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June 5, 2007

Beyond the Majors

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Last session! I’m back in the Advertising Track for the Beyond the Majors session–considering I nearly died last session it’s a relief to be back in the very pretty Paid Search room. I picked my seat because there’s a plug here. No dead laptop today! Just dead wrists. After this, I’m going to find an Advil the size of the moon. Also I think I have an ear infection. You get to hear about it because we’re running a little bit late. Lucky you.

Lisa’s over in the Give It Up session. Here’s hoping Danny has a last minute change of heart and lets her blog it. I want to know what happens!

Okay, we’re starting. Jeff Rohrs is moderating the panel of Scott Greenberg (Marchex), Matthew Greitzer (Avenue A|Razorfish), T.J. Kelly (LookSmart), Anton E. Konikoff (Acronym Media), Tom Paraboschi (Miva).

Anton Konikoff starts us off. His office is in the Empire State Building on the 55th floor.

Their company focuses on Paid Search and Contextual, SEO, Keyword Intelligence, Enterprise-wide Keyword…something

The oligarchs are the rich, powerful, the ones who control everything. Anton’s Russian so you’ll just have to imagine the accent and the picture of shady characters (they’re in exile) that he puts up.

GYM are the major engines (he adds Ask is too, in his opinion), they’re the oligarchs of paid. If we only had a few options, what would the world be like?

“The absence of alternatives clears the mind marvelously” –Kissinger

He proclaims June 5 International Tier 2 Engine Day. Can he do that?

He thanks all other Tier 2 engines for existing. Quigo and Kanoodle get special nods for being cool with contextual stuff. More engines, verticals and international are mentioned.

When should you consider tier 2 engines:

  • Large budgets and not enough inventory on GYMa
  • Opportunity to lower blended cost/conversion
  • Brand defense imperatives
  • Client/boss insists on diversification – one client wanted to use 12 different engines (which may or may not be worth it.)
  • Really good search engine reps.

What’s to like about Tier 2:

  • Lower CPCs than the majors
  • Better and Unique Positioning (Kanoodle and USA Today)
  • Fewer Bidders = more winners
  • Different Footprint
  • Tap into niche audience segments
  • High touch customer support

According to Microsoft, 1% of market share is $100 million in revenue and $1 billion in market cap.

Challenges:

  • Don’t provide conversion tracking typically
  • Lack of APIs and integration with big management tools means that you must do manual reporting and optimization is often necessary.
  • Typically not real time results
  • Don’t always report on the same metrics as the majors and some don’t include impressions
  • Features sometimes don’t exist (geo targeting, budgeting, testing for landing pages and multiple ad copy
  • Distribution is not always top notch
  • Click Fraud potential is thought to be higher
  • Editorial guidelines are not always clear

You need to be smart and always do a cost benefit analysis. Your spend could be too low to justify the effort and time. Always evaluate your campaign. Searcher behavior and benchmarks are likely to be different from Tier 1 engines. Don’t assume that clickrates or ROI will be the same. Launch with volume words that convert well in GYMa. Test broader keywords that are just too expensive in the majors. Ad Copy must be VERY targeted; use negatives. Start with low bids and test, test, test. Dedicated landing pages might be worthwhile, evaluate your situation. He recommends sharing your conversion data with the vendors; you’ll save time.

Matt Greitzer steps up to the podium. He needs to speak more slowly. His company spent $151,000,000 in paid search and considerably less than 1% was allocated to Tier 2 engines. When you include verticals, the number is more like 5%.

Challenges as he sees it:

  • Operation barriers–it requires a lot more effort with every new engine you add; learning a new UI, more time, etc.
  • Quality Issue–both real and perceived quality problems. Customers don’t want to test things that ‘aren’t going to work’.
  • Low Volume–If you’re going to get 2% incremental volume, is it worth the extra hours a week that you’re going to put into it or should you spend that time on your google campaign?

He goes through a case study. My wrists thank him.

A couple of specific recommendations: He sees success in verticals for B2B, particularly with Business.com and Industry Brains. Also Quigo and Pulse360. In the travel space, he likes Trip Advisor, they offer good traffic. For the retail space, he likes Shopzilla, Pricegrabber, NexTag, Shopping.com. For retail, you can see a 10-20% increase in volume. You’ll need to do feed management.

Scott Greenberg is the home town kid. They’re headquartered here in Seattle. Marchex has three parts to their business: PPC, Contextual and Search Marketing. He’s going to focus on Enhance Interactive which is the first of those three.

They focus on traffic quality. Their unbilled click rates are 10-12% which is about industry standard. They tailor their distribution to meet advertiser ROI goals. They have their own network as well as search partners. The network is local, verticals and touches more than 200,000 Web sites. On June 30, they’re re-launching 100,000 of Web sites as well as all their zip code sites.

T.J. Kelly from Looksmart. Aw, he just got married a couple weeks ago. Congrats! He says he’d like help figuring out how he stops playing with his ring.

T.J. admits that they’ve had an interesting past. He talks superfast. Why do they all talk so fast?

He touts LookSmart’s extended reach as a way of cutting down the time you have to spend on getting out there. They have publisher growth and are able to serve out ads further.

They have average daily search queries of 400 million and a fairly low average CPC.

Technology (adcenter, api, scalable platform) and Client Services (campaign tracking

Tom Paraboshi is our last speaker. Hi, Tom. Talk slow, I’m tired. (I know his name is spelled differently here, it isn’t spelled consistently from his table card to the speaker list slide so I’m covering my bases.)

45% of people’s time online is spent browsing. This gives tier 2s an opportunity to be there in places that aren’t search.

Trends they’ve seen: quality not quantity focus, vertical specific traffic, PPC beyond acquisition, for branding purposes. Many advertisers are being priced out of the majors.

Miva recently launched their Precision Network. It is vertically focused PPC, spans 18 business categories, has lower volume and higher value, was developed in response to advertiser demand and is ROI focused. It is now out of beta.

He goes through case study.

Q&A notes

Landing pages for the second tier engines should be done on the most granular level that you have time for. Test, don’t just give up on it. You wouldn’t give up if it was Google.

They’re building more tools all the time. Look into engines, they’re moving to transparency and ask about tools. They’re also working on offering ways to tailor traffic.

Wishlist:
-Ease of use from the Tier 2s.
-One point of contact and one interface for all the Tier 2s so that it’s not 2%, 2%, 2%–it’s one space with 6%.
-Quality needs to grow as well as quantity–verticalization is the first step.





One response to “Beyond the Majors”

  1. pat writes:

    Search for “SMX Coverage” in Google.
    funny.



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