sxc marketing

This one says to believe the hype… don’t believe the hype is the sequel

Posted on: February 3, 2010

Paid Search Traffic Share Down 26%

I almost do not know where to begin to debunk this story… for technically the story is accurate in the statement “The share of search traffic coming from paid listings is decreasing at the expense of organic traffic.” I love analysts… most of their ignorance comes from only having the “theory” and none of the “practice” of doing what they so analyze. They report the numbers, but none of the context. Yes, Paid Search “share” has declined as a part of overall search traffic. But why? Analysts tend to avoid the “why,” because they have no idea why, but they do try, in their limited capacity, to explain why.

What data are you using for your conclusions

The “analyst” decided to track some branded terms… “travelocity,” “orbitz,” “walmart,” “home depot,” “usaa” and see what spending was year-over-year. Huh? Are they insane? That is the data set? Branded company terms?

As anyone who buys search will tell you, buying your company name is fraught with controversy because most likely your company is already listed in the first few spots in the organic listings, which are free. So why use paid search for them? Well, some studies tend to show that you’ll get a 10%-20% lift in response by buying your branded term. Those who become more paid search savvy naturally gravitate away from branded terms. Branded Terms in paid search is the hallmark of search Luddites. It’s easy to do, shows great results, but how much it actually helps your particular business has to do with a variety of factors external to Search.

What does happen, and I know this from having bought hundreds of millions of pounds worth of search advertising, is that you eventually squeeze out branded terms, in favor of long-tail Search terms, as you learn to be more efficient with your spend, and if your budget gets cut in Search, they are the first terms you pull out. They look good on a spreadsheet of performance, but often do not really drive the business.

The environment

Search spending is going up. What? But what is with all the articles talking about paid search spending dropping? Well, it is going down as a “share” of overall search because the pitch is getting bigger. Yes, Paid Search spending is growing, but the overall number of searches is just growing faster.

TechCrunch had an article that explained the phenomena of both the long-tail of search terms, and the increase in overall search volume effect.

Longer Queries Driving Down Ad Impressions? How About Bankrupt Advertisers?

Part of their conclusion suspects that a lot of the advertisers are not around anymore. Which really begs the question that if you are going to use Paid Search, get in a good internal system to manage it.

This is great for Paid Search advertisers, no, not just great, stupendous, because it increases the available opportunities to reach your audience more efficiently. Basic economics tells us that more supply (Searches conducted,) over less demand (slower growth in advertisers) will drive down the actual cost per acquisition in search. Result? You get customers more efficiently. If you’re not then you should be taking a look at what systems you are using.

Paid Search Spending is Going Up

Don’t believe me? Ok, here is the math to figure this out. If we can assume for a moment that Google is the measure of search spending, all we have to do is ask one simple question. Is Google making more money or less money this year than last? Answer: More money.

Google Profit Jumps 30% Despite Slowing Economy

Yes, Paid Search spending is going up. My advice? Get a good system internally to help manage your Paid Search program; for God’s sake don’t build your own. Or even outsource your paid search to a company that knows what it’s doing, and just ignore the proclamations about Organic search vs. Paid Search. Why? In Paid Search you can control your messaging, what pages you direct people to, and you don’t have to rely on any “suspect” techniques by companies promising to improve your organic listings that could get you in trouble, or worse, get you banned from the engines you now rely on to conduct your business.

Now granted, I could take a couple random search terms from different companies and show you why Paid Search spending is down, but why would I do that? I’d just look like an analyst.

ranty rant signing off…

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