For those of you who think Google is set on taking over the world, add this to the list: Google pay-per-click ads will now show up on Yahoo! search engine results. The two companies signed a 10 year deal thus further increasing Google’s dominance in the paid-search world.

AdAge put together a great article summarizing a few of the details and I would encourage you to read it.

While this deal is causing fear of rising CPC costs, increased government scrutiny, and Yahoo! becoming more reliant on Google; there are also a few pros such as small business being able to advertise on both Google and Yahoo! from one platform and Google learning from Yahoo’s successful display advertising techniques (especially with Google’s acquisition of DoubleClick).

This won’t affect the consumer for at least another 3 months as Google and Yahoo! have agreed to delay implementation to allow the Justice Department to read the fine print. Hopefully, it wont be Senator Ted Stevens doing the reviewing (see below).

 

Continue reading "Google and Yahoo! Join PPC Forces"

Building out a pay-per-click advertising campaign can be a tedious and, dare I say it, slightly boring process. The strategy that takes place leading up to the build-out, and the optimization that takes place post build-out, is challenging and enjoyable. However, the build-out itself is just good old fashioned grunt work.

Well, Trace recently discovered a program called Efficient PPC that has changed our PPC build-out lives forever.

We used Efficient PPC in the past to build-out a massive campaign; but until recently we hadn’t tapped into the full potential of this angelic app. Yesterday, when building out a large PPC campaign, I dug in a bit and discovered the power of Efficient PPC. Basically, creates multiple campaigns, ad-groups, keyword lists and text-ads in one fell swoop.

Here’s how it works (For the sake of this example, I’ll ignore the campaign level and geo-targeting and pretend all these ad-groups are part of one big, messy campaign--which would be incorrect; but I don’t want to write all day):

Let’s say I’m advertising a chain snowboarding shop in the DC Metro Area and I only want to target people in the specific cities in which these shops reside. With Efficient PPC, I simply create a list containing the specific cities (Arlington, Washington, Bethesda etc.) and call it “City-words.” I create another list containing all the keywords in the snowboardingvertical (gnar gnar, radical, sick, etc.) and call it “Snowboarding-words.” These lists have now become tokens and are implemented by using braces ( {city-words} ). Here’s where the genius of Efficient PPC kicks in. Rather than manually creating multiple ad-groups with separate keyword lists and text-ads; Efficient PPC automatically populates my ad-groups, keyword lists, and text-ads based on the lists I’ve created. That’s probably still a bit confusing, so check this out:

Continue reading "Efficient PPC: A Must Have Tool"

Pay-per-Action (PPA) is an advertising model based on, of all things, actions. Its cousin is Pay-per-Click (PPC). PPC campaigns cost advertisers money each time someone clicks on their ads. PPA campaigns only cost advertisers money when someone takes an action.

You may be familiar with both PPA and PPC without even knowing it. PPC ads are shown on Google all the time. They are the advertisements associated with keywords such as “web design” and “washington d.c. restaurants” and are typically shown in the right sidebar of search results. Google calls its program “AdWords”—and it has been wildly successful ever since it began.

There are a number of problems with PPC. One of the more significant problems is called click fraud. The idea behind click fraud is simple: click on competitor ads to run up their costs and run down their advertising budgets. Of course, Google, Yahoo!, and many others have made significant efforts to mitigate click fraud; but, it still happens.

PPA is not without flaw, but will definitely further fight these sorts of issues. PPA is not a new idea. For example, Amazon has offered this sort of affiliate relationship with web sites who list their books or other products. Anytime someone clicks over to Amazon and actually purchases one of their products, the affiliate gets a small referral fee.

But PPA is a new idea for Google.

Google recently announced a limited release of the PPA model. PPA ads will show throughout their content network (i.e., on web sites running AdSense) and also through text link ads (i.e., publishers will be able to link directly to PPA ads).

There’s more to dive into; but, here are a couple of take homes: How much are you willing to pay for a lead? How much are you willing to pay for someone to buy a product? Those answers may vary but, hopefully, you have a good idea. If you know a new customer is worth $1,000, are you willing to pay $5 for a lead? Well, if 1 in 10 leads convert to an actual customer, that means you would spend $50 for $1,000 of new business.

PPA in the Google context is going to be important, so stay tuned to when Google releases it to all advertisers.

Today’s Washington Post had a front-page article entitled ”‘Click Fraud’ Threatens Foundation of Web Ads.” It’s a good overview of pay-per-click (PPC) advertising and the problems challenging the model.  Some of the more interesting facts and stats mentioned in the article:

• Google and Yahoo together handle more than 70% of all web searches in the U.S.


• PPC ads generated $5 billion last year, which is about 40% of the Internet advertising market.


• The PPC model is only about four years old.


• The Yankee Group research firm estimates that 10% of clicks on text ads are fraudulent.  Google claims it’s less, while others estimate it to be as high as 30%.


• Google employs “about three dozen” people who monitor click fraud, 20 of whom respond to click fraud complaints from advertisers.


• 39% of Google’s third quarter revenue ($1.04 billion) came from its affiliate network (text ads placed on other sites).


• New York ad agency Carat Fusion says that “sixty percent of new customers come through Google.”


• This summer, Google, Yahoo, Microsoft Corp., and Ask.com executives agreed to form a click fraud working group to develop industry standards.

Clearly, click fraud has the potential to be an enormous problem as the number of bogus companies and networks grows (and becomes more sophisticated).  To help maintain advertiser confidence in PPC, Google and Yahoo tout their dedication to combating click fraud with expert staff and innovative, secretive technology (which they conveniently can’t say too much about since releasing details on exactly how they fight fraud will tip off the cheaters trying to stay one step ahead).

The solution to all of this is mentioned indirectly in the article when John Slade, director of Yahoo’s click-fraud protection efforts, says that “advertisers must help search engines thwart fraud by sharing more information about what visitors do on their sites after clicking on ads.” This is where Google’s 2005 acquisition of web analytics package Urchin (now dubbed Google Analytics) starts to make more sense.  At the time, Google said their goal was, in part, to “help web site owners and marketers ... generate a higher return-on-investment from their advertising spending.”

Online advertising started with a nice enhancement to a basic offline model: pay-per-impression.  Rather than the wide estimates of how many people might see your ad in a magazine, online, you could know exactly how many times your ad was displayed and, presumably, seen by a potential customer.  Pay-per-click was a big step in the right direction when advertisers said “I don’t care about people just seeing my ad, I want web traffic—and I’ll pay more for that.” The next obvious step?  Pay-per-conversion (Google called it cost-per-action or CPA when they announced testing the new program in June).  Advertisers are now saying what’s been obvious all along—that they’ll pay the most for an actual customer.

It’s not a new idea, nor is the technology all that advanced.  Amazon’s affiliate program (and others like Commission Junction, LinkShare, and DoubleClick) has paid affiliate marketers based on actual purchases for years.

Part of the challenge, though, in combating fraud and implementing a pay-per-conversion solution is a technology one.  Site owners need to be able to share data with Google about what their users do on their sites after arriving through a text ad.  That becomes a lot easier when the site is using Google Analytics.  Whatever the data sharing solution, it has to be a largely automated one.  Google’s text ad success is a classic long tail example, which falls apart if the pay-per-conversion solution only targets the most advanced site owners and advertisers.

With massive amounts of money at stake, you can bet the problems around click fraud will be solved in the long run.  Will it be by thwarting fraudulent clickers through automated technology or by advancing the advertising solution beyond paying for clicks at all?  It may be too soon to tell.