© SiteLab International Inc., All Rights Reserved, 2006 PPC: 101 Search Engine Advertising Dana Todd Co-founder and Principal, SiteLab International Inc. Search Engine Strategies Chicago 2006

© SiteLab International Inc., All Rights Reserved, 2006

Lesson Plan Introduction Overview of Search Paid Search Process Under the Hood Managing Campaigns

© SiteLab International Inc., All Rights Reserved, 2006 OVERVIEW OF SEARCH

© SiteLab International Inc., All Rights Reserved, 2006 Google NOT PAID PAID

© SiteLab International Inc., All Rights Reserved, 2006 Yahoo! Search POSSIBLY PAID PAID

© SiteLab International Inc., All Rights Reserved, 2006 Live Search (MSN) NOT PAID PAID SHOPPING PAID

© SiteLab International Inc., All Rights Reserved, 2006 Shopping Engines: Mostly Paid $ $ $

© SiteLab International Inc., All Rights Reserved, 2006 How do you buy Search? Direct Contract with Site Hybrid Ad Auction Networks –Complicated system for ad ranking –“Yield-maximizing” ad ranking –All top engines are or will be using this model –Not as simple to automate management Traditional Ad Auctions –“Max bid” is your maximum risk –Bid higher, stay higher –System correct “bid gaps” - you pay a penny more than the ad below you

© SiteLab International Inc., All Rights Reserved, 2006 OLD: All bids are visible to all advertisers Traditional Ad Auction Model OLD: “bid- gaps” occur and create pockets of opportunity

© SiteLab International Inc., All Rights Reserved, 2006 New Hybrid Auctions Blind auction – you can’t see other max bids Ad rank is determined by a number of factors: –What you’re willing to pay per click –What your competitors are paying –“Quality Score” or “Quality Index” –Value of the ad space What is “Quality Score”? Quality Score = keyword's CTR + relevance of your ad text + historical keyword performance + other relevancy factors (such as landing pages)

© SiteLab International Inc., All Rights Reserved, 2006 More about Quality scoring If you have a low quality score, you must pay a higher minimum bid SEs fiddle with the weighting factors Feels a little like SEO! Google heavily weights landing page “quality” Penalties may be applied at kw or domain Net result: more relevancy, but higher prices

© SiteLab International Inc., All Rights Reserved, 2006 PAID SEARCH PROCESS

© SiteLab International Inc., All Rights Reserved, 2006 Paid Search Process Post-Launch Campaign Management Campaign Expansion Keyword Generation Forecasting/Goal-setting Budgeting Copywriting Pre-Launch Campaign Organization Controlling Ad Distribution Tracking Flighting/ Ad Schedule Campaign Optimization

© SiteLab International Inc., All Rights Reserved, 2006 Buckets based on desired completed action and importance (Cost per acquisition, volume, products, seasonal) Each bucket assigned a budget –Yahoo and others use “Categories” which can be any organizational criteria –Google has “AdGroups” which should be small and semantically clustered –Microsoft calls them “Orders” $50 Film school Performing Arts Full Sail Campaign Organization - Keyword Buckets

© SiteLab International Inc., All Rights Reserved, 2006 Geotarget Daypart Bid Gap Top Three Positions CPA Bids Keep Below Competitor Seasonal Florida Design School Graphic Arts Orlando Performing Arts University Video Game Design Music Production Computer Animation Design School Game Development Education Film Program Art Program Media Program Art Degree Art School Campus School Within buckets, each keyword may have individual strategy with bid rules, match types and negative keywords Optimize at the keyword level to maximize ROAS (return on adspend) Examples of Keyword Buckets

© SiteLab International Inc., All Rights Reserved, 2006 Keyword Generation Where? –Your site, your competitors, trade literature, vertical sites, software, search suggestion tools, thesaurus, your brain… –Brand names are typically best performers (if you have a known brand)

© SiteLab International Inc., All Rights Reserved, 2006 Keyword Generation – think sales funnel Information KWs Shop KWs Purchase KWs “computer” Less than 10% of keywords Less than 1% conversion rate Good for traffic and branding “lightweight laptop computer” 10% -20% of keywords Conversion Rate: 2% - 4% “Compaq Presario V5201 US” Tail terms 50%+ of keywords Product names Conversion Rate: 3% - 5% Not a lot of traffic

© SiteLab International Inc., All Rights Reserved, 2006 Microsoft AdCenter funnel tool

© SiteLab International Inc., All Rights Reserved, 2006 Google Keyword Tools Provides robust kw research

© SiteLab International Inc., All Rights Reserved, 2006 Google Keyword Tools Seasonality/trending, negative word generator

© SiteLab International Inc., All Rights Reserved, 2006 Controlling Ad Distribution “Match types” control how narrow or broad you want keyword triggers Broad Match Phrase MatchExact Match Negative Keyword = “baby”

© SiteLab International Inc., All Rights Reserved, 2006 Controlling Ad Distribution Terminology varies by venue, as does behavior

© SiteLab International Inc., All Rights Reserved, 2006 Controlling Ad Distribution - Targeting Universe searching for “tennis shoes” Searching for tennis shoes Phrase Match “tennis shoes” Negative KW “baby” Geotarget Time of Day Age, Gender (Microsoft) Behavioral (coming soon)

© SiteLab International Inc., All Rights Reserved, 2006 Setting Base Values and Goals “Conversion” can mean many different things Absolutely required homework! –What are your target goals? –What are the actions you value? –What dollar values can you set? Target Cost Per Click: Marketing Budget ÷ Required Clicks Required Leads: Target Conversions ÷ Target Conversion Rate ROAS Revenue ÷ Cost It’s OK to guess – use your gut if you’re not sure. You can always modify your assumptions

© SiteLab International Inc., All Rights Reserved, 2006 Goal-Setting Example Widgets Price: $200 Campaign Budget: $2,000 Target Conversions: 150 Site Conversion Rate (click to sale): 5% Target Cost Per Conversion: Budget/Desired conversion events $2,000/150 = $13.33 Required Clicks: Target Conversions/Conversion Rate 150/.05 = 3,000 clicks ( if I want 150 sales, I need to buy 3000 clicks ) Avg. CPC: Budget/Required clicks $2,000/3,000 = $.67 ( average keyword cost I can afford ) Or a much simpler way to calculate this: Gross margin x conversion rate = breakeven CPC

© SiteLab International Inc., All Rights Reserved, 2006 Tracking Website analytics –Webtrends, Omniture, HBX, ClickTracks, Yahoo tracking, NetTracker, Google Analytics… Ad-serving software –Mediaplex, Doubleclick, Atlas, TruEffect… Tracking software integrated with bid mgt –Atlas, Efficient Frontier, Keyword BidMax, Performics, Inceptor… Offsite tracking –Call tracking, coupons, promo codes Post-click behavior –Use cookies to track delayed purchases –Sales lead software/funnel –Lifetime customer value

© SiteLab International Inc., All Rights Reserved, 2006 Building the Ads Because CTR can affect your position and your ROI equation, creative ad text is critical Use the keyword in title and/or description Limited text character requirements Must pass editorial review Choose appropriate landing page URLs COOL TIP! Use this parameter to shortcut keyword insertion in a Google ad: {KeyWord:default title or word} –Ex: {KeyWord:Cheap Digital Cameras} will insert exact user query in the bracketed area

© SiteLab International Inc., All Rights Reserved, 2006 Google Ad Sample

© SiteLab International Inc., All Rights Reserved, 2006 Searchers Prefer Uninterrupted Logic

© SiteLab International Inc., All Rights Reserved, 2006 Schedule Map out a calendar in terms of: –Campaign rollout –Reporting/Analysis –Testing period(s) –Other promotions (offline, online) –Budget changes (e.g. overspend on Google during kickoff) Schedule promotional and seasonal messaging Dayparting – time of day, days of week Overlay any expected seasonality Schedule quarterly “housecleaning”

© SiteLab International Inc., All Rights Reserved, 2006 UNDER THE HOOD

© SiteLab International Inc., All Rights Reserved, 2006 Under the Hood: Yahoo (OLD)

© SiteLab International Inc., All Rights Reserved, 2006 Yahoo! Updates Estimated average position, bid range for top positions

© SiteLab International Inc., All Rights Reserved, 2006 Under the Hood: Google

© SiteLab International Inc., All Rights Reserved, 2006

Under the Hood: MSN On MSN, an “order” is an ad-group

© SiteLab International Inc., All Rights Reserved, 2006 Under the Hood: MSN

© SiteLab International Inc., All Rights Reserved, 2006 Under the Hood: MSN

© SiteLab International Inc., All Rights Reserved, 2006 MANAGING CAMPAIGNS

© SiteLab International Inc., All Rights Reserved, 2006 Budgeting Reality check: daily budgeting technology isn’t perfect, so usually underdelivers or overdelivers –Uses projected distribution/clicks to spread your budget across 24 hour period Google is set up for daily budgeting Yahoo defaults to monthly budgeting, but daily budgeting is available –TIP: don’t try out the daily budgeting feature if you’re on credit card payment terms MSN will allow daily caps on a monthly budget Most Tier II engines are monthly budgets

© SiteLab International Inc., All Rights Reserved, 2006 Managing Bids – The Basics 80% Manage 2-3x Weekly 20% Manage Daily How often?

© SiteLab International Inc., All Rights Reserved, 2006 Managing Bids Bid management software helps –Lots of options for purchase or “rent” –Ex: search engine-supplied tools, Atlas, Keyword BidMax, Omniture, SearchRev, Performics –Note: “bidding rules” don’t work well on hybrid auctions –Low volume kws won’t have much data to optimize automatically against ROI or other projected values People are still required!

© SiteLab International Inc., All Rights Reserved, 2006 Optimizing & Maximizing Expanding the buy –Search networks –Contextual/Content networks –Expanding your kw list Optimizing your ROI/ROAS –Keep a “probation” bucket of kws: fix ‘em or kill ‘em –Find sweet spot for each kw Using SEM for cross-channel marketing support –Use search for measurement, “navigation”, branding –Use search for special messaging (promos, price breaks, tie-ins to offline campaigns)

© SiteLab International Inc., All Rights Reserved, 2006 Resources SEMPO.org

© SiteLab International Inc., All Rights Reserved, 2006 SiteLab is a full-service Interactive Agency. We develop, manage & promote Web sites to bring integrated marketing success to medium and large companies around the globe. San Diego - New York