Covario: all you need to know about online search!

Online’s share of the media market is going up in all markets, to 20 per cent and over in the US and UK for example. But search remains by far the biggest sector although there are important developments under way, from the growth of mobile to the possibilities of Facebook. Here Larry K. H. Jenkins (pictured), vice-president of global client strategies and solutions at award-winning independent search agency Covario explains how search is changing and why.

1/Google searches are up, cost per click is down. Why?

The increase of mobile devices in general, especially in the U.S. where there was a triple-digit increase during 2011. By the end of this year mobile is expected by some to represent nearly a quarter of all paid search clicks. It should also be noted that mobile clicks in the Eurozone more than doubled in 2011.

Search queries on mobile sites tend to be different than on desktops. For example, on your mobile, you may be searching for a restaurant or a store to go to and you will be looking at reviews, menus, etc., while at home on a desktop you may be looking more at buying a branded product of some sort.

For our clients at Covario, we do not necessarily target the same keywords because we know search behaviors may vary depending on the devices. Since some keywords are most expensive than others, it is quite possible that those keywords targeted for desktop searches are more expensive than those targeted for mobile devices. Plus, now we have tablet devices with their unique UIs, which is another interface to target for search.

CPC on mobile is generally less expensive than on desktop. The main reason is that even if advertisers advertise on mobile not everyone is on mobile and for various reasons:

1) Since only the three first spots are visible on a mobile screen, advertisers think it’s expensive to come up at the first three positions of the Google search results pages.

2) Most of the mobile sites are not yet user-friendly (building a mobile site is not always the top priority), so advertisers do not see the point in users having a bad experience using their mobile sites. They prefer to wait and have a good mobile site before investing in advertising on a mobile device. As a result there may be less competition on mobile and CPCs are less expensive. As the percentage of mobile searches increase overall, total searches do increase as well, but the cheaper CPCs in mobile (where searches increase) make the overall CPCs decrease.

Advertisers are more savvy. They now know what a match type is or a negative. They understand the quality score concept better and as a result most of the Google AdWords accounts are more optimized than ever so CPCs are lower. Also more and more advertisers, especially in retail, have bid management tools, which ultimately bring lots of efficiency.

It’s Important to note the multiplier effect…

Research points to a clear statistical advantage in securing the click from a searcher if the website holds more real estate on a search engine results page (SERP). Occupying more of page one of any given results page not only increases the paid search click through rate (CTR) and therefore increases the number of visitors and decreases the per click costs (due to quality score improvements), but also reduces the click costs further by ensuring that organic search is doing its part in facilitating a blended Cost Per Click (CPC) from the medium which might not have been possible with PPC alone.

2/Google has recently made various tweaks to its system. Which are the most important and are they of benefit to advertisers?

Google is always making some changes, but they are affecting PPC programs less in general than in SEO. For PPC, the latest changes include:

Adding product images ads that make the ad more relevant with the addition of an image.

Adding reviews (stars) on the ads.

Adding site links – not very new but still pretty new in Europe.

Skype-able ads and videos ads are big trends in Europe, really interesting from the advertiser point of view, they help save money while still getting exposure.

For SEO, Google tries to create good content in and out from themed hubs. They also like websites to be maintained from an accessibility (e.g. page load speed) perspective and release new tools to help webmasters. Recent releases to the Google algorithm are around authority (linking) and distribution (country locators). These releases are designed to help maintain the quality and targeting of Google’s organic search results.

It’s all good for advertisers so long as they concentrate on quality of content and associated partners.

3/Is the search market always destined to be dominated by Google?

It appears so probably, based on the current environment, except for certain countries like China or Russia, for example, where there are other regionally dominant search engines (e.g. Baidu in China and Yandex in Russia). Baidu has a chance by virtue of the population size in China.

In general, Bing/Yahoo has not taken off very much. They don’t seem to have the inventory and investment has been limited. In Europe, the content network in not available. The UI is less intuitive as well, which discourages advertisers to push further – although Facebook could be a major factor in the future.

If Google steps over the mark in personal privacy, this could lead to some push back in the Eurozone from consumers or from government embargoes, which would possibly open up the market.

Facebook is a big contender with their internal search and their partial ownership by Microsoft/Bing.

4/Search revenues are counted in the advertising box – would they be more accurately defined as direct marketing?

This is a difficult question to answer – it depends on your perspective and the definition of both!

5/What role does creativity play in search marketing? Is it possible for companies with smaller budgets to compete with big spenders by being cleverer?

Creativity is key because PPC supports many other initiatives for our customers, such as ATL, Download of apps, offline launch etc. We often have a separate PPC budget to support specific non-search initiatives. We have proof that PPC helps those initiatives as we see, for example, more downloads of apps online during the time when a PPC campaign is launched. PPC is one of the quicker ways to get conversions and leads for any program.

Because PPC is very competitive in general, you need to think out of the box if you want to appear on specific keywords. PPC can support so many things. You just need to think about it!

Anyone can compete with anyone, you just need to study carefully what keywords you are after. If you do your keyword research well (i.e. identify the keywords to go after and differentiate them from the crowd) you can compete. But if a small PC manufacturer goes after the generic word ‘PC,’ then no.

As paid search is based on bidding algorithms and quality scores, small companies can employ A/B split testing or multivariate testing in order to compete with the biggest brands

On the SEO or earned media side of search, creativity comes into to play a lot more these days in the integration and leveraging of relevant social media content in smart ways to help improve link-backs and improve social signals that Google and other engines weigh heavily in organic search rankings.

6/Does the response to search marketing vary in different markets across the world? Do consumers in China, for example, behave as they do in the US? Is it possible to identify ‘mature’ search markets and ’emerging’ search markets?

There certainly are regional differences in consumer search behavior by country and by language. That is one of the major reasons global marketers choose to work with search agencies like Covario that have global presence and multi-language capability amongst team members located around the world. A lot of the emerging markets for search are in APAC, especially China. In addition, there are key emerging markets in the eastern part of Europe and in Latin America.

7/ From Covario’s point of view, as an independent, are the big marcoms companies a threat?

Yes. However, today’s advertisers do not want necessarily want to have all their marketing and media channels managed by the same agency. At Covario, we are search marketing specialists for both paid (PPC) and organic search (SEO). We also offer search and software solutions. We work directly with global marketers as well as with other advertising agencies that are not as specialized as we are in search marketing. We complement them because our search expertise adds client value.

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