Archives for posts with tag: adwords
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Google to Use Commissions to Promote Growth in Non Search Products

November 9, 2008 //
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From Jan 1st 2009 the current Google Best Practice Funding programme will be no more.  The programme aimed at rewarding agencies who show growth of both clients and revenues by rewarding a % rebate on all spend with Google is being scrapped.  This move has been coming for a few years with Google gradually changing the programme and its conditions to slowly reduce the amount returned to agencies.  Originally set at the market rate of 15% for agency purchases Google has tweeked and changed their model to bring it down to a level where the bigger agencies are currently on receiving 6-8% commission on their sizeable Google budgets through the current Best Practice Funding Scheme.

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.

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Categories Google

Lets Call the Whole Thing Off!

November 6, 2008 //
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Google announced yesterday that it was pulling out of the agreement with Yahoo which would have allowed them to display Google Adwords listings on Yahoo search results in the US.  The announcement comes in the face of a potentially lengthy and costly legal battles with competition regulators which Google has decided would “distract the from their core mission”.

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.

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Categories PPC

Google to Tweek Quality Score

October 31, 2008 //
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Google has today announced plans for further changes to be made to their quality score algorithm following the changes to the Google scoring system which took place in September.

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!

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Categories Google, PPC

Google Launches Display Ad Creation Tool

October 17, 2008 //
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Google has announced on the Inside Adwords blog the launch of a display advert creation tool in the US and Canada in an obvious attempt to broaden its market for display advertisers and in the hope of expanding its share in this area.  The availability of ads for the use in display and placement campaigns is often a barrier to entry for the smaller companies as a full professional creative suite can cost thousands of pounds.  By providing this tool they will be hoping to broaden the reach of their placement network and steel some market share from the big publisher sites such as Yahoo!, AOL and MSN.

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.

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Categories Display Advertising

Google to reverse minimum bid and introduce dynamic quality score

August 22, 2008 //
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The Google Adwords blog has announced a number of “quality score improvements” (debatable use of the word improvements!) which will come into play for your Adwords listings in the near future.

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.

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Categories Google, Search Engine Marketing
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