IgnitionOne released a Q4 2014 report today, highlighting trends and data for digital marketing across search, programmatic display, social and mobile. During this time the Yahoo!/Bing partnership grabbed the largest share of the US paid search market since 2008 following two quarters of strong growth. Mobile devices also show strong growth in both search and display advertising.
Key findings in the report:
- Yahoo!/Bing shows historic growth at best share since 2008: Yahoo!/Bing continued to chip away at Google’s huge lead and now holds with 26.3% of US search spend versus Google’s 73.7% in Q4. This is the highest market share and largest growth in share over consecutive quarters since the inception of the Search Alliance and equates to a 25.8% jump. The last time growth was close to this robust was in the period of Q4 2007-to-Q1 2008 when they saw a 20% jump.
- 2014 ends with a strong Q4 for Paid Search: Ending a robust holiday shopping season, US Paid Search saw advertising spend up 11% YoY in Q4. This is the highest rate of growth in 2014.
- Phones and Tablets pull even in spend share growth: Spending growth YoY for tablets is up 37% while phone spend is up 78%. As marketers become more sophisticated, creating stronger mobile-specific experiences, and consumers embrace a multi-device lifestyle, mobile becomes more attractive to marketers for effective reach.
- Mobile display growth continues – Mobile continues to see strong growth, limited only by inventory available. Most interesting is YoY growth for Android impressions far outpacing iOS, peaking on Thanksgiving Day with 57.8% of impressions.
- Healthy growth in programmatic display: Marketers continue to move budget to programmatic display ads due to stronger, trackable results with spend up 35% YoY. Contributing factors to increased effectiveness include better use of data feeding smarter strategies, and greater message relevance based on use of consumer data.
“These numbers show significant growth of mobile across the board, so it’s becoming more important for marketers to get a clear view of the customer across devices and across interactions,” said Roger Barnette, president of IgnitionOne. “Our IgnitionOne data management platform fuels messaging across search, display, social and mobile, making reports like this possible. Pulling together first- and third-party data allows for optimization of all interactions and increased relevance of messaging served.”
This report is the latest in a series of reports from IgnitionOne, reviewing trends across the online advertising landscape. This and previous quarterly reports can be downloaded at http://www.ignitionone.com/thought-leadership/
On Wednesday, Bing announced some changes to its Enhanced Campaigns that substantially affect marketers.
While the change will clearly continue the adoption trend of mobile search advertising, started by Google Enhanced Campaigns (GEC) in 2013, it is unfortunately at the expense of advanced marketers.
Based on our recent experience with Google, we expect this to lead to increased CPCs. Beyond that, what does this mean for sophisticated marketers?
- Marketers with the bandwidth and knowledge to manage their accounts at a granular level will see a reduction in their level of control, as well as a decrease in efficiency.
- Marketers will be required to utilize mobile and tablet bid multipliers at the campaign level, reducing their control of traffic by device type.
- Marketers will not have the ability to advertise to just mobile or tablet traffic. They’ll be required to advertise on desktops even for mobile app downloads, for example, with a bid at least 1/3 of their mobile bid.
- Marketers will continue to have the ability to target, bid and design for tablets as Bing enhanced campaigns has the ability to separately target Tablet traffic (although still only through multiplier bids).
- Significant reworking of accounts will be required, particularly for more sophisticated marketers with larger, more granular structures. The good news is that a lot of groundwork has already been completed due to GEC in 2013.
Read the full report here.
Digital marketers have the daunting task of understanding why a consumer does or does not convert. A great way to combat these online non-converters is to get inside of their heads. Despite the convenience of online shopping, many consumers may be overwhelmed by the process of sifting through various websites found on a simple search that yield the product of their interest.
Fortunately, there are tools available now that make purchasing products online more convenient for shoppers. These should be leveraged by retail marketers and used to pique the interest of non-converters and in many cases, transform them into recurring online shoppers.
One of these tools is the increasingly popular comparison shopping engine, which are websites that offer a place for consumers to view the same or similar products at different prices across multiple retailers, encouraging stronger consumer engagement. Aside from the obvious preferred giants like Amazon and Bing, there are numerous other comparison engines that consumers are frequenting to get the biggest bang for their buck such as thefind, shopzilla, PriceGrabber: the list goes on.
Many of these sites also offer apps for mobile devices that conveniently allow users to scan bar codes from their smartphone and compare offline prices with online alternatives. IgnitionOne research has shown an increasing trend in paid search spend on smartphones early in Q4 2012 (http://www.ignitionone.com/pdf/ignitionone-q3-2012-online-advertising-report.pdf ). With the use of comparison shopping engines on mobile devices combined with the increase in paid search spend on smartphones, retailers can rest assured that as more consumers adapt to using these tools, purchases on mobile devices will continue to increase. By understanding who their customers are and how they are shopping, retailers have a tremendous opportunity in the mobile arena.
Consumers are also using multiple comparison shopping engines at one time to find the products they want at the prices they are willing to pay, making it more difficult for digital marketers to break down the path to conversion. The readily available comparison information on the sites also provides a challenge for retailers who do not offer price match opportunities or who cannot lower their prices. Why would a consumer spend more and pay for shipping if another reputable retailer is offering the same product for $20 less and free shipping? Not only do retail marketers have their hands tied in trying to understand the path to conversion, but it is also becoming increasingly difficult to differentiate their offerings from the competition, and customer loyalty programs aren’t cutting it anymore. By understanding their shoppers’ demographics, continuously monitoring the competition, and implementing a solid promotional strategy in combination with optimizing their digital marketing media, retailers can avoid losing shoppers to the competition.
Google Product Listing Ads (PLAs) can help retailers optimize their digital marketing strategies. With PLAs, prices are easily compared across several online retailers. Often, a potential consumer is unaware and unsuspecting that retailers and Google are offering options they may not have even realized they were looking for. This is a great way for digital marketers to increase exposure on the path to conversion (I actually found myself distracted while typing this blog because of online shopping with PLAs, and I’m certain that the goal of the retailer has been met, as I am grabbing my credit card at the moment).
New tools are making it more convincing for a potential buyer to purchase a product, and online advertisers are gaining the upper-hand in persuading them. With the use of insights from IgnitionOne, retailers can optimize their digital marketing performance and understand the different channels consumers are browsing in their path to conversion.
Now excuse me; I have some online shopping to do!
The age old question: am I wasting media dollars advertising via PPC when my listing also appears in natural results? It’s a completely valid question– why would I, as a marketer, waste any media budget on traffic and revenue I would pick up anyway via organic search? This has been a concern for years now and there is a lot of research on the subject. Theories that oppose paid search advertising argue that people value the perceived “editorial integrity” of organic listings, saying they are more trusted and unbiased; therefore, conversion rates should be higher (Hotchkiss et al. 2005). On the flip side, others stress the importance of paid search ads in being able to display controlled advertisements that speak more to the user and what they are specifically in the market for (Jansen 2007).
Both Google and Bing came out with their own case studies to address this hot topic. The Google study looked at the impact of organic listings on click incrementality across paid results. They found that the click-through-rate of paid ads with associated organic search results was higher and that this impacted the position of the organic result on the page (Google, 2012). This research was built on another Google study, which found that 89% of traffic generated by paid search ads isn’t replaced by organic clicks when the paid ads are paused (Google, 2011). The Bing study also investigated whether paid ads provided a source of lift or was cannibalizing organic search results. The result was that the organic click-through-rate increased whenever the paid ads were active, leading to the conclusion that paid ads were not cannibalizing natural results, but were driving more clicks through paid ads, as well as incremental clicks to the natural results (Roth, 2010).
Well that’s great, you say. So, the search engines themselves conclude we shouldn’t hold back from giving them money and buying paid media. As a marketer, we need validation from research that is completely unbiased and stands nothing to lose. On top of that, as marketers, we need to know how much running paid ads affects our overall revenue and net profit, not just traffic, something that neither of these studies addresses.
Marketing Science published an interesting article about a study from two professors at the Center for Digital Economy Research at NYU Stern, which analyzed not only the effect of paid search on incremental clicks, but also on conversion rate, and overall profitability. The study was conducted on a major nationwide retailer store chain over the course of eight weeks and found that whenever paid and organic listings were grouped together, click-through rate was 5.1% higher (Yang, Ghose 2010). This positive interdependence was found to be much stronger for brand terms. The conversion rate was also 11.7% higher during times when paid ads were running alongside natural listings. Interestingly, the study found that the overall profitability of the search programs combined was up between 4.2-6.15% during times when the paid listings were live.
So, is paid search worth it? IgnitionOne has heard this question before and one case study in particular hones in on this very query. IgnitionOne analyzed brand terms across Google & Yahoo, answering whether paid search brand advertising is worth the cost. We found that live paid search ads led to an increase of 17% more natural clicks, and the overall net profit for this particular client was over $24,000 (backing out paid search media spend). The revenue increases came directly from paid search ads, as there was no revenue increase found from organic search when paid ads were on. This indicates that paid search attracts more qualified traffic than natural.
The key takeaway is that all signs point to paid media fueling search traffic overall and that revenue will increase by running on brand terms in both your paid and natural programs. The jury is still out on the impact on the generic terms, so the best thing you can do is isolate a certain portion of your nonbrand terms and TEST, TEST, TEST! The simple reality is that each company’s advertising media has a variety of products, as well as goals, which will certainly impact how well both search programs affect your bottom line.
- On September 11, 1990, a young MBA student of McGill University in Montreal, Alan Emtage, emailed a newsgroup about a “nifty new tool for net users.” The “archive server,” or “Archie,” as it was later named, became the first search engine that paved the way for such monster companies as Yahoo! and Google, by gathering script-based data in response to user queries.
- Before it was Google (in 1996), Larry Page and Sergey Brin had high hopes for a search engine they named “BackRub.”
- When Google moved to their Paolo Alto office in 1999, the company was composed of only 19 employees. As of March 31, 2012, there are over 33,000 employees in 13 countries.
- Google’s search technology, PageRank, is named after Larry Page.
- Google’s first rented office space was a garage in Menlo Park, California.
- The Google Doodle originated as an out of office message. In 1998, Brin and Page attended the Burning Man festival in Nevada. They designed a burning man doodle to indicate that they were not in the office to fix technical issues in the event of a server crash.
- Yahoo! stands for “Yet Another Hierarchical Officious Oracle.”
- Yahoo! was initially named “Jerry’s Guide to the World Wide Web,” in 1994, and served as a way for Jerry Yang and David Filo to keep track of their online interests.
- Terry Semel, then CEO of Yahoo!, almost purchased Google for $5 billion in 2002, but he didn’t because the price was too high. Google is now worth over $250 billion.
- Google rents goats to mow their grass and clear fire hazard brush on its Mountain View campus.
- It is rumored that Bing stands for “Because It’s Not Google,” because it’s not Google! Bing is marketed as a “decision engine,” not a “search engine.”
Bing has introduced a new match type which gives advertisers the ability to tighten up search queries that are matched to an existing broad match keyword. The new match type, Broad Match Modifier (BMM), can be used alongside their existing phrase and exact match terms. This new feature will assist advertisers in finding the right balance between too little and too many impressions and clicks. Responding to this change, marketers should examine their keyword strategy for Bing campaigns.
- BMM can help capture additional relevant search queries not included in your phrase/exact match keyword list
- Since BMM does not include matches to synonyms or relevant search queries that are not included in keyword lists, marketers should build out separate campaigns or ad groups for BMM keywords while keeping existing Broad Match keyword structures to minimize any loss in traffic until there is enough statistical data to make ROI decisions
- This feature allows advertisers to have more control over their keywords, and how their ads are being displayed against keywords, which should result in better performance
IgnitionOne recommends that marketers avoid including modified minor words (i.e. +a, +an, +the, +for, +to, +in). Searchers often omit these words when searching, so attaching a “+” to them can limit traffic. Furthermore, IgnitionOne highly recommends the use of BMM for campaigns with strict ROI goals. This feature allows advertisers to have more control over their keywords, and how their ads are being displayed against keywords, usually resulting in better performance. Lastly, please note that this feature is currently only available in the US and Canada.