Efficient Frontier Insights

Google Content Network Success Story - MySpace Converts!

Lifescript, an Efficient Frontier client, recently published a case study on its success with the Google Content network. It shows how Aloke Fernandes, our account manager, worked with Lifescript and used Efficient Frontier's and Google's reporting tools to identify high converting sites within Google's content network. To Aloke's surprise, one of those high-converting sites happened to be MySpace. The case study goes on to discuss how Lifescript went on the leverage the effectiveness of social media advertising.

Brian Hogan, SVP of Marketing and Business Development at Lifescript, is quoted in the case study (PDF available here )

"By scaling and managing large sets of keywords, Efficient Frontier has not only allowed us to reach relevant users on search, content, and social networking sites, but has also helped us grow our search revenues three-fold over one year."

These posts on content advertising show the differences in CPCs and CTR on content versus search and demonstrate how content adverting can be a valuable source of revenue, especially for certain business types. This post by Vividh Chaudhary discusses some best practices for setting up content campaigns.

Average CPC - Search vs. Content

Last week Search Engine Watch posted Efficient Frontier's average CPC by vertical for search advertising. I've been asked to compare that data to content advertising. Our average CPC across all clients in January 2008 was $0.65, while for content it was about half, at $0.32.

Content CPCs for Auto, Dating and Travel are closest to their respective search CPCs. I showed in this post that Auto and Dating sites are spending the largest share of search engine advertising on content, so it makes sense that they can afford a higher relative CPC on content. Financial advertisers' search CPCs are well more than double their content CPCs, showing that search is a more targeted and valuable channel for them.

 

Content Spending: How much is enough?

How do you decide how much of your search budget to allocate to contextual advertising? The quick answer: as much as your budget will allow that allows you to reach your conversion goals. However, data shows that content works better for some verticals than others. Businesses whose websites match the mindset of those browsing related content will generally have more success with contextual advertising.

The average Efficient Frontier client spends 3.4% of search budget on content, but that number varies widely by vertical. Because Efficient Frontier's portfolio optimization algorithms look at the entire portfolio of keyword bids across both search and content, where spend is allocated is an indication of the effectiveness of that channel.

Dating sites experience the most success with content advertising - in December 2007, 6.4% of Efficient Frontier client spend in the dating vertical was allocated toward content. it makes sense that content is a good match for dating sites, since users are generally in the mood to meet people when browsing sites where dating-related content ads appear, and thus more likely to take the time to fill out a registration form

Automotive advertisers spent slightly more than average on content advertising in December 2007, at 3.8%. Again, the mindset of those browsing auto-related content is similar to the mindset of those visiting an auto website.

Financial advertisers' allocation of spend toward content was about average in December 2007, while Travel and Retail advertisers spend less than average on content. It seems that content advertising works very well for advertisers that have content to offer, and not as well for those for whom a conversion is a purchase. Search and shopping engines are more targeted channels for advertisers seeking to increase purchase conversions, as the mindset of the purchase-driven user is much more focused than the content-browsing user.

To learn about best practices for content advertising, read this post.

Click Through Rates - Search vs. Content

How do click through rates compare across the search engines for search and content? Last month, Vividh wrote about best practices for content targeting, and the performance data below further demonstrates the need to manage search and content campaigns separately, due to significant variances in performance.

Analysis of CTR across a stable group of clients revealed that MSN has the highest CTR for search, at 2.49% in December 2007. In general, advertisers have seen high CTR and conversions on MSN, although CTR has declined over the past year, suggesting that MSN is becoming more competitive. CTR on Google search has remained fairly stable over the past year, and remains more than double Yahoo search CTR.

Content advertising, as most search marketers know, is less targeted and thus has far lower click through rates. In December 2007, CTR on Google search was 31 times greater than on Google's content network (AdSense), at 2.14% for search and 0.07% for content. The AdSense network has grown substantially over the past year, with the addition of MySpace in December 2006 and the continuing explosion of blogs, many of which run AdSense. It's not surprising then, that CTR on AdSense has dropped by 75% over the past year, even while content spend grew 39% among the same group of clients.

The clickable area change in mid-November may have contributed to the 15% drop in AdSense CTR from November to December 2007, but if it it did, it will only serve to increase ROI by reducing accidental clicks.

Given that content and search are so different from a behavioral, monetary, and performance perspective, it is important to organize campaigns and set bids accordingly to maximize return on each channel, as outlined here.

SEM Tools: Risks, Limitations & Best Practices – Part II: Content Targeting

In the second post of the series, I will focus on another popular search engine marketing tool: content targeting. This post mainly covers various setting options in content targeting to be aware of and ways to avoid common mistakes.

Part II: Content Targeting

Content targeting implies the use of the SEM platform to place bids and advertise on websites which are part of the search engine’s content network. There are few points to keep in mind while using content targeting for SEM campaigns.

1. Do not turn on search and content for the same campaigns

Search engines provide the option to have the same campaign targeted to both, the search and the content network. Creating a single search+content targeted campaign seems like an easy choice, but in order to be more effective, it is better to create two separate campaigns, one search targeted and the other content targeted.

Content advertising is quite different from search advertising. Through content targeting your ads show up when someone is browsing a web page/website which contains keywords related to your campaign. In search advertising your ads only show up when a user enters a keyword in the search box that you have placed a bid on. The intent of the searcher is much stronger than the intent of the user browsing a website, where they may already be viewing the content they were searching for. Thus, content advertising has much lower click through rates and lower CPCs, but can give your campaign broader exposure outside of search.

In order to show ads relevant to a web page, the search engine algorithm needs to match the keyword with web page content. Since it is not possible to find relevant web pages simply by looking at one keyword, the search engines look at all the keywords in an ad group and identify the dominant theme represented by that ad group. Once they have identified the theme, they find relevant web pages and place ads on them. In search advertising the algorithm just looks at the keyword to show the ads.

Therefore, it’s a good practice to have separate campaigns targeted only to the content network. Within these content campaigns group similar keywords together in ad groups so that each ad group has its own theme.

2. Be careful what you bid

As mentioned above, content CPCs are much lower than search CPCs, because of less competition and lower conversion rates. There is no reason you should bid same amount for search and content placements, especially when search engines provide options for separate bidding. As recommended earlier, always try to have separate campaigns for search and content but in case you have the same campaigns targeted to both the search and the content network, you should separate bids for search and content clicks. For example, to separate bids in Google AdWords you can check the box "Content bids" during campaign set up.

3. Understand Billing Options

You should understand and if required, use the various billing options available for content targeting. For example, Google currently offers several billing methods such as CPC (Cost per click), CPM (Cost per 1000 impressions) and PPA (Pay per action).

In CPM you pay for 1000 impressions whether or not anyone clicks on your ad. CPM is applicable to the advertisers who want to reach customers early in the advertising cycle, with ads designed to increase awareness but not necessarily generate clicks or traffic.

In PPA, you don’t pay for the clicks but pay only when certain action (for example, subscription or lead capture) is completed by the users on your website. You can set this action and the price you are willing to pay for it. PPA billing is useful when click-to-conversion rate is extremely poor and when the advertisers know exactly how much each conversion is worth to be able to set its value.

In conclusion, for a campaign to be effective on content network ensure that similar keywords are grouped together (as discussed in my post on campaign organization) for the search engines to identify the dominant theme, campaigns are set up for the most efficient bidding and you are using the billing method most appropriate for your business.