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Archive for September, 2011

Filtering ‘bad’ traffic: get beyond good and evil

Friday, September 30th, 2011

In some parts of the world, lengthy conversations are still being held on the subject of persuading clients to devote enough budget to digital. In light of past battles nearly won, it’s particularly maddening that some paid search campaign managers seem so bent on handcuffing their own accounts, that they are limiting their upside through a process of excessive filtering.

To be clear, it’s important to use a means of excluding unwanted traffic – such as keyword exclusions (negative keywords). But it’s also important that overall campaign strategy be driven by a game plan rather than fear or “best practices” hearsay. You’re in advertising, not corporate security. If you feel like your whole job is to keep “bad” clicks away from the website, chances are you’re over-filtering.

Some clients – indeed, more than half – will be timid and will go about trying new things in accounts slowly. And that’s fine.

A select few clients will be gunslingers, aggressive marketers who actually love to try new things.

But never, ever should the agency or expert over-filter on behalf of the client without being absolutely certain that the client is as conservative as one might assume.

In platforms like AdWords, we’ve been handed wonderful tools to get very granular in excluding certain keyword phrases and display network sources (and other segments) that are almost certainly bad bets to convert for the target market. From this simple principle inevitably grew overkill. Instead of focusing on the business reasons for filtering, some marketers focused on to-do lists (to look busy); exotic strategies (to look “advanced”); and scare tactics (to win business or to sell a new tool). And instead of seeing Google’s machine-learning capabilities in keyword match typing and display network placement (expanded broad match in search and automatic matching in the display network) as broadly positive developments with some negative elements that require hand-tweaking, some marketers have chosen to outright reject them and see only negative aspects.

And so the negative keyword lists and publisher exclusions lists grew. And grew and grew and grew. And sometimes they were misapplied to the whole campaign when applying them at the ad group level would have sufficed.

Sure! Powerful machine learning by the world’s largest technology company, using the world’s largest dataset, is 100 percent worthless! You should filter as much as you can by hand, and when that fails, get other computers involved to counteract Google’s computers, willy-nilly. You should make your account into one big filter.

Hmm.

As I see it, there are three main drawbacks to this over-filtering bias:

  1. You limit volume potential and total profit overall.
  2. Because you artificially create a narrower universe, but forget just how narrow you made it (and why), when it comes time to look for creative ways to expand that finite volume (like when the client asks for more, more, more), the “out of the box” means of boosting volume you come up with turn out to be worse than some good potential traffic that was right under your nose. (Specifically, “so-so” phrases that you’ve so hastily negatived out, or “so-so” publishers that you’ve excluded, might have served some purpose to the business – moreso than grasping at straws for unproven keywords or new, exotic channels.)
  3. What I like to call the “short leash problem.” When you try to anticipate and react to every possible poor-performing segment (and sub-sub-sub-segment), your analysis is actually getting too granular, and your assumptions, too causal. Mathematically, if you slice and dice everything enough, something will be coming in last place – often for no good reason. The upside of using a broader approach is that you keep your options open for random good luck. This approach may lead to more learning, and in the end, more volume and total profit.

There may even be deep-seated reasons we get addicted to the short leash. Economists explain the behavior as “myopic loss aversion,” and it can affect investment returns.

Think of it this way. One day, you lost a mitten. When you’re five years old, that’s bound to happen. But for some reason, the adult brain sees this loss as a significant moral failing and a potential threat to the family’s future financial viability. You’d hear about it over and over again, with constant warnings to “never” lose a mitten again (thinking in terms of absolutes), or worse, be fitted with “idiot strings” to ensure the security of your personal hand-warming equipment (shaming). You’d think that after years of training, and in an adult scenario that involves a mandate for profit maximization, it wouldn’t be hard to drop the baggage. But it is! Too easily, “should” and “ought” creep into our decision-making in ways that aren’t synonymous with “the predicted return on investment.”

If you’ve ever tried to advise Google that it’s going about something in the “wrong” way, or asked it to define exactly what a valid or invalid click is, you know that Google and its computers don’t think in terms of good and evil. Catchy slogans (“don’t be evil”) are basically red herrings; they are not, in any shape or form, Google policy.

One way of looking at the Google world of data-driven success is to say that “Google is like a baby’s brain” (terms used by one Googler attempting to explain the company’s apparent managerial chaos). Systems are built to absorb and learn at a breathtaking pace, just by “taking it all in” and letting the “brain” do what it does best – compute, iterate, and develop more complexity in responses than could be possible through a deliberate effort to “plan.” In fact, the “baby’s brain” analogy is a compliment to Google, at least in moral terms. A baby is much more judgmental and discerning than a machine-learning system. As inhuman as it may sound, machine learning works at its breathtaking best when it’s free of moral baggage.

Take a concrete example. Why prejudge a certain publisher in the display network because it’s a “certain type of site”? Just let the machines run and cut off the non-performers at a predetermined point. It could be that you get 200 clicks on a “silly” travel site for the same price as you pay for 30 clicks on the “serious” one, so the two turn out to be equally good buys.

Similarly, you should avoid excluding keyword phrases that “might not be exactly” what is being searched for. What if they aid in research stage awareness, or convert occasionally? Exclude away if the data look pitiful. But please don’t leap into a priori negativing-out of phrases including things like “recipes,” “cheap,” “directions,” “software,” etc. just because these are slightly off your desired micro-intent. Try keeping them hanging around a little longer to see if they convert occasionally. Or try different ad groups, landing pages, and creative for different types of intent.

In some cases, you’ll make some amazing discoveries. We’ve discovered that searchers interested in high-volume orders actually use a variety of different signifiers, and they’re all seeking slightly different things (most of them being some form of bulk order). But at first glance, some of the words (“wholesale,” let’s say) appear to convert poorly. Until you solve the puzzle, the tight-leash, exclude-whole-hog mentality appears sound, but it doesn’t correspond well with the broader potential inherent in the search behavior.

To be sure, you’ll still want to use your human judgment to see patterns and to adjust slightly to taste. Just don’t overdo it. And try using rounds of lower bidding (signifying something that is worth less to you) rather than exclusions (signifying that the source is literally worthless to you).

This article originally appeared at Clickz on August 12, 2011. Reprinted by permission.

Google’s Definition of Relevance in PPC? Clicks.

Tuesday, September 20th, 2011

Relevance in search means a lot of things to a lot of people. Information retrieval scientists right down to the average user of a search engine might think there is quite a lot to determining what is “relevant” to any given user on any given query. There is. Although by no means scientific, SEOmoz’s annual review of what experts think are factors determining search ranking

So when organic search principles seemed to be seeping into paid search programs, many observers read a lot more into the terminology than really should be read, it seems.

Remembering back to the launch of AdWords Select in 2002, Google explicitly defined the AdRank formula as your Max Bid on a keyword multiplied by CTR. They referred to this as rewarding more relevant ads. Indeed, at times they displayed a green bar denoting “user interest.” What was relevance, or “user interest”? It was synonymous with “clicks.” More clicks, higher ad rank.

Enter Quality Score, circa 2005, and several updates of it since. A whole industry has arisen trying to deciphering it.

Some Google documentation refers to “relevance,” “the quality of the landing page,” “other relevance factors,” and so on.

But for years, key architects and managers of the AdWords product have quietly counseled people not to go overboard in interpreting these definitions.

Nick Fox, one of the leading pioneers in the AdWords program, used to remind us that the various other “relevance factors” were mostly “different cuts at” either predicting or reflecting the same measure of relevance… that being clicks, or CTR.

At SMX East last week, in our session on AdWords best practices, Fred Vallaeys flatly stated that by so-called “relevance,” Google basically means clicks.

It might sound really cool to try to divine how Google assesses information and scent, and user satisfaction all the purchase cycle, from ad impression, to click, to landing page, to further activity on site. It might be neat to guess at the semantics and other technology involved in “other relevance factors.” But in terms of the overall weighting in the vast majority of cases, as Vallaeys implied, these things might as well not exist. Google counts clicks. They may count them relative to the situation, normalize them for match type, etc. etc., but that’s what we mean by “relevance” here.

Another thing Vallaeys said (agreed on by many of us over the years) is that you shouldn’t be slavishly pursuing this click goal at all costs. You pick the ad, the segment, the bid, the match type, etc., that ultimately returns the best ROI for you. So in other words, Google rewards x, and you should be generally mindful of it, but ultimately pursue y.

“So why, then, do we devote so much time in these sessions to Quality Score, when so many other things are so much more important?,” asked an attendee.

“Because people want us to,” replied a panelist.

The truth about how to outperform the competition in the AdWords auction is not simple. But it’s also true that the “Quality Score industry” benefits from overcomplicating things and in many cases, misleading people about how Quality Score works. Also, like too many SEO’s, Quality Score pundits offer too much speculation about components of the formula, instead of sticking to what is known to be true.

Displayed Quality Score, like toolbar PageRank, has a seemingly endless capacity to bamboozle. It’s time to give it a rest, at least in the general marketing industry dialogue.

Knowing the ins and outs of the formula helps me quite a bit in my job, but I don’t think these lengthy dissections of it in public forums are as helpful as many speakers hope. I vow to pare back my treatment of QS in the future, and to focus on the most helpful tips and heuristic uses.

Display Ads for ROI: Hardest-Working Ads Online?

Monday, September 12th, 2011

While search marketing has often been lauded for its killer ROI and – especially on the paid search side – its incredible capacity for fine-tuning and testing, its cousin on the display side hasn’t always attained the same standard. Perhaps because of past miserable failures, some advocates for the display side simply issued it a different rulebook. Why should it be expected to “perform,” when it clearly can’t?

But what if it can? What if there’s a good chunk of the display world that needs to be tested, optimized, iterated, and forced to run the same gantlet as “performance media” like search advertising and affiliate marketing?

Too often, display advertising has been coddled like a supermodel: allowed to swan in late to the shoot; paid exorbitant sums for lackadaisical performance…as long as it looks good, someone will go to bat for it and it will get a repeat engagement somewhere.

Paid search ads, meanwhile, have been like James Brown, the “hardest-working man in show business.” Singing, dancing, sweating…there isn’t anything paid search ads won’t do to make the paying customers happy.

Chalk it up to the guilty consciences of publishers and their trade group partners who secretly don’t think their display advertising is capable of performing. As a result, they overcompensate with elaborate measures of brand lift and other indirect metrics. Spokespersons like comScore’s executive chairman, Gian Fulgoni, are congenitally squirmy about true performance measures. Keynoting recently at an IAB Canada industry event, Fulgoni thundered that it’s time we stopped counting the click as a meaningful measure of ad performance.

The click! Call us crazy for still believing that a click may be the first step in getting someone to, you know, visit your website.

Ironically, speakers following Fulgoni earnestly reported not only impressive CTRs (click-through rates), but on-target CPAs (cost per acquisitions) on recent campaign efforts. Recalling the keynote, they’d hasten to add “with all due respect to Gian Fulgoni’s point…in a lot of ways we agree that performance measurement needs to get beyond the click.” Sure. But there has to be some reason you brought your CTRs to the table.

For avid search marketers, the most comfortable place to start in a renewed quest to expand out to display advertising is often the Google AdWords Display Network (formerly called the content network). The principles (and the cookies served to those who visit your site after the click) have much in common with your search campaigns in AdWords.

Two types of advertisers today are paying particular attention to display ads as an additional means of customer acquisition.

1) Traditional e-commerce players, steeped in the measurement of ROAS (return on ad spend) on all segments of their search keyword marketing.

It’s amazing that a significant amount of content has evolved on the web that appears well-aligned with the vast universe of e-commerce sellers. It’s not as easy to find high-intent prospects reading content as it is when they search directly for your products. The ecosystem has been self-optimizing to a degree because relevant publishers are increasingly incentivized through improving AdSense revenues, and irrelevant ones’ earnings are dropping.

These websites have to build their audiences somehow. It doesn’t come out of thin air. Well, because they offer large amounts of relevant – and often practical and action-oriented – content, many of them do pretty well in organic search results. The fact that they can “monetize” the traffic keeps them in business, and allows advertisers to continue facilitating that monetization.

In other words, these aren’t just random matching algorithms going bump in the night; this is an increasingly organized and predictable ecosystem involving symbiotic relationships. Advertisers hope that the “go-to” conversion-driving publishers in the Display Network continue to succeed in building their audiences.

A fascinating development – completely overlooked by the SEO community and the journalistic outsiders commenting on Google’s harsh treatment of some content sites in its recent Panda update – is that websites like Suite101.com, About.com, Squidoo, eHow.com, Answers.com, and many others continue to drive strong conversion volumes in AdWords Display Network stats. These sites were supposedly “hammered” by the Panda update, and that supposedly happened because they offer too much useless, regurgitated, rapidly-written content. Well, they certainly haven’t dropped off the map as far as our e-commerce clients are concerned. They may not be the highest-quality publishers in the world, but in a world short on quality content across many subject areas, they are often “good enough.” Indeed, their visitors appear to be more transactionally-oriented than they would be on high-minded “quality” websites.

For all intents and purposes – although the user behavior dynamic is significantly different – the way that e-commerce publishers use Display Network is often similar to the way they use search. You can tweak bids on segments like publishers, exclude publishers and pages you don’t like, try additional targeting refinements such as demographic-based bidding, and more. And the key metrics (CTR, CPA, and average order size; by ad, source, ad group, etc.) look or can be made to look more or less identical to the metrics you’re tracking on the search side. Sure, if you’ve got fancy attribution models, you might give the display ads additional credit beyond directly attributable performance. But the point is, you can compare apples to apples. For many advertisers, that’s very reassuring.

Such advertisers simply aren’t listening to all of the exhortations about how you’re supposed to treat display radically different from search, and maintain different expectations for it. Perhaps they didn’t get the memo. Or perhaps they’re onto something.

2) Aggressive CPA-focused advertisers who have been mainly rewarding performance in their interactions with publishers and marketing tacticians. Rather than being willing to pay for clicks, they generally “pay out” on a CPA basis to affiliates, websites, and networks. Yet some of the tactics (like aggressive pop-ups, spyware, etc.) employed by publisher sites in the past are drying up because users are rebelling. So now, they are looking into compromise solutions that tap into more mainstream forms of display advertising. Because a number of channels now subject display ads to Quality Score algorithms analogous to those employed on paid search platforms, advertisers may be able to increase delivery and lower costs by optimizing for relevancy to get ahead of less diligent competitors.

For CPA-obsessed performance marketers, the inventory and methodology used by traditional e-commerce players may not apply as well. Instead of hoping that Google’s probabilistic matching technology will find them high-intent matches across many good-quality content sites of all stripes, they may be dialed into a vertical such as gaming, targeted mainly at males in the 15-29 demographic. Here, the campaign deployment may be quite different. A traditional “Automated Placements” campaign, corresponding with keyword terms that are literally being searched for, may not be the way to go. The secret is that the demographic is so large and that there is so much relevant content to sort through, the potential is huge but the process of sorting out high-intent (and deep-pocketed) customers from low-intent audience members is going to be more daunting and more meticulous – and yes, it will definitely involve new channels like YouTube. Large effort, but great rewards, to the companies that can crack that nut.

Here’s my wish for your ROI-focused display ads in the latter half of 2011. You’ll add profitable volume to your campaigns, and – like the hardest working man in show business – be moved to exclaim “so good, so good, I got you…HEY!!”

This column appeared at ClickZ on June 17, 2011. Reprinted by permission.

Groupon Plans Major Pivot in 2013

Thursday, September 1st, 2011

Groupon is addicted to money, spending half a billion dollars a year to acquire new subscribers. Yet it now claims that it will kick the habit in 2013, reducing that spend to zero.

There is approximately one way they can effectively do this. That is: be acquired by Google.

Another approach might have been to think of some other way to grow than to indiscriminately acquire spambox signups in the hundreds of millions without pausing to assess profitability. But when you’re Groupon, “pausing,” even for a breath, is not on the agenda.

 


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