to focus on the basics: ad copy testing, landing page optimization and SEO (to get “free” traffic as well as helping SEM CTRs).

Optimize your Bing campaigns. Bing should now represent 20-25% of your volume. Ensure that these campaigns are running optimally with full keyword coverage, if you haven’t done so already.

Plan for mobile. If mobile starts to monetize in a big way next year, you could see 10% or more conversions coming from mobile. It’s prudent at this time to start testing mobile via the AdWords platform.

Put cross-channel infrastructure in place. As an advertiser of reasonable scale, chances are that you are using Facebook as an advertising channel. Ensure that you are looking at Facebook data in a cross-channel context to fully understand the efficacy of the channel.

Dr. Siddharth Shah
Director, Business Analytics

November CPCs: Increases in all sectors YoY

 

CPCs in all sectors remained at substantially higher levels than last year. The YoY increase in CPCs for November are 10% for Finance, 6% for Retail, 24% in the automotive sector and whopping 37% in the travel sector. Given the strong retail performance over Thanksgiving week, we could see CPCs increases in Retail for December. We will keep you posted.

Dr. Siddharth Shah
Director, Business Analytics

'Tis the Season to be Jolly

Strong numbers over Thanksgiving mark the start of a robust retail season

The 2010 retail season kicked into high gear on Black Friday. All key metrics were up on a YoY basis; revenues were up 33%, spend was up 37% and ROI was up 3%. The positive trend continued over cyber Monday too where the numbers were up 35%,20% and 12% respectively. In fact, numbers were up over the entire Thanksgiving week (counted from the Monday before Thanksgiving to Cyber Monday).

 

Online consumers are getting bargain savvy but are increasing in number

When we examined the query volume over Thanksgiving week, we noted a shift in buying patterns between 2009 and 2010. This year, consumers searched a lot closer to Black Friday. Further, they continued making purchases over the weekend. This was unlike last year when consumers searched throughout Thanksgiving week until Black Friday. Query volume then dropped and picked up on Cyber Monday.

 

Both Spend and Revenue growth came from higher consumer volume this year. Spend which was  27% more  this Thanksgiving week than last year, increased because of a 33.4% increase in click volume. CPCs on the other hand declined 4.5%. Similarly, although the average consumer made a 4.9% smaller order this year, the overall number of orders was 40.9% higher.

These trends reflect an interesting consumer trend. While the  number of consumers making purchases online has sharply increased, this consumer is a bargain savvy one, willing to wait until Black Friday/Cyber Monday to make a discounted purchases.

Advertisers might be missing an opportunity

The return on investment for advertisers can be a good indicator to estimate if advertisers are catching to trends in consumer demand. When ROI on advertiser campaigns increase dramatically it means that they are operating far above their acceptable efficiency targets and are extremely profitable. However, while this may sound like good news,  it also means that they are not capturing profitable traffic and are therefore sacrificing volume. ROI trends for both 2009 and 2010 reveal that advertisers were far above their baseline ROI numbers on Cyber Monday. We estimate that they could have gained 30-40% more business on Cyber Monday had they increased their SEM budgets for Cyber Monday.

 

Conclusions

The numbers from Thanksgiving week are highly positive for retailers; this season is going to be great. Based on the trends we are seeing, we expect retail advertisers to spend  20-25% more this quarter than in the retail season last year.

We are also seeing a shift in consumer buying patterns. The average consumer is more bargain savvy and is looking to buy between Black Friday and Cyber Monday. Advertisers should pay heed to this trend and spend more in the same time period.

Finally, ROI trends indicate that advertisers have not captured all profitable consumer volume this Cyber Monday. Similar analysis on past data for December reveals that advertisers tend to underestimate demand during the month and miss out on profitable traffic. We hope that retailers capitalize on this opportunity and capture untapped consumer volume by increasing their advertising budgets.

 

Dr. Siddharth Shah
Director, Business Analytics