Rank first in Google! Or Last, maybe.

The other week Google introduced a new ad position on their results pages, at the bottom of the page. Reporting in AdWords will only display two ad positions, top and other, grouping impressions on ads at the bottom of the page with those generated from ads to the side. The ‘Top vs. Side’ segment became ‘Top vs. Other’.

In the blog post announcing the launch the change was explained as providing benefits for the user experience without compromising the advertisers’ interests:

In many cases, we have found that displaying ads below search results fits better into the user’s flow as they scan the page from top to bottom. On average, this placement performed better than side ads in terms of click-through rate in our tests.

This change was not made without testing and enough data to give a clear indication of what the likely effect on the market would be. Ads have been seen in this position in a number of different markets prior to the announcement. Pre-launch testing is not all that surprising from Google and has been seen many times in the past.

Movement in the SERPS

Is there any value to the advertiser in appearing at the bottom of the search engine results page (SERP)? It is almost certain that, now that it is launched, Google found no problem for themselves, however their interests do not always correspond to that of their users, or customers. Adding ad positions below the fold has even attracted the attention of non-digital marketers, and how this change and the uncertainty it introduces would affect the perceived value of an AdWords click.

Click throughs by Average Position on the first page

Graph from Click Throughs in the Search Results

A lot of data has been graphed and blog posts written on how organic listings below the first two do not receive a lot of traffic. The difference between the click through rate of AdWords ads positioned above the organic results and those to the right is significant. Putting ads below the tenth spot certainly doesn’t seem like it would increase the number of clicks each ad could get. But maybe that is not the point.

Splitting ad positions between the top and the bottom of the SERP differentiates the two positions further than between the top and the side. The top results will appear less cluttered with fewer links, even with the addition of more Google Places content.

For the AdWords advertiser, the perceived and probably actual value of a top three position also increases. With additional ads moved to the bottom of the page, the amount of above the fold screen real estate available is reduced.

Differentiated Impressions

Like the introduction of above the fold bidding on the content network, creating further differentiation between advertising inventory in AdWords creates additional products. Moving some of this inventory below the fold creates a greater difference in value, and potentially intensifies competition for one class of product.

The cost for placements above and below the fold will change as a consequence of this. The cost of traffic for placements consistently appearing below the fold will probably increase. Decreased visibility will affect their click through rate (CTR), and as a result negatively affect Quality Score (QS).

Placements at the top of the page will probably benefit from this. What one position loses in exposure the other should gain. The Quality Scores for the top placements should improve, if they receive a greater share of the advertising traffic for any given SERP. To what degree this will result in a lower cost per click will depend on what, if anything, changes in bidding behaviour from the other participants in the market.

The most likely outcome from Google’s latest change to how AdWords ads are displayed is an increase in revenue per impression. Creating greater differentiation between advertising inventory will encourage advertisers to modify their tactics and spending to maximise impressions above the fold, possibly raising the average cost per click. Moving one kind of ad position to a position below the fold will increase the value and yield on those that remain above, while the almost inevitable decline in CTR and QS will increase their cost per click.

Update: Google announced in a blog post titled New ways to take action on top of page bid estimates new tools to automate bidding to appear specifically above the fold. While it is not like the options introduced with above the fold bidding on the content network, the effect is the same.

Generic versus Brand Searches

Creating a Generic versus Brand Search Rule

Brand search term rules are so important that Google Analytics uses ‘Generic Keywords vs Brand Keywords’ as an example name during the custom Multi-Channel Funnel grouping creation process. It is a very powerful tool, assessing the general performance of a search related campaign, paid or otherwise. Further segmenting search by paid and unpaid and adding both direct and referral traffic makes it even more useful.

Search, Direct and Referral Paths

Search marketing is a great opportunity to reach people without much awareness of your brand and change their behaviour. Online search is more or less a de facto collection of bookmarks, where people enter queries based on URLs, brand or product for sites they have already visited. Tracking queries by the presence of brand terms through Multi-Channel Funnels can reveal how often non-branded search leads to branded queries, direct or referral sales. This can be a great tool for selling the value of SEO internally by demonstrating its value in the customer’s product research behaviour.

Regular Expressions for the rules

Regular expressions are a great way to keep your sanity when you are building the rules for any group of keywords. For example, brand traffic is not just going to be attributed to the correct, proper name of the brand. Variations in spelling and construction have to be accounted for. As an example, for tracking queries on the brand ‘Greyhound Australia’, the regular expression would include the brand and its most common misspellings:

greyhound|grey hound|grayhound|gray hound

The same kind of regular expressions can be used in other rules, like product terms or search terms targeted in a focused SEO project.

Product Terms with or without Brand

Whether or not a search contains a brand term only really speaks to awareness. Brand terms alone don’t distinguish between navigational, informational or transactional queries. A search for just ‘Greyhound Australia’ is clearly navigational. The search lacks any other qualifying term and Google’s recent change to how sitelinks are displayed for some queries seems to indicate even they regard such searches as purely navigational.

Brand rules with and without product terms

Creating rules that label traffic using qualifying terms and traffic that doesn’t can make the difference between navigational and informational searches in the funnel clear. Differentiating between a search for ‘Greyhound Sydney to Canberra’ and ‘Greyhound Australia’ is the difference between seeing a funnel with two brand searches, and a funnel with a search for a product including a brand term and a navigational brand search.

Campaign Source Attribution

There are more online customer acquisition channels than search. Directories, display networks, guest posts, links and advertorial are all tools that can reach new customers or initiate research and purchase behaviour. Multi-Channel Funnels and custom groupings make it easy to see how they feed into other traffic sources.

Tracking more than search traffic

Adding rules for campaign URLs used in advertising or branded content and source URLs such as social media touchpoints make it possible to see how these activities drive customer behaviour. The ability to identify campaigns that drive sales both directly and through other channels make informed decisions regarding future activity easier.

Custom Groupings: Just Start Using Them

Multi-Channel Funnels make it easier to see what works, what doesn’t and how certain activities can lead to sales. The ability to differentiate between broad information searches and brand focused queries and identify how they are linked across different search mediums is valuable. Tracking conversions across campaigns and channels makes it easier to make informed decisions about social media activity, guest posts and display advertising or directory lists as well.

Plan how to integrate Multi-Channel Funnels with your current online activities. The process to get started can be as simple as:

• Create custom Channel groupings focusing on sources that matter:
  • To you
  • To the people you report to
• Create new Channel groupings from existing ones to monitor new campaigns and sources
• See what works, see what doesn’t, see what can be improved

What are your Must Have Multi-Channel Funnels?

The single most important thing I think Multi-Channel Funnels can give you is the ability to see what broad research behaviours lead to direct navigational activity, either as direct visits or navigational brand searches.

How are you going to use these new tools in Google Analytics?

Total Impressions by Quality Score

The data used in the last blog post demonstrated that Quality Scores of between 7 and 10 featured prominently in Average Positions of 3.9 and higher, and that the bulk of impressions the campaign received were a result of terms with a Quality Score of 7 or higher, barring one outlier at Quality Score 4 in the dataset.

Impressions for Quality Score or Impressions for Keywords

That most Impressions occurred through a Quality Score 7 or higher keyword becomes less remarkable once the number of keywords at each Quality Score is considered. An easy majority of the keywords from the data used in the original blog post had a Quality Score of 7 or higher.

Number of Keywords by Quality Score

How do the keywords with a Quality Score of 7 differ from those at other levels? Google has publicly stated that Quality Score is calculated using a number of factors like:

• The historical clickthrough rate (CTR) of the keyword and the matched ad on Google; note that CTR on the Google Network only ever impacts Quality Score on the Google Network — not on Google
• Your account history, which is measured by the CTR of all the ads and keywords in your account
• The historical CTR of the display URLs in the ad group
• The quality of your landing page
• The relevance of the keyword to the ads in its ad group
• The relevance of the keyword and the matched ad to the search query
• Your account’s performance in the geographical region where the ad will be shown
• Other relevance factors

Ignoring the “don’t be an idiot” factors such as landing page quality and relevance of the keyword to the ads in the ad group, Quality Score is mostly influenced by the performance of the search terms, the keyword, the ad and your own account history.

Impressions, Quality Score, Click Through Rate and Cost Per Click for Quality Score 7

Click Through Rate, Exact versus All Shown by Impressions for Quality Score 7

Quality Score is strongly associated with the Click Through Rate (CTR) on the exact match of the keyword in the campaign. It is not easy to get to this data through AdWords, either online or with their desktop tool, and usually requires a little work in a spreadsheet.

The dataset use for an Impure.com workspace compares the keyword’s exact match Impressions, CTR and Cost Per Click (CPC) with those listed for all searches it accounts for. The exact match data was acquired through the all search term report available through the AdWords account management site.

For keywords with a Quality Score of 7, there is a relationship between the exact match Impressions it receives and the CTR it has. Keywords at this Quality Score with more impressions tend to have a lower Click Through Rate than those with fewer. This pattern does not hold for the Click Through Rate of all impressions triggered by the keyword.

Exact Match CPC by Impressions and Click Through Rate for Quality Score 7

The relationship between exact match Impressions and CTR also exists for Cost Per Click. Keywords with more Impressions also pay less per click. Again, once you use data for all Impressions triggered by the keyword, this relationship seems to disappear.

All Searches CPC by Impressions and Click Through Rate for Quality Score 7

For the campaign examined, it appears that it is the volume of Impressions that the keyword receives for a Quality Score of 7 that can influence CPC as much as Impressions. However, the relationship this has with the cost for all clicks received as a result of phrase or broad match is a little unclear.

Regarding Quality Score as a bulk discount rather than a relevance score is a more meaningful perspective. At least within the dataset used and for a Quality Score of 7, the more Impressions and the better the Click Through Rate, the cheaper the traffic.

Defining Click Through Rate, Average Position and Quality Score

The definitions for Click Through Rate, Average Position and Quality Score below have been quoted from Google AdWords help pages.

• Click Through Rate (CTR)
  • The number of clicks your ad receives divided by the number of times your ad is shown (impressions). (Source)
• Average Position (Avg. Pos.)
  • Refers to the average position on a search result page that an ad appears in when it’s triggered by that keyword. (Source)
• Quality Score
  • Quality Scores help ensure that only the most relevant ads appear to users on Google and the Google Network. (Source)

Visualising Click Through Rate by Quality Score & Average Position

A guide to the Impure.com graph linked to. Either use the embedded graph, or click this image to go to the active work space and explore it further.

In this example set of campaign data the distribution of high CTR by both Quality Score and Avg. Pos. is clustered near an average position of one, and a Quality Score of between 7 and 10. A lot of the traffic in the campaign had a Quality Score of 7 and as a result, activity associated with that Quality Score uis present in most ad positions above the 5th spot on the result page. The workspace was created by Impure.com, a rather cool tool that makes it possible to share visualisations and let others explore them further.

While a high Quality Score tends to mean that the keyword is in a higher position in the Search Engine Results Page (SERP), it is not the most significant factor. In the attached graph Click Through is more closely linked to Average Position, regardless of its apparent Quality Score.

Click here for the full, active, workspace.

The graph shows average CTR for an Average Position and Quality Score. Position one and Quality Score ten are in the uppermost corner, with the largest spike in both data-sets. When the 3D Surface visualisation first opens, Quality Score is displayed as ten on the rightmost line, through to one on the leftmost. Average Position is depicted as highest on the page closer to the original point of view.

The Graph and the Data

The first file linked to via the switch, ‘all-qs-avepos.csv’, uses a complete campaign, whilst the second, ‘number-ctr.csv’, displays only a small sample from the original. The third, ’1-39-ctr.csv’, only has data for average positions 1 through to 3.9.

In the campaign examined, the most active average positions are between 1 and 3.9. Whilst there are impressions recorded for other positions on the page, it is this area where most of the activity is recorded. A histogram where you can explore how impressions, clicks and so on related to reported average position can be found here.

Determining Average Position in Google’s Results

Cost per Click, Average Position and Click Through Rate

There is a strong connection between an ad’s Average Position and its Click Through Rate in Google’s search results, in the same way as there is a strong relationship between Quality Score and Click Through Rate, even with the indeterminate number of other ranking factors Google AdWords takes into account.

A Quora question; “Does “broad match” on Google AdWords often lead to lower quality scores for keywords?” touches on a few of the more interesting points regarding just how Google uses Click Through Rate data to determine a keyword’s Quality Score. Google’s own explanation of the topic is also worth reading through.

Ultimately, if you are willing to spend enough, you can get almost anything to appear near the top of Google through AdWords. Quality Score is in effect a discount for both providing an ad that does not seem to annoy the users and bulk buying traffic, represented by a higher Click Through Rate. Quality Score deserves its own blog post, and so it will be covered further in another post.

But do not mention the content farms

This February has been a month of drama for the search industry. It started with Google accusing Bing of cheating at a search panel at the start of the month. Google followed up the lively panel discussion by publishing a lot of screenshots explaining why they are convinced that Bing was using their search results as a ranking factor.

The write-up on how they did this is pretty comprehensive, but just briefly: they planted artificial queries and set sites to rank for them within their own live directory. They then used the queries and clicked on the links they planted there with computers running Windows, Internet Explorer and with the Bing toolbar installed. It was published on Google’s official blog after the talk, and found its way into the USA’s mainstream media, in a severely abridged form. Bing responded shortly after as well, and put their case forward on their own blog.

In the discussion that developed around this very public fight, kilobytes of text were used to list which search engine came up with what. Google’s copying of Bing’s left column and infinite image search scroll were mentioned, as was Google’s universal search. Issues like whose content Google was incorporating into their own product, sometimes against the owner’s wishes, emerged too. Google’s original statements regarding their own manual control over a site’s position in search emerged, and their original statement “we do not have the capability to manually change it” was brought up.

In all the excitement however everyone seemed to forget what the search panel was expected to be about: content farms, and poor quality content funded by AdSense. The discussion about search quality that permeated the search and Internet marketing community seemed to be forgotten. Even the long running debate over whether or not Google was favouring their own products, such as YouTube and Google Places, was forgotten for a little while.

Adapted from BrisbaneOnlineMarketingMeetup.com – Purported SocMed / Digital Marketing Gurus

Winning at PVP in EVE Online

Wining at Spreadsheets in Space

PVP in EVE Online is not fair. In fact the challenge in PVP in EVE Online is in setting up these unfair encounters. In most MMORPGs, the actual act of combat consists of a few mouse clicks and some waiting. EVE Online is no different. It is the risk of losing stuff that makes players focus on everything before the actual combat a lot more. It is taking the right mix of ships, avoiding being out-numbered and cornered by a superior foe and acting before the opponent even knows they are in a fight where player skill starts to make a real difference.

Why SEM is like EVE Online PVP

Search Engine Marketing (SEM) in very similar to PVP. It is a zero-sum environment where operators compete for a resource through actions governed by a set of rules and environmental factors generated through user behaviour. There are a few principles that carry over from EVE Online PVP to SEM.

• Situational awareness is king
  • Know how the advertising network works
  • Understand competitive activity
  • Understand how the market behaves
• Observe, act and assess
  • Analysis without an accompanying action is useless
  • Assess the effectiveness of activity & reassess decision making model
  • And repeat…
• Know where you can compete and where you can’t
  • Don’t waste time & resources competing directly with advertisers intent on outspending you
  • Find alternative ways of reaching potential customers.

Information is the key. Understanding how the query space works, having good situational awareness, and knowing where in the sales funnel certain terms are is valuable. It won’t save you from the SEM equivalent of a gate camp (high margin and ‘branding’ campaigns with large budgets), but it is essential for remaining competitive without burning through your budget.

Google has just announced that Ad Sitelinks are now available for any campaign and the introduction of seller rating extensions. Getting Ad Sitelinks to display is still dependent on the ad meeting certain criteria, most probably relating to the spot on the page the ad displays in as determined by bid, competition and click through.

Ad Sitelinks provide alternative points of entry to the site aside from the main landing page, allowing the advertiser to offer alternative offers. Links to areas such as “Store Location”, “Quote Calculator” or “Product Reviews” can appeal to viewers who might not have responded to the main offer.

Search can be a powerful indication of intent, but with more generic terms, the action or information sought by the market can vary between individuals. With branded or descriptive terms the visitor might be seeking further information beyond the noun and a price point. Ad Sitelinks makes it possible to provide this at first glance, and generate traffic where the user may otherwise have continued on to the organic listings.

Using the same visual language of the organic results also makes the ad appear more authoritative and trustworthy. The addition of seller ratings can create the same effect. Creating richer content in a format closer to what the user is trained to look for on a SERP gives the advertiser the opportunity to disrupt their normal search and engage with the ad.

The data generated by a campaign is not a true representation of the population. The data is a snapshot limited by the markets targeted and the visibility available for the budget spent. Any single campaign can be exposed to direct competition over the whole market or specific subgroups. For example, just because “Campaign A” does not get traffic from Victoria does not mean that no-one in that state is searching for “Keyword B”.

A competitor could simply be focused on that market and value the traffic more. Other factors to consider are the effectiveness of the competition’s creatives and offers, the appeal of their product, efficiency of their site in turning clicks into sales and how much they return per conversion. All of these factors will influence their budget, and how much they are willing to spend per click or impression. Tools provided by the advertising networks that increase the efficiency of campaigns like Remarketing are also worth considering.

According to Wikipedia, a confidence interval is defined as:

…a particular kind of interval estimate of a population parameter. Instead of estimating the parameter by a single value, an interval likely to include the parameter is given. Thus, confidence intervals are used to indicate the reliability of an estimate. How likely the interval is to contain the parameter is determined by the confidence level or confidence coefficient. Increasing the desired confidence level will widen the confidence interval.

In use here, it is assumed that between similar competitors, the average Cost Per Acquisition (CPA) within the group is likely to be within a 95% confidence interval of the known CPA.

Confidence interval and estimated CPA

Confidence interval can give you an estimate of what other bidders may be paying for a conversion, assuming they are operating as efficiently as you are. In the graph included above, confidence interval of the CPA is used to estimate the most likely highest possible CPA a campaign can still compete on. In conjunction with Cost Per Click data, it is fair to assume that the competitors in the query space are willing to spend over the highest likely observed CPA. Reasons for their bidding strategy can vary from shutting out competitors by absorbing a short term loss, to a higher sustainable CPA. In a query space where a number of different verticals are competing for the same traffic, this metric is considerably less useful and your mileage may vary. For comparing CPA campaigns, creating a model for understanding the market, or simply to assess which ads are potentially performing a lot better or worse than your target in the face of direct competition, it is a useful tool.

Confidence interval can be a guide to how much your competitors expect to spend per conversion, assuming a lot of similarity in product and business practices. Arbitrage and industries with heavily commodified products are prime candidates for this, as well as campaigns with a very aggressive high cost bidding strategy, such as those competing directly with another member of your industry.

This volatility is an interesting challenge for account management, and can create a risk in responding to rapid changes. Low traffic and conversion numbers make it difficult to collect meaningful data over short time periods, making it hard to tell the difference between an emerging negative trend and an outlier. This creates problems in both managing low activity campaigns, campaigns in highly competitive and volatile markets, and new campaign testing.

Averages, Standard deviations and Confidence intervals

Averages, standard deviation and confidence intervals are a few statistical tools available for analysing the data. The actual figures used to determine response will vary from campaign to campaign even for the same product, due to other factors such as the size of the audience and the means used to reach them. The tools used to explore the information and create heuristics for guiding analysis often will not change.

The sample data tracks a gradual upwards trend in the average cost per conversion in a focused Adwords campaign. There is an outlier at double the mean that skews the mean and standard deviation in the third reporting period. Normally this would be discarded, as its apparent effect on both the reporting period and ongoing mean and standard deviation is significant.

It is only on the fourth reporting period that the data starts to become consistent. While there is still some volatility in each reporting period, the reporting period mean remains within one standard deviation of the ongoing mean. The hypothesis that the ongoing campaign mean at four reporting periods can be used as a guide for this campaign is supported by the confidence interval of the whole campaign data set. In the example campaign, it can be assumed that after four reporting periods, there will be enough information to make decisions regarding optimising this campaign.

The figures based on the whole campaign can be used as a guide for assessing the effectiveness of specific ads, placements and keywords while minimising the risk of removing a creative that can still be productive. These metrics provide a guide for deciding when a campaign, keyword or creative needs direct intervention, or may just be having a bad week.

The model that you create using data from previous and current campaigns is ultimately only a guide. It can be used as a framework for assessing creatives and traffic, but these heuristics will only ever be as good as the data they are derived from. There is need to review of any model used to guide the decision making process periodically. The market is constantly changing, be it SEM, social or display advertising. Factors such as seasonality of the product, external environmental factors and competitor activity can have a significant impact.

There is another question that is just as important as the skills with which their studies have equipped them. What have they never been exposed to? It is too easy to assume that the recently graduated are all familiar with every aspect of their chosen profession, from SEO to PPC, site design and email marketing. However, even basic technologies like RSS and server-side statistics may be new to some recent graduates.

Does university deliver what we think they should?

Unfortunately when you are in the fishbowl it is too easy to forget that what you take for granted is not common knowledge and may not even be mentioned in a thirteen week course. While miles of column-inches have been devoted to proclaiming the younger generations as computer savvy savants, very little attention has been given to what this might actually mean in terms of a marketable skill set. Years spent on Myspace and a degree with the words ‘online’ and ‘internet’ does not an online marketer make.

Staying up on the edge

What is important is something that is not, in my experience, taught in university: a drive to learn and experiment with new ideas. The tools to do this are easily accessible, and should be introduced at university as well. In the courses that I did part-time, very little of what I already knew was actually covered. In fact, a lot of what was covered was not up-to-date with strategies where I worked at the time.

Professionally in this field it is negligent to not spend at least some of your own time exploring new things and keeping up with the latest developments. Is this reflected within the universities, or is it something that the graduates are expected to stumble upon?