Yawho Are You?
Posted on January 31, 2010
Filed Under yahoo | Comments
SEM traffic is a bit like scotch whisky. You might think you’re getting a pure single malt from the glens of Google or Yahoo, when in fact you’re washing down a blend of different traffic sources. Sure, you’ll get the strong flavours of the world’s leading search engines, but often there’s an after taste of something else. And that’s not always pleasant.
Last week, New Media Age’s Will Cooper picked up on some unwanted after taste from Yahoo’s search partner network, prompted by Efficient Frontier’s latest quarterly search engine report.
Traffic Quality
The quality of SEM traffic from Yahoo has been under scrutiny for some time, in particular its network partners. So I’ve distilled the traffic from a campaign that runs on Yahoo and Google to see how they compare. Here’s the overall view:
The grey bar represents the percentage of clicks of the whole campaign that come from either the search engine itself or one of its partner sites. The diamond shows the relative quality (revenue per click in this case), where the search engine itself is always indexed at 100%. Note that above Google and Yahoo are indexed independently; I’m not saying they have equal traffic quality.
The first thing to note is that both Yahoo and Google’s partner networks deliver significantly worse quality traffic compared to the engines themselves.
The second is that Yahoo is much more dependent on its partner network for total traffic than Google is.
Yahoo’s Partner Network
Let’s look how Yahoo breaks down in detail:
You’ll notice is that there’s not a lot of well known names. Those that are there don’t tend to convert as well as Yahoo does.
Aside from the unknown sites (which couldn’t be identified for various reasons), the largest partner is fastbrowsersearch.com, which is a toolbar. Surprisingly though, it converts better than Yahoo itself.
Google’s Search Network
Contrast this with the data taken from the Google campaign:
There’s lot of well known ISPs and portals there. Many of them convert as well, or even better, than Google does.
But there are two sites, Ebay and Amazon, which convert very poorly compared to Google. This may be due to the particular data sample. However many SEM professionals argue (myself included) that they aren’t search sites in the original sense and shouldn’t be in the Search Network.
Improvements To Be Made
I often say that there’s no such thing as good traffic or bad traffic. It is either correctly priced or incorrectly priced. That’s improvement number one: let SEMs break out, filter and bid on these different traffic sources separately, just as we can between Google Search and Content.
Yahoo introduced domain exclusion some time ago, though it’s somewhat unweidly in the current form. But that’s still better than Google, which gives you no such flexibility (even though you can do it easily on the Content Network).
Finally, Yahoo needs to adopt Microsoft’s Adcenter platform as soon as possible. The reason Google has such high quality sites such as AOL, BT and Sky is that it monetises the traffic much better than Yahoo does. From all the data I’ve seen, Adcenter can do an equal job to Google. It will give Yahoo much better commercial clout when negotiating distribution deals.
Speaking at SES London
Posted on January 27, 2010
Filed Under trade shows | Comments
It’s nearly February, so that must mean it’s not long until the Search Engine Strategies conference hits London. This year it’s 15th-19th February at the Business Design Centre in Islington (as you can tell from the enormous graphic at the foot of this post).
I’m speaking on Tuesday 16th on the keynote “State of the U.K. Industry Discussion Panel“. I think 2010 could be a year of significant change, so I’m sure we’ll have an extremely healthy debate.
If you want to attend, then get yourself a pass by the end of the week and you can save £100.
Google UK’s Q4 revenues in GBP
Posted on January 22, 2010
Filed Under google | Comments
Google results came out yesterday, so here’s my usual look at the sterling version of the numbers.
| Quarter | USD (millions) | GBP (millions) | FX |
|---|---|---|---|
| Q1 07 | 578 | 296 | 0.5117 |
| Q2 07 | 600 | 302 | 0.5037 |
| Q3 07 | 661 | 327 | 0.4948 |
| Q4 07 | 692 | 338 | 0.4891 |
| Q1 08 | 803 | 406 | 0.5056 |
| Q2 08 | 774 | 393 | 0.5071 |
| Q3 08 | 776 | 410 | 0.5282 |
| Q4 08 | 685 | 437 | 0.6373 |
| Q1 09 | 733 | 510 | 0.6959 |
| Q2 09 | 715 | 463 | 0.6474 |
| Q3 09 | 765 | 466 | 0.6093 |
| Q4 09 | 772 | 473 | 0.6127 |
FX rates are taken from oanda.com as usual.
Here’s the chart of the data table:
Here’s the year-on-year percentage growth:
And finally the quarter-on-quarter percentage growth:
Perhaps the only concern is that QoQ, Q4 is only 1% up on Q3. You would hope it would be higher given all the additional retail activity during that time. But it’s a decent quarter all-in-all, up 8% YoY in GBP and 13% YoY in USD. Let’s hope there’s more of that to come in 2010.
Will 2010 be tough for UK SEM agencies?
Posted on January 20, 2010
Filed Under sem agencies | Comments
How many SEM agencies in the UK have a sustainable business model? That may seem like an odd question given that search is undoubtedly the most successful advertising medium of recent years, but it would seem that the agency sector isn’t necessarily sharing in the medium’s growth.
Last week saw the adminstration then MBO of Latitude. Less widely reported, but no less relevant, was Tradedoubler’s completion of a rights issue that essentially paid for the write-down of The Search Works acquisition in 2007. While I understand that it’s business as usual at both firms, this has led many people to ask just how robust the sector is.
Will Cooper posed this question on Friday on the NMA web site. It’s his opinion that despite Google’s Best Practice Funding subsidy ending over a year ago there are still some agencies who haven’t adapted their business models. Will sounded confident of that opinion when I spoke to him on Monday. Unfortunately, I think he’s right.
I first raised my concerns on this blog back in September 2007. One post highlighted a firm blantantly using discounts as a hook to gain new clients. Selling on price instead of value like this rarely has a happy ending in the long run.
It would seem there are more agency administrations, restructurings and buyouts to come.
Google UK’s Q3 revenues in GBP
Posted on October 16, 2009
Filed Under google | Comments
This is an update on a previous post, looking at Google’s UK revenues in GBP. Google breaks out its UK revenues due to SEC regulations, but in dollars. This makes it difficult to determine how successful they’ve been in the UK because of currency fluctuations. I make the conversions back to sterling, so here’s the latest based on yesterday’s Q3 results.
| Quarter | USD (millions) | GBP (millions) | FX |
|---|---|---|---|
| Q1 07 | 578 | 296 | 0.5117 |
| Q2 07 | 600 | 302 | 0.5037 |
| Q3 07 | 661 | 327 | 0.4948 |
| Q4 07 | 692 | 338 | 0.4891 |
| Q1 08 | 803 | 406 | 0.5056 |
| Q2 08 | 774 | 393 | 0.5071 |
| Q3 08 | 776 | 410 | 0.5282 |
| Q4 08 | 685 | 437 | 0.6373 |
| Q1 09 | 733 | 510 | 0.6959 |
| Q2 09 | 715 | 463 | 0.6474 |
| Q3 09 | 765 | 466 | 0.6093 |
FX rates are taken from oanda.com as usual.
Here’s the data in chart form:
The quarter-over-quarter change:
And the year-over-year change:
Not a bad result at 14% up year-on-year. Looks positive for the economy, and pretty much what I expected after reading Efficient Frontier’s UK Q3 report.
Efficient Frontier Search Theatre @ ad:tech London
Posted on September 12, 2009
Filed Under trade shows | Comments
It’s ad:tech London in a couple of weeks (22-23 September) and I’m very excited about the Efficient Frontier Search Theatre. This year at ad:tech we’ve decided to try something a little different, so we’re putting on an array of sessions about different aspects search.
There are 7 free sessions each day, and we’ve timed them so they don’t clash with the many other great events happening around the show. We’re also presenting with colleagues and partners from Google, Microsoft and Ayima to give a really well-rounded set of discussions.
Finally, I’m also presenting in the afternoon on Tuesday 22nd.
Look forward to seeing you there!
Google’s UK Revenues in GBP
Posted on July 21, 2009
Filed Under google | Comments
Google’s Q2 2009 results came out last week, with the usual parade of pre-forecasting and post-analysis. I thought it would be useful to breakout the UK component of their revenues. Being a US company, Google report in US dollars, so I’ve made a rough estimate of what those revenues are in sterling.
| Quarter | USD (millions) | GBP (millions) | FX |
|---|---|---|---|
| Q1 07 | 578 | 296 | 0.5117 |
| Q2 07 | 600 | 302 | 0.5037 |
| Q3 07 | 661 | 327 | 0.4948 |
| Q4 07 | 692 | 338 | 0.4891 |
| Q1 08 | 803 | 406 | 0.5056 |
| Q2 08 | 774 | 393 | 0.5071 |
| Q3 08 | 776 | 410 | 0.5282 |
| Q4 08 | 685 | 437 | 0.6373 |
| Q1 09 | 733 | 510 | 0.6959 |
| Q2 09 | 715 | 463 | 0.6474 |
I’ve taken the FX rates from quarterly mid-market averages supplied by oanda.com. And for the more visually minded, here’s that data in a chart:
The data suggests that the UK business has started to mature since the start of 2008. We can clearly see the seasonal trends (high Q1, Q4; lower Q2, Q3) that one would expect as overall growth diminishes. Although we have only 2 quarters of data for this year so far, this seasonality seems to be more marked.
I’m sure, like me, you can’t resist a couple more charts. So here they are. The first one looks at quarter-over-quarter change:
The second looks at year-on-year change:
So with double-digit YoY growth in a recession, perhaps Google doesn’t have too much to worry about in the UK.
Automated Bid Management: The Debate Continues…
Posted on July 11, 2009
Filed Under bid management | Comments
After a long hiatus, this week I thought it was about time that I came up with another blog post. Whilst scratching around for ideas, I noticed the perennial debate about automated bid management had sprung up again over on Search Engine Land.
Guest columnist Nic Abramovic posted a rant about automated bidding tools. The article is fairly uninformed and in places insulting, but I suppose he’s entitled to his opinion. Clearly he’s had a bad experience at some point with automated bidding tools.
I don’t know if Nic was taking aim at any tool in particular, but I feel the need to counter a few of his points, at least from an Efficient Frontier perspective. He does bang on about rules-based systems, which are widely acknowledged to be inefficient. However, he doesn’t attack them because of their inefficiency, but rather on perceived short-comings that could affect any system:
“Most rules-based bidding can only accept a limited amount of data (no matter what search marketing agencies may sell you on) – for example: 7 day, 30 day and lifetime “snapshots” of how your keywords are progressing.”
Historical data is essential, and the more the better. Recency techniques allow EF to use it all, while reacting to changes in the keyword market and conversion rates.
“[Agency leaders require] a PhD from a school such as Stanford and anyone who actually knows what they are doing is working at Google and not at a search marketing agency (sorry, a PhD from a state school does not necessarily qualify as “World Class”).”
Fortunately EF’s founder Anil Kamath does have a PhD from Stanford (on top of his MSc). As one of the comments points out, there are many excellent universities, both private and state funded, such as Michigan. That’s good news for EF’s Sid Shah, who got his PhD from there.
“Another area to watch would be when you have different cost-per-acquisitions for different products, campaigns or keywords. If you are selling various products, you might have specific margins and be able to spend up to X amount, depending on the product purchased. Rules-based systems wouldn’t be able to handle this because they are based on CPA targets.”
CPA targets are just one way of running a search campaign. Chasing ROI, margin or net profit means you have to understand that all conversions aren’t equal. Multi-metric optimisation is a basic and we’ve done that at EF since day one.
Fortunately, I wasn’t the only one who found the article odd. Frank Watson at Search Engine Watch also wrote a rebuttal that led to a debate about editorial control with SEL’s founder Danny Sullivan.
Ironically, of course, bid management is not appropriate for everyone. It’s a pity that Nic didn’t provide a more balanced view. It would have made his opinions more credible.
Thankfully, we can always rely on RKG’s George Michie to provide a balanced and sensible discussion. George is one of the best writers when it comes to PPC and I read his blog avidly. The most recent post is the first in a series and I look forward to reading the rest when they are published.
My last point on this topic, for now, is that there is an unwritten assumption in Nic’s article that people can do bid management better than machines. People have their flaws, no matter how experienced and skillful they are. Let people use all their marketing nous and imagination to build great campaigns that sell compelling products and services. But let the algorithms decide the right bids. As ever, PPC management is not black and white, it’s about the combination of human and computer intelligence to find the optimal solution.
Back in June
Posted on May 7, 2009
Filed Under general | Comments
I’ve not managed a post since March, and this one will be the only one in May. I’m afraid other things have kept very busy, including exciting changes at Efficient Frontier.
But the main thing that’s kept me busy is something else. I’ll let this man hint at what that is:
IAB Engage for Search
Posted on March 18, 2009
Filed Under trade shows | Comments
I spoke yesterday at the IAB Engage for Search event at the CBI conference centre in Centre Point. It was a very enjoyable morning and there’s a great write up on the IAB site. There’s also some good photos on Flickr.
On a personal note I can say the lunch afterwards was excellent. At these kind of conferences lunch is usually dull, but the apple crumble with custard was lovely!
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