Ok, so i’ve completely thrown the idea of live blogging out of the window due to non-existing internet connectivity but i’ll be posting my notes one by one in the coming days…

Keynote day 3: Jason Calacanis from Mahalo.com

Jason has quite a reputation as an industry renegade, so I looked quite forward to his session. For those of you who don’t know Jason, his recent venture is a ‘human-powered’ search engine. So instead of relying on fancy algorithms like Google, Jason relies on human editing to provides searches with relevant results.

Jason started off by clarifying his stance on SEO, as he’s generally known as the guy who thinks SEO is ‘absolute BS’. He now said that as far as SEO is about building relevant, user-friendly sites, he’s all for it :).
Mahalo looks similar to the old directory sites (and which failed one by one) but Jason believes their failure was due to their decreasing quality content. Mahalo with its human editing weeds out bad content.

The problem with this concept is though that the amount of work increases as the number of pages on the site increases. Not only do new pages need to be added, but all pages need to be maintained. To solve that problem, Mahalo is creating community involvement (like Wikipedia) to reduce their workload. Mahalo users have an interest in keeping the contents clean and relevant.

Another benefit of Mahalo is that site owners have input in the content that is being displayed on the search engine, unlike at other search engines. I believe that is a major selling point for a lot of merchants and big brands, who feel disempowered by the ‘big three’ regarding the information that is indexed and served to search engine users. Mahalo’s role is limited to doing QA on the content that is being submitted (about 20% of the links submitted by website owners are accepted). Spam doesn’t exist on Mahalo because they have no way of making it into the index

An additional feature of Mahalo is that it tries to combine search with the social graph (i.e. your social connections). Mahalo users can see who referred their search results, find movies recommended by their friends, etc. To do this Mahalo interacts with a number of online social networking sites to aggregate your social connections. That said, Jason doesn’t always believe in asking permission before scraping content from other website. He says asking for forgives gets you further :).

Jason made a very good point saying that what search needs is less pages, not more. Think about it, most searches on google generate millions of results and hardly anyone ever looks past the top ten. The industry should go back to valuing quality of quantity.

Mahalo would best be suited for the ‘mid-tail’. Google and other engines are pretty good at serving the long tail and the short tail. Getting the middle ground right is more difficult according to Jason. That’s where the human element and the social element of search can add value.

As an SEM company with a global reach, we were very interested in getting some feedback from other people regarding their experiences.

The panel included online marketers from Japan, China, Singapore, Australia and Latin America.

Common to all these (and other) countries is that they are much more diverse than the US. Not only do many have multiple official languages but there are also cultural linguistic differences within languages. In asian countries one is also confronted by the problem of the character sets, and the search engine’s interpretation of ‘context’.

In China and Japan, there are multiple ways of expressing intent and different demographic groups use a different vocabulary.

Australia is the exception in that it is fairly homogeneous but Internet penetration is not as great as expected from a 1st world country, and relatively few users have broadband.

In Japan and Singapore on the other hand broadband is widespread and users are internet savvy. In Japan people can even scan bar-codes with their cellphones to compare prices online. Really cool stuff which shows the enormous potential of mobile search.

The Chinese market is massive, yet difficult to penetrate, even Google plays second fiddle to Baidu, the Chinese search engine giant. E-commerce is still fairly small in China and it seems to me the country is about a decade behind the US in terms of web usage (e.g. portals are the biggest sites in China)

Overall, the panelists confirmed what we experience in practice: every country is different and it is crucial to understand the local culture in order to set up a successful campaign. Don’t outsource your keywords and adcopy to a translation agency and expect that you’ll end up with a performing campaign. You need native speakers to understand the intricacies of foreign markets. And even then, not all foreign ventures are a guaranteed success…

Ok, not quite. The idea was to post summaries of the sessions presented at SES in real time but the reality is that having hundreds of people trying to connect to the same wireless network at the same time results in agonizing connectivity not seen in the modern world since the early nineties.

However, today Derrick and I found the Internet (see picture) and to our surprise, no one else seemed to be using it (hence the stunned look on my face).

We are now online and will be posting our session summaries shortly…

My colleague Derrick and I are attending SES New York next week. If you interested in meeting up or having a chat, feel free to contact us and we’ll make a plan.

Our details are on this page.

Since the introduction of Adwords, Google has been rolling out new features regularly. Most of the time, these additions were aimed at helping advertisers to create more targeted and relevant advertising campaigns. Even though the introduction of the Quality Score (QS) algorithm and the associated introduction of minimum bid prices boosted Google’s revenue, the underlying principle was that it would weed out irrelevant ads from the Adwords system.

Last week however it emerged that Google is beta testing a feature called ‘Automatic Matching’. What this will do is match your ads to keywords you’re not actually bidding on but which Google deems relevant to your campaign, in order to ensure that your monthly budget limits are reached.

Some analysts see this feature as a sign that Google is feeling the pressure of Wall Street and is (desperately) looking to maintain its revenue growth.

As an Adwords professional I do know that this feature offers no benefit at all to a knowledgeable advertiser although there are three parties which could potentially benefit from it.

1. Google: there is no denying that Google will increase its revenue implementing this feature. Most advertisers set their budget above what they actually expect to spend to ensure that their campaigns are sufficiently buffered and don’t run out of money during the month. What Google is proposing is creaming off that surplus budget.
2. Corporate advertisers: Not all search engine advertising is ROI based, an increasing portion of spend is dedicated to branding. This is mainly the case for large corporates who can afford not to generate direct revenue from online marketing. Automatic Broad Matching allows them to spend their money without the hassle of running a large PPC campaign.
3. Advertising agencies: For agencies that charge their clients a percentage of spend, Automatic Broad Matching offers the same benefits as it does to corporate advertisers. It enables them to spend more of their clients’ money (and increase their revenue) without the additional effort of running a large campaign, just sit back and let Google do the work for you.

Would I ever use this feature (luckily you can opt-out)? Definitely not.

As a company, we believe in adding value for our clients and based upon years of experience, we are of the opinion that running a campaign using large scale broad matching is not the way to go about it. Not only because broad matches are a poor indicator of a user’s intent and often have a poor ROI but also because you lose control over your marketing campaign. Even when you’re only interested in branding, you should be concerned about which keywords trigger your ads. Having seen Google’s broad matching in action, I would say it is far from perfect and not always in the advertiser’s best interest.

Search engine advertising is increasingly becoming more complex and competitive. All the more reason to take charge of how and where to spend your budget and not to rely on the ‘easy’ options being offered by parties who are incentivized to increase your costs.

So your ad is sitting on position 1 on Google, and you get a reasonable amount of clicks a day. Your ROI is excellent and you think you have optimized your campaign to it’s full potential… You may also be mistaken.

One of the metrics in the Google Adwords reports that is often overlooked by search engine marketers is impression share. Impression share is basically your campaign’s market share of all the impressions it is eligible for. If you are bidding on the word ‘widget’ you would ideally like your ad to be shown every time a user searches Google for this term. Many people will be surprised to hear that this is not the case, not even if your ad is normally in the top position.

Here’s why: every time a user enters a search queries, Google executes an auction to determine which ads should be shown. As your competitors come and go, and alter their bid prices, your ad does not always win this auction. Sure, on average you might be doing OK but most likely you don’t win every auction.

According to the Google reports, there are two reason why you might not reach your maximum impression share. Firstly, if your daily budget is too low, Google will exclude you from certain auctions in order not to exceed your budget. In the other case, you lose the auction because your ad rank is too low.

Google defines ad rank as the product of Quality Score (QS) and your max CPC so increasing either of these two factors will increase your ad rank. Unfortunately, Google only reports on impression share on a campaign level, so you need to structure your campaigns cleverly to make optimal use of this data. For instance putting all your trademarked keywords in a seperate campaign will help you to determine how often your ads are shown when someone searches for your brand (ideally, this should be 100% of the time).

The easiest way to increase your impression share is to increase your max CPC. Increasing your bid prices doesn’t mean that your effective CPCs will increase, especially not if you’re already occupying the number 1 position. It does definitely increase your risk though, as a determined competitor could send your CPCs soaring. And it definitely will increase your total costs as you will gain more impressions and more clicks. But as long as your are generating profit from your increased traffic, it makes sense to try and grow your impression share.

Obviously obtaining a 100 percent impression share is unlikely to be a viable goal. But looking at this metric will give you a good idea of the size of your potential market and your position in it.

Over the past few weeks we have been spending extra attention to the evil beast of PPC advertising: click fraud. During the holiday rush it is easy to miss suspicious traffic since the ‘normal’ campaign metrics no longer apply. Traffic soars, adcopy needs to be updated to reflect the latest offers, items go in or out of stock, seasonal and holiday related keywords come and go. All this within the space of a few weeks.

There were two main reasons to really scrutinize our traffic for fraudulent clicks at this time of the year:

1. To offset the increased risk of click fraud during the peak retail season.
2. To see if Google’s assertion that they catch most invalid clicks holds true when traffic volumes spike.

We looked at mountains of data from our campaigns and created experiments to test the robustness of our own monitoring systems and Google’s filters. In general, we found that both performed really well although one can never assert with 100% probably whether or not a click is fraudulent (the best you’d come to certainty is when it converts into a sale).

We learned a lot from this exercise and decided to update our click fraud risk calculator based on our findings. This calculator does not tell you what percentage of your traffic is fraudulent. Google already does an excellent job at that if you’re not using your own (or third-party) monitoring systems. What it does do is assess the risk profile of your PPC campaign so you can take appropriate measures to mitigate this risk.

Hopefully you will find our little tool very useful and if you are interested in a more in-depth analysis of the intricacies of click fraud, have a look at this Google click fraud presentation, or read more about our findings here.

In a previous post I explained why companies should use their brand name in their PPC campaigns. In short, you should be doing this because it can be a source of cheap traffic and because you need to ensure that your competitors do not take up the prominent top PPC listing when people search for your brand. That said, who should you trust to do your brand bidding for you?

Traditionally, brand management has been the domain of offline advertising agencies. But from what our company has seen so far, these agencies are terrible at running a decent PPC campaign. They offer it to their clients because they want to ‘own’ a client and offer him a full range of marketing services. But in general what the client gets in return is not good value for money. Agencies will run a PPC campaign on a few broad keywords, including brand names, and will generate a probably decent amount of traffic but for a sizeable management fee, usually a percentage of advertising spend.

Based upon data from campaigns that we run for our clients, between 40% and 60% of search traffic is generated by a client’s brand name. So running a PPC campaign just based on a few keywords is feasible if you have a well known brand but you lose out on a large portion of potential traffic if that is all you do.

The question is, should you be paying your agency a lot of money to run a small brand based PPC campaign? Probably not.

An alternative option is to let affiliates use your brand name in their campaigns. But If you only have a few affiliates, they will also behave like an agency and just run a small campaign based on your brand name. After all, it will give them the greatest return for their effort. It is basic economic theory in practice. They will get a very good ROI on the cheap brand name traffic and are not incentivized to expand their campaigns to include the 40-60% of potential customers you are missing out on.

If you have numerous affiliates however, the competition amongst them will ensure that bid prices for your brand name increase so much, that your affiliates are forced to expand their campaigns into the (less competitive but less lucrative) long tail to generate more profits.

This scenario probably maximizes your traffic volumes but having plenty of affiliates makes it difficult to police their behavior and protect your brand. Although there are plenty of reputable affiliates out there, there are also the rotten apples seeking a quick gain at any cost and your brand reputation could suffer.

So what is the best option? Personally I would not be comfortable to make my brand name available to any PPC marketer if I did not have a personal, direct relationship with them. This rules out making your brand available to affiliates indiscriminately. I would select affiliates with a proven track record and with solid references.

At this point, I would not chose a traditional agency if they charged me a percentage of spend on my PPC campaign.

Would I run my PPC campaign in-house? I would, if I had the expertise, a well-known brand and a small set of products or services on offer. Otherwise, you’re better off to outsource it.

In the end, it doesn’t really matter who manages your (brand based) PPC campaign, as long as they offer you full transparency. Chose a PPC marketer that you can trust and that will work closely with you to optimize your acquisition costs. Incentivize them to perform and don’t reward them to spend money on your behalf without accountability. Verify that you get the most amount of qualified traffic for your money!

As I have said before, you cannot hide bad performance for long in the world of PPC. That is why affiliates tend to be better at PPC than agency. They have to perform to survive. But a fee-based agency could be more incentivized to look after your brand’s reputation. There is however no reason why the two models cannot be merged. With full transparency and accountability it is possible to reach a business model that combines the performance of an affiliate with the trust of an agency.

Some retailers and traditional advertising agencies are not keen on using a company’s brand in a PPC campaign. There are two main reasons why I believe not using your brand power in PPC is a poor decision. These two reasons are not necessarily the ones cited by marketing managers as they might be hesitant to admit their real motives.

First of all, ‘brand management’ has always been the traditional marketing agency’s ivory tower. It is what they do and in a way, it is the only thing they do. Very little of their advertising spend has an accurately measurable ROI. These agencies do not want to cede any ground to PPC marketers because it is an area they tend to have very little expertise in and they just feel threatened. It is easier to convince their clients that brand bidding is pointless in PPC advertising and to retain exclusive control over a client’s brand.

Secondly, their clients listen because they are cost conscious. They spend large amounts of money on building their brand in the traditional media so why would they spend any more on PPC? Obviously, if consumers are searching for their brand on search engines that means they already know the brand. No need to spend even more money on PPC ads. All they need to do is sit back and hope that the consumer actually finds their site. Right?

As retailer, you are now reliant on the fact that your site shows up on top of the natural search results for the query that the user typed in on the search engine. This is a fair assumption if you have a well established website which was built using SEO best practices. But it is also a fair assumption that your competitors are bidding on your brand and that their ads will appear above you natural listings. Consumers are a fickle bunch and a well written ad might persuade them to shop at your competitor instead.

In addition, consumers will find numerous ways to misspell your brand name. Are you sure your site will come out tops for each of those misspellings? In PPC campaigns, Google will match your ad automatically to its misspellings and with one ad, you can target all those consumers who otherwise might never find your site.

Finally, more and more people (like myself) type a brand name into a search engine (it’s so tedious to type the ‘www’ and the ‘.com’) and expect the search engine to come up the with the site we’re looking for. Just check out the popularity of these two brands on Google. Do you really want to rely on natural search results to drive this traffic to your site?

Yes, it does not seem fair that you need to pay for your brand name in PPC campaigns when people could find your site through other means, but that is exactly what search advertising is about: making it easy for people to find what they are looking for.

PPC based brand bidding is not expensive relatively to bidding on more generic terms. Google will give you an excellent quality score when you bid on your own brand which means CPCs will be really low. But there are quite a few caveats which you should take into account when outsourcing your brand bidding to a PPC marketer. I will address these in a next post.

To conclude for now: brand bidding constitutes an additional cost to your brand building marketing campaigns but the cost is likely to be marginal. And for this marginal cost you can ensure that your potential customers do not get lost on the way to your site. A small price to pay I would say.

Most people who have some experience with PPC marketing will be able to tell you all about ROI, CPCs, conversion tracking and the likes. They will also tell you that adcopy is important and that it is a good idea to test adcopy variations to see which one performs the best. But as adcopy goes, that is where most marketers’ knowledge stops.

Most aspects of PPC are easily quantifiable which is why this marketing channel is so successful. You can measure exactly how much revenue your advertising spend is generating. But beneath the clarity of ROI, there a lot variables (known and unknown) at play. Variables which cannot as easily be measured.

The Cinderella of these variables is definitely ‘the adcopy’. Although search engines do try their best to assign a quality score to the adcopy, this quality score is only relevant to the advertiser because of its impact on the eventual CPC. It is nearly impossible to measure the impact of the adcopy on the psyche of the search engine user.

Forget about your portfolio of keywords, your adcopy is what users will eventually see in their search results. It is your virtual shop window and you should take great care in designing it. Unfortunately, search engines often have different ideas of what constitutes good adcopy.

For instance sometimes adcopy with a relatively low CTR proves to have an excellent conversion rate. This would be the type of adcopy preferable to an advertiser, because it reduces the amount of unqualified traffic. In a PPC model however, search engines have little incentive to reward adcopy with low CTRs. Cost per Acquisition (CPA) models should therefore gain more and more ground in the future as they align quality scores with advertisers’ goals.

Untill that happens though (Google’s CPA model is only in beta so far) don’t give up on experimenting with your adcopy. I would always focus on adcopy that converts best, and ignore quality scores initially. Once you know what it is that entices your visitors to convert, you can always try to make your adcopy more search engine friendly or create dedicated landing pages tailored to your adcopy.

By taking this approach, we managed in some cases to create adcopy with a CTR and conversion rate identical to the initial one but with an average CPC that was 30% less (and this without altering the keyword bids). Just play with the length and the phrasing of your ads without changing its meaning and you will be surprised at the impact on your CPCs.

Some people like to ignore adcopy optimization because of its unquantifiable properties but when you think of it, it is what makes search engine marketing an art rather than ‘just’ science.