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  • No, the Green Ad Label Did Not Dramatically Increase Google Text Ad CTR

    Recently, the search community appears to have lost their collective mind over the question: Did Google changing the color of the tiny label denoting ads as paid links from yellow to green dramatically increase their ad click-through rate beginning in April?

    Logically, the answer to that question is no, given that Google didn’t even roll green ad labels out to all users until mid-June and were only testing the feature for a limited number of searches until that point.

    Even ignoring that fact, our data just doesn’t back up any clear increase in CTR as a result of green ad labels, and there are several reasons why analysis to the contrary might be flawed.

    No Change in Text Ad CTR on Google.com vs Search Partners

    One analysis on the subject that’s been widely shared is a Wordstream post featuring the following graph, which shows Google.com CTR relative to search partner CTR rising beginning in early April.

    The argument goes that this relative rise is the result of Google rolling out green ad markers to google.com ads beginning in early April while search partners continued to use yellow markers.

    Looking into Merkle’s own data, split out by device (since this is a crucial bit of segmentation for any trend analysis these days), we see no steady movement in how much greater Google.com CTR is relative to search partners since the beginning of March.

    While there are obviously some pretty significant daily swings in this metric, neither desktop nor phones saw even a 3% difference in relative CTR comparing the last day featured in the graph to the first.

    I don’t want to say that anyone’s analysis that goes against my own is outright wrong, but the fact that Wordstream’s data appears to aggregate data across devices makes me think they might be getting deceived by the numbers they’re using.

    CTR Didn’t Change, but Desktop Partner Share Did

    Taking a look at the share of text ad traffic coming from search partners, we did begin seeing a rise for desktop computers beginning in early April – conspicuously around the time Wordstream reports an increase in google.com CTR relative to search partners.

    Could this rise in share be to blame for the increase in overall google.com CTR relative to search partners observed by Wordstream, as partner traffic from a new source manipulated the relative CTR of google.com?

    Perhaps, but even looking at overall relative CTR across all devices we see only a brief rise and then return to past relative CTR for Merkle advertisers.

    It’s possible Wordstream’s traffic mix by device is different than that of Merkle, which could impact this overall CTR look.

    However, we feel pretty confident in saying any changes in relative CTR were not driven by a different colored ad button, and that different data sets are not to blame in our reaching a different conclusion than Wordstream.

    Either way, this debate brings up another point that’s important to remember in analyzing performance.

    The Search Partner Network is Volatile

    Comparing google.com performance to search partner performance can be a worthy exercise in determining if you want to target your ads to partner sites. However, using the search partner network as a ‘control’ group is not a good idea.

    That’s because specific sites frequently fall in and out of Google’s partner network. For example, eBay started using Bing Ads for mobile searches in 2014, causing the share of Bing Ads traffic coming from mobile devices to increase from 25% in Q1 of that year to 36% in Q3. eBay’s mobile ads are now right back with Google, along with a ton of impressions, but fairly low click volume for Google overall.

    Other recent changes to the search partner network include Google and Yahoo rekindling their ad serving relationship in late 2015, AOL moving to Bing Ads as a partner, and Google beginning to show PLAs in image search, with those searches deemed part of the partner network.

    Long story short, search partner performance, and particularly CTR, can wax and wane with the simple addition or subtraction of a single partner, and is for that reason not a very good bellwether.

    Conclusion

    Our data does not point to a rise in Google.com CTR relative to search partners since early April, around the time Google began testing green ad labels.

    Even if it did, it’s pretty unlikely that such a rise would have had anything to do with the change in label color, as that change wasn’t rolled out to all users until mid-June -- a time when Wordstream's analysis actually shows google.com CTR decreasing slightly compared to search partners.

    Are searchers 15% more likely to click an ad that has a few pixels that are green as opposed to a few pixels that are yellow, per Wordstream’s analysis? No way.



  • In the Age of Dying CSEs, Feed Management is More Important Than Ever

    Over the past year, there’s been a clear change in the scope of product feed usage as the CSE landscape has shifted and Product Listing Ads have continued to evolve. When Merkle moved into feed-based marketing there were more than ten major active CSEs and PLAs were just getting off the ground. Feed management was viewed as synonymous to CSE management because that was the main use case for a product feed.

    Fast forward to Q1 of 2016 and only two major traditional CSEs see meaningful volume, while PLAs have come to make up 70% of our retailer clients’ non-brand click traffic on Google. At the same time, Google continues to show increasing favoritism to the PLA format, with the elimination of right-rail text ads and frequent tests for expansion

     

    Yes, CSEs have consolidated significantly. However, with the continual strong growth of PLAs and marketplaces, and sustained success in affiliate programs and display remarketing, the definition of feed management has morphed. Rather than just a way to run CSEs, feed management has become an essential strategic element integral to success across many digital platforms.

    Analyst Oversight Critical Component to Succeeding with Feeds

    Many retailers and agencies think about a feed as a set-it-and-forget-it file that requires initial set-up, but not much attention thereafter. However, our analysts have proven time and time again that active management and collaboration on all feed-based marketing is essential to maximizing efficient revenue for that channel.

    We at Merkle are huge proponents of using the power of technology to manage marketing programs at scale, while also relying on the intuition and creativity of human analysts. The analyst piece is critical to ensure that automated processes and their outputs are used in meaningful ways that are tailored to each retailer’s unique needs.

    For example, Google’s Dynamic Remarketing ads automatically populate with products a user viewed previously, with Google filling in the blanks with whatever products they deem relevant. Across a feed of tens of thousands of products, letting Google decide which products are best to show any given customer is undoubtedly not an ideal solution.

    Through careful performance analysis and consideration of one client’s objectives, our team grew Google dynamic remarketing orders 136% by flagging a recommended set of products in the feed for Google to use to fill in those dynamic ad product gaps.

    In another example, we identified opportunities to build on two of our mature client programs by launching feed-based CPC programs on Houzz and Polyvore. By jumping on these social shopping opportunities early, we were able to add 41% and 156% percent in incremental comparison shopping revenue in a time when many CSE programs were starting to decline.

    This success was a result of our understanding of what products from our clients’ catalogs made sense on each platform, coupled with bidding and filtering recommendations provided by our proprietary tools.

    For Google Shopping Campaigns, some of the feed management pieces that can substantially improve performance include title and image testing, maximizing the use of ad extensions, providing clean, informative product attributes, and using the feed to smartly segment products for bidding purposes.

    Having feeds and paid search managed under one roof has proven particularly beneficial for our client set. In addition to working together on Shopping campaign strategies, we can swiftly implement changes to the feed and immediately assess the impact of those updates.

    The data speaks for itself, with PLA share of non-brand sales 10 percentage points higher for clients that move feed management to Merkle.

    As a whole, the performance we’ve seen highlights the breadth of important feed-based initiatives and the significant impact that effective management of those initiatives can have across a retailer’s digital marketing program. In order to perform well in the feeds realm, retailers must stay on top of the changing landscape and question best practices for even the most established programs.

    If there’s one thing we know in digital marketing, it’s that the only constant is change. Having a clean, accurate, and complete data feed will set marketers up to capitalize on feed-based opportunities, regardless of how they change in the months and years to come.



  • Google Testing New Product Listing Ad Filter Buttons on Mobile, Including In-Store Availability

    Google Shopping has grown immensely as a traffic source for advertisers over the past year, particularly on phones. Looking at growth by device type, Merkle advertisers saw a 162% Y/Y increase in phone Product Listing Ad (PLA) clicks in Q1 on average, far outpacing desktop and tablets.

    Along with doubling the size of PLAs on mobile devices and increasing the frequency with which these units appear on mobile search results, Google continues to test a variety of different mobile PLA formats and features to aid in that growth.

    One new mobile PLA feature that we’ve noticed recently is the addition of filter buttons below PLAs. We have seen three different buttons showing up; In store, Top Rated and Price Qualifier (ex. Up To $130).

    While tests in which Google automatically filters products based on superlatives found in the query (such as ‘best coffee grinder’ featuring only top rated grinders) have been well documented, these new buttons appear to show up for general searches that do not feature superlative qualifiers.

    Below you can see an example for the search “keurig coffee makers”:

    Once a user clicks through one of the buttons they are directed to a Shopping page featuring only products that meet the specifications of the button selected.

    Potential Impact for Advertisers

    If these buttons catch on with searchers, they have the potential to impact which products users purchase, as well as the likelihood of a product being picked up in store.

    For advertisers with brick and mortar stores, the ‘In Store’ button makes it easier for users who prefer to pick up a product in store to find those brands which can offer that possibility.

    In fact, we have already observed a rise in online purchases with in-store pickup selected on mobile for clients that are running Local Inventory Ads (LIA), beginning in mid-May. For one advertiser, in-store pickup orders have roughly tripled in the last month.

    This seems to confirm that users are making use of these buttons, and leads us to believe we should also expect to see an increase in traffic for products that fall below the price ceiling of the price point button. Similarly, products that have strong product ratings will likely see an increase in traffic because of the ‘Top Rated’ button.

    On the other side of the coin, if these buttons are widely rolled out and used, we would expect to see a decrease in traffic for products priced above the price ceiling featured in the button as well as for products rated poorly relative to other Shopping options.

    Getting Local Inventory Ads Set Up

    Advertisers interested in being featured in the in-store results should set up Local Inventory Ads (LIA). There are a few steps that need to be taken to participate. First, review the criteria and policies to ensure eligibility.

    Some of the important criteria is having brick and mortar stores, selling physical goods at those locations, being located in the country you are targeting and having a Google Merchant Center and Google My Business Account. Advertisers also need to provide Google with local product feeds in order to participate.

    Getting Products Ratings Set Up

    Setting up Product Ratings gives advertisers the ability to take advantage of the ‘Top Rated’ button. Products need to have three reviews and a minimum of 50 reviews across all products in order to qualify for the program. To setup Product Ratings fill out this interest form provided by Google to receive additional information.

    Conclusion

    These updates seem like a great user experience upgrade for searchers, who now have the ability to quickly filter the results so that they are more relevant to what they are looking for, instead of having to scroll through the PLA results at the top. It would be interesting to see statistics on how many people click on one of these buttons first over the PLAs at the top.

    More qualified clicks are also better for advertisers, as searchers should be more likely to convert after clicking through to a product that meets the specifications of the filter.

    Mobile PLAs continue to grow significantly, and this test could lead to additional clicks on PLAs for products that fall into one of the button categories, as well as corresponding declines in traffic for those products that fail to meet the requirements of the featured buttons.

    It will be interesting to see if and to what extent Google continues to test this mobile PLA format in the months to come, and the impact it has on mobile PLA and text ad performance.



  • Expanded Text Ads Latest Example of Paid Search Updates SEOs Need to Be Accounting For

    In any given week there can be dozens of articles written across the SEO industry about changes in traffic or ranking and how it might be the latest Penguin or Panda or Chupacabra update.

    There are even entire tools built with the aim of tracking how much change is occurring within organic search at any given moment.

    While these updates and tools sometimes lend themselves to shining a light on specific optimizations SEOs should be looking to make for their sites, more often than not the reporting surrounding potential updates seems aimed at explaining performance fluctuations SEOs might be seeing.

    As a research analyst responsible for understanding how the search landscape is shifting and the impact of updates on performance for brands, I obviously understand the benefit of knowing when something out of our control is impacting our data.

    Indeed, Merkle’s own Dave Coppedge wrote Monday on rising dark search traffic from the Google app and the apparent resulting declines in organic search visits just yesterday. This is an important trend to be aware of in assessing recent mobile organic traffic.

    To that end, however, I would argue that SEOs should be keeping their ears to the ground for paid search updates as much, if not more, than they do for algorithm updates that more often than not impact only a small share of searches.

    This has been particularly true over the past year, as Google’s ad updates have done more to impact the overall organic ecosystem than anything else.

    Expanded Text Ads Primed to Increase Text Ad CTR

    Formally announced by Google recently, Expanded Text Ads (ETA) radically change text ad specs from one 25 character headline and two 35 character descriptions to two 30 character headlines and an 80 character body.

    The resulting ads are much wider on desktop and take up an additional row of vertical space on mobile devices.

    Google itself cited as much as a 20% increase in CTR for these new ads compared to old text ads, and particularly on mobile the format seems likely to garner clicks that might otherwise go to organic links as the organic results get pushed further down the page.

    As advertisers move to adopt the new format, SEOs can very likely expect organic traffic to take a hit, and performance evaluations in the months to come need to take this into consideration.

    This is just the latest in a long line of Google ad updates that are impacting organic performance perhaps more than any algorithm update over the past year.

    Your Mobile Organic Growth Probably Slowed Over the Past Year, and It Has Nothing to Do with Rankings

    Starting in mid-2015 Google began to overhaul its search results on mobile devices, most notably:

    • Doubling the size of Product Listing Ad units on phones
    • Increasing the frequency with which it triggers PLAs
    • Adding a third text ad above the organic links where there used to be only two.
    • Increasingly featuring the Local Pack at the top of the SERP for queries which display local intent

    Aside from the enhanced prominence of the Local Pack, these moves dramatically improved mobile paid search growth, and continued to drive the impressive Y/Y Google paid search trends we observed in our Q1 Digital Marketing Report, including a 33% increase in overall clicks.

    However, all of the above updates pushed organic links further down the SERP on mobile devices, in turn reducing mobile organic visits - once the golden goose of organic growth.

    All told, Y/Y organic visit growth on phones went from +63% in Q1 of 2015 to -1% in Q1 2016. Likewise, overall Y/Y organic visit growth fell from +12% last Q1 to -7% in Q1 2016.

    Regardless of SEO efforts, these updates had a substantial impact on organic visits for most websites.

    Organic Data Only Makes Sense Alongside Paid Data

    If the massive swing in mobile organic visit growth over the past year has taught us anything, it’s that organic search success and failure can only be determined when taking into account paid search updates and results.

    The latest episode of just such an update stands to be the rollout of Expanded Text Ads, which will likely accelerate paid search Y/Y click growth at the expense of organic search visit growth.

    Paid search managers everywhere are already preparing for the impact to performance and adjusting expectations and budgets accordingly.

    SEOs, as well, should be bracing for the change and ready to account for it in performance reports.



  • Organic Search Traffic Down in May? The Google App May Be to Blame

    While reviewing natural search performance for several clients in May, an interesting and concerning trend became apparent – organic search traffic is trending downward.  

    Or is it?

    In SEO, our first response when we see a traffic impact across multiple properties is to scour industry news for rumor of an algorithm update. Though often times, it’s difficult to come across any confirmed updates by Google. Furthermore, speculation based on search engine results page (SERP) volatility doesn’t always paint a clear picture of what may be happening.

    So what do we do when nothing out there suggests an algorithm update? We dive into analytics. In SEO (and digital marketing in general), our ability to illustrate the success of campaigns and SEO implementations relies heavily on our reporting capabilities.

    Segmenting by channel, device, and referrer is critical, especially as changes to the SERP (read monetization) continue to impact natural search performance, which already saw YoY negative growth across all devices in Q1.

    DARK SEARCH STRIKES AGAIN

    We know from previous studies, such as Groupon’s bold experiment, that Natural search is often underreported for a variety of reasons. Dark search is an increasingly painful thorn in the side of SEOs.

    Generally, dark search is thought of as a percentage organic traffic being reported as direct, but this term can also apply to referring sites or “other” traffic as well. Our efforts are becoming more and more difficult to quantify because of disappearing data.

    On April 27, 2016, Google increased the amount of “dark search” traffic with an update to the Google App for Android. With the roll-out of this update, we noticed an immediate spike in referrer traffic that coincided with the immediate decline in organic traffic.

    The App sends the referrer id of com.google.android.googlequicksearchbox, which had no attributed visits prior to the update. As user devices continue to update to the new version of the App, referral sessions continue to increase over time.

    It’s a convincing argument when you look at the combined data for this specific client – approximately 11% of organic mobile traffic from Google has shifted to referral traffic since the App update occurred.

    This percentage varies by client, likely due to user demographics, but the shift appears to be present across all clients reporting this referrer. Values range from approximately 5% to 11% of organic mobile traffic from a sample of clients in varying verticals (including MerkleInc.com).


    To complicate matters, reporting of referral sessions from com.google.android.googlequicksearchbox seems to be very inconsistent across analytics platforms. There are instances where one platform (such as GA) is reporting a substantial number of referral visits, while another (Adobe Omniture) is reporting none at all. An evaluation of server logs may be the only surefire way to quantify how much traffic is originating from the Google app.

    WHAT NEXT?

    Ultimately, this looks to be part of the pattern of incomplete data for organic search. We, as SEOs, must be diligent in our efforts to account for as much natural search traffic as possible in order to paint a clear picture of natural search performance. As we wait to see how this evolves, it is important to consider Google app traffic when reporting SEO performance.  
     
    Additionally, we need to keep an eye on referring sites data so we can detect additional cases of traffic shifting from organic. Obviously, the traffic shift discussed here impacts a very specific segment of traffic – Android Google App users, but likely foreshadows what we can expect with the increasing number of “search” technologies like Google Assistant, the Gboard, Spotlight Search for iPhones (which reports as direct traffic), Amazon Echo, Search Apps, and others.

     



  • What You Need to Know About Google Demographics for Search Ads, Including 20 Months of Data

    Publically announced last Tuesday at Google’s Performance Summit but long available for marketers whitelisted into the Beta, AdWords Demographics for Search Ads targeting allows advertisers to adjust bids and targeting based on searchers’ age and gender.

    Using performance data for one Merkle advertiser that’s had age and gender targets added to some campaigns in its AdWords account with 0% bid modifiers since October 2014, I’ll walk through some of the major points that marketers should understand as these targeting capabilities roll out to more advertisers.

    Google Cannot Identify Age and Gender for All Users, but They’re Getting Better

    The first and perhaps most important thing to understand about these targeting capabilities is that they do not target the entirety of searchers that are a particular gender or age, as Google is unable to attribute all searchers to age and gender buckets.

    For example, here we have the share of total search traffic attributed to each age bucket as well as traffic share from users attributed to ‘undetermined’ for the campaigns studied:

    As you can see, the share of traffic attributed to ‘undetermined’ declined from 69% in October 2014 to 47% in May 2016. Thus, while Google is attributing many more users to age buckets than it was two years ago, only about half of paid search traffic for this advertiser can be attributed to users tied to age buckets.

    Taking a look at a similar chart for the gender demographic, we find that the share of traffic that cannot be attributed to a gender declined from 62% in October 2014 to 41% in May 2016.

    This means it’s slightly easier for Google to assign users to a gender than an age bucket, which makes sense given that Google is using users’ declared information in Google accounts as well as other signals Google collects to infer these assignments.

    While both gender and age are included in the personal information that’s necessary when signing up for a Google account, the non-declared information used to infer this demographic information about users, such as search history, is likely more predictive of gender than age.

    It’s worth noting that Google didn’t always collect gender information from users signing up for a new account, and only started doing so in 2012 after the launch of Google+.

    Regardless, both age and gender demographics can only be assigned to about ~50%-60% of searchers. This means that campaigns using age and gender targets with the 'target and bid option' selected for specific demographics (meant to limit ad reach to only those users included in the demographics targeted) aren’t actually targeting all of the users in those demographics targeted, but just the share that Google is able to attribute to a gender or age bucket.

    Another important point comes up within the gender data, where we find that Google attributed roughly the same amount of traffic to males and females through the first several months of tracking. However, since September 2015 females have accounted for at least 40% of traffic every month while males have accounted for 17% or less traffic over the same time frame.

    As this advertiser still sells very nearly the same exact products now as it did in 2014 and is bidding on basically the same keywords, it’s unlikely that the demographics of search traffic have actually shifted this much over the past 20 months.

    This calls into question how accurate Google is when it does assign a user to a gender or age, or at least how accurate they used to be, though isn’t proof in and of itself that these buckets are incorrect. Just something to keep in mind when making use of these targeting options.

    It’s also important to go into demographic targeting with an open mind in terms of which ages and gender might perform best for a particular brand.

    Performance Should Drive Strategic Decisions

    One point I can’t stress enough: don’t assume which demographic groups perform best for you in search.

    While you may know the age groups and gender that drive most of your brand’s orders and sales, the only way to know which users perform best in search is to add these demographic groups to your campaigns.

    For example, while I discussed earlier that our long time demographic advertiser sees significantly more traffic attributed to females, conversion rate is almost identical for males and females. Thus, male traffic is just as valuable on a per-click basis as female traffic, even if it accounts for a much smaller share of traffic.

    As such, advertisers shouldn’t go into age and gender targeting thinking they’ll just target all campaigns to the demographic buckets that perform best for their brand overall and exclude all the others. Aside from the questionability of how well these demographic groups are getting populated, you may be surprised by how these gender and age buckets perform compared to one another.

    The only way to know is to add these targets and accumulate data, and our example advertiser now has twenty months of data on how different genders and ages perform for different campaigns to inform optimization and targeting decisions.

    What else might advertisers want to know going into using age and gender targets?

    Here are a few additional points:

    • Age and gender demographics are not currently available for Google Shopping campaigns. This limits how much they can play into ecommerce advertisers’ strategies, as Google Shopping accounted for 70% of all non-brand clicks for Merkle retail clients in Q1.

    • Average position does not populate for age and gender targets, so advertisers will not be able to use this metric in measuring the impact of bidding adjustments.
    • Users deemed under the age of 18 are not attributed to an age bucket and clicks from these searchers are rolled up to undetermined.

    Conclusion

    Even if Google’s ability to assign users to gender and age buckets is somewhat limited for now (and perhaps a bit questionable), it’s great that more advertisers will now be able to use Demographics for Search Ads age and gender targets, which have long existed in Beta.

    I highly recommend taking advantage of these targets if you aren’t already to at least begin collecting data on how gender and age groups perform once Google begins rolling them out in earnest, though the timeline for when they will be available to all advertisers is currently uncertain.

    Further, with Google’s formal announcement marketers can finally begin publishing best practice tips and tricks for making the most of these targeting options.

    The fun has just begun.



  • Google Shopping Campaigns Webinar: 3 Important Areas of Focus

    Join us on Wednesday June 01, 2016 at 2 PM ET as AnnaMarie Thomas, Partner Manager for Google Shopping, and Todd Bowman, Director of Feed Management at Merkle, go over three of the most important areas of focus advertisers should keep in mind when it comes to Google Shopping campaigns.

    Register for the webinar here.

    During the webinar, you’ll learn about:

    • The effects of the new GTIN enforcements
    • Target Customers with RLSAs and Customer Match
    • How to take advantage of the mobile explosion with Local Inventory Ads (LIAs)

    Google Shopping Ads are now the primary source of non-brand paid search traffic for many ecommerce brands, and in Q1 PLAs accounted for 70% of all non-brand Google search clicks for Merkle advertisers on average.

    Don’t miss this must-see webinar on how to take your Shopping Campaigns to the next level and get the most out of this valuable ad format.

    Sign up today.



  • It Sure Looks Like Yahoo is Showing a Lot More Google Shopping Ads

    Since Yahoo announced in October 2015 that it had struck a new search ad deal with Google, advertisers and analysts have been left to wonder if or when the agreement would lead to any meaningful changes in the search advertising landscape.

    Keen-eyed marketers had spotted Google ads serving on Yahoo even in the months before the official announcement, but until recently, these tests (including a new Product Listing Ad (PLA) format) appeared to have remained very limited.

    Merkle data now suggests that Yahoo began significantly ramping up its use of Google Shopping Ads (aka PLAs) as early as the end of March.

    Google Desktop PLA Search Partner Share on the Rise

    In the Merkle Q1 Digital Marketing Report we showed search partner share of desktop PLAs rebounding in March after a drop earlier in the year. Looking more closely at those numbers and the daily trends since, we have seen two major spikes in desktop PLA partner share over the last month and a half.

    The first spike occurred around March 18th and 19th, with partner share of desktop PLAs rising from about 4% to between 6-7%. On April 27th, partner share rose sharply again to between 8-9%.

    In short, search partner share of desktop Google Shopping Ad clicks has more than doubled over the last two months.

    Importantly, the same trend is not apparent for mobile devices, but desktop partner growth has led to a spike in overall year-over-year PLA click growth.

    Why is this Probably Yahoo and Not Something Else?

    Unfortunately, advertisers have little, if any insight left into the specific Google search partners that are producing traffic for them, so we can’t directly confirm that the data above is tied to Yahoo.

    That said, there are several lines of evidence that provide a compelling case that Yahoo has indeed significantly ramped up its use of Google Shopping Ads.

    The Sheer Scale of the Partner Share Increase

    A lot has happened to drive more PLA search partner traffic in just the last nine months, but this recent partner share spike is unrivaled.

    First, we believe Google picked up several major retailers as partners in its AdSense for Shopping program in August 2015. This led to a big increase in partner PLA share on mobile devices (where PLA partner traffic was close to zero before), but a more modest increase on desktop of about two percentage points.

    Similarly, in December 2015 Google began serving PLAs on its own image search results (which it classifies as search partner traffic). Again we saw big spikes on mobile, but partner share of desktop rose only another percentage point or so.

    Again, partner share of desktop PLA clicks has increased by 4-5 points in the last month and a half, more than the increases from the earlier factors noted above combined. Very few properties, Yahoo being one, have the kind of search volume that could produce such a result on their own.

    Historically, we’ve found that Yahoo produces around 10% of US desktop search ad clicks. StatCounter data shows Yahoo controls a little over 7% of US desktop search. Similar ballpark, and if Yahoo were giving Google the ability to serve PLAs on half of its desktop traffic (Yahoo’s deal with Microsoft requires Yahoo to serve Bing ads for a majority of Yahoo’s desktop search results*) you would expect to see numbers like we have above.

    *It’s not clear to me exactly what this means. Does Yahoo serving Bing text ads at the same time as Google PLAs still count towards that majority? I don’t know, but the point remains that we probably shouldn’t expect PLAs to serve for 100% of relevant desktop queries on Yahoo.

    Click-through Rates Have Largely Held Up

    If Yahoo isn’t causing the rise in PLA search partner share, it would probably take at least several very large sites to produce the kind of click volume we are seeing. That’s because even huge sites like Amazon and eBay, which have a great deal of search volume, have not historically produced a large share of search partner ad clicks (in these two cases from text ad clicks).

    Partners that aren’t primarily search engines, like Amazon and other retail sites, produce very low search ad click-through rates. This keeps their share of clicks fairly low, but also drives down overall click-through rates.

    When Google added a few large retailer search partners in August 2015 (we believe), overall desktop PLA click-through rates fell by about 25%. And remember, this change only increased partner share by about two points.

    With partner share jumping 4-5 points now, desktop PLA click-through rates have declined a bit, but nowhere near that previous drop. In the past, we have found that Google produces a higher CTR than Bing and Yahoo, so a modest decline from bringing Yahoo on board wouldn’t be surprising.

    Yahoo.com Share of Bing Product Ads Has Dropped

    Probably the most direct and compelling data indicating that Yahoo has made a major change around product ads is the sharp decline in the share of Bing Product Ads clicks that Yahoo is producing.

    With timing very similar to the rise in partner share of desktop Google PLA clicks, we see that Yahoo’s share of Bing Product Ads clicks fell from around 40% in early March to as low as 25% in April and May. We are not seeing this with Bing text ads, where Yahoo’s share has declined, but more slowly and steadily.

    Signals from Q1 Results

    When Alphabet/Google released its Q1 earnings report last month, its results were considered a disappointment by stock analysts, particularly on the profit side, even as revenues rose 17%. Alphabet shares fell 6% in after-hours trading that night.

    One factor that cut into Alphabet profits, was a relatively large increase in traffic acquisition costs (TAC) paid to distribution partners. TAC to partners rose 33% Y/Y in Q1, up from 23% growth in Q4 and just 8% growth in Q1 2015.

    For its part, Google blamed the TAC increase on the shift to mobile, where TAC rates are higher. Presumably, Apple commands a pretty penny to use Google as the default search provider for Safari on iOS devices, but Yahoo is also known to command a very high TAC rate.

    According to SEC filings, Yahoo keeps 93% of the search ad revenue produced by Bing ads on Yahoo properties. If Yahoo has a similar arrangement with Google, it would push Google’s TAC rates higher. At least for Q1, the shift to mobile (and Apple devices) is likely still the dominant factor, as Google pointed out, but Yahoo could be a significant piece as well, and will be more so if it continues to ramp up its use of Google ads.

    It Seems a lot Easier to Trigger PLAs on Yahoo

    Last, but not least, go conduct a product-related search on Yahoo. If your experience is like mine, there’s a very good chance that you will see Google PLAs. While the plural of “anecdote” may not be “data,” if it were not so easy to trigger PLAs on Yahoo, it would be a lot harder to take the real data above seriously.

    Why Should Advertisers Care?

    While the business dealings between Google, Yahoo and Microsoft may be of more interest to their stockholders than they are to day-to-day marketers (particularly with a potential Yahoo sale looming), this type of development can have meaningful ramifications for search practitioners.

    It’s always important to understand the major external factors that are shaping our search programs so that we can better assess performance and more intelligently prioritize our work. Often a major change, announced or not, requires timely action just to avoid a negative outcome.

    If Yahoo is indeed in the process of significantly ramping up its use of Google Shopping Ads, some marketers may need to reassess their budget allocations, particularly if those budgets are platform or ad format-specific.

    A large influx of Yahoo traffic to Google PLAs could also negatively impact overall PLA conversion rates (this appears to be happening), requiring a reassessment of bidding and/or campaign segmentation strategies.

    Finally, we can’t rule out text ads as being in play here, which would up the stakes, but the data is not as clear. It does make sense, however, for Yahoo to make a big move with PLAs first as it is the newer of the two major search ad formats and Bing has had less time to catch up with Google on the monetization front in the product ad space.



  • Branding in China's Digital Golden Age: What Marketers Need to Know About Brand-Building on Baidu

    Stats on the China market are staggering enough to get even the most cautious marketers excited – the world’s second largest economy according to the World Bank; largest mobile market (Statista); home to the fourth largest digital platform in the world, Baidu. Our last issue of Dossier talked about the groundbreaking partnership between Baidu & Merkle, when we announced Merkle is Baidu’s first US-headquartered reseller. Our partnership offers exceptional performance in one of the world’s largest but most challenging markets. In the newest issue of Dossier, we dive a little deeper into the importance of brand building in China, and key opportunities for brands across the Baidu portfolio.

    It’s no secret that Chinese consumers are among the world’s most brand-conscious buyers. In fact, they’re willing to pay more for branded products compared to their price-driven peers in other markets. According to McKinsey, 45% of Chinese consumers believe a higher price point equates to better quality, compared to just 16% among US consumers.1

    A recent study found 49% of young generation Chinese will advocate for brands personally and online, compared to only 34% among their peers in the US.2 This trend is also reflected in Chinese searcher behavior. Chinese consumers are more likely to use search to research and validate brands, while US searchers are more likely to search non-brand products and look for price comparisons.

    As such, brand value is extremely important in China. Sounds like a brand marketer’s dream. But why should this matter to digital marketers?

    It matters because China is the world’s largest mobile market. Its rising middle class is extremely comfortable purchasing across digital devices, not to mention nearly 90% of Chinese consumers use Baidu for search. Simply put, the stakes are high for brands in China’s hyper-competitive digital ecosystem.

    B.A.T., or the ‘Big Three’ digital players in China (Baidu, Alibaba, and Tencent) are known to dominate the landscape in search, e-commerce, and social media, respectively. While e-commerce is big business in China, opportunities for brand-building remain limited. Increasingly popular Alibaba competitor, JD.com, offers little to no brand control, as the experience is like being in a virtual department store.

    While you can have some brand control in the form of a brand store on Alibaba’s Tmall.com, maximizing the robust brand opportunities on Baidu is attractive to advertisers and allows the most brand control in China’s digital landscape. Considering the critical importance of brand building in China, this makes search, and in particular Baidu, a key part of a brand’s China marketing strategy.

    BUILDING A BRAND ON BAIDU

    A key opportunity for companies marketing on Baidu is to leverage Baidu’s Brand Zone. Brand Zone allows advertisers to own a sizable amount of the search engine results page (SERP) with brand content and information, not only ensuring top placement, but essentially owning all the space above the fold. The result can be akin to a SERP takeover experience, which is completely unique to Baidu and not available on other search engines.

    It might sound obvious, but Brand Zone works for brand searches only, and must be exact match. Baidu’s philosophy is that for exact brand searches, the consumer is specifically looking for a particular brand and therefore enjoys the rich brand experience that Brand Zone delivers. The results back up this belief. Engagement with Brand Zone is high, with an average click-through rate of over 50% compared to 25% for brand searches on Google.3

    There are a variety of formats and options within Brand Zone, and the experience is very customizable based on content, assets and consumer value-adds that the brand can provide.

    BMW does a great job of leveraging multiple ad formats within Brand Zone, including images, videos, and the ability to scroll through a carousel of the different BMW series. Beyond including images, music, video, and social media tie-ins, some savvy luxury brands have even used Brand Zone to live-stream their fashion shows from Paris and New York – effectively taking their brand experience into one of the world’s most voracious luxury markets via search.

    Unsurprisingly, Brand Zone comes at a price and is best for enterprise brands looking to ensure a rich brand experience. The thing for advertisers to remember is that Brand Zone is the only way to ensure top-of-page placement for your brand.

    In addition to Brand Zone, advertisers should ensure that they are taking steps to protect their brand keywords. Designing and implementing a brand protection strategy is one of the first things Merkle does when onboarding new clients and is a form of trademarking your brand on Baidu.

    Now look at this brand search for Topshop. Without brand protection, Topshop is not able to secure the top placement on the Baidu SERP, with competitors like GAP and Shopbop appearing above them using their brand name.

    Compare this to when a company has brand protection and is also employing Baidu’s Brand Zone, like the BMW example, resulting in a very different experience.

    INCREASING DISCOVERABILITY & CAPTURING NON-BRAND CLICKS

    Another opportunity for marketers is Baidu’s Mini Zone. Unlike Brand Zone, Mini Zone is triggered by non-brand search. Mini Zone lives on the right rail and can bump out. Advertisers can buy keyword packs from Baidu for up to a year for Mini Zone.

    The example above shows some savvy Mini Zone work by Chanel for the term “lipstick.” You can see the bump out trumps the paid and organic results for lipstick and successfully grabs the searcher’s attention.

    BEYOND THE SERP

    While Baidu is China’s largest digital platform and the world’s fourth most trafficked site, there’s much more to Baidu than the search engine alone. Baidu has numerous successful and important properties, including Baidu Knows (community forums), Baidu Baike (wiki-like encyclopedia), Baidu Music, Baidu Map, Baidu Cloud, Baidu Space (social network), and more.

    Baidu’s Brand Zone Matrix is yet another way to maximize visibility across Baidu properties. Why stop at the SERP? Brand Zone Matrix offers advertisers “6 plus 1” – which is the ability to have Brand Zone on up to six Baidu platforms, plus be mobile-optimized across them all.

    The consistent visibility and brand experience across multiple platforms ensures strong brand performance on Baidu, at massive scale.

    In a fast-growing brand-conscious market like China, smart marketers will maximize all high-performing opportunities to capture market share and drive performance. Merkle makes this easy for our clients. Visit merkleinc.com/Baidu to learn more about how we can help with your China marketing performance.

    1 McKinsey Research, China’s New Pragmatic Consumers, 2010
    http://www.mckinsey.com/business-functions/marketing-and-sales/our-insig...

    2 Boston Consulting Group Study, The New China Playbook, 2015
    https://www.bcgperspectives.com/content/articles/globalization-growth-ne...

    3 Merkle numbers from Q4 2015



  • Google Dominance Grows with Mobile Search

    It wasn’t that long ago that predicting Google would struggle in the age of mobile was all the rage.

    These predictions usually included the prophesy that apps would overtake browsers as the preferred method of viewing content on smartphones, and search would move to niche engines that specialize in specific areas of content. Google would be left on the outside looking in, and the giant would slowly lose its grip on digital marketing dollars.

    Looking at the landscape of today, however, it’s clear that Google is doing quite well for itself with the growth of mobile device usage. If anything, it seems, we should have all been worried about the fate of Bing and Yahoo in the age of mobile.

    Google Search Spend Growing Impressively

    According to our latest Q1 Digital Marketing Report, which includes data and in-depth analyses across paid search, SEO, social media, display advertising and more, we found that Google paid search spend increased 25% Y/Y in Q1. Google later officially reported 23% revenue growth in constant currency terms.

    As you can see from the chart, this represents Merkle's biggest Y/Y spend increase on Google since Q3 of 2014.

    At the same time, aggregate CPC declined 6% - a result of mobile paid search traffic, which carries much lower CPC than desktop for most advertisers, growing significantly in share over the past year.

    While some of this growth is a result of increased mobile device usage, much of it is tied to changes Google made over the past few quarters, including:

    • The addition of a third text ad above the organic results on phones where there used to be only two
    • The increased size of the PLA format on phones in early September

     

    • The rise of search partner traffic on phones, particularly for PLAs

     

    • The apparent rise in the frequency with which Google shows PLAs on phones beginning in July 2015 and continuing through March

     

    All of these changes contributed to Google’s growing mobile traffic and spend, which is in turn driving much of Google’s impressive overall spend growth.

    Looking at overall spend share attributed to Google, the result is obvious – Google is winning the fight for search advertising dollars by more than it was last year:

    Bing and Yahoo Struggle to Generate Growth

    As Google took spend share, Bing and Yahoo are naturally losing share, and the big differentiator seems to be mobile.

    While Bing and Yahoo together accounted for 14% of all paid search clicks in Q1, they combined for just under 5% of phone clicks.

    Read another way, Google accounted for 95% of all phone paid search clicks. 95%!

    And while Google’s efforts to monetize mobile search have certainly hurt organic visits, Google actually gained share of mobile organic visits Y/Y in Q1, indicating that it’s a query volume problem as much as it is a monetization issue for Bing and Yahoo.

    This is backed up by data from StatCounter, which shows Google’s share of search engine usage up nearly six percentage points in March Y/Y.

    In order to gain paid search spend share back, Bing and Yahoo have to find a way of getting their results in front of mobile users more often.

    Yahoo, for its part, feels it can create ‘a richer, more action-oriented set of experiences’ in mobile search by incorporating ‘rich card experiences.’

    However, even carving back share by enticing users with a superior search experience will be an uphill battle considering the current landscape of mobile device usage.

    Google is the Default Search Engine for Most Smartphones

    Take a look at how Q1 organic traffic breaks down by OS:

    Android and iOS devices combined to account for 43% of all organic search visits. All mobile devices combined accounted for 44% of organic search visits.

    The browsers on both Android and iOS devices use Google as the default search engine, meaning users have to consciously change the default search engine in their browsers or actively go to the Bing or Yahoo websites in order to search through these engines.

    This presents Google with a massive advantage in getting mobile users to search through its engine, and it’s unclear if Bing or Yahoo really have any clear path towards battling back without paying iOS to become the default search engine on iPads and iPhones (which some have estimated cost Google $1 billion in 2014, likely more now).

    Advertisers Must Focus Resources Where Their Search Dollars Are Going

    Google is currently widening the gap between itself and competitors in terms of search traffic and ad spend. Mobile is a huge driver of that success, both because Google has updated its SERP in several ways that produced more ad revenue and because Google is well positioned as the default search engine for most mobile devices.

    Bing and Yahoo are on the other side of that coin, with trouble both generating mobile searches as well as monetizing the traffic.

    If current trends continue, it won’t be long before Google accounts for more than 90% of all search spend. That means it’s going to continue to get harder for advertisers to justify devoting resources to optimizations specific to Bing and Yahoo, especially now that non-Google spend is split between Bing Ads and Yahoo’s Gemini platform.

    I’m sure there will be a few who read this and shake a fist at their screen as they shout that Bing and Yahoo far outperform Google in this or that metric and that it’s incredibly important to manage this traffic carefully, but the sad reality is that clicks from those engines just aren’t growing for most brands. Google is where the growth is.

    Casting anti-trust philosophical and legal issues aside, a one search engine world is actually a lot simpler for advertisers. If all users are turning to the same place for searches, advertisers can focus all of their attention and time on a single platform, and only have to update systems and processes for updates from one entity.

    Maybe Bing and/or Yahoo can right the ship and regain some of the spend share they’ve been bleeding, but for now paid search marketers are forced to slowly but surely apply a greater share of their attention to Google.



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