Its an interesting test from Google but surely if it was to be deployed across Google Adwords companies would become wise to it and all 10 would have the favicon in place?  How about, as an interested alternative, allowing only the ads which achieve a CTR. above a certain threshold to show the favicon?  A reward for writing well targeted creative and following Adwords best practice, surely that’s more beneficial than introducing something which will become nothing more than decoration for the SERP in a few months.

Car Insurance is one of Google’s biggest markets with the number 1 PPC position commanding CPC’s in excess of £10 and thousands of searches each month.  So you would think that these comparison sites, who at the time of writing hold 2 of the top 3 PPC positions, would be adding to, not taking away from, Google’s revenue growth targets.  But when you look at the trend for car insurance searches on Google over the past few years you will see a steady decline since mid 2006.

And if you plot that against searches for the brand names of the major insurance comparison sites you can see that the growth in their search volume could be the cause of this.

Prior to the emergence of comparison sites, if you wanted a quick an easy list of insurers online, what did you do?  You searched for car insurance on Google.  But with the amount of branding activity these sites do offline and the awareness it has generated, people are fully aware of the places they need ot go to compare car insurance offers and providers.  So they are now going direct to their site of choice, or performing a brand search for that site instead.  Therefore whilst the comparison sites are spending a large amount on Google Adwords, they are taking away a large chunk of its revenues from this market through their very presence.  And you have to say, as people look to save every penny in difficult times, this trend is only going to continue, and car insurance will become a less and less lucrative market for Google and they will have to find a replacement cash cow for the future.

Maybe this trend was a contributing factor to the decision to allow gambling advertiser on Adwords?  And this is their replacement revenue source, that is of course until someone finds an effective way of comparing odds on the leading gambling sites and we are back where we started!

Early reports indicate that, when selected, Google timeframe will automatically increase your Adwords daily budget if you are under spending against a budget allocate for a set timeframe.  How nice of Google!  They have invented an option to make sure you spend every last penny possible with them!  Doubtless this idea came from some senior member of the Google team looking at the total unspent budget allocations within the Adwords system.  Initial indications are unclear but I think you can be sure the system does not work the other way, reducing daily budgets when you are overspending against a monthly budget.  After all, if you budget runs out sooner, there’s a chance you will add more!

This new option will make little difference to the educated search marketer who should be using CPCs and not daily budgets to manage their campaigns (other than in exceptional circumstances) but it could mean that a lot of direct advertisers find very little left in their Google pot at the end of each month if they enable this new option.

The affiliates will have to agree to Google’s terms and conditions which will mean that the affiliate is responsible for ensuring the gambling sites they advertise are legitimate, therefore removing all liability from Google themselves!  Another requirement is that the affiliate is “adding to the user experience” and not simply showing details of a single gambling site or regurgitating website copy available elsewhere.  The word “comparison” came up on more than one occasion int he call and so affiliates comparing gambling programmes is clearly an area Google is thinking for the new sites they allow on board.

All campaigns will be manually approved by Google by a specialist gambling tema they have set up.

Who will qualify?

• affiliates comparing programmes or “adding value” to the user journey

Who wont qualify?

• Affiliates direct linking to gambling providers
• Affiliates copying or mirroring gambling sites or copy from gambling sites

So its open season for affiliates who meet the criteria and a potentially expensive time for gambling companies who’s own CPCs will rise and they will begin to see their affiliate commission payouts on the increase at the same time, double whammy!

All campaigns are automatically opted in to the iPhone search results by default but to the intelligent search engine marketer this new functionality offers new opportunities for trial, refinement and maximisation of mobile search.

To the lazy or uneducated this box will remain ticked and the PPC campaign will continue to run on both standard web search and the new iPhone and advanced mobile search.  Using the same keywords, same ad text, and directing to the same website.  There is no harm in this as such given the volume and the way it follows standard search specifications.  But in many industries this would be massively missing an opportunity.  Location specific products such as hotels and national companies with regional branches could do so much more with this functionality if they put their minds to it.

Mobile campaigns need treating differently to standard web search campaigns because users interact with mobile Internet in a different way.  To realise the opportunity then there are a number of steps I would recommend;

Campaigns: deactivate iPhone search in your main campaign and set up a new campaign targeting ONLY THE NEW iPHONE SEARCH.  This will allow you to build a campaign aimed solely at the mobile users and mean you can make the necessary amends.

Keywords: build a keyword list based around mobile users.  This tends to mean simplifying your keyword list and using more broad keywords and dropping the long tail.  But make sure you include location specific keywords if your product fits with people using destinations in searches.  Most people using mobile search to find things want to find something nearby so will often include a town or area name in their search.

Ad Text: Obviously follow the standard Adwords guidelines of making it relevant the search phrase but also consider making it specific to mobile users.  If you are going to offer something special (see point below) then include it in the creative.  Also consider reaching out to mobile users in the creative, a message such as “welcome mobile Internet users!” might sound cheesy, but it’ll also make you stand out.

Website/Landing pages: It is still best practice to have a tailored site for mobile visitors even as mobile Internet advances.  But by splitting out the campaign so you can be sure the visitor is coming form a mobile device, why not send them to a page targeted at their needs?  Or even offer them something special? If you have local stores why not have a splash page offering a discount for all users who show the page in-store and make a purchase?  this would work great for hotels, coffee shops etc.  20% off if you show this page in store.

Tracking: Make sure you track it separately so that you can judge performance.  This probably wont be performance by way of conversions but it will certainly help to see bounce rates and site traffic stats.

Bid strategy: Use the fact you have split the campaign out to your advantage, use the tracking you have installed to judge keywords based on mobile search performance rather than web search performance.

Keep testing!: your unlikely to get this right first time but by trying different things you are bound to find some successes so don’t be afraid to try.  iPhone’s and other mobile devices with full browsers are set to revolutionise mobile Internet, it is better to make your mistakes now and learn from them, rather than in a couple of years when you are already behind the game!

Mobile strategy shouldn’t be something which gets lumped together in the general web pot, in the same way search shouldn’t.  Making sure you have a clear strategy and objective for mobile activity will ensure that as mobile Internet grows, you are best placed to take advantage.

This obviously as cause agencies to rethink their current commercial agreements with clients and could see some major shake-ups in the search marketing agency world as existing contracts become unmanageable without the commission in place.

What has become clear in the last couple of weeks however is what Google now plans to do with agency commission, they are going to use it to grow their non-search products.  It has been clear to see recently for those who deal with Google on a regular basis, that Google is desperate to expand their product mix outside of paid search.  They have launched media planning tools, display ad creation tools and have used every given opportunity to push the Google Placement Network.  Similarly with Youtube and their video advertising options, there has been national roadshows to agencies broadcasting the availability of their video advertising options.

And now this week Google has announced that they will be introducing agency commissions on all YouTube advertising (nma article here) and it is thought that the rebate amount is going to be back up to the 15% agencies enjoy on other media channels.  There are also rumours in the industry that a commission is set to be introduced on advertising across the Google Placement Network, although only for the largest players.

So it appears Google no longer feels it needs to compete in pay per click advertising due to its dominance, and that it is better placed rewarding advertisers in the areas it wishes to grow in.  You cant really fault them on that logic.  The removal of Best Practice Funding is unlikely to see agencies pulling spend from their Google Adwords campaigns, as it remains the best performing search engine around.  But by offering an incentive to broaden the products utilised they can begin to make headway in other areas.

In Yahoo’s response via email to it partners they reassured PPC advertisers that, whilst they were disappointed by the announcement, it would not prevent them becoming an “ever-stronger player in online advertising”.  and reaffirm their strength in certain sectors by quoted their positioning across selected news verticals.  A clear attempt to say “don’t give up on us yet!”

In a further twist, Yahoo! CEO Jerry Yang has come out and reverted on his original defiance on a sell out to Microsoft by claiming that he was open minded about a potential deal with Microsoft having been bitterly opposed to such a deal when originally proposed.  Its funny how he has changed his mind immediately prior to the Google announcement!

So its back to square one in the search engine battle for supremacy with no deals on the table and everyone working independently.  But for how long?  Yang’s announcement is bound to start the Microsoft-yahoo rumour mill off again and it is probably more likely to go ahead after yesterday but who knows?  I’m sure there will be more twists in the tail before the saga ends.

The latest announcements as announced on the inside Adwords blog are not yet in place but are likely to be in the next week so it is considering how they may affect your Adwords campaigns.  The changes come in two forms:

Position Normalisation on CTR Influence

Reading between the lines on the release (it isn’t Google’s clearest ever announcement!) Google are going to be accounting for the position of an ad when deciding how significantly CTR should apply to the quality score.  Traditionally CTR has played a huge part in the quality score algorithm and I have no doubts it will continue to do so, but the problem with it has always been, it can be bought.  The big spenders, with the deep pockets, can afford to bid to position 1 and buy a good CTR in a short space of time.  Through this latest change Google are aiming (at least I hope) to reduce the ability to do this by accounting for position when judging what constitutes a “good” click through rate.  So for example a CTR of 3% in position 5, would be determined a better judge of quality than 5% in position 1 where the ad is the first thing is searcher sees.  This should allow for a much more level playing field for the lower spending advertisers and negate, to a certain degree, the spending power of the big players.

Changes in Position 1,2 and 3

Traditionally the top 3 positions which appear above the natural search results are determined by whether the top 3 advertisers in the max CPC x QS model had a sufficient quality score to merit inclusion in the top bar (what quantifies sufficient is unknown).  These three positions are highly valuable and get high CTR due to their prominence on the page.  What the latest changes are going to do, in essence, is to place more emphasis on ad quality and QS in this equation and less on max CPC (see a trend here?).  So that if an ad in position 1 doesnt have the necessary CTR and ad quality to appear in position one, but wins the general auction, it wont stop the ads in position 2 and 3 from leap-frogging into these prominent positions.

My general feeling is that these changes will normalise the market for the benefit of the small business PPC marketer.  Obviously Google will still make their money as a lot of clicks at a medium CPC is better than a couple of clicks at a high one.  it could also prompt the big PPC spenders spend even more as they try to achieve the positions they previously hold, win win for Google!

I expect a pretty turbulent PPC landscape over the next week so Ill be keeping a close eye on things, I advise you to do the same!

The tool looks remarkably easy to use in the video demonstration, as you would expect, as it works on a simple standard template with upload functionality for a logo, selling point and call to action.  The background css is fully editable to create the appropriate colour scheme and the tool creates ads in four standard sizes.  This is a smart move from Google and they have followed the simple model of Adwords which will appeal to the less savvy SME market.

It is only available in the US and Canada at the moment but once proven successful a UK launch is inevitable as Google aims to try and win the battle to become more than just a search engine and more of an advertising platform.

Removal of min bid - Firstly it is removing the current system of allocating each keyword a minimum bid amount which must be met for you keyword to appear in the paid search listings. All listings will have the chance to appear on whatever keywords they wish with just quality score and max bid amount dictating the position of the listing (essentially a move back to the old system prior to min bid being introduced). The minimum bid system is to be replaced with a CPC estimate for your first page bid, that is, the bid amount Google estimates it would take to get your ad on the first page.

Dynamic/search query level quality score – Secondly the quality score system is going to be changed so that it is allocated at search query level rather than keyword level. This means an advertiser bidding on broad match phrase loan, will have a different quality score on the term secured loan to personal loan and the phrase loan itself. Also accounting for user data such as location (based on IP and Google account details).

What does this mean to Google?

More search listings!- These changes should see the appearance of an increased number of listings on any given search phrase. With people able to appear on any keyword they wish (so long as they are willing to pay) and a large number of previously inactive keywords will suddenly come into play. 

More money! - Essentially what Google are saying is, “You want to appear? Fine, but it’ll cost you!” and I’m sure many advertisers will pay that money….to begin with. Much like the changes in trademark bidding my prediction is a flurry of activity before things die back down and things return back to normal

More competition and increased CPCs! Linked to the above point, by telling people what it will cost them to appear on first page Google are prompting people to increase their bids to get the exposure. If an advertiser is appearing on the second page and sees that they could be first page for an increase of £0.20 CPC, there is the temptation there for them to make that increase which they may not have previously done. Once this temptation is there for every advertiser the whole market for first page listings should become more expensive.

What does this mean to advertisers?

The return of the long tail - Although it has remained beneficial to have a long targeted keyword list for a lot of advertisers the broad match system has allowed them to be relatively lazy. The inclusion of quality score at a search phrase level will mean that it will become much more important in terms of an increased QS and a reduced CPC to have all relevant keywords in your account

Increased brand term CPC? - This ties in very nicely with the removal of brand term protection a few months ago. The function that stopped this from being a long term issue was the minimum bid. Competitors were struggling to make the most of the changes as they were blocked by not having a high enough bid. With the latest announcement this has been removed. So although people will be forced to pay more to bid on a competitors brand, they will not be banned completely, probably producing the same surge in brand CPC as last time (approx 130%) which would equate to a 169% increase since the beginning of the year!

Higher first page CPC - As touched on in the section on Google the likely hood is that these changes will produce more competition for first page listings resulting in higher CPCs. By allowing people to see what it will cost them to appear on the first page you are giving them the push to bid to that level. Some will shy away and save their spend, to others it will be the carrot they need to make the next step.

The changes are set to be rolled out to “a very small set of advertisers” in the next few days according to Google but make sure you keep an eye on your campaigns as I expect the full rollout will follow on from this soon after.