SearchTHIS: DoubleClick on Pay-for-Play

In the biggest news since DoubleClick acquired the performance marketing firm, Performics, a new search white paper hit the streets today offering a summary collection of guiding principles in pay-for-placement search and a taste of the upcoming DoubleClick Search Trend Report.

Today’s white paper is a first look at industry studies of the same ilk as DoubleClick’s trend report, but with a slight difference. The collaborative Performics/DoubleClick issue has the look and feel of the reports we have come to know and judge from DoubleClick, however the structure of the information and its language echoes the no-nonsense culture of a Midwestern firm, rather than a polished New York industry monolith.

Search is complex. Search is difficult. Search can be unforgiving and costly if you don’t watch it closely -- just a couple of the report's delicate pearls of wisdom delivered with a sledgehammer. Some of this information we have seen before, some we haven’t, but it sure is nice to see an easy-to-understand format for such a complicated segment of online marketing.

Un-natural search

The data collected in this document comes from Performics clients with accumulated conclusions from “hundreds of thousands” of “active keywords,” which raises an important question. What exactly is an active keyword? The answer is the first in a series of surprisingly useful clarifications.

In the absence of industry guidance in the arena of defining search terms, advertisers, marketers and search providers often adopt a make-it-up-as-you-go methodology. This practice can lead to disaster and often leaves the above mentioned entities wasting time trying to translate similar information which should be time well spent doing other things. Almost anything else would be good.

The white paper seeks to avoid this by clarifying search specific terms from the word go. Since traditional online marketers rarely use the phrase “active keyword,” the term is readily defined as a phrase that receives at least one click a month. Another beyond-the-norm definition offered is “Average Position” that refers to a mean rank for keywords in a given time period.

Another handy definition is “keyword length,” that refers to the number of words in a phrase. Some will argue that the length of the keyword or phrase is not quite as important as the depth and breadth of its application. Most notably, elsewhere in the report is an indication that searchers are becoming smarter in their use of terms. Reinforcing a continuing trend of deeper use language by searchers are conclusions that over 82 percent of active keywords are two, three or four keywords long, while only 7 percent are one word long.

Good news and bad news

One of the main focal points of the white paper is the delivery of an 80/20 theorem in pay-for-placement search as it relates the number of terms in a given campaign. Although it might seem blasphemous for a search solutions provider to do so, Performics reports the largest portion of keywords often shows the smallest portion of return. Specifically, 62 percent of active keywords generate less than ten clicks per month.

The blasphemy comes in the realization that only 15 percent of keywords generate the dominant portion of conversions or desired actions. Hypothetically, if a paid search advertiser currently bids or positions against 100 keywords and only 15 of them generate the dominant portion of traffic, then why would the advertiser need a search tool like the one Performics or DoubleClick offers to manage a search program?

It’s just not as simple as finding 15 keywords and sticking with them. Any search marketing dilettante could launch a program with a small bunch of keywords, set it on autopilot, and move on to more important things. Search is too complex for that. To help straighten out some of the complexity, DoubleClick sorted search fundamentals into key categories. Beyond 80/20 (labeled “Click Volume Considerations”) are four other core principles of search marketing.

Fundamentals of search

The number of keywords is only relative to each client’s needs assessment. The white paper labels this first understanding “Campaign Size Considerations.” Since savvy search marketers use a variety of tools to implement search programs (examples include keyword generators and competitive analysis), ultimately keyword selection will vary according to performance goals and activity over time. Keyword selection cannot be limited to the performance of one keyword or phrase on one search site.

Back to the 80/20 rule, the second principle, “Keyword Length Considerations,” relates to search activity and development of search behavior. In the report, it is noted that searchers are becoming more sophisticated in their expectations of search engines. In the end, the more advanced search sites become, the longer keywords will become and more difficult it will be to select them.

“Pricing Considerations” top the list for most advertisers in any media and represents the third core principle. Searchers are becoming more educated about return expectations, yet click costs continue to increase. Performics labeled keywords beyond $.50 per click as expensive and cited 60 percent of active keywords cost $.20 or less. While this labeling process is highly relative, as in specific examples of seasonal keyword pricing, it does illustrate a very good point. A high keyword cost due to competitive activity does not guarantee performance.

The need for placement at the top of the list has been the subject of much debate and conjecture in search. The Performics analysis suggests that while core principle number four, “Positioning Considerations,” is critical, the best results emerge from a combined analysis of where a listing falls on a page and the cost or return goals. The white paper reports that using return metrics in conjunction with position management disciplines are the most effective means of program management. And, in the instance where high positions are sacrificed for the sake of ROI goals, lower positions still generate enough traffic to justify keeping a given search term or group of terms in a search program.

The real data is yet to come

This white paper serves only as precursor to the more complete search report due out in the next month, but there are still a few questions unanswered by the DoubleClick/Performics merger. How will advertisers react to placing all their search eggs in one basket with Performics offering search consultation along with DoubleClick branded tools? Will firms competing with Performics shy away from DART for search for this reason? What effect might this potential fallout have on the two firms?

The answers to questions such as this often come quite hastily when advertisers or search agencies are presented with difficult choices in the marketplace. Despite possible conflicts or all-in-one considerations, one thing is certain -- the no-nonsense approach to disseminating intelligence should be the rule, not the exception. In this regard, the DoubleClick/Performics combination is a clear winner.

Additional resources:

Download a copy of the DoubleClick white paper (when it becomes available). 

iMedia 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. Ryan believes in sound guidance, creative thought, accountable actions and collaborative execution as applied to search, or any form of marketing. His principled approach and staunch commitment to the industry have made him one of the most sought after personalities in online marketing. Ryan volunteers his time with the Interactive Advertising Bureau, Search Engine Marketing Professional Organization and several regional non-profit organizations. Meet Ryan at the Kelsey’s ILM:4 Conference, November 3-5, 2004 and Ad:Tech, NY November 8-10.