Efficient Frontier Insights

From Russia with Love

We’ve just returned from a trip to Moscow to visit our Russian partner, iConText, and wanted to share some exciting developments for Efficient Frontier in the Russian market.  IConText (icontext.ru) have been an exclusive partner of Efficient Frontier since earlier this year and the growth we’ve seen so far has been fantastic. 

We had the opportunity to present at an iConText event on Friday talking about the success of our partnership so far covering both Search and Facebook.  Of particular interest was the work we are doing integrating Yandex campaigns into our platform.  Yandex is by far the most popular search engine in Russia controlling an estimated 65% of the search market leaving Google a distant second.  Our platform has been integrated with Yandex for some time and we’re now working on launching our portfolio bid optimisation to the Yandex marketplace to help advertisers get more returns for their campaigns.

Clients such as Dostavka, Wikimart and Biglion all spoke about the increased performance they have experienced since migrating to the Efficient Frontier platform.  Biglion, one of the largest daily deals sites in Russia, referred an increase in subscriptions of more than 50% and Dostavka, a large e-commerce site, described how EF optimisation has increased orders by over 100%!

In addition to search there was a lot of interest in our Facebook platform.  The Social Networking scene in Russia is dominated by local player Vkontakte leaving Facebook with just 4.5 million users.   However the limited reach has done nothing to stop advertisers wanting to launch advertising campaigns on the network.  We expect access to our Facebook platform to accelerate the efforts of Russian advertisers who are starting to ramp up their social marketing. 

Russia now has the second highest number of internet users in Europe and that number is growing at over 40% year on year.  With the Russian online advertising market set to grow at well over 30% next year to over $1 Billion, 2012 promises to be a very exciting year for both iConText and Efficient Frontier.

 

 

 

Phil Dance - Director, International Partner Development

Multi-Click Data, Multi Frustrations?

In my latest Search Engine Land column, I take a look at click paths. While they may seem mundane or complex they are very useful tools when broken down in understanding how consumers behave. For instance, one can tell how much time consumers spend researching purchases, how some keywords help other keywords convert, and when coupled with attribution they can inform bidding decisions.

For more on the subject and some helpful tips, visit this link to my recent analysis:
http://searchengineland.com/making-sense-of-multi-click-data-88571

Dr. Siddharth Shah
Sr. Director, Business Analytics

Efficient Frontier & Context Optional release first joint quarterly State of Digital Marketing Report for Q2 2011

Today marks an important milestone for Efficient Frontier and Context Optional with the release of our first joint quarterly State of Digital Marketing Report for Q2 2011. While Efficient Frontier’s quarterly reports have long been a trusted source of data in the digital marketing industry, we are excited to add even more valuable insights to our social media analysis, using data gleaned from Efficient Frontier’s clients as well as Context Optional’s client index representing more than 15 advertisers and 20 million fans from a multitude of verticals including retail, entertainment, CPG and finance.

Many key findings this quarter indicated how competitive Facebook is becoming in the digital marketing sphere, and show that the longer brands take to engage on Facebook, the more it will cost them in the long run. We also found that advertisers are focusing more on Return on Investment (ROI) than on volume, which resulted in slower growth compared to Q1 of last year. In addition, Bing/Yahoo’s ROI continues to improve, resulting in them gaining a percentage of Google’s coveted spend share. 

Key highlights in the Q2 report include:

• Search spend growth slowed to 8%, down from 17% year on year in Q1 of last year. We believe this is due to advertisers focusing on ROI instead of volume, as well the slower than expected economic recovery.
• Facebook advertising continues to get more competitive, with CPCs increasing 22% from Q1. This means that the longer brands wait to engage consumers on Facebook, the more expensive it will become to acquire fans.
• Brands are increasingly focused on fan acquisition and engagement on Facebook. Between October 2010 and 2011, brands in our index are on track to double their Facebook fans. Consumers on Facebook are also increasing their engagement with brands. Our analysis reveals that one post made by a brand leads to 100 comments from consumers on average.
• Bing/Yahoo! gained 3.4% points of spend share from Google since Q4.

For the 2011 outlook, we predict:

• Facebook CPCs will continue to rise at a double-digit pace, and as a result, brands should not waste any time increasing their understanding and use of the channel, acquiring new fans and exploiting new ad formats such as Sponsored Stories.
• Continued testing and investment in Facebook will see advertisers evaluate and likely increase their spend. Looking ahead, we believe that advertising dollars will shift from offline media to search, Facebook and display. While we believe all online advertising channels will continue to grow, the Facebook channel will show the strongest growth in the months ahead.
• Bing/Yahoo! will benefit if ROI improvements continue.

To get the full story, download our State of Digital Marketing Report for Q2 2011.

Dr Siddharth Shah
Sr. Director, Business Analytics

 

 

Efficient Frontier's perspective on the Facebook ad marketplace on the Wedbush conference call

Yesterday, Justin Merickel, our VP of Marketing and New Product Development, joined  Lou Kerner of Wedbush for the call, “Facebook: The State of the State.” Justin kicked off the call and was followed by representatives from Epic Social, 8th Bridge, and Crowdstar. The speakers focused on current climate of Facebook advertising, video, and gaming, and looked to the future of Facebook as it becomes an even more valuable vehicle for online marketers.

Check out the presentation here. Special thanks to Lou for hosting.

http://www.slideshare.net/loukerner/industry-call-20110629

 

European Performance Summits

The most valuable time we have at Efficient Frontier is that which we spend with our clients, sharing our vision and plans and listening to their ambitions and goals.  

That’s why in the last few days we hosted two events, in London and Hamburg, to bring clients, prospects and partners together in one room with Efficient Frontier and our new colleagues at Context Optional. 

On Thursday, June 16th, the majestic Royal Opera House, London, served as the stage for speakers from Efficient Frontier and Context Optional, including respective CEOs David Karnstedt and Kevin Barenblat, who joined a crowd of 150 marketers to discuss all aspects of performance marketing across search, display and social media.

Guest speakers from Google, Admeld and Facebook discussed the future of display buying on an interactive panel.  Finally, our keynote speaker, Professor Dan Goldstein from London Business School, shared his latest research on sharing and virality across social networks.

After the conference, the Royal Opera House was transformed into a glamorous dining room, and the evening was capped off with drinks and dinner.

Marc Blinder and Kevin Barenblat introduce Context Optional

The following week on Tuesday, June 21st, the action transferred to Lichtwerk Studios, Hamburg. A distinct contrast to the Royal Opera House, this converted factory building provided an excellent post-industrial backdrop as marketers from all over Germany gathered to discuss the latest developments at Efficient Frontier and the wider industry.  

A full afternoon of content, including a presentation by Efficient Frontier’s Dr. Sid Shah, was crowned off by an interactive display from futurologist Nils Müller of TrendOne.

Lunch at the event in Hamburg

All presentations and discussions were captured on video, so check back soon as we share some of the highlights from these recent events.

Jonathan Beeston, Global Marketing Director

Search Updates from Seattle -- YaBing! Style

I recently attended the Yahoo! Search and Bing Customer Forum in Seattle, WA, a precursor to SMX Advanced. Rob Wilk, Senior Director, Account Management, Yahoo! and David Ku, Corporate Vice President, Ad Platform, Microsoft, provided the opening remarks and called to order a day of  insightful presentations.

The first few hours included:

“Bing Consumer Search Innovation”

• Yusuf Mehdi, Senior Vice President, Online Audience Business, Microsoft
• Focused on Bing’s personalized search efforts and integration with Facebook
• Highlighted the streamlining of Facebook data into search results

“Yahoo! Consumer Search Innovation”

• Vivek Sharma, Vice President, Product-Management – Search & Marketplaces, Yahoo!
• Touched on privacy vs. personalization in search results
• Highlighted the new focus on answers instead of links

“Yahoo! and Microsoft Search Alliance Update”

• Chi-Chao Chang, Vice President and General Manager, Global Search Business, Yahoo! and David Pann, General Manager, Search Network, Microsoft
• Phase 1 was to “Stabilize the Marketplace,” Phase 2 will focus on “Execution”
• Discussed the core processes that will lead to areas of focus
• Highlighted the massive effort involved in migrating platforms that took only one year and three months to complete (really, the numbers were quite impressive)

“Efficient Frontier’s Q1 2011 Global Digital Marketing Performance Report”

• Dr. Siddharth Shah, Senior Director, Business Analytics, Efficient Frontier
• Highlighted the ROI improvements post-migration of platforms
• Download the full report here

Though there were many highlights to the above presentations, the real gem was the brief unveiling of a never-before-seen new product.  Though they didn’t require NDAs to be signed -- and I won’t be the one to blow the lid off completely -- let’s just say, managing your AdCenter Accounts. Yes, there’s (going to be) an App for that. And that was the gist of the rest of the day: innovation! 

After lunch we sat at intimate tables in break-out sessions:

• Looking Back: Recently Released AdCenter Features
• AdCenter Next: Upcoming Features & Scenarios
• AdCenter Account Optimization
• Bing SEO Update

The sessions were each followed by roundtable discussions with Yahoo and Microsoft product developers and engineers. The atmosphere was educational, collaborative, and once again, innovative. At the end of “Looking Back,” the Yahoo and Microsoft team members asked the audience what features they would like to have seen rolled out, and, of course, those were just the features highlighted in the next session.

The new features rolling out in the next three to six months will be game-changers on how the AdCenter platform works, and will require even further hard work from their product and engineering teams, even further collaboration with their agencies/advertisers, and even more innovation. But, it’s exciting! When was the last time you saw “innovative,” “game changer” and “exciting” in a blog post about Yahoo! and Microsoft?

And, yes, folks, they’re finally addressing and solving the Match Type issues!

Karen Maciolek
Senior Account Manager/Master Social Media Strategizer

May CPCs: Steady numbers across the board

In May, CPCs increased by 3 to 4% in the Automotive and Retail verticals as Finance CPCs declined slightly by 4% MoM. On a YoY basis, however, Finance CPCs are up 40%, indicating the continuing strength in the sector. We will report June CPCs when the second quarter rounds up.

Dr. Siddharth Shah
Sr. Director, Business Analytics

 

Building your Facebook fan base: Tips for CMOs

Roger: "So do you like me or like-like me?"

JWoww: "Like-like."

-Jersey Shore

JWoww seriously digs Roger; she “like-likes” him. A “like” would not have sufficed to communicate her intent -- something more had to be said. That is why Roger asked for clarification. It is this basic insight that CMOs have to understand if they want their Facebook marketing campaigns to succeed -- that not all “likes” are created equal.

There are five types of “likes” in the Facebook eco-system: 

TYPE OF “LIKE”	HAPPENS WHEN A USER CLICKS ON…
Fan page “like”	the like button on your fan page
An ad “like”	the like button on your Facebook ad
An app “like”	the like button in your Facebook app
An offsite “like”	the like button on your own web property
A comment “like”	the like on a Facebook comment

In all but the last case, the advertiser acquires a fan, which is reflected as a number on the fan page. And while the virtues of acquiring a fan have been discussed in detail on multiple forums, websites and in the blogosphere, it still begs the basic question: how many of these fans like you and how many really like you, eg “like-like” you ?

It is important to understand the nuances of intent between these “likes.” While someone “liking” an ad makes them a fan just like a person who “likes” your fan page, the value to your brand is arguably lower. An app liker might like your app, but do they like your business?

I am not arguing against “like” acquisition campaigns. In fact, I am firmly in the camp that believes in the value of “likes” and have seen several brands do a great job at acquiring, managing and communicating with their fans by following this strategy. The fans return the favor by becoming a part of the brand awareness consciousness and show a strong propensity to buy from the brand.

Well-thought-out Facebook marketing plans are now crucial. Understanding how to successfully deploy a “like” campaign is a vital aspect of this. I have seen marketing strategies successfully build a fan base of 5 million users seemingly overnight. It’s a great goal -- but wouldn’t you want to make sure these fans truly like your brand, eg “like-like” your brand?  The ones who really want to engage with you, the ones who will advocate your brand to their friends, the ones with a greater likelihood to buy your products and hence will justify your Facebook marketing budget in the future.

What can CMOs do when building a brand strategy?

1. Ask the hard questions first. 

-What is the goal of my Facebook marketing campaign?

-Why should I build this big fan base? 

-What value will I get out of it?

-How will I convince my bosses to give me a Facebook budget? (Remember, you need an initial  budget to advertise, build apps as well as an ongoing budget to engage with your growing fan base)

2. Build an execution strategy.

-How will I acquire fans?  Organically or with a combination of Facebook advertising?

-Shall I build an app ? What will my app do?

-Who will run my PR and brand engagement efforts once my fan base is built?

-How will I incentivize my users to engage with my brand? What offers and promotions will I use?

3. Figure out who will do it.

-Will I run this program internally or will I outsource it?

-Does my vendor have an integrated fan engagement and advertising platform?

These questions are difficult to answer and open-ended. However, by posing them I hope to inspire you to build a fan base that not just “like-likes” your brand but loves it!

Dr. Siddharth Shah
Sr. Director, Business Analytics

 

Sponsored Stories: Adding Efficient Scale to Facebook Campaigns

Our purchase decisions are strongly influenced by what our friends like and recommend. The research to prove this out is available in droves. The influence that friends have on our purchase decisions is one of the primary attraction points for Facebook’s Sponsored Story ads -- ads that derive content directly from friends’ interactions with a brand’s Facebook presence (page, app, place, domain). 

Facebook’s new Sponsored Story advertisements promise enhanced influence via the explicit endorsement of friends. But do they deliver? As we analyzed preliminary advertiser data from Sponsored Story ads, we felt validated by some of the results but were surprised by some others.

Sponsored Story ads vs. Conventional Object Ads

When we looked at the Sponsored Story and object ad data for a set of our clients over a period of four weeks, we found that Sponsored Story ads had a 39% lower CTR (click through rate) than object ads. At first glance, this is counterintuitive (and surprising). We expected users to respond with greater propensity to ads for brands that their friends liked. Hence, intuitively CTRs should be higher for sponsored story ads and not lower. A deeper look at the data unveiled the reasons for lower CTRs.

When we looked at unique CTRs, the Sponsored Story CTRs were 3.4 times that of object ads. In other words, CTRs on Sponsored Stories appear lower because the same users have been ad served many more times in the time period. This is further validated when we look at the average impressions per user. The Sponsored Story ads were ad served more than 10 times that of their object ad counterparts. 

Finally, and most importantly, we were able to drive a 22% lower Cost per Acquisition on Sponsored Story ads vs. object ads in this time period.

Sponsored Story vs. Object Ads: Key Metric Share

How much incremental volume can advertisers drive from Sponsored Story ads economically? As we optimized Facebook campaigns of our clients on both ad formats, we found that we could drive about 33% of conversions from Sponsored Story ads spending 28% of our total budget. What’s more, the impression share and click share were 49% and 25% respectively. Thus Sponsored Story ads are an economical way to gain impression share while at the same time an easy way for advertisers to scale their conversion volume by about 30%.

 
Should you advertise in the Sponsored Story format?

We are optimistic about Sponsored Story ads. Our enthusiasm is echoed by Facebook, which recently unveiled three new Sponsored Story formats, bringing the total to seven. Advertisers would be well advised to try Sponsored Story ads to leverage its three key benefits:

(1)   It’s an economical way to scale Facebook campaigns.

(2)   It’s an easy way of gaining impressions on the Facebook platform.

(3)   It’s a great way to leverage the explicit endorsement of a “like.”

Dr. Siddharth Shah
Sr. Director, Business Analytics

 

Taking the Lead in Social Media Marketing: Efficient Frontier Acquires Context Optional

Today is an exciting day for Efficient Frontier. We’ve just announced that we’ve acquired Context Optional, thereby creating the first comprehensive suite of solutions for social media marketing. Context Optional has quickly become a leader in enterprise social marketing solutions, maintaining and engaging audiences on behalf of major Fortune 500 companies. Joining forces with Context Optional was a natural next step for Efficient Frontier as we continue to become the leading global digital marketing company.

This acquisition will significantly expand our social media offerings and create the first unified solution for managing and optimizing Facebook fan acquisition through to fan retention and engagement. Marketers will also have a complete suite of online marketing solutions available to them across some of their most important social networks -- Facebook, Twitter and LinkedIn.  

By combining our complementary companies, we’ve created a seamless and unique level of efficiency for our clients -- something they’ve repeatedly asked for and we’re thrilled to be able to provide.

As a result of this acquisition, marketers will be able to:

• More efficiently target audiences based on social engagement insights and continually refine their Facebook application experiences to better match their audiences’ interests
• Deliver a seamless and measurable end user experience with consistent, integrated advertising and social marketing content
• Better track their campaigns through integrated analytics to receive a more complete view of performance

We believe that this acquisition will broaden Efficient Frontier’s offerings even further, expanding beyond our roots as a search engine marketing company. While SEM remains core to our business, our scope goes far beyond that, and includes holistically managing and optimizing display and social media advertising on behalf of our clients. We look forward to moving into the (pardon the pun) new frontier of digital marketing with Context Optional as an integral part of our future.

 

David Karnstedt
President and CEO