Insights on State of Paid Search in Q2

We just recently saw Q2 come to a close, and a flurry of findings of Q2 activity in the paid search arena have been published. Three reports hit our inboxes yesterday, one from Adobe’s Digital Marketing, one from Kenshoo and one from The Search Agency – all highlighting paid search spend, click-through rates, cost per click and more by engine and device in Q2. Here’s a snapshot of some of those findings. 

Spend

Spend is up across the board, according to the three studies.

United States

The Search Agency reported a 22 percent increase year-over-year (YoY) in paid search spend. Here's a snapshot of not only spend, but also clicks, click-through rate, and cost per click YoY:

The Americas

For North America and South America combined, Kenshoo reported a total of 25 percent spend increase YoY.

Here, Kenshoo shows spend relative to revenue YoY:

U.S. + U.K. and Germany

Adobe’s data showed the three countries with a collective 25 percent growth in spend YoY.

Clicks and Click-Through Rate (CTR) by Engine

When it came to clicks and CTR in Q2, results were mixed.

United States

The Search Agency showed clicks were up on both Google and Bing in Q2, 38 percent and 20 percent, respectively. An increased CTR plus the increase in advertising spend, said The Search Agency, “is indicative of a strengthened economy."

U.S. + U.K. and Germany

Adobe reported CTR on Bing-Yahoo was down, while Google’s CTR rose 20 percent in Q2 2014, and said it was likely due to “Google changing its text ad formats for search queries (denoted by a subtle yellow 'Ad' icon opposed to being explicitly highlighted as ad or sponsored result).”

The Americas

Kenshoo data showed CTR was up 2.3 percent in Q2 in the Americas. 

Cost per Click (CPC)

CPC data varied by study in the Q2 roundup.

United States

Google’s CPC decreased by 16 percent, while Bing CPC increased 27 percent in Q2, The Search Agency reported.

U.S. + U.K. and Germany

Adobe’s stats show CPC growing in Q2 for all but Yahoo-Bing in the U.S. Overall, said Adobe, Google CPC increased 4 percent YoY.

The Americas

Kenshoo data showed the average CPC in Q2 for the Americas at $0.63.

(via)

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Want to Increase Your CTR by Nearly 50%? Consider Search Refinements

Ask many search marketers what their number one goal is and they'll probably tell you it's to appear in the top position on the first search engine results page (SERP). This is understandable.

We all know that consumers, more often than not, will click on the top ad above or to the right of the organic results. For the advertiser, that means a better click-through rate (CTR), more site traffic (often at a lower cost per click), and presumably more sales.

However, search marketers should also be mindful that a consumer clicking on the first ad he or she sees doesn't constitute the totality of shopping behavior on the search engines.

In fact, it's rarely a "one and done" situation.

When users visit a search engine, they conduct multiple searches nearly 65 percent of the time, according to a study by Compete. What's more, three or more searches were conducted in nearly half of all sessions and 12 percent of sessions included a whopping 10 or more searches.

What Are Search Refinements?

This should probably come as no surprise considering the high number of "touches" many online shoppers make before eventually settling on a purchase.

The key takeaway for search marketers is that single phrases are rarely typed into a search engine in isolation; it's far more common for searchers to enter multiple phrases in rapid succession, building on each preceding one, until they find what they seek.

These subsequent phrases are known as "search refinements."

As an example, I recently sat down with a friend who was searching Google for a used Mercedes Benz SUV. His initial search term was "Mercedes," quickly followed by "Mercedes-Benz," "Mercedes Benz M-class," "Mercedes Benz M-class used" and finally "2012 Mercedes Benz M-class used".

Will Appearing in Search Refinements Increase CTR?

Although my friend didn't find what he was looking for (more on that later), he did end up clicking on the ad of a local dealer whose ads appeared on the SERP for four of his five searches.

This behavior raises an important question: are searchers more likely to click an advertiser who appears on each subsequent search?

To find out, I conducted a study analyzing estimated CTRs for 268 advertisers who consistently appeared on subsequent search refinements (for instance, "oven reviews" and "convection oven reviews").

The Results: A 47% Lift in CTR

Users were indeed more likely to click on advertisers that appeared more often in the same session.

Specifically, the study showed that an advertiser who appears at least 10 percent of the time for both the initial query and the follow-up query received an average lift of 47 percent of their initial CTR on the subsequent search.

As an example, take an advertiser who received a CTR of 1.0 percent on the term "Venetian Hotel." That same advertiser appearing on the search refinement, "Venetian Hotel Vegas," would be expected to experience a "CTR bonus" of .47 percent relative to other advertisers, because he appeared on both terms.

Of course, the impact of repeated impressions may not be the only factor that results in a bump in CTR.

Undoubtedly, advertisers who are more thorough in targeting search refinements also tend to be more rigorous in their approach to ad copy and landing page design. After all, the best advertisers go to great lengths to ensure their campaigns respond to searchers' intent and deliver a relevant experience.

Consider Search Refinements When Creating Your Campaign

Search refinements are incredibly underappreciated. While many advertisers focus heavily on initial keyword expansion and ad copy optimization, relatively few think about the impact their ads might have when seen in rapid succession.

Search marketers should consider not only the keywords they target, but also the sequence in which those keywords may be entered as users refine their initial searches.

By ensuring high coverage and relevant ads across the entire chain of search refinements, you not only can increase your CTR on the initial search phrase, but also on longer, more specific phrases as well.

(via)

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The New AdWords Opportunities Tab - How to Get the Most Out Of It

Google announced an enhancement to the Opportunities tab in AdWords in November that aimed to help streamline paid search campaigns and make day-to-day management easier. The new graphical interface provides more in depth insights on ways to improve your campaign performance.

This tool is great because it's constantly checking for new areas of optimization that you can focus on. For example, if your ads aren't currently using sitelinks or call extensions, the Opportunities tab will provide estimates on the number of additional clicks and higher click-through rate for your campaign. It will also make recommendations to create new ads groups from existing keywords to provide more relevant ads to users.

If you are managing multiple accounts and adding new campaigns on a frequent basis, it can sometimes be difficult to keep track of what to optimize. This tool can help identity those areas, and assist you in ensuring your accounts function at their highest capacity.

However, as with most tools, there are hidden "gotchas," and the Opportunities tool is no exception to the rule. While the tool provides a lot of benefits, it's important to review Google's recommendations carefully before making changes. Below are some guidelines and considerations to keep in mind when using the Opportunities tab.

Recommended Budget Increases

Google always lets us know when we're below our daily budgets on campaigns. The Opportunities tab provides a nice summary of what you can expect to gain if you increase your budget:

If I drill into this deeper, Google shows me that by tripling my budget from $15 to $45 triples by impressions and clicks. It also triples my overall spend (keep in mind set daily budgets can over spend as much as 15-20 percent over the limit). The "Current" budget below is based on last week's performance:

Last week was a holiday week, and the campaign was intentionally bid down. The client also has a new budget for January that is significantly lower than the December budget, so increasing the daily budget will result in pacing too high, and the monthly budget will expire before the end of the month. While more spend gets me additional impressions and clicks, it would result in spending my budget way before the month ended.

Guidelines

Ensure your daily spend limits take into consideration the overall monthly budget. If you have a campaign that is pacing behind, consider increasing the daily budget, but ideally, you want to flight your spend evenly during the month. Large fluctuations in your daily budget make it difficult to document trends over time.

Also take into consideration days of the week that your spend is higher/lower, and if day-parting is active. Adjust your daily budget on the days of the week that have the highest conversions and/or click-through rates, while ensuring that you keep your budget in line with the monthly target. If you are using a day-parting strategy, ensure your budget covers the time period and your ads are showing during that time.

Adding New Keywords

Getting fresh keyword ideas is essential to any AdWords campaign. Search behaviors change over time, and it's important to capture fresh and new keywords that are relevant to your client's business. The Opportunities tab provides you with a list of new keywords in your campaign's ad groups:

In looking at the first recommended ad group opportunity, Google estimated that this new ad group would provide an additional 1,000 impressions, 18 clicks, and only $17 in cost per week.

In researching the 25 new keywords Google recommended, 5 were not relevant to the client's business. Several of the terms were also extremely broad, and had various meanings.

I ran the keywords through Google's Traffic Estimator tool to see if the impressions, clicks and cost estimates were the same as what was provided in the Opportunities tab:

5.04 – 6.09 clicks per week

978 – 1,190 impressions per week

$2.87 - $3.57 cost per week

While the number of impressions was about the same, the number of clicks and costs were significantly less.

Guidelines

While Google will provide you with keywords that it deems relevant, it's important to review these terms to ensure they are relevant to your client's business.

Know and understand what keywords are right for your client. Don't just add keywords because Google recommends adding them. Review the recommended keywords carefully to ensure they are the right keywords.

Also, it's important to note that the estimates for impressions, clicks, and costs may be somewhat different than what the Opportunities tab indicates.

(via)

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Search Engine Traffic Drives Most Ad Clicks on Websites [Study]

Advertising network Chitika released a study today that showed how ad click-through rates (CTR) on a website vary when users come to that website from search engines like Google, Bing, Yahoo, Ask and so on. According to the research, ad CTR was highest on a website when visitors came from Ask.com. Google trailed behind Bing and Yahoo in fourth position. 

When asked if the high CTR coming from Ask was perhaps due to the demographic set of that engine, Mahima Badsra, Chitika data scientist and a lead author of the report said:

"While the precise demographics of the Ask.com user base are unclear, it is reasonable to assume that less tech savvy individuals are the heaviest users of the service due to the Ask.com toolbar controversy and ensuing backlash from the tech community.

"Additionally, as users of the search engine have consistently exhibited the highest CTRs within the Chitika network, it is likely that Ask.com's user base is, on average, different from that of Bing, Google or Yahoo, who exhibit different, but somewhat similar average CTRs."

Chitika reminded readers in the report to apply discernment to the data.

"In terms of search engine-referred traffic, Ask.com’s substantial lead in this area needs to be taken with a proverbial grain of salt, as its share of search engine Web traffic is only 2 percent within North America."

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Top Search Result = Poor Ad CTR [Study]

Advertising network Chitika released a study today that showed how ad click-through rates on a website vary when users come to that website from Position 1 in the organic search results versus other positions. Data showed the highest CTR on ads in a website occured when users found the site from Position 10 in the SERPs.

As a follow up to Chitika's study last summer that showed how rankings yielded traffic, Chitika said this is a stark contrast in terms of ad performance.

"What is clear from the data set is that although the first position of a Google search result drives the most search traffic, an average visitor coming from that link is the least likely to convert into an ad click," according to Chitika.

Chitika said the reason why Position 10 might be driving the most ad CTR on a site could be due to unsatisfactory results.

"When a user scrolls down and clicks on a link at Position 10, it is more likely that they have not found what they were looking for, increasing the probability of that person clicking on an ad related to their search query," Chitika said.

Chitika said that marketers shouldn't necessarily be vying for 10th position on every keyword, but that in terms of driving ad revenue, it's not a bad place to be overall.

"On a popular search term, 2.4 percent of potential visitors still represents a sizable audience, and by being the number 10 result, it's likely a site will see higher ad revenues," Chitika said in its report. "However, for lower volume or specialized search terms, ranking as high as possible will help in attracting the largest audience, since the proverbial 'pie' of users on those terms is already fairly small, along with the potential revenue impact of higher visitor CTRs."

So what's a marketer to do with this data? Cristian Potter, a data solutions engineer at Chitika, said it's important to note that this report examines aggregate traffic trends, and may not apply to groups of sites.

"Hitting the sweet spot requires some analysis of an individual site's traffic, for example, understanding how users are finding the site, and how certain campaigns have impacted actions undertaken by users on the site itself," Potter said. He added that this research can serve as a "as a point of reference in plotting metrics and key performance indicators."

While the data seemed to show an interesting relationship, sites that go after ad revenue have a seemingly delicate balance of providing a great user experience and making money. Not having the most relevant content (Position 10 versus Position 1) and subsequently driving users away through an ad doesn't seem like a great idea, either.

Potter agreed.

"User experience is always a key consideration when it comes to deciding on the number and placement of ad units," Potter said. "This also ties in with expected CPM on each ad unit - it should be worth the site's while to place an ad in a prime position. However, this study was solely behavior focused. The characteristics of the one or more ad units on each site within the sample will have varied considerably."

(via)

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