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Jun 5, 2008

Bogus Stats Mislead Results on SEM

Ed: Bogus stats mislead on search engine marketing results. The findings imply:
  • Paid clicks from search engine pages (versus Long Tail affiliate pages) convert better to advertiser customers.
  • Google out-performs Yahoo in their ability to convert customers.
Does Google pay Efficient Frontier to produce this garbage?

26% of Google users search, rather than use the address box, to find a website. This group converts 100%. They are looking for the advertiser's website. Excluding this cluster from the stats, we would conclude:
  • No significant difference between Long Tail and pure search conversion. Long Tail affiliates convert users at similar rates to search pages.
  • No significant difference between Google and Yahoo.
Further, we should ask:
  • Advertisers paying Google for 26% of visitors who were already coming - does this make sense?
  • Google generates plurality of paid clicks on their pages; not Long Tail pages. Yahoo does a better job serving the Long Tail.
  • Both hide low CTR (click through rates) and conversion rates - that statistically may be in the noise range.
Online advertising needs to improve. Let's start with statistical transparency.

Clicks: 52%, 26%, 22%
Conv: 56%, 26%, 18% - Net 56/74 =75% Ratio 75/56 verus 66/54 - T-stat nil

UK Search Syndication Traffic Quality

Our post on search engine syndication network performance in the US showed that in general, pure search converts better than syndicated traffic. Efficient Frontier UK data shows a similar trend, as shown in the table below.


We looked at conversions from UK advertisers in 4 different verticals, and found that, on average, 78% of Google's paid search clicks came from google.co.uk or google.com, while only 54% of Yahoo's paid search clicks came from search.yahoo.co.uk or search.yahoo.com. (Note: this data does not include clicks from the engines' respective content networks) Microsoft Live Search doesn't show ads outside of its own search properties in the UK, so was not included in the table.

Yahoo had a wider discrepancy between the percentage of clicks and percentage of conversions than Google (78 - 82% vs 54 -66%), which suggests that Yahoo's average 662 syndicates covert at a much lower rate than Google's average 228 syndicates. Ask and AOL are Google's two biggest UK syndicates, and account for a similar share of clicks and conversions, showing that they drive high quality clicks in comparison to Yahoo's largest syndicates, which include sites like couponmountain.co.uk and findstuff.co.uk.

Data from our UK Search Engine Performance Report: Q1 2008showed that Google accounted for 85% of UK search engine spending in Q1 2008, compared to Yahoo's 12%. Google's high volume of pure search paid clicks and smaller syndication network relative to Yahoo speaks to the strength of Google's brand in the UK, both as an advertising platform and a destination site.

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