fall 2006 davison/lincse 197/bis 197: search engine strategies 14-1 optimize your paid search...

Fall 2006 Davison/Lin CSE 197/BIS 197: Search Engine Strategies 14-1

Optimize Your Paid Search ProgramOptimize Your Paid Search Program

In this section, we discuss:In this section, we discuss:

Types of Paid SearchTypes of Paid Search

Planning Paid SearchPlanning Paid Search

Paid Search OptimizationPaid Search Optimization step-by-step guide to implement a paid step-by-step guide to implement a paid search campaignsearch campaign


Why Paid Search?Why Paid Search? Compare to SEM, what are the advantages of paid Compare to SEM, what are the advantages of paid

search?search?

EconomicEconomic advantages advantages

Customer qualityCustomer quality

Customer segmentationCustomer segmentation

CostCost

TimingTiming

TechnicalTechnical advantages advantages

Unlimited keywordsUnlimited keywords

FlexibilityFlexibility

Customer oriented designCustomer oriented design


Why Paid Search?Why Paid Search? What’s the catch?What’s the catch?

Show me the moneyShow me the money!! Remember the click frauds?Remember the click frauds? Paid search can be Paid search can be expensive expensive if not executed properlyif not executed properly


Types of Paid SearchTypes of Paid Search Fixed Placement

The placeThe place your ad appears remains fixed your ad appears remains fixed The price The price is usually also fixedis usually also fixed Pay – per – Pay – per – impressionimpression Long contract timeLong contract time

Pros & ConsPros & Cons Place guaranteed. Price predictable & fixedPlace guaranteed. Price predictable & fixed Not flexibleNot flexible Bottom line: be Bottom line: be VERY SUREVERY SURE about what you are pursuing about what you are pursuing


Types of Paid SearchTypes of Paid Search “Traditional” Paid Placement

The one we’ve been discussing the whole semesterThe one we’ve been discussing the whole semester Google & Yahoo still own 97% marketGoogle & Yahoo still own 97% market Small players: GoClick.com & msn AdCenterSmall players: GoClick.com & msn AdCenter

CharacteristicsCharacteristics Pay-per-clickPay-per-click Pay by bidding in keyword auction Pay by bidding in keyword auction


Types of Paid SearchTypes of Paid Search ““Traditional” Paid PlacementTraditional” Paid Placement

Keyword bidding is a complicated process Keyword bidding is a complicated process Both Google and Yahoo now use a Both Google and Yahoo now use a combinationcombination of price of price

and click-through to determine the winner for a bidand click-through to determine the winner for a bid This makes estimation of final keyword cost difficultThis makes estimation of final keyword cost difficult


Types of Paid SearchTypes of Paid Search Contextual Ads..

Contextual ad system scans Contextual ad system scans the text ofthe text of a Web site for a Web site for keywords and returns ads based on keywords and returns ads based on what the user is what the user is viewingviewing

It is a more sophisticated form ofIt is a more sophisticated form of affiliated marketing affiliated marketing Google’s AdSense & Yahoo’s Content Match network are Google’s AdSense & Yahoo’s Content Match network are

examples of contextual Ad. Vendorsexamples of contextual Ad. Vendors Google: same as AdWord; Yahoo: separated Google: same as AdWord; Yahoo: separated


Types of Paid SearchTypes of Paid Search Contextual Ads: Pros & ConsContextual Ads: Pros & Cons

AudienceAudience: very specific customer groups: very specific customer groups ControlControl: You : You cannotcannot choose the site, the place or the ad. choose the site, the place or the ad. CostCost: should contextual ad. Cost the same as paid : should contextual ad. Cost the same as paid

placement?placement?


Types of Paid SearchTypes of Paid Search Local AdsLocal Ads

Local search is deemed as the holy grail of advertisingLocal search is deemed as the holy grail of advertising Used to be mainly offline (think yellow page and local Used to be mainly offline (think yellow page and local

newspapers)newspapers) At infancy stage onlineAt infancy stage online

More than ¼ searches in 2004 are near home or workMore than ¼ searches in 2004 are near home or work

70% had used the Internet to search for a local service 70% had used the Internet to search for a local service business at any point, and 46% had used the Internet to business at any point, and 46% had used the Internet to search one or more times for a local service in 2005search one or more times for a local service in 2005


Types of Paid SearchTypes of Paid Search Local AdsLocal Ads

Yahoo is the biggest vendorYahoo is the biggest vendor Free listingFree listing


Types of Paid SearchTypes of Paid Search Shopping SearchShopping Search

Specifically designed search engines that offer one-stop Specifically designed search engines that offer one-stop shopping for particular productsshopping for particular products

Customers: transactional searchers ready to buy (twice as Customers: transactional searchers ready to buy (twice as likely to buy and buy twice as much)likely to buy and buy twice as much)

1% of all Internet traffic, 22% growth rate (2004)1% of all Internet traffic, 22% growth rate (2004)

Major players

Competitors in the same product category are charged the Competitors in the same product category are charged the same per-click feesame per-click fee


Planning Paid SearchPlanning Paid Search STEP 1: Don’t forget your GOALS!STEP 1: Don’t forget your GOALS!

What do you want? Traffic or conversion?What do you want? Traffic or conversion? Remember to measure them!Remember to measure them!

STEP 2: Paid Placement Search – Position STEP 2: Paid Placement Search – Position Top position attracts 40% more Top position attracts 40% more traffictraffic than 2 than 2ndnd position position 80% of the lower demand keywords show higher 80% of the lower demand keywords show higher

conversion ratesconversion rates for for lower slots!lower slots!

STEP 3: Don’t forget local search!STEP 3: Don’t forget local search!


Planning Paid SearchPlanning Paid Search Marketing Basics (and how they relate to SEM)Marketing Basics (and how they relate to SEM)

Scarcity:Scarcity: scarce items cost more (less supply, more demand)scarce items cost more (less supply, more demand) In shopping search -- product categories with more competitors cost In shopping search -- product categories with more competitors cost

more more In paid placement – more bidders = higher feesIn paid placement – more bidders = higher fees

Efficiency: Efficiency: sellers will maximize the price based on the value sellers will maximize the price based on the value to the buyersto the buyers

In other words, In other words, the market price is anthe market price is an unbiased estimate unbiased estimate of the true of the true value of the productvalue of the product

In the real world, In the real world, nono market is totally efficient – information asymmetry market is totally efficient – information asymmetry In paid placement – In paid placement – better understanding of your keyword valuebetter understanding of your keyword value is the is the

key to higher efficiency key to higher efficiency


Planning Paid SearchPlanning Paid Search Marketing Basics (and how they relate to SEM)Marketing Basics (and how they relate to SEM)

Efficiency: Efficiency: sellers will maximize the price based on the value sellers will maximize the price based on the value to the buyersto the buyers

Why could someone outbid you?Why could someone outbid you? In other words, why would the value of a keyword be higher for your In other words, why would the value of a keyword be higher for your

competitors?competitors?


Planning Paid SearchPlanning Paid Search Starting your paid placement campaignStarting your paid placement campaign

Start small: Start small: don’t expect it to work at the beginningdon’t expect it to work at the beginning Start broad:Start broad: choose a collection of keywords, collect data choose a collection of keywords, collect data Monitor closely: Monitor closely: collect traffic, conversion, profit…. As much collect traffic, conversion, profit…. As much

data as you could getdata as you could get Optimize the listOptimize the list Iterate!Iterate!


Step-by-step Paid SearchStep-by-step Paid Search 1. Decide your budget1. Decide your budget

Build to budget: Build to budget: add up all your costs and ask for the budgetadd up all your costs and ask for the budget Creative costsCreative costs Management costsManagement costs Media costsMedia costs

Budget to build : Budget to build : handed a budget to do everythinghanded a budget to do everything Decide your media costDecide your media cost

Very difficult task, since cost is dependent onVery difficult task, since cost is dependent on click-through click-through And google only shows you the AVERAGE bidAnd google only shows you the AVERAGE bid And MORE THAN that!And MORE THAN that!


Step-by-step Paid SearchStep-by-step Paid Search 1. Decide your budget1. Decide your budget

Decide your media costDecide your media cost Test using both yahoo and googleTest using both yahoo and google Don’t estimateDon’t estimate Use the averageUse the average

Media cost could Media cost could notnot be estimated accurately be estimated accurately Second price auctionSecond price auction Conversion affects feeConversion affects fee Auction is an ever-changing gameAuction is an ever-changing game


Step-by-step Paid SearchStep-by-step Paid Search 2. Set Up Your Account2. Set Up Your Account

Focus on one vendor to beginFocus on one vendor to begin Google vs. YahooGoogle vs. Yahoo

Used to have different styleUsed to have different style Gap surfingGap surfing, , bid jamming & bid jamming & daypartingdayparting No longer usefulNo longer useful

$1

$0.5

$0.25

$0.99

$0.51


Step-by-step Paid SearchStep-by-step Paid Search 3. Select Bid Management Tool3. Select Bid Management Tool

To start, google or yahoo tools are fine (and free!)To start, google or yahoo tools are fine (and free!) Other tools are:Other tools are:

Market leap performics The search works


Step-by-step Paid SearchStep-by-step Paid Search 4. Select Targets4. Select Targets

Keywords or productsKeywords or products For shopping search engines, set up trust-feed and pay a For shopping search engines, set up trust-feed and pay a

fixed feefixed fee For paid placement, refer to our discussion before regarding For paid placement, refer to our discussion before regarding

keyword selectionkeyword selection


Step-by-step Paid SearchStep-by-step Paid Search 5. Manage Keywords5. Manage Keywords

Yahoo divide keywords into Yahoo divide keywords into categoriescategories Google refers to them as Google refers to them as ad groups ad groups campaign campaign

6. Match Type for Keywords6. Match Type for Keywords Broad matchBroad match (google default) / (google default) / advanced matchadvanced match (Yahoo): (Yahoo):

include variation of keywordsinclude variation of keywords Phrase matchPhrase match (google): must contain the exact phrase! (google): must contain the exact phrase! Exact matchExact match (google) / (google) / standard matchstandard match (yahoo default): only (yahoo default): only

the exact phrasethe exact phrase Negative matchNegative match

7. Geographic targeting of keywords7. Geographic targeting of keywords


Step-by-step Paid SearchStep-by-step Paid Search 8. Select Bidding Strategy8. Select Bidding Strategy

Three focuses: maximize Three focuses: maximize returnsreturns, minimize , minimize costscosts, maximize , maximize profitprofit

The The keykey is to use metrics to drive your bids – objective bidding is to use metrics to drive your bids – objective bidding

Metrics useful for bid managementMetrics useful for bid management CPA: CPA: ad cost / number of ACTIONS (ad cost / number of ACTIONS (minimize minimize costscosts)) Profit Margin: Profit Margin: profit per unit / revenue per unit (profit per unit / revenue per unit (maximize maximize profitprofit)) ROASROAS: revenue / ad cost (: revenue / ad cost (maximize maximize returnsreturns)) ROIROI: profit / ad cost (: profit / ad cost (maximize maximize returnsreturns)) AllowableAllowable: highest CPA : highest CPA

You You cannotcannot optimize ALL metrics! optimize ALL metrics! Different optimization strategy leads to different performancesDifferent optimization strategy leads to different performances


Step-by-step Paid SearchStep-by-step Paid Search 9. Make your bid9. Make your bid

Bids start at 1 to 10 centsBids start at 1 to 10 cents

Every bid must be at least 1 cent higher than the bid belowEvery bid must be at least 1 cent higher than the bid below

You can set You can set budget maximumsbudget maximums, , bid maximumsbid maximums, and , and capcap for your campaign for your campaign

Bidding is usually an iterative process – trial and error!Bidding is usually an iterative process – trial and error!


Step-by-step Paid SearchStep-by-step Paid Search 10. Attract the searchers10. Attract the searchers

Optimize the copyOptimize the copy Use the keywordsUse the keywords Sell your uniquenessSell your uniqueness Don’t hype it up, but try to draw attentionDon’t hype it up, but try to draw attention Call to actionCall to action Create urgencyCreate urgency

For shopping searchFor shopping search Complete and correct metadataComplete and correct metadata PricePrice Merchant ratingMerchant rating


Step-by-step Paid SearchStep-by-step Paid Search 10. Attract the searchers10. Attract the searchers

Optimize the landing pagesOptimize the landing pages Include the keywords – reinforce the Include the keywords – reinforce the messagemessage Reinforce your Reinforce your offeroffer Do NOT use Do NOT use pop-upspop-ups and and visitor trapsvisitor traps


Step-by-step Paid SearchStep-by-step Paid Search ““Maintenance” -- Measure and Adjust!Maintenance” -- Measure and Adjust!


What’s Next?What’s Next?

fall 2006 davison/lincse 197/bis 197: search engine strategies 14-1 optimize your paid search...

Documents

advantages of paid search

paid search campaignwhy

paid search programin

paid placement search

types of paid searchplanning

paid searchmarketing

search engines

demandin shopping search