STATS: Google Becoming More Efficient: Improved CTR

Google Becoming More Efficient: Improved CTR

The recently reported decline in Google paid clicks caused what may be an unnecessarily strong reaction in the investment community this past week. Efficient Frontier's US Client Index, which covers more than 20 million paid clicks each month, did indeed see a 5% drop in click volume on Google when comparing January 2008 to January 2007. But same advertiser spend was up on Google by 7% in the same period, and click through rates improved by 10%. CPCs were up by 13%. This data suggests, as Comscore posited, that Google is becoming more efficient at serving ads by delivering more relevant clicks to advertisers. Thus it is able to charge a higher premium for those ads, hence the increase in CPCs.

Our Search Engine Performance Report: Q4 2007 showed that ROI on Google was up 7.5% from Q4 2006 to Q4 07, which does not spell disaster in my mind. Next week we'll take a look at overall statistics for February on this blog. Stay tuned!

Ed: Google turned off area-click in Nov-07. Was it timed with a new targeting change in Sep/Oct that improved CTR? Or reduced impressions on non-optimized affiliate content pages?

ComScore clarifies view on Google 'paid click' data

By John Letzing & Benjamin Pimentel, MarketWatch

"It is common knowledge in this industry that Google has been targeting what it deems to be low-quality ads," the ComScore executives wrote. "It has introduced a 'quality score' that it uses to prioritize placement of ads or to decide to suppress an ad altogether." 

Content Spending: How much is enough?

The average Efficient Frontier client spends 3.4% of search budget on content, but that number varies widely by vertical. Because Efficient Frontier's portfolio optimization algorithms look at the entire portfolio of keyword bids across both search and content, where spend is allocated is an indication of the effectiveness of that channel.

To learn about best practices for content advertising, read this post.

February 21, 2008

Average CPC - Search vs. Content

Last week Search Engine Watch posted Efficient Frontier's average CPC by vertical for search advertising. I've been asked to compare that data to content advertising. Our average CPC across all clients in January 2008 was $0.65, while for content it was about half, at $0.32.

Yahoo Reveals (Some) Details About Its Ad Plans

February 26, 2008, 9:27 am
Yahoo Reveals (Some) Details About Its Ad Plans
By Saul Hansell

The meat of the presentation by Jerry Yang, chief executive, and Sue Decker, president, of Yahoo at the Interactive Advertising Bureau’s convention Monday was a new advertising system called Apex (for Advertiser Publisher Exchange).

...

The key benefit that Ms. Schneider said Yahoo would give publishers was the ability to have more pages on which their existing sales force can sell ads. In the case of the newspaper deal, local papers will be able to sell bundles that include ads on visitors to the newspaper site and other people on Yahoo’s network that it can identify as living in the local area.

The behavioral targeting ambitions can be seen in a different deal that Yahoo cut last year with WebMD last fall. Under this scenario, users who visit WebMD will be tagged, presumably through a cookie on their browsers. Later, when those users visit Yahoo properties, they can be shown ads that are sold by WebMD (rather than Yahoo). Since WebMD knows what conditions they are interested in and has relationships with health care companies interested in people with those conditions, it presumably can sell the ads for more money than Yahoo could.

These deals are interesting because they are the reverse of the typical advertising network arrangements in which networks buy the unsold pages from publishers at low rates. Here Yahoo is giving some of its pages to publishers to sell high rates, presumably because they have data about users and relationships with advertisers.

It also shows some ways that Yahoo can open its traffic and its vast trove of data about users to other players.

Analysis/Questions:

• Newspapers gain simplified ad serving and coordination; and save labor costs. Since it is easier for advertisers to buy direct, do they dis-intermediate themselves from ad buyers?
• Newspapers gain more local impressions. Do they need more inventory? Have they already sold their existing inventory?
• Yahoo takes over sales of non-local impressions. Is this the same as the remnant market of hundreds of advertising networks?
• Targeting brings higher eCPM's. Would an auto dealer pay 10x higher to target the 10% who are ready to buy a car? If not, does targeting reduce the total dollars spent by the auto dealer with the local paper? If the auto dealer pays 5x more, the newspaper makes less, but uses 10% of inventory to satisfy the advertiser. Does this create more unsold inventory at the expense of lower ad dollars?
• Video brings higher eCPM's. Is the newspaper staff ready to support the creative needs of local advertisers?

The net is that newspapers gain more inventory and become the local ad reps for Yahoo.

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ALLIANCE OF MAJOR MEDIA COMPANIES TO DELIVER PREMIUM ONLINE ...

Feb 15, 2008 ... announced the creation of quadrantONE, a new online sales organization focused on ... “By aggregating the online audiences of quadrantONE’s ...

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Feb 15, 2008 ... While Google and Yahoo and Microsoft are all large advertising forces on the Web, and are generally the default agencies ...

QuadrantOne Signs Yahoo Newspaper Partners - ClickZ

Newspaper publishers, working to appear unified as print revenues decline, bring 138 sites to fledging network.

NEWS: Microsoft Tells Advertisers “Engagement” Is More Important Than Clicks, But Is Vague on Details

Microsoft Tells Advertisers “Engagement” Is More Important Than Clicks, But Is Vague on Details, Techcrunch by Erick Schonfeld

Online advertising executives love talking about “engagement”: It is not the impressions or clicks that count, it is how many people who saw your ad and actually ended up doing something about it. In a speech today Brian McAndrews, Microsoft’s senior vice president of Advertiser & Publisher Solutions, announced the beta of a new way to measure the effectiveness of ad campaigns that Microsoft is calling “Engagement Mapping.” Instead of measuring clicks or impressions, engagement mapping aims to track how many times a person comes across an ad on the Web, and correlate that to actions taken down the line. So if you see an ad on Facebook for a Visa card, and then on three other sites before you click through to sign up, Microsoft will give Facebook some credit for that eventual customer engagement.

Ed: Similar to Turn's behavior targeting with delayed click through - stretching beyond stochastic significance to justify value for advertising clients.

Market Insight
Did you know that over 25% of ad-driven responses on advertisers' websites can be attributed to ads that are viewed but not clicked on? Of these 'view-through' responses, over 50% occur more than a day after the ad was seen.

How should advertisers respond to this information? Turn recommends monitoring both click-through and view-through actions to understand true campaign performance.

0.62% Average Click Through Rates!

The average click-through rates for all ads served by both advertisers and publishers using DoubleClick ad serving also were stable through the year, with an uptick of 11% from Q2 to Q3. The average click rate in Q3 was 0.62%, DoubleClick reports. Rich media click rates continue to be about five times those for non-rich media ads. (full)