The Science of Managing Search Ads

A colleague forwarded me an article about Google AdWords from the NY Times. I especially liked this part, "For more than one million businesses, Google’s search advertising system is like a hose inundating Web sites with traffic. Managing it effectively, though, is as much art as it is science. It requires a mix of analytics and gamesmanship, a combination of skills that has become vitally important in the Internet age."

You know I agree with this and liken pay per click advertising to commodities trading. Not that I've done commodities trading personally - but there's bidding and competition and risk and return, so there's definitely similarities.

I've got the sense that most of 2009 was like a hose innundating me with information, traffic, decisions.

The intersection of art and science, gamesmanship and analytics at the tip of a firehose - what a place to be!

10 Things You Can Do with Social Media and Some Common Perceptions

Here are 10 things you can do with social media:

• join a group or invite people to join a group
• post a news item or job to LinkedIn
• write a blog article
• tweet
• post a blog comment
• mine leads, find information
• read comments
• respond to comments
• post a video
• make connections with other people

In the last two years I’ve heard many objections to social media. Here are some common perceptions about using social media

• I won’t have time: it’s playtime; there’s no revenue opportunity; I don’t get excited about cost avoidance; I’ll be better off spending time on something else; sitting in front of a computer is for people with lots of free time; we don’t want to appear unresponsive
• My audience doesn’t use social media: e.g. Facebook is for kids; decision makers don’t use social media; CEOs and top executives don’t use Twitter
• I already communicate with my audience: people should meet face to face or communicate by phone; I use listserve and email
• It should be centralized; it is a function for the Marketing Communication team; it has to be monitored; there should be rules; we don’t want public criticism

No doubt in some situations there is an element of truth in each of these perceptions. Engaging in any activity means some time commitment. If it isn’t done well, there won’t be a worthwhile revenue opportunity. It’s true Linkedin is a more likely demographic for certain target audiences than Facebook at present. Certain interactions are more productive face to face and a corporate entity has to protect its brand identity and messaging.

The flip side to this is that all of these perceptions are also partially false. I’ve actually heard people who say that there’s no opportunity reverse course and say they fear they will be flooded with inquiries and won’t have time enough to respond. Being unresponsive can have consequences but social media is not a two way dialogue between the company and the group. Group members are relying on other group members to contribute and respond as well. A good practice would be to listen to what people are saying, facilitate the discussion and correct misperceptions. Plenty of busy CEOs, board members and top decision makers at the most prestigious organizations use Twitter, Linkedin and Facebook for personal and business reasons to stay in touch with colleagues, to follow developments in their field and to keep tabs on competitors. And no doubt meetings, email, telephone and traditional media are all important but as a matter of fact, they aren’t all really centralized under Marketing Communications. On top of that, communications about your company go on all the time between your customers and competitors without involvement or approval by your company. An online forum or group gives companies a chance to be part of the conversation.

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Quantifying ROI on Advertising Expense

When measuring ROI on advertising, we should look at immediate sales revenue plus the longer term benefits to branding.

How do you determine ROI on advertising expense or what should you expect from a marketing campaign? These are deceptively difficult questions because a buyer makes decisions based on awareness of a company or its products that likely was built by multiple contacts over a period of time. There is some debate about the influence of TV advertising driving people to search online for a product or a company. Accepting for the moment that people will search a store circular or search online for something they remember seeing on TV, is it fair to credit the TV ad with all the ROI for a given sale?

It’s natural to focus on ROI and it’s easy enough to set a revenue target for an ad campaign, or for that matter, any category of expense such as labor or equipment. Tracking the revenue from an ad campaign can be quite easy in many cases, if your campaign uses any specific tracking parameter: a promotion code, unique product codes or catalog tracking ID, a unique landing page or a pay per click ad. Asking, “Where did you hear about us?” is pretty much automatic in ecommerce and direct marketing. But if you run a car dealership or a dry cleaner or you build houses, it’s not always automatic. Salespeople can ask the same question, “How did you hear about us?” but often the mechanisms for collecting and reporting the answers are not really in place. What’s more in almost any business, maybe the ad was the proximate cause of today’s inquiry or sale, but maybe many other factors were taken into consideration before the ad triggered an action. If your sales cycle is long, then is it realistic to expect immediate revenue from advertising?

Advertising builds awareness, loyalty and credibility, promotes trials or drives repeat purchases. But product quality or store location, customer service and recommendations play a role in purchase decisions too along with myriad other factors. Measurement of advertising effectiveness can attempt to quantify the increase in brand recognition or those types of factors too. Establish clear, realistic goals. Would it be reasonable to set the same ROI objectives for an established product in a competitive market as you would for a new product without any campaign history? Would ROI on print media be the same as an email campaign or outdoor signage? Should you use only the media with the highest ROI for your product and how will that impact market share and target demographics?

So what is a business line manager supposed to do? Set goals, measure, test and constantly improve. When any one of these four elements are weak, advertising is usually cut; and without advertising the business will likely decline. Focus on tracking when designing ads so the performance can be measured; test different ad copy and different media with different target audiences; and try to improve with every iteration.

Original Art and Backups

A small accounting firm called one day because a hard drive crashed. The caller said that years of work had been lost and wanted to know if it could be recovered. Yes, we'd send it to a data recovery firm, they'd open the drive in a cleanroom and probably recover upwards of 95% of the data. It would be around $5,000.

And the moral of the story is that you should keep multiple backups of critical files, client work and original art. I recently had a whole directory damaged by a power outage. But I restored 7,500 files from backup, stress free!

Logos, banner ads, stationery and photos are edited and sized for specific applications. A photo that starts out at 30MB might be scaled down to 20kb for the web and then won't be suitable for printing at 300 dpi at 8.5" x 11". Logos or other files created in Illustrator may wind up in a specific size as a JPG or some other format. Not to mention that artwork can be extremely complicated with layers of text and graphics in the original Illustrator file that are easy to edit in Illustrator but later won't be easily edited as JPGs. It's best to keep the original vector art files so edits can be made later. Getting copies of the original art at the conclusion of a project is a good practice you should consider before working with designers. And then, keeping them organized and backed up is going to save time and money.

Listen to Your Customers

My law professor taught me one of the most important lessons ever, "listen to people who disagree with you." It's as relevant to law as it is to product development.

New product ideas are constantly coming to my attention. Someone has an idea and devises a market for it. Unfortunately, a lot of times it works better if the market tells you what it wants and the product development teams go about making a product to suit the needs of the end users. In market research we fall victim to "confirmation bias". That's our tendency to hear what we want to hear, to ignore things that don't fit our way of thinking and to hear more of what confirms what we may already believe. And worse still we want to make things happen so we are predisposed to say yes. I find it very liberating to say no these days. Next time someone proposes a new product ask them, "Can you prove there's a big enough market for this product?"

Search Optimization Tips

Search optimization comes down to the content on the page. So when designing a website, it's helpful to keep in mind a few search optimization tips. Keep the most important words up front, make important keywords the subjects in the first sentence, put keywords first in the paragraphs. Don't use articles and pronouns like "them", "him", "the" and use nouns instead if you want to emphasize the relevance of a particular noun. Or do the opposite if you want to deemphasize a particular word.

Search is based in part on weight, proximity, frequency and prominence. So the first word, the first sentence and the first paragraph tell readers the most important things and to a search engine they have the most prominence.

Let's take a word like "wings". Wings has different meanings: like wings at Super Bowl; wings on things that fly; wings of buildings and so on. Search engines may gain insight into the connotation of the word based on very advanced algorithms. A reader understands wings in context based in part on the proximity of wings to other words in the sentence or paragraph and a search engine does too.

The first paragraph is about search optimization and keywords. The second paragraph is about search. The third is very heavily weighted to wings. If "wings" were replaced by "it" the weight and frequency of "wings" would go down.