Marketers continue to allocate budgets to U.S. paid-search advertising campaigns, but growth slowed to 15.5% in the second quarter of 2012, compared with the prior two quarters. In Q4 2011, paid-search ad spend grew 22.4%; and in Q1 2012, 30.3%, according to a quarterly report that IgnitionOne will release Thursday. Clicks also slowed to 13.2% in Q2 2012, compared with 29.1% in the prior quarter. Click-through rates came in flat year-on-year, ending an upward trend. Impressions, however, grew faster than last quarter with a 13.7% increase year-on-year, compared with 7.2% sequentially. The cost-per-click (CPC) rose 2.1% year-on-year, but clicks on Google fell slightly to 3.1%. The IgnitionOne report points to an increasing reliance on mobile paid-search ads that support less expensive clicks, as well as new ad formats that are generally lower in price. Yahoo and Bing experienced a 24.3% jump in CPCs, which the report suggests continues a sequential shift toward the two companies touting best practices. It has led to greater competition in auctions through the rise of broad-match keywords used as stepping stones to highlight other match types. The report points to a shift in market share during Q2. Google holds 79% of share compared with the Yahoo and Bing alliance at 21%, representing a 1% point year-on-year uptick for the quarter. Marketers increased the ad spend with Yahoo and Bing by nearly 33% year-on-year, which tops Google's 11% growth. Google's push toward mobile devices, as well as search and display advertising, will clearly pay off. Mobile search ad spending rose 333% year-on-year. Mobile search ads also had greater growth in engagement as clicks grew 325%, while impressions grew 130%. On Wednesday, Google announced the Nexus 7 tablet built by and co-branded with Taiwan's Asus. It will begin shipping in mid-July starting at $199. The device, available on Google Play, will feature Google Android 4.1, Jelly Bean, along with a Nvidia Tegra 3 processor. For Google, the Nexus 7 tablet will not only support advertisers through its search engine and affiliate networks, but also social signals from Google+, and games and books available through Google Play.
Marin Software has formed a partnership with RevTrax to connect online paid-search ad clicks and analytics to in-store purchases. This should give marketers running campaigns across channels the tools to closely match budgets to media. The agreement supports data analysis on margin and redemption that aims to support brands. Paid-search promotions link to printable or mobile landing pages that display a coupon with a unique barcode or promo code. The brand can track back the unique code to the coupon and paid-search ad driving engagement. The RevTrax technology triggers a code that sends conversion data to Marin, which attributes the keywords to the specific campaigns, search engine and network. Seth Sarelson, COO of RevTrax, said the offline data reports on things like margin analysis. Are consumers more likely to buy products with higher margins based on specific search ads? Do they come in the store and redeem the coupons quicker? A disconnect kept marketers from attributing paid-search campaigns to in-store purchases, although most sales still take place in brick-and-mortar stores. For every $1 of ecommerce revenue generated from paid search, marketers can expect to see approximately another $6 of in-store revenue, according to a RevTrax study. The finding shows that if marketers undervalue the search channel by not factoring in-store sales into the paid-search ROI calculation, they may undervalue the channel by as much as 85%. A handful of companies have begun to link paid search to in-store sales and revenue. In 2011, Merrell Wreden, vice president of marketing for AMF Bowling, told MediaPost SearchBlog about plans to launch a mobile campaign and tie in coupons. Now, the company takes the strategy a step further to link in paid-search ads. Through support from marketing company MediaWhiz, AMF tied offline conversion data from RevTrax with campaign data from the search engines to analyze return on advertising spend. It took six months, but monthly revenue attributed to search marketing rose more than 10 times than revenue in the first month of the program. Over nine months, AMF Bowling's conversion rate jumped 74% and cost per conversion dropped nearly 70%. Matt Lawson, vice president of marketing and partnerships at Marin Software, said revenue rose tenfold by optimizing offline conversions.
In my last column, I shared SEM lessons learned from my ten-year Bonnaroo reunion. One of the more heady revelations I had at the festival was that “a lot can happen in 10 years.” As I think about the 20-year reunion in 2022, many questions come to mind:
At the Google I/O conference this week, Big G made good on the rumor that it would launch a 7-inch tablet of its own for a $200 price point. Obviously looking to out-Kindle Amazon, Google is hoping to get some semblance of a firm installed base of the Android tablet on an optimal version of the OS. Personally, I don’t even pay attention to the silly food names Google attaches to its sweetshop of Android flavors. It ain’t sweet and it’s not a joke anymore. Only the geeks at Engadget and TechCrunch can track these iterations, let alone care to. What the company fails to do with its own OS it is trying a bit more convincingly to do with the content it layers onto it. Also part of yesterday’s wave of announcement was the launch of the Google Play Magazines section of the app store. Mimicking the Apple Newsstand, the online shop has a sizeable catalog of major titles, since Hearst, Rodale, Bonnier, Forbes, Newsweek and Conde Nast’s Wired all are here. In my early and fleeting test of the system, Google Play Magazines works a bit differently from Apple’s Newsstand in that it is cloud-based. You purchase the magazines by issue or trial or sub at the Web-based site and can have them delivered to a dedicated magazine app reader on the device you choose. It is worth mentioning that payment on Google Android is pretty much as seamless as Apple iOS and iTunes now. Once you are signed into the system with your Google ID and have a payment method on file, you are one click away from buying. On the Samsung Galaxy Tab 2 device I used, the issues show up in the Magazine Play app in a pleasant row. While the app and magazines are in the cloud, they do appear to download to the device for offline reading. But the cloud does track where you left off in a title so you can pick it up in the same place on another device. Most of the magazines come to the system as facsimiles of print without much interactivity. But titles like House Beautiful come with a little blue icon bug designating an interactive edition. The issue I tried had much of the functionality of its iPad counterpart. Images could go full-page. There were videos triggered by interactive icons. And the interactive editions did have hot links for easier navigation. But Google clearly acknowledges in this design that most of Android devices are smartphones and so there is a reading view on most pages that allows you to extract text from the layout for better small-screen reading. One puzzling downside in my use was the absence of the magazine section on the Google Play storefront on the device itself. The old sections of the interface are still all that is available, so I couldn’t actually buy a magazine on the tablet itself. The Web was the purchase interface. I don’t get it. You put magazines in the cloud, and then you make them disappear?
In last week’s column, I looked at how Harvard Business Review bloggers Karen Freeman, Patrick Spenner and Anna Bird spelled the end of the purchase funnel. Today, I’d like to look at the topic they tackled in the second of the three-part series, "If Customers Ask for More Choice, Don’t Listen." Barry Schwartz, the author of “The Paradox of Choice,” believes we’re overloaded with choices. In fact, we have so many choices to make, often about inconsequential things, that we live with the constant anxiety of making the wrong choice. This paradox meets today’s consumer head on, over and over, in situation after situation. The other factor, which I’ve seen play a massive role in buying behaviors, is the degree of risk in the purchase. The bigger the purchase, the higher the risk. The final piece of the buying puzzle is the reward that lies at the end of the potential purchase. Our brains are built to balance risk and reward in fractions of a second. But we don’t do it by a calm, rational weighing of pros and cons, thus engaging the enlightened thinking part of our brains. We do it by unleashing emotions from the dark, primitive core of our brain. The risk/reward balance whips up a potent mix of neural activity that sets our decision-making engine in motion. The degree of risk or reward sets the emotional framework for a purchase. High reward, low risk generally means a fairly fast purchase, such as an impulse buy. High risk, low reward may mean a very long purchase cycle with an extended consideration process. Whatever the buying path, there will be an undercurrent of emotion running just below the surface. Now, let’s match up the findings of the HBR team. High-risk purchases automatically ramp up the level of anxiety we feel. We’re afraid we’ll make the wrong decision. And, in a complex purchase, there’s not just one decision to be made – there are several. At each decision point, we’re bombarded by choices. If the hundreds of purchase path evaluations I’ve done are any indication, the seller spends little time worrying about presenting those choices in a user-friendly way. Catalog pages are jammed with useless and irrelevant items. Internal site search results are generally abysmal. And product information typically takes the form of a long shopping list of features. Very little of it speaks to buyers in a language they care about. This is a dangerous combination. We have the natural anxiety that comes with risk. We have a gauntlet of decisions to make, each raising the level of anxiety. And we have websites that contribute greatly to the frustration by making it difficult to navigate the information that does exist, which is either too little, too much, too irrelevant or too salesy -- never does it seem to be just right. Again, Freeman, Spenner and Bird ask us to make it simpler for the buyer. Provide them with fewer choices, and make them as relevant and compelling as possible. Ease the burden of risk by providing information that reassures. Realize that one of the components of risk is the degree of bias in the information we’re given. It that information reeks of marketing hyperbole, it will be discounted immediately. In our numerous eye-tracking studies, we’ve found that in most instances, three to four options seems to be the right number to consider on a Web page. These can be easily loaded into working memory and compared without causing undue wear on our mental mechanics. So, on a landing or home page, three or four groups of coherent and relevant information seems to be an optimal level. We call them “intent clusters.” For navigation bar options, we try to keep it between five and seven choices. If we expect mostly transactional traffic, we ensure there is a “fast path” to purchase. If we expect a lot of purchase research, we aim for rich promises of relevant and reliable information. As Freeman, Spenner and Bird remind us, “The harder consumers find it to make purchase decisions, the more likely they are to overthink the decision and repeatedly change their minds or give up on the purchase altogether. In fact, regression analysis points to decision complexity and resulting cognitive overload as the single biggest barrier to purchase.” As marketers, our job is to eliminate the barriers, not erect new ones.