Marketers Unite – Open up the Kimono
The same day that Apollo Group announced its partnership with Advertising.com was the same day that an article in AdAge told of “a war of words” as “as search-marketing vendors went toe-to-toe with Google and Yahoo over the engines’ responsibility to protect advertisers.” Click fraud is like SPAM. Everyone has a different definition. Bots that generate clicks are obviously fraud, but are sites that generate clicks but have a lower conversion rate than the engine itself fraud? Or, are they just lower converting traffic that should be priced accordingly? I’ll say this upfront. I am not a search engine marketer. I don’t naturally comb through logs and do not have the ability to create a proprietary bid strategy let alone program it. Similarly, I know what API stands for, but couldn’t clearly articulate a definition or its benefits. What I am, at least in part, is someone that can track conversion rates and share data that I hope will tip others in favor of transparency. At the very least, this data might help some feel like recent performance trends aren’t their fault.
The beauty of lead generation is that it provides almost instant feedback regarding performance of media. The search engines make it somewhat more difficult to compare apples to apples, but for this comparison we have to bite the bullet and look at performance across the entire engine as opposed to trying to compare keywords to keywords. This week, I share conversion data for similar lead generation campaigns run on Google and Yahoo. Next week is even more fun as I’ll share data comparing Yahoo Search and Content Network to Google Search and Google Content Network.
Graph #1 – Description: This graph looks at Yahoo search traffic over a nine-month period. The blue line represents conversion rate whereas the red line represents traffic, i.e. click volume.
Graph #1 – Explanation: As any real expert can attest, search engine marketing is anything but an exact science. This is especially true for performance-based marketers who must manage their bids closely to insure constant profitability. As a result, it is very common for click levels to see greater volatility than is caused by time (time of day, day of week, season, etc.). On the whole though, especially compared to the Google graph below, running on Yahoo is very consistent.
Despite its many faults, Yahoo has long been a favorite of performance marketers, many of whom are able to spend as much on it as they do on Google despite Google’s 2x greater market share. The important thing to note about this graph is the dramatic change that occurred around the beginning of this year. Click volume rose sharply but conversion rates dropped; the worst possible combination for a direct marketer. Log-analysis showed that the biggest impact were new, third party sites that either hadn’t syndicated the Yahoo feed before or had been pulling a different set of keywords. Volume is good for search engines, especially if the engine in question is about to lose upwards of 40% of its volume in just a few months time. But volume without conversions of course isn’t so good. Were it easy to find high converting traffic, the race for #1 would be a lot closer than it is today.
Graph #2 – Description: This graph looks at Google search traffic over the same nine-month period. The blue line again represents conversion rate, and the red line represents traffic, i.e. click volume.
Graph #2 – Explanation: This graph could just as easily be Google’s stock price. It is in fact, though, click and conversion data. I imagine that I am not alone in thinking that the ideal graph would have a steadily increasing click curve and at the very least a steady if not increasing conversion curve. This does assume that the incremental cost per click decreases, otherwise growth in clicks with no growth in conversion would spell unprofitability.
Unfortunately, we must ignore some of the big peaks and valleys – those are the result of active bidding. The main point though is that Google too shows some interesting changes that occur during the beginning of the year. Similar to Yahoo, there is a healthy uptick in clicks, but unlike Yahoo, the conversion rate increases compared to the four months prior. This is due in part to this vertical of lead generation being opposite commerce – November and December are slower than January. The steady conversion rate though, along with log corroboration, help show that the increase comes not from new traffic but from market effects.
As we conclude, I want to thank those that contributed to these graphs and for their willingness and desire to begin a more public dialogue on performance. We all have our competitive advantages that we must keep, but in the end, the only way we can hold the engines accountable is by coming together and facing them on a unified front.
