At Net Media Planet we are constantly striving to maximise clients PPC campaign performance by getting the best ROI for their advertising spend. We are often asked the question as to the benefits of clients bidding on their own brand term where they rank in positions 1 naturally in the Search Engines.
Brands want to know whether the uplift in the number of sales they receive from bidding on their brand terms is profitable, when you take into consideration the cost of their brand bidding through Google. Or whether this budget is better spent elsewhere (further coverage of generic keywords to attract new customers) and letting their natural rankings pick up the sales on their brand terms.
As a result we have been running incrementality tests for some of our clients in order to measure the uplift in revenue generated by bidding on brand terms through PPC, compared to revenue generated through SEO when PPC is paused. By taking into account PPC costs, this measured uplift in revenue can then be used to calculate incremental profit generated from PPC activity.
As this is a common question within the industry, we developed an approach to show a fair and accurate test of bidding on brand terms at different times of the week and month. Our methodology also factors in seasonality along with accounting for location targeting which has resulted in some interesting insights. We have recently tested this methodology on a large retail brand and here are our findings…
Analysing Incremental Revenue and Profit
The diagram below shows the results we received as an average across the board from the trial.
1. The first column shows the revenue when brand bidding was paused
2. The second column shows the revenue split between PPC & SEO when brand bidding was activated.
You can see that there is an incremental growth in revenue overall. Whilst SEO revenue does decrease as PPC is active, the overall incremental profit is shown in the fourth column once the ad spend for PPC has been calculated.
Results from incrementality tests we have run show a 35% increase in revenue generated from brand terms when PPC is combined with SEO, compared to revenue generated when PPC is paused. The conclusion being that it is more profitable for brand to bid on their brand term through PPC as they will be missing out on sales if they do not. Naturally, for other brands, we may not see the same picture and it is a case by case and hence the value of testing.
We are currently carrying out further analysis to analyse incremental revenue and incremental profit driven by PPC by hour of the day. This is to see if there are further ways in which we can maximise clients ROI for their advertising spend.
Google TV (with YouTube at its core) hasn’t quite worked, as mainstream TV content owners and broadcasters are blocking access to their content. So it looks like Google is going to spend a hundred million dollars to create it’s own original video content for YouTube.
To start with they are going to work with Hollywood stars to create short films. This is going to provide the catalyst to disrupt TV consumption and move more of it online and onto YouTube. Here are five reasons why:
1 This quality original content from Hollywood is going to pull more people to YouTube and make it more appealing as a destination
2 YouTube Live (youtube.com/live), which will enable live video broadcasting for everyone to use, is now in beta – it’s going to have mass appeal with lots and lots of live broadcasters just as we have lots and lots of content bloggers
3 Young people love consuming video media and have increasing accessibility available across online devices. The youth of today will be the adults of tomorrow – with money to spend.
4 Brands pay top dollar to advertise on TV. Advertising online provides measurability that offline TV can’t. Brands will certainly be supportive of YouTube’s ambitions and provide early assistance in the form of sponsorship and connections…
5 Google wants to diversify its revenue stream from traditional search. Revenue from targeted advertising on video could be their next cash cow.
We’ve been successful in the YouTube advertising space for our clients and have won Econsultancy Innovation in Paid Search award 2011 as a result. I’m personally very excited by this new area of digital. I hope to see YouTube, or any rival, challenge mainstream TV and be successful!
Anyone who’s recently been involved in a marketing debate will have probably heard comments along the lines of:
“I know that half of my advertising budget is wasted but I’m not sure which half”
It’s a tricky topic; how do you measure the effect of advertising on sales, and really understand and evaluate the contribution of each element in the marketing mix.
With this foremost in our minds our team has developed a new tool called SPARK, which allows us to analyse a multi-channel marketing campaign, including both online and offline.
With SPARK we can identify some core issues, such as how many sales are initiated across each channel, what role each channel played in the sales cycle, and how each channel influenced the final purchasing decision, and how many sales come from each channel.
What’s so valuable about SPARK is that it enables us to advise our clients on the best way to deploy their budgets to deliver optimum ROI.
We’re really proud of SPARK, a tool we’ve developed specifically for clients with complex multi-channel marketing strategies. We think that it is THE essential communications planning tool.
If you want to find out more about SPARK get in touch with myself or Luke Judge, Head of Business Development, on 020 3008 4967.
Google’s latest innovation was announced earlier this week – the Google +1 button. This latest innovation is causing a bit of a storm in the industry because of the potential effects of Google’s latest amendment to their SERP’s (search engine results pages.)
What is it all about?
The Google +1 Button is a button that appears next to natural and PPC advertisements in Google and allows users (who are logged into their Google accounts) to recommend websites to their friends via Google. It’s currently in beta test on Google.com in English and here’s what the new ad’s will look like…
For more information regarding the Google +1 Button you can view their video below…
What are the implications of the Google +1 Button?
Google is saying that the introduction of the +1 button will result in a better user experience, as users trust recommendations from their friends and, as such, will see more relevant PPC ads, and websites with more ‘approvals’ higher in the natural rankings. It is true to say that Google has been using data from social sites such as Twitter and Flickr as part of their organic ranking algorithm, and as such websites with big online followings show higher up in the rankings, as they are more popular and therefore deemed more relevant for users.
But is this actually true? There has already been talk in the industry about how advertisers will be able to take advantage of this in regards to organic rankings. It is possible that some advertisers will look to create Google accounts specifically to hit the +1 button in the hope to improve their natural rankings. It may also be the case that advertisers are all running around hitting the +1 button on their sites and their friends sites to improve their natural rankings…in a way a little bit similar to link exchanges between websites that help boost natural rankings.
What is not known is how much weighting Google’s natural algorithm will give to these +1 buttons as part of the overall makeup of its secret algorithm. But this latest innovation is definitely going to start to stir SEO agencies into action (authors note: Net Media Planet do not offer SEO as a service) and as such lead to websites appearing higher in the rankings, due to SEO’s agencies using the +1 button to improve their websites positions in Google’s organic listings. This could actually mean there would be a worse user experience for users…time will tell.
Personally I think this is a good move by Google. The principle of using friends recommendations to highlight websites should in theory lead to better relevancy for users (aside from the point highlighted in the paragraph above.) However, there may be something else at work going on here in the background…
If more users start using the +1 button and want to share their recommendations with their friends via Google, then users may start giving Google more information on whom their friends are. This will inevitably keep users with Google rather than moving across to competitors such as Bing and Facebook. Google launched its social search product back in October 2009 which has had relatively little impact, but the +1 button puts Google in a stronger position to release more products which could tap into their information of users and their friends.
Google has stated that the +1 button will not have an effect on Quality Score for PPC advertisers. It is fair to say that it may have an effect on click-thru-rate (CTR) for PPC ads, as users are more likely to click on ads that have been recommended to them by their friends. As such PPC advertisers, and their agencies, will be closely monitoring their CTR rates of their ads to see what effect the +1 button has been. If they see detrimental effect, the question arises of what actions can be taken to improve the number of people hitting the +1 button on their ad’s. We could see PPC strategies promoting people to click on the +1 button in a similar way that advertisers currently are trying to have users ‘like’ their fan pages on Facebook.
Google has stated that the +1 button will be used as part of the algorithm that makes up the natural results rankings, which is going to have a knock on effect for websites and their SEO agencies. Advertisers and their agencies may look to try and artificially increase the number of recommendations a website is getting by activating new Google Accounts to help improve their overall rankings. It is unknown as yet what weighting Google’s algorithm will give to these +1 buttons, so I do not expect to see any immediate changes in the natural SERP’s, but it will be interesting to see how this latest development plays out.
In summary, it is fair to say that this +1 button has caused a stir in the industry, but how much of an effect it has will have to be seen. In principle the idea of friends recommendations for websites that appear in Google would be useful in providing more relevant results for users…but it remains to be seen that the +1 button will not be used to artifically promote websites which will lead to a decrease in user experience.
For more information regarding the Google +1 Button you can visit the Google AdWords blog here.