INSIGHT blogArchive: October 2008

Archive for October, 2008

GOOGLE Algorithm Update…Coming Soon

31
October
2008

Google is always working on improvements that will help show the most relevant ads to searchers. Today they announced two changes designed to enhance how they calculate a site’s Quality Score and display rank.

George Assimakopoulos
Principal Manager

Google announced today they will be changing certain components to its algorithm over the next several days. The first change will help better evaluate the precise quality of an ad – regardless of its position on the page. The second change will improve how Google promotes ads to positions at the top of search engine results pages (SERPs). Let’s take a look at both of these changes in more detail.

More precise Quality Score calculation
Google is now weighing Click-Though Rate (CTR) as the most significant component of Quality Score because it directly indicates which ads are most relevant to searchers. Typically, ads in high positions earn better CTR than those in low positions, because ads in higher positions are more visible to searchers. To calculate the most accurate Quality Scores, it’s important that the influence of ad position on CTR be taken into account and removed from the Quality Score. In the coming days, Google will update the portion of the Quality Score algorithm that accounts for ad position. This will result in more accurate Quality Scores, ensuring that ads compete fairly for position based on their quality and bid, and enable Google to show the most relevant ads to searchers by rewarding high-quality advertisers with better ad positions.

Higher quality ads above the search results
Google is also changing the way they determine which ads show in the yellow region above the search results. These positions are particularly valuable to advertisers because they are prominently positioned on a SERP page. Given their prominence, it’s especially important that these ads be high quality; therefore Google will place extra emphasis on quality when determining which ads to show in this location. To appear above the search results, ads must meet a certain quality threshold. In the past, if the ad with the highest Ad Rank did not meet the quality threshold, Google may not have shown any ads above the search results. With the coming update, Google will allow an ad that meets the quality threshold to appear above the search results even if it has to jump over other ads to do so. For instance, suppose the ad in position 1 on the right side of the page doesn’t have a high enough Quality Score to appear above the search results, but the ad in position 2 does. It’s now possible for the number 2 ad to jump over the number 1 ad and appear above the search results. This change ensures that quality plays an even more important role in determining the ads that show in those prominent positions.

Keep in mind that these enhancements may cause changes to any campaign’s ad position, spend, and performance. The good news is that this will level the playing field even more across competitive industry segments – especially for non-branded keyword terms.  Google is essentially announcing that they are weighing in favor of "more clicks with lower bids". Our assumption is that challenging economic times have forced businesses and organization to bid down of keyword terms and thus search volume is likely down.  As a result, Google is changing their algorithm in an attemp to maximize clicks – even if they come at a lower cost-per-click.

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E-mail Open Rates Best Practices

30
October
2008

E-mail open rates should be compared internally, not to industry standards.

Ryan Moss
Media Coordinator

E-mail marketing has become extremely popular, but many marketers still do not understand how to measure the success of open rates. The issues that arise include: what is a good open rate? What is the industry standard? Fortunately, these questions are relatively easy to answer.

Most e-mail marketing experts, myself included, agree that companies should not compare their own open rates to industry open rates, and that there is no set "good open rate." Instead, it is recommended that companies compare their results internally. The first e-mail blast should be used as the benchmark and from there, companies can compare subsequent e-mail blast open rates. One of the goals of e-mail marketing programs is to have continuous improvement with regard to open rates.

There are a couple of reasons why it is not good to compare your own results to the industry standard. One of the main issues is that there is no set way to calculate open rates and therefore, different e-mail service providers (ESPs) calculate open rates differently. If the "industry standard" open rate is calculated one way and your open rate is calculated another way, it is not an accurate comparison. Additionally, how the names on your list were acquired affects open rates. People use many different techniques to grow their contact lists (co-reg, viral marketing, website sign-up, etc.). Because of this, some lists have a more active following than others and thus will likely have a higher open rate.

Remember with e-mail open rates compare numbers internally and not to industry standards. Strive to improve the open rate with each e-mail blast sent out to achieve maximum success.

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Great Marketing for Lousy Economic Times

29
October
2008

Economic problems continue to mount in the United States and consumers are spending less resulting in lower revenues. As a consequence marketing budgets are getting tighter. Now, more than ever, organizations must optimize their marketing efforts.

George Assimakopoulos
Principal Manager

Recessions are periods of opportunity that can be taken advantage of or which can take advantage of you. By cutting your marketing activities, not only will you sell less than if you had kept your marketing steady but you may lose core customers to competition. That means you’ll have to spend more time, money and energy in the future to win them back. We have noticed that across our vertical clients online marketing budget are not getting cut - but we are getting scrutinized like never before.  We have to choose promotional indulgences carefully and we must prove the value of emerging Web 2.0 media expenditures.

During such challenging economic times, we remind our clients that "the low-hanging fruit" opportunities should be where we concentrate marketing budgets to mazimize return on advertising spend (ROAS).  David Warschawski of B2B Magazine illustrates this point well in his most recent article.  He says "…even when a business is cash-strapped, there are ways to market that enable you to enjoy greater dividends. Two online marketing strategies that have great return on investment are:

1)  Reaching your core target audience through brand-centric public relationship campaigns that secure local, regional and trade media coverage.

2)  Updating your Web site so it uses the latest search engine optimization techniques. This will dramatically increase your chances for being found when members of your core target audience do an Internet search for your type of product or service."

Smart businesspeople know that when they continue to invest or buy even more when the stock market is down, they secure a stronger future for themselves. The exact same approach is true for marketing.

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Twitter for Marketers

27
October
2008

How to use Twitter as a marketing strategy.

Stefanie Berliant
Media Coordinator

The spotlight on Twitter.com has only become brighter in this past year. Viral in nature, Twitter allows for real-time group conversations and encourages link sharing.  According to Nielsen Online, Twitter is the fastest growing US online social networking site with a 343% in year-over-year audience growth.

Marketers are now capitalizing on the popularity of Twitter as a new online marketing strategy, a social marketing tactic, to promote their companies by driving traffic, brand awareness and healthy online discussion about the products and services. 

Marketing Sherpa offers tips to integrate Twitter in a company’s online marketing mix. First, a company must identify its target audience on Twitter. Members can be targeted based on location and on behavior and interests though community “hashtags” or groups.

When making “tweets” or updating content, keep the volume and timing appropriate. The content of your tweets will depend on the target audience’s interests and on the goals of the organization.  Technology allows for easy conversion of existing RSS feeds to tweets. Another option is to create customized accounts and/or fictional characters to represent a company.

In order to grow the audience base, it is important to interact with the members you follow, encouraging communication and interaction by replying to posts or “re-tweeting” updates to your own followers.

Finally and most importantly to any marketer, track metrics to determine the success of the Twitter marketing campaign.  Twitter allows members to monitor page views generated and track clickthroughs. Additionally members are able to track how its audience accesses Twitter updates either though mobile devices or directly online.

While Twitter has further evolved the presence of the web, make sure that a company has the time and resources to invest in “twittering” should it decide to incorporate Twitter into its online marketing strategy. 

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Paid Search Spending On Rise, Despite Economic Turbulence

21
October
2008

A high majority of marketers plan to either maintain or increase spending on paid search within the next year

Christine Pepin
Media Coordinator

A study conducted by JupiterResearch revealed that over 80% of marketers spending at least $50,000 per month on paid search advertising will maintain or increase this spending by next year.  With hard hits to the stock market and the country in economic crisis, budgeting for future marketing efforts is a challenge.  However, paid search advertising is a tactic marketers are unwilling to do without.  This year, marketers spent the majority of their budgets on search, followed by display ads, then classifieds.  Although significantly less was spent on lead generation this year, eMarketer predicts this ad format will see a 46% increase in spending, compared to search’s rise of 44% by 2013.

Between 2009 and 2013, eMarketer estimates that paid search advertising will double, approaching $23 billion.  Senior analyst at eMarketer, David Hallerman, states “Even if the economic crisis levels off this prediction, made in August 2008, the accountability of paid search makes it more valuable than most other forms of advertising, online or offline.”

Change in Paid Search Spending

US Online Ad Spending

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Presidential Campaigning In Video Games

16
October
2008

To campaign in swing states, Barack Obama is using a new medium: video games.

Ryan Moss
Media Coordinator

Many people were impressed when presidential candidate Barack Obama utilized viral marketing to help raise money for his campaign. Now Senator Obama has taken campaigning to a new level as he is advertising in nine major video games in 10 swing states.

Electronic Arts (EA) has confirmed that Senator Obama purchased in-game ad space in Madden NFL ‘09, Burnout Paradise, NASCAR 09, NHL 09, NBA Live 08, Need For Speed: Carbon, ProStreet, NFL Tour and Skate. This advertising program, which consists of Obama ads on stadium signs or billboards, is aimed at males 18-34 who are the main users of the selected video games. Online gamers in Colorado, Florida, Iowa, Indiana, Montana, North Carolina, New Mexico, Nevada, Ohio and Wisconsin are exposed to these ads, in a program that will run from October 6 until November 3.

EA also contacted Senator Obama’s opponent, Senator John McCain to see if he would be interested in a similar program, but Senator McCain declined.

This is the first time a presidential candidate has used in-game ads to campaign. Whether it will be successful remains to be seen. If it is successful then this will likely become a trend for future elections and possibly even for private businesses.

Image from Burnout Paradise on Xbox 360
Example of Obama Video Game AD

 

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Online Marketing and the Economy

14
October
2008

How are the ups and downs in the stock market affecting online ad spending?

Stefanie Berliant
Media Coordinator

A September 2008 survey by Epsilon shows that of 175 CMOs, 63% increased their digital marketing spend in 2008 and 53% have decreased their traditional marketing spend. This survey confirms the ongoing trend that digital ad and marketing spending is growing as traditional ad and marketing budgets are reduced. However 66% of those surveyed believed that total ad spending would fall as a result of the economy. Additionally, many companies have reduced their online ad spending estimates. Their forecasts still show growth, but at a slower rate.

How resilient is online marketing to the unpredictable economy? Despite the rollercoaster the stock market has been though in the past couple of weeks, the numbers for online ad spending in first half of 2008 seem generally strong, according to Interactive Advertising Bureau and PricewaterhouseCoopers.  Their data shows double-digit growth in search, display (i.e. banners, rich media and video) and e-mail when compared to the first half of 2007. Compared to the first half of 2007 overall ad spending has increased by 15.2% in the first half of 2008.

One category that did have a 5% decrease in ad spend was online classifieds.  Classified ad buys tend to be short-term purchases with short-term objectives. Due to this nature of classifieds, these types of ads give a better snapshot of the strength of the economy. This negative growth closely reflects current economic weakness. The reason why most display-related ads have experienced positive growth is because they are contracted in advance. For that reason, they are not good indication the current state of the economy.

However, it is important to understand that the state of the economy is only one factor in what affects ad spend. Some believe that the ad industry was undergoing a major transformation, even before the crisis at the end of September occurred, moving from a media marketplace of high demand to one of high supply. But as both studies show, companies should continue to reallocate traditional marketing budgets to online.

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To Text or To Call, That is the Question

1
October
2008

Marketers continue to recognize the increasing potential of direct communication with their audience as text messaging surpasses mobile phone calls in Q2

Christine Pepin
Media Coordinator

According to Nielsen during Q2 of this year, more text messages were sent by the average U.S mobile user than phone calls.  Although there is a significant difference between these two modes of communication, they are not comparing apples to apples.  Far more information is expressed in one phone call than in one text, and therefore the ratio for what is conveyed is not 1:1.  Nonetheless, the research identifies a rise of mobile use, and specifically the medium that brings instantaneous connection to the user.  Marketers, who are constantly looking for ways to break through clutter and noise, see the value of this direct communication.

While text messaging is a great way to contact an audience, its success relies heavily on proper demographic targeting.  A common mistake made by marketers is relating texting to synchronized emails, which appears similar.  However, as Nielsen reveals, mobile users under the age of 25 are the ones relying primarily on text message.  The two mediums do not share the same primary users and this difference must be considered.  Senior Analyst at eMarketer, John du Pre Gauntt, reminds us of this distinction and encourages that “Marketers engaging with text still need to master the art of conversation.”

Average Monthly Calls and Texts per US Mobile Phone

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