I recently came across the term “Cyber Monday”. It’s the name used in the States to describe the Monday after Black Friday, which is the the traditional start of the holiday shopping season Stateside. Cyber Monday is based on the assumption that after 3 days plundering the shops like rabid T-Rexes, our US bretheren choose to cyber shop from the comfort of their computer come Monday.
So I decided to research our own pre-Xmas shopping binge habits here on the Emerald Isle.
Using Google Insights for Search and analysing data from Oct, Nov and Dec 2005, 2006, 2007, 2008 (Irish data only!), I made to the following fascinating findings as regards searches on Google in Ireland, which include the words “Buy Online”:
Sunday was overwhelmingly the biggest day of the week during the research period for Google searches which included “Buy Online”.
In each and every year studied, the first Sunday in December was the peak, followed by the last Sunday in November.
This year (drumroll), Ireland’s Cyber Sunday will fall on December the 6th. November the 30th will be Cyber Sunday 2.
Searches for “Christmas Gift” will grow throughout the first 2 weeks of December and then peak around about the 15th of December (there are no day of the week trends here). This is most likely people researching purchases online prior to consummating them offline.
3 other interesting facts about online shopping in Ireland:
In 2008 36% of Irish people made an online purchase. We are ranked 10th in the world for online buyers.
54% of Irish consumers research offline purchases online first.
In 2008, only 20% of people said they would not use the internet for Xmas shopping at all.
So online stores, stock your shelves or prepare to drop-ship like Contepomi, Cyber-Sunday is trundling your way!
According to IAB UK: Online Advertising expenditure grew 4.6% to reach £1.7 billion in the first 6 months of 2009, overtaking TV for the first time.
63% of this online expenditure was on paid earch (Google Adwords et al). Which is viewed by many advertisers as “recession friendly”, leading it to grow 12% from the same period in 2008.
In the UK 23% of advertising expenditure goes online.
The European average is approx 11%.
Last like figure for Ireland is from 2007 when a whopping 3% of advertising expenditure went online. Let’s pick up the slack Ireland!
This post is for you if you are, or plan to be, an online advertiser. It will explain how Google users interact with the various positions and listings on the Google search results page. We have identified 3 types of interaction; Eyeballs (Adviews), Fingers (Clicks) and €€€s (Conversions which are enquiries, sales etc) for this post.
Eyeballs (Adviews):
Mulley Communications released an important study last month entitled “Google Search”. One of the key findings of this study was that 70% of the sample group look at the top result first whether this result was a sponsored link or not. So if your sponsored link is in position no.1 on the left hand side of the SERP (Search Engine Results Page) you are in the most viewed position on the page.
Fingers (clicks):
Our internal stats for the first 6 months of this year across 20+ adwords accounts show that average Click Through Rate is 4.6% when an ad is in the top 2 positions (left or right of SERP) for a relevant search. Click through rates decrease as your ad moves down the positions on the page.
When the search term is specifically relevant e.g. “laser eye surgery Dublin” matching keywords have click-through rates upwards of 20%.
€€€ (Conversions):
Our internal studies have also shown that people who click on sponsored links are more likely to enquire or buy. Here are recent Google Analytics stats from our own site, the goal is an enquiry:
As you can see the top converting traffic source was Microsoft Live, but with one enquiry the data is not statistically significant.
When you compare Google Organic to Google Cost per Click (AdWords traffic) we see that AdWords traffic is twice as likely to enquire as it’s organic counterpart. This is a trend we have been seeing again and again over the past 2 years.
We believe the reason for this is that people looking for information on a subject will click on the organic list. Whereas a shopper, who want to make a purchase or enquiry and they want to make it now, is more likely to click on the sponsored links, it’s logical.
Conclusion:
The top of the Search Engine Results page is prime position for ad views with 70% of searchers looking at the top listing.
When a sponsored link is in the top 1-2 positions it benefits from a CTR of about 4.5%. Considerably lower than the 70% ad views, why?
This is because the majority of searchers are info seekers. So the wiki’s, forums and news sites on the organic list best suit their informational requirements. However the minority of searchers are shoppers, who want to make a purchase or enquiry and want to make it now, so they are more likely to click on the sponsored links and convert from there.
If I had written a post on branding 12 months ago I would have been explaining my thoughts on why display advertising is an inefficient use of marketing budget and that branding is bound to go the way of the dinosaur.
Brandosaurus?
I would have asked questions such as: “Why would a company spend vast sums of money on display advertising attempting to communicate with people who may or may not ever be interested in their product? Especially now when they can tap into the rivers of people actively searching for their services on search engines such as Google & Yahoo, with their credit cards at the ready.”
I would have also rammed home salient points such as: “Surely only after every last click from all available search engines had been gleened would a company start trying to inform and persuade new customers to consider buying their product via branding!”
However, I have recently changed my views on the importance of branding in the marketing mix, here’s why:
1/ Top Searched Terms
The screengrab below illustrates the most searched terms in Ireland over the last 30 days. We can see that 14 of the 20 entries are brand names. This indicates that people are very likely to search for brands they are familiar with. The user often knows who they want to buy from before they go to a search engine.
2/ Google acknowledged the importance of brands to search earlier this year when they adjusted their search ranking alogarithm to favour brands for generic industry terms. Google CEO Erick Schmidt recently went so far as to describe the current state of the web as a “cesspool of false information”. Google believe brands create credible content hence the favorable rankings for established brands.
3/Specific Media recently conducted a 12 month study which shows display advertising campaigns lift searches for specific brands by 155%. Clickers who had been exposed to display advertising prior to arriving at the site were 22% more likely to purchase.
Here in OnlineAdvertising.ie, we saw further evidence of this recently when a client in the health and beauty sector invested in a display campaign (Google Adwords Content Network) with a budget equal to their Google Adwords Search Campaign. 3 months later the monthly volume of searches on Google for their brand have lifted 56% on their previous level and is increasing month on month.
The 3 points above illustrate that all the marketing activities which the consumer was exposed to before they landed on the site count. Firstly branding will increase searches for, and hence, visits to, a website. Then the website will benefit from an increased conversion rate as people have a prior relationship with, and trust in, their brand.
As with all symbiotic relationships the benefits flow both ways: Display advertising boosts search advertising clicks and conversions while Search gives key metrics for measuring the success of a branding display campaign.
Branding is sowing the seeds which will both increase market size and your market share. Search marketing is the harvesting of demand within your market and for your brand. They skip happily into the sunset hand in hand!
Quality score is how Google rewards Adwords advertisers who display the right product to the right audience in the right manner.
Why does Google reward relevant advertising?
Google’s holy grail is “user experience”. If a Google user searches for information on “Car rental in Paris” and the search results displays Autotrader car sales, tractor leasing and Paris Hilton fan sites, the searcher is unsatisfied and quite likely to use another search engine such as Yahoo instead (well the “hes” might take a peek at Paris Hilton first). It takes less than 5 seconds to type Yahoo.com into the URL or Google search bar*, and the switching costs are zero.
Because it is so simple for a Google user to switch to another search engine, Google prizes “user experience” above all and seeks to reward Adwords advertisers who focus their efforts on the same.
Concurrently, if Googling e-shoppers are finding the products they seek easily, they are more likely to buy, and likely to buy more. This broadens Adwords advertisers’ smiles and they will funnel more of their advertising spondoolas into Google. It’s your classic win-win-win!
*Did you know: The second most searched term on Yahoo in the UK is actually Google!
So how does a good Quality Score benefit me as an Adwords advertiser?
It increases your Ad rank on the Google Results page. You can bid less for keyword than your competitors yet appear higher on the Google results page if your Quality Score is sufficiently higher.
It reduces your Cost Per Click. CPCs are a function of Bid and Quality Score. Simply put, the higher your Quality Score the less you will pay for your ad position.
It increases the Cost Per Click for the competitor immediately above you. This benefit appeals to the more “Machiavellian” advertiser. Because Google Adwords is an auction, advertisers pay the maximum bid the next placed advertiser would have paid. Having a strong Quality Score increases the value of your bid meaning the person above you needs to pay more to be above you.
These benefits are explained in detail in the YouTube video at the end of this post.
How do I increase my Quality Score?
There are 3 principle determinants of Quality Score for Google Search:
Click Through Rate. Hight CTR = High QS, Simple as that (please see case study below).
Keyword to Adtext Relevance. The more times the search query appears in the adtext the better.
Landing Page relevance & quality. Again search query repetition on the landing page is important here. Not just on the face of the page but in the backend too (Well search optimised pages will benefit from better QS). Landing page loadtime is another factor, the faster the better (sorry Flash).
Case Study: Click Through Rate and Quality Score “The Chicken and The Egg”.
Recently the most important keyword (SEO) in our own adwords campaign (SEO Campaign!) was not showing due to poor quality score(4/10). The CTR for this keyword was 0.3%, The average CPC was €3.83 and the average postion was 5.9. What to do? Well I know that higher positions benefit from higher CTRs (although Google states they have “normalized” Quality Score to even out differences for rank) so I decided to drastically increase my my maximum bid to see if by increasing Ad Rank, I could increase Click Through Rate which in turn would increase Quality Score.
I created a new adgroup with exactly the same keywords and adtexts but tripled my maximum bid and gave it a good start by searching “SEO” on Google and clicking on our own ad myself to give it a CTR jumpstart (I just invented reverse click fraud!). 3 weeks later I checked back. My Quality Score was now a healthy 7/10, my ad position was now 2.5, my CTR was now 1.8% and AMAZINGLY, my CPC had only increased to €4.22 (10%).
Lets analyse these stats. By tripling my maximum bid (and bumping up QS with a cheeky click), I moved from ad rank of 6 to top 3, my CTR increased times 5, my quality score nearly doubled and in the end I only ended up paying 10% more per click.
So what exactly happened here? There is a little bit of “egg before the horse” and “cart before the hen” here. The increased bid led to increased position led to increased CTR which led to increased QS which may have increased position again which would have increased CTR again further increasing QS and so on and so on. I’m sure you catch my drift.
What is evident is a multipler effect from higher ad position to higher CTR to higher QS and back.
Conclusion: The first point worth noting is by improving Quality score I moved 3 postions up the ranking and only paid an extra 10% per click! The second point to note is the relationship between Ad Rank and Quality Score via CTR. The third is if you are starting from a low quality score there is potential for a multipier effect of higher QS = higher postion = higher CTR = higher QS and so on, this could be called the “Chicken & Egg” effect because one leads to the next.
Recommendations: To benefit from a strong Quality Score; start campaigns by bidding aggressively on keywords (this doesnt mean increasing your budget, just your bids). Let the campaign work up some “history” at the higher bid levels and CTRs, you can then start reducing your bids and reaping the rewards of a strong Quality Score.
Everybody loves Videos!
This is an excellent video fro Google’s chief economist Hal Varian which explains The Google Adwords Ad Auction using practical examples. Well worth a watch!
Welcome the to first OnlineAdvertising.ie blog post.
When explaining the features of Online Advertising, I often feel it is so superior to it’s “offline old man” (bespectacled, wooly jumper wearing, slippered old fella) that to refer to this super-efficient, new school of digital activities simply as another form of advertising, is to do it an injustice.
I believe online advertising mediums such as Search Engine Marketing, Social Networks, Online Videos & TV, Blogs & Online Newspapers have so much more to offer both advertiser and consumer, that they warrant their own title; so I have decided to relabel them as “Advertising 2.0″.
“What is Advertising 1.0 then?” I hear you ask. Advertising 1.0 is what we know as “Traditional Advertising”, or “Offline Advertising”, basically all advertising pre-internet(could PI usurp BC?)! Most popular mediums include TV, Press, Radio & Outdoor.
So what are the differences between the 2?
Here we go:
Context of Adview- Advertising 2.0 is interaction-based advertising while 1.0 is interruption-based advertising. Lets face it, nobody turns on the TV or radio to see or hear advertising. There are numerous locations online where relevant useful advertising is welcomed by the user.
Measureability- In Advertising 2.0 every section, of every campaign in 100% measurable. This facilitates calculation of Return on Investmentand the Ongoing Optimisation of campaigns.
Pricing - In advertising 2.0 costs only accrue when an advertisee indicates their interest in the product by clicking on the ad. This is obviously a superior model than pricing based on adviews alone.
Distance from Point of Adview to Point of Purchase/Contact- The 2.0 advertisee can navigate from point of adview to point of purchase/contact within seconds. This solves the “Leaky Bucket Syndrome” found between adview and purchase/contact in Advertising 1.0.
General Campaign Objective - The thrust of Advertising 1.0 has traditionally been brand awareness. Due to it’s advantageous features, Advertising 2.0 is more direct and is geared towards increasing sales and enquiries.
As you can see Advertising 2.0 is a more efficient and better value way for companies to grow their business.
Every year an increasing proportion of the Irish population move an increasing portion of their lives online (shopping, banking, socialising, working etc). This demonstrates that beyond the above stated advantages, “Advertising 2.0″ is now an essential part of every businesses marketing mix.
Get More Online,
Alan
Got anything too add? Disagree? Please pop your thoughts in the comments. We’d love to hear from you.
