how a once in a century financial event will impact digital advertising the internet strategy forum...
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Study Overview Covario high tech customers (B2B and B2C) Represents estimated $ M in 2008 spending US/Canada-based firms Conducting global advertising programsTRANSCRIPT
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How a Once in a Century Financial Event will Impact Digital Advertising
The Internet Strategy Forum October 23, 2008
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Overview
• Review of spending trends and growth rates
• How organizations are reacting to trends
– Driving consistent metrics of success– Leveraging SEO more effectively– Integrating search more effectively into other forms of advertising
• Major challenges
– Universal search making things more complex– Keyword price inflation
• Q&A
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Study Overview
• Covario high tech customers (B2B and B2C)
• Represents estimated $225-250M in 2008 spending
• US/Canada-based firms
• Conducting global advertising programs
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Major Highlights
• Year on Year growth rates for Q3 were up– Q2’07 to Q2’08 = 43.3%– Q3’07 to Q3’08 = 51.2%– This growth was driven by EMEA/APAC – US growth increase was only 32%– Covario estimates ~5% resulting from one-time Olympics related spending
• Google continues to dominate spending with 83% market share in US and 95% in EMEA
• Continued erosion of Yahoo CPCs, while CPC rates on other engines went up
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Year On Year Growth Rates for Q3
• Overall growth was 51%
• EMEA growth was 204% over same time in 2007
• US growth rate has decreased steadily throughout the year
• Growth driven by Olympics advertising (~5%)
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Regional Spend Analysis
• Spending in US accounted for 82% of total
• Allocation to EMEA trimmed to 20% —consistent with 2007
• APAC spending at 10%
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Regional Spend Analysis — North America
• Google commands 82% of the spending allocation — up slightly
• Yahoo’s gains in Q2 are consistent in Q3
• 83% of customers in the study are conducting spending on Ask —small amounts
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Regional Spend Analysis — EMEA
• Google dominance continues to grow — 95% market share!
• Yahoo market share is 4%
• Investments in Russia running largely through Yandex and Rambler (80%)
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Regional Spend Analysis — APAC
• Baidu did not see any appreciable growth given Olympics
• Google surge is largely Olympics related
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Trends in CPCs
• CPCs are down 8% Y-o-Y on average
• Google CPCs are at $1.14 with Yahoo at $1.03 (for consistent keyword sets)
2007 2008
Search Engine Q1 Q2 Q3 Q4 YE Q1 Q2 Q3
Baidu $0.14 $0.11 $0.14 $0.13 $0.13 $0.11 $0.12 $0.18
Google $1.06 $1.03 $1.23 $1.28 $1.22 $1.13 $1.09 $1.14
MSN $1.02 $1.21 $1.13 $1.42 $1.28 $1.67 $1.51 $1.60
Yahoo! $1.38 $1.41 $1.50 $1.72 $1.59 $1.55 $0.16 $1.03
Yandex $0.75 $1.37 $1.26 $1.15 $1.16 $0.98 $1.23 $1.17
Total $0.98 $0.92 $1.18 $1.30 $0.19 $1.14 $1.07 $1.09
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Going Forward
• Growth rates are going to revise down– Display will be hit worst, this is already being seen in Yahoo results– Search will slow from 40% Y-o-Y growth to ~20%
• Currency• EMEA/APAC
• Google will gain more share
• CPCs will go up as inventory contracts– Would plan on paying 5–10% more over next 18 months for same number
of clicks
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What To Do? Prime Real Estate Is Going to Be More Valuable
52.6% in Organic Pos 1–4
11.9% in Paid Pos 1–3
Total = 52.6%64.5%
PAGE 1 TOTAL
93.1%
Source: Enquiro
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Better Leveraging Organic
#1 Organic
#1 Paid
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What does our PvO analysis do?
Paid Organic
Con
vers
ions
100
20
85
ROIpaid = 20ROIincremental = 5
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Impact of Paid Listing on Organic Traffic (Branded Query)
0
200
400
600
800
1000
1200Visits
Day
Organic
Paid
Paid campaign paused
Organic traffic jumps
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Maximize Traffic
Optimize Bookings
Optimize Ad Revenue
Optimize Ad Revenue
Building an Integrated View of Marketing
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Purpose is to Integrate and Optimize Media Mix
Consumers
Maximize Traffic
Optimize Orders and Bookings
Optimize Ad Revenue
Optimize Customer Engagement
Display
Mobile
Advertisements
Visitors
Search
Site #1
Site #3
Site #4
Site #5
Site #6
Site #7
Site #2
Video
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Universal Search Results Making SEO More Complex
News
Books
Video
Shopping
Web
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…And Changing the Value of the Real Estate
Heat mapregular results
Heat map blended results
Source:
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Trends in CTRs — Expect Inflation
• CTRs were down on Google from same period last year
• Yahoo has the lowest CTR rates of the major platforms
• MSN has consistently had the highest CTRs for the past 6 months
2007 2008
Search Engine Q1 Q2 Q3 Q4 YE Q1 Q2 Q3
Google 2.20% 1.80% 2.40% 2.60% 2.40% 2.20% 2.10% 1.90%
MSN 1.70% 1.30% 3.00% 2.60% 2.60% 1.70% 2.80% 2.20%
Yahoo! 1.10% 1.80% 0.90% 1.00% 1.00% 0.90% 0.90% 1.00%
Yandex 0.60% 1.00% 1.10% 1.60% 1.20% 2.40% 2.70% 3.00%
Google 2.20% 1.80% 2.40% 2.60% 2.40% 2.20% 2.10% 1.90%
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Overview
• Review of spending trends and growth rates
• How organizations are reacting to trends
– Driving consistent metrics of success– Leveraging SEO more effectively– Integrating search more effectively into other forms of advertising
• Major challenges
– Universal search making things more complex– Keyword price inflation
• Q&A