September 12, 2012
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Search Advertising Fundamentals
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Search Ads
Paid Search AdsNatural search results
95% of Google
Revenues
From Search to Purchase
AdvertiserPlaces ad on Search Engine (ex. Google)
UserTypes keyword and find results on Search Engine
Clicks Ad and enters Web site Looks at
Products on siteExits from the
site – No purchase
Looks at Products on site
Makes aPurchase
Advertisergets Revenue
Return on Ad Spend (ROAS) can be ascertained
From Search to PurchaseSearcherSearches for
Relevant info.
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Bill Gross – The Founder of Paid Search Advertising
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World’s First Pay-Per-Click Advertising Engine. Later Changed its name to Overture.com
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Yahoo to buy Overture for $1.63 billion
July 14, 2003 1:21 PM PDT
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Salar KamangarIn early 2002, a Google employee, Salar Kamangar, now 28, convinced Mr. Schmidt and the founders to switch to an auction-based system like the one set up by Bill Gross, the head of IdeaLab. Mr. Gross had created Goto.com, a search engine made up entirely of ads, where advertisers paid only if their ad was clicked on, and the advertiser who bid the most per click was listed first.
He helped Google change the rules of the game
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In 2003, US Paid Search Advertising Revenueswere $972 million.
In 2011, US Paid Search Advertising Revenueshit $14.8 Billion (up 27% over 2010 revenue).
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Paid Search Advertising is..
• Measurable.
• ROI focused.
• Relatively in-expensive.
• Great source of consumer insights.
Best Practices in Search Engine Marketing
Build a Marketing Plan
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70% of retail search advertisersdo not have a marketing planthat connects goals – strategicinitiatives and tactics.
The “GOST” Framework
Primary Goal
Secondary Goal
Strategic Initiative #1
Strategic Initiative #2
Strategic Initiative #3
- Tactic 1- Tactic 2
- Tactic 1- Tactic 2
- Tactic 1- Tactic 2
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Primary Goal
Secondary Goal
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Strategic Initiatives
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Paid Search Tactics
The “GOST” Framework
Grow Sales Revenue by
120% to $xyz
Revenue/Cost > 8x
Promote “star” products
nationally.
Flank competitors
using Private Label
Gain 30%+ PPC SOV in top 5 states
- Expand Reach- Create
Differentiation
-Map Competitor Activity
- Include Price in ad copies.
- Track Impression
Share- Local buying
behavior
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FY 2011: Y/Y SEM Results
• Y/Y Revenue Growth = 220%.
• Revenue/Cost = 11 x.
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Deciding what products to promote via paid search
• Scrub your keyword list regularly• Time Bound promotions to boost sales• Experiment with ad copies and landing pages
• Focus on Efficiency and growth• Controlled Keyword list expansion• Identify new sources for keywords
Is Keyword Search AdvertisingRight for you?
•What’s your average order value? What is the order margin?
Velocity
Margin
Keyword Strategy and “Return on Investment”
Ink Cartridges
Gourmet Food (ex.
steak)
No-brand trinkets
High End Jewellery
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Key Points
• Category level segmentation based on margin and velocity.• Unique paid search strategy for each segment.• Pre-Plan the keyword mix for each segment.• Treat trademark and non-trademark campaigns separately.• Treat each keyword as a “profit center”.
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A Structured Approach to GrowingThe Paid Search Program
The Opportunity Matrix
Consumer Markets Competitors Occasion
Keyword Strategy
Ad Copy Strategy
Bidding Strategy
Landing Page Strategy
SE
M
E
lem
ents
Non-SEM Factors
• Provides a framework for targeted testing.• Combination tests can open up new opportunities.• Establishes a logical construct for testing causal relationships.
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Paid Search Revenue Has Dropped.I don’t know why?
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x x x =Impressions Click through
RateConversionRate
AverageOrder Value
SalesRevenue
• Precise Problem Statement. • Which of the elements below has dropped. How much?• Since when has the drop been observed?• List Possible Causes for drop in specified element.• Test results to establish the Most Probable Cause.
5 Step Problem Analysis
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Are All Paid Search Clicks Equal?
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Tracking Revenue/Click across geos for Lenovo.com
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What does this mean for the search marketer?
• Geo-targeted customer acquisition strategies.
• Deeper shopping cart analysis for different geo’s.
• De-code geo-specific customer purchase patterns
to create more precisely targeted campaigns.
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Summary
1. Use the GOST Framework to structure your Marketing Plan.2. Know what products to advertise via Paid Search.3. Use the Opportunity Matrix to Grow Paid Search Program.4. When Paid Search revenue drop happens, use 5 step Problem Analysis process.5. Evaluate the Quality of Paid Search Clicks by Geos. to create targeted campaigns.
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Questions Please
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NetElixir Inc.
Email: [email protected]: www.netelixir.comPhone: 609.356.5112
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