Marketers are pursuing paid-search marketing opportunities in droves, with Business Week recently reporting that paid search will comprise a whopping 33% of all online advertising revenues, up from 7% in 2001. But maintaining your advertising presence in this hot segment of online marketing continues to be the subject of much confusion. The biggest source of this puzzlement lies in that paid search does not fit into the “traditional” online marketing mold. So much so, the Interactive Advertising Bureau (IAB) is working with major search providers to develop terms and conditions specifically for the space.
In Tools of the Trade, Part One we looked at the foundation of a pay-for-placement program, selecting keywords, and projecting user behavior in order to formulate the initial pay-for-placement search strategy. In the evolution of your effective pay-for-placement search marketing plan, the message is important, but effectiveness measurement and appropriate spending are paramount to the long-term success of your initiative.
In pay-for-placement search marketing, your budget can change on a daily basis. Unlike other forms of online marketing, the “how much is enough” budget formula can look like a Mensa jumble. Variables in Pay-for-Placement are endless-- click costs, click rates and the number of searches make it impossible to provide an exact figure. The best way to project spending? Use a prospective keyword list, start with reviewing recent searches, and project click costs within the search sites selected and develop your plan from there. Since your program should include many paid-search providers you may need some assistance in keeping everything organized and running smoothly.
Whether you are managing multiple sites or just need some additional help in overseeing the bidding process in a single-site program, a third-party bid manager can you help you maximize your presence on paid-search sites. Since Overture seems to be at the top of everyone’s paid-search marketing list, it maintains a list of approved vendors on the site.
The biggest strengths of using a third-party bidding provider is that it enables you to save money and time in bid management in an efficient user interface environment comparing costs and keyword position performance across multiple paid-search providers. Since the ROI may differ greatly from position one to position three (200% to 300% click cost variances are not uncommon) effectively positioning your listings in this manner may well prove to be the single most cost-effective means for controlling your presence on the site. Of course there is a cost of entry with using a bid manager, but many providers offer additional a la carte, or bundled tools that help with efforts like tracking post-click activity.
An established leader in the bid management sector is GoToast which provides among other services, bid management across at least 22 paid-search providers.
I recently had the pleasure of speaking with GoToast Chief Executive Officer Dave Carlson and I asked him about the relationship with Overture. At first glance one might ask, why would Overture agree to let a third-party manage bids when it has invested a great deal in providing tools for advertisers to manage bids?
“Overture is clearly playing the long game-- allowing advertisers to focus on specific keywords consistently proven, so that over the long term said advertiser will keep the investment over writing this marketing budget off as ineffective.” Carlson makes a good point. I often notice big paid-search sites touting magnificent advertiser counts but the subject of advertisers that have become disillusioned by high click costs and abandon the space remains unspoken. Stay tuned for more on this later. Of course if advertisers would just step up measurement efforts this would be a thing of the past.
Management Begets Measurement
My advice for measurement? Yes. I am always surprised to hear from search marketers, who for any number of reasons still maintain the only metric used for paid search is click costs and subsequent traffic. Maybe your Website builder has a problem using third-party measurement instruments like Spotlight Tags, or maybe the advertiser’s only sales channel is offline. Whatever the reason, ROI-tracking tools in paid search range from the terribly simple to the magnificently complicated, and one or all of these measures should live inside a paid-search program.
By far, the easiest tool to use is covered in the average middle school mathematical curriculum -- Algebra. This is what I refer to as the “quick and dirty” measurement formula because you need only the basics in business information.
Total leads (aggregate clicks) * close ratio = Total # sales
Total # sales * average sale * profit margin = Total Revenue
ROI = Total revenue divided by Ad costs
For multiple paid-search program performance comparison, you can add unique source information to click urls “=sourceoverture”, for example. Beyond that, there’s signing on with your favorite third-party ad-serving group to tag purchase confirmation pages, and applying predictive sales formulas to calculate return based on the actual numbers of purchases. Providing the advertiser uses third party served post-click behavior reporting for other online ad formats, this method allows relatively easy integration with the existing reporting infrastructure. In the absence of an online purchase point, the point of contact or registration page can be tagged using the same discipline.
Bid managers are stepping up to the plate to provide a one-stop value-add for advertisers in this space as well. GoToast, for example, goes beyond average click tracking via third-party measurement tactics by allowing the advertiser to use a live Java script to bring the reporting structure closer to real-time as opposed to re-routing.
Clearly the aforementioned measurement tools do not require an advanced degree in differential calculus. They answer the immediate gratification tendency paid-search advertisers’ demand, while adding a dimension to understanding user behavior. But, what of the users who don’t make the purchase decision immediately, and moreover how much would the clicking user spend over a lifetime? This next level measurement includes a much more advanced measurement calculation, known as lifetime value, and retention.
iProspect is one of the largest search engine marketing firms in the business. It has teamed up with another big name in Web analytics, NetIQ, to offer search advertisers the ability to measure the lifetime value and retention of users down to the site and even keyword. “User behavior as it relates to search is non-linear -- a user may search for the advertisers’ term, click to the site only to return later to make a purchase”, reports Dr. Amanda Watlington, Director of Research of iProspect. “Additionally, many users convert once and later return to the site to make additional purchases.” In my opinion, calculating the lifetime value of a customer is a more advanced method of calculating the overall value of search click traffic and would be particularly valuable for considered, large ticket purchases.
Go Forth and Search
The cause and effect relationship pay-for-placement popularity has initiated is heavy competition in many categories driving up the cost of clicks and a declared need for strong stewardship in managing listings. If advertisers are to continue in this space, they must answer the value question as it relates to each search provider and the keywords users initiate to make a purchase decision. Although the search marketing industry has only begun to define itself as such, effectively using the tools we have available will ensure the industry keeps pumping out steam.
About the author: iMedia search columnist Kevin Ryan’s current and former client roster reads like a “who’s who” in big brands; Rolex Watch, USA, State Farm Insurance, Farmers Insurance, Minolta Corporation, Samsung Electronics America, Toyota Motor Sales, USA, Panasonic Services, and the Hilton Hotels brands, to name a few. He is currently Director Market Development of IPG’s Wahlstrom Interactive where he provides guidance in directional online marketing to Wahlstrom’s prestigious list of clients and sister agency brands.
Americans loves reality TV. So, it should come as no surprise that "American Idol" is the most popular show in America. But the reality genre has been around long before audiences witnessed hopeful contestants crumble beneath Simon Cowell's biting criticisms or supported by Paula Abdul's sympathetic, albeit erratic, personality. The key to "Idol's" success lies in what the show introduced to TV: audience interactivity. The show allows viewers to become part of the production, breaking the barrier between stars and audience members.
Banking on this notion, TV discovery app startup Peel recently launched the "Idol Interactive Experience," which provides all users the opportunity to air their judgments.
As the images above suggest, when contestants perform, their photo is featured above a bar that records audience sentiment -- negative (Boooo!) or positive (Cheer!). During the performance, viewers can continually tap each button to affect the overall registered sentiment. The same rules apply for the judges. As they critique the contestants, viewers are given the ingenious opportunity to evaluate each judge's performance, giving the audience at home the chance to turn the loud, reactive "Boooos!" issued from the show's live audience into personal, yet publicized, sentiments of disgust. After the voting is done, a leaderboard displays the final results with the contestants stacked up against one another.
Though the "Interactive Idol Experience" is only one of Peel's TV services, which include gathering personal preferences and viewing recommendations based on past behavior, Peel's focus on a show that many can't live without, is one step toward providing a service viewers find indispensable. Though the app is rather simple, it encourages audience participation -- the reason why "American Idol" is so popular to begin with.
As Peel's VP of marketing Scott Ellis told Mashable, "We think we're still just in the first inning here as far as what social TV is capable of." And taking it slow is a smart move, as social TV apps should not overwhelm viewers but engage consumers without distracting them from the TV. In the early stages of social TV, a complicated app will fail. People watch TV to watch TV, and they do not want to work.
GetGlueI love "Mad Men," and for 17 months I waited patiently. So, as I sat perched in front of the tube, anxiously awaiting this season's premiere, all I could think was, "This better be worth the wait."
It was, and the magic of "Mad Men," with its nostalgia-inducing portrayal of the 60s while simultaneously depicting the timeless ups and downs of personal relationships and professional experiences, reaffirmed my commitment. And GetGlue, an app developer that provides users the opportunity to check-in and share entertainment, chat with friends and other fans, and unlock stickers and other rewards, made "Mad Men" the second most social TV show of 2012 by providing the platform for die-hard fans, like me, to express their anticipation.
Here's a video detailing GetGlue's app:
Like the characters that ramble around "Mad Men's" Sterling Cooper advertising agency, GetGlue is extremely hot right now. After closing a $12 million round of new financing and reaching two million users (who have checked-in more than 300 million times), GetGlue completed a major overhaul of their iPhone app. The new update gives those checked-in the opportunity to enter into multiple conversations with those watching the same shows and offers new TV viewing guides based upon personal tastes, friend activity, and community trends.
GetGlue has created a digital go-to world for TV viewers to easily connect with others and express ideas. As GetGlue's CEO Alex Iskold told The Guardian, "The challenge is to keep it simple on the surface, but make it engaging enough for people to use every day." Clearly, success in this new arena calls for gentle user introductions, specifically considering that the app is complimentary to the TV, and must remain so for repeat use.
And large broadcasters are taking notice, as GetGlue has struck deals with 75 networks, including Fox, NBC, ABC, CNN, HBO, and Showtime. What's most interesting is GetGlue's success with user check-ins. For those in the industry who believe check-ins are outdated or ineffective, Iskold offers a confident response: "People talk about going beyond the check-in, but that's often because they couldn't get it to work. 300 million check-ins on GetGlue tells me that they have always worked for us." Just because a feature does not work for some, doesn't mean that is does not work for all. In a new, bourgeoning industry, companies should be careful not to disregard something simply because others have.
Nearly everyone is familiar with the music identification app Shazam. It's why you no longer get into heated debates at bars over song titles and artists. It is one of the most widely-used, mystifying applications -- imagine my difficulty explaining the use of acoustic fingerprint technology to recognize songs "out of thin air" to my grandmother. And, with 175 million users worldwide, it was only time before Shazam directed its large following toward TV. If you weren't aware, TV content is slowly becoming "Shazamable," as the company applies its audio recognition technology to the TV. But Shazam is not the only company seeking to confuse my grandmother by venturing into TV audio fingerprinting, nor does it provide the best application. That designation should be given to Yahoo's IntoNow.
When Yahoo acquired IntoNow for a reported $20 million in April of 2011, industry experts questioned Yahoo's decision to obtain a TV check-in service amidst a growing sea of them. IntoNow's smartphone app, launched in the beginning of 2011, only allowed users to check-in. However, as 2011 came to a close, IntoNow launched an innovative smartphone and iPad app that easily justifies Yahoo's purchase.
Using audio recognition technology, IntoNow's app identifies the program and, as the company's Adam Cahan told Forbes, produces "highly relevant content. That could be content related to the show on TV, social information of what friends are watching, or loyalty rewards for watching certain programs." What's really impressive, if linked to a scripted program, IntoNow supplies the user with relevant tweets about the show, even tweets issued by the show's actors. In addition, if you're watching the big game on Sunday, the app provides stats for both teams and players. The following is Yahoo's IntoNow promotion:
As Cahan tells Wired, "We're moving away from text and text input." So, IntoNow's mission is to provide relevant interactive content with a small amount of input required from the user, which is a common theme emerging among successful social TV apps -- engagement sold beneath a guise of not having to be tasked with engaging.
Living in America can create a feeling of isolation, as if our shores are enclosed by cling wrap. But one only needs to cut through this invisible barrier and venture across the pond to discover an app creating a big splash in Britain.
Zeebox is an iOS app that launched in October of last year, with plans of arriving in American in April of this year. By January 2012, it had acquired 250,000 users, which quickly grabbed the attention of Britain's largest subscription TV service, BSkyB. With BSkyB's £10 million investment, Zeebox launched a TV ad campaign that greatly increased downloads of the app, which managed to shock the startup's CEO Ernesto Schmitt, who tweeted:
Here is one of Zeebox's commercials that aired, managing to spark an onslaught of new users:
As with other social TV services, this app allows users to interact with friends and congregates show-relevant Twitter and Facebook commentaries. However, what's truly catching the consumer's eye is its "click-to-buy" function. As an ad appears on the TV screen, a click-to-buy button pops up on Zeebox's real-time screen. Clicking this button takes the viewer to a web retailer that sells the item or directly to the brand's website. Although making TV ads interactive in the past has failed, Zeebox's CEO Anthony Rose offers a compelling argument: "By moving this functionality to your smartphone or tablet, and delivering an experience that is synchronized to the show you're watching on TV, we think that Zeebox finally delivers on that magical click-to-buy promise."
In addition, brands can purchase targetable ads to be shown within the app as their brand's commercial airs on TV. And lastly, Zeebox permits broadcasters to build and feature their own interactive, custom branding to appear within the app when specific shows air, making the typically more generic show pages offered by the app more relevant to the consumer. According to paidContent.org, for shows that have utilized this feature, "an impressive 93 percent of users stay using the app features until their show ends."
To more fully understand this app, the following video offers an in-depth look into Zeebox:
I know what you are thinking: Twitter is not a "social TV app" per se, so why is it being featured? The truth is, Twitter still dominates the social TV landscape, with solid help from their app, and to ignore this platform within the article would be to overlook the elephant in the room. Although it hasn't launched an app specific for "social TV," it seems that only in time will Twitter direct its massive following to a new social TV app. One that uses acoustic fingerprint technology to allow users to check-in to programs, presents show-relevant information and stats, or provides TV-viewing guides based upon past behavior, all while offering up its standard recipe for success: 140-character nuggets of expression (in this case, specifically about TV shows).
To reiterate Twitter's power, on March 21, Mashable reported that the season two finale of ABC'S "Pretty Little Liars" created the most social noise of any scheduled series in TV history, all thanks to Twitter. According to SocialGuide's report, "Fans sent a whopping 645,000 tweets during the first broadcast, hitting the 32,000 tweets per minute mark. Over the course of the day (a catch-up marathon was playing), 1.6 million tweets were sent by 667,000 users."
Twitter's success should not be ignored, and the company's dominion brings up some valuable questions for those invested in the social TV ecosystem: Would it be in Twitter's best interest to launch a "social TV" app? If Twitter were to do so, what would be the effect on the startups featured above? Or, is a smarter move for Twitter to stay out of the game and increase consumer use by being employed within the social TV apps already launched? Does having a critical mass of followers ensure app success?
The social TV landscape is extremely volatile, and many apps have proven unsuccessful in this new environment. But, as with any accelerating field, the speeding winds will blow away the chaff, and large monetization opportunities await the companies whose apps provide the most value to the consumer. As Jack Myers predicted at the Social TV Summit in Los Angeles, "Social TV will be an $8 to $12 billion business in 2020." There is no doubt that the blending of social interaction and TV will greatly impact the future, and the apps that best assist the consumer across the shrinking bridge between the two will be the most successful.
Kyle Montero is an editorial intern for iMedia Connection.
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