Mazda Gets Pontiac Search Engine Traffic Ppc

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Text of Mazda Gets Pontiac Search Engine Traffic Ppc

Search and the New Economy Session 2 Web Analytics

Prof. Panos IpeirotisSearch and the New Economy

Session 4

Pay-per-click Advertising

1Todays ObjectivesUnderstand current audienceGet intelligence from referring URLsGet intelligence from search keywords

Plan and optimize site for target audienceOptimize internal searchOptimize external search

Keyword-based Advertising (Pay per Click, PPC)Understand pricing modelUnderstand keyword selection principlesUser generated content and ads

Advertising NetworksGuest speaker: Heath Row, Research Manager at Doubleclick

2

Anatomy of Search Results: GooglePPC AdsPPC AdsOrganic Web Results3

Anatomy of Search Results: Yahoo! PPCAdsPPC AdsOrganic Web Results4PPC TerminologyPPC: Pay Per Click

CTR: Click Through RatePercentage of clicks to impressions

CPC: Cost Per ClickPrice an advertiser pays for each click on his/her ad

Daily BudgetAmount advertiser is willing to spend, each day, on PPC ads

5How PPC Works

Search Engine Server

UserUser enters queryEngine runs auction and displays winning ads

AdvertiserAdvertiser s place bidsAdvertisers Website/Landing Page

Surfer clicks on an adSurfer lands on websiteMillions of auctions executed every dayOnce the daily budget is reached, the ad will no longer be shown.6The PPC Auction ModelBasic modelHighest bidder gets highest slotWinner pays winning bidNot ideal! Why?

Vickrey-Clarke-Groves (VCG) auctionSecond price auctionOptimal for single slotReveals true willingness to pay, no need to be strategicWinner for slot i pays maximum bid of bidder that get i+1 slot

Still not the best for Google, Yahoo, MSN etc.Why?7Ad Quality Score + Landing Page QualitySearch engine needs repeat customers

Needs to improve user experience for long term

Bid transformation:(Bid $ amount) x (Ad Quality Score)~ (Bid $ amount) x (CTR rate + relevance)

In other words, rank by expected revenue for GoogleHigh quality ads Lower bid amount(incentive compatibility)Details for quality score: https://adwords.google.com/support/bin/answer.py?answer=10215 Main difference between Yahoo and Google until 20078Mini Case: Cost per Click and HolidaysCPC increases before the holidaysShould advertisers refrain from bidding?How to approach the problem?

CPC increases but conversion rate (CR) increases moreCost per Acquisition (=CPC/CR) drops!Holiday season offers better bargain than other days9Todays ObjectivesUnderstand current audienceGet intelligence from referring URLsGet intelligence from search keywords

Plan and optimize site for target audienceOptimize internal searchOptimize external search

Keyword-based Advertising (Pay per Click, PPC)Understand pricing modelUnderstand keyword selection and bidding principlesUnderstand important campaign techniques

10AdWords DemoIssues to consider

Daily budget, Max CPC (affects top placement)

Ad generation + landing page

Keyword generator, Traffic estimator

Campaign SettingsAd position preferenceTargeting capabilitiesDaytimeGeo targetting11Ad GenerationHeadline:

Ad Text:

Landing URL

Well Written(describing product)Poorly Written (vague, generic, dull){{StaticSearch keyword insertionWhat matters?12Improving PPC ROILanding PagesTargeted pages that are part of the website often outperform the home page as a landing page (Clovis)

Website Home PageAverage Conversion Rate: 1.17%

Targeted Website PageAverage Conversion Rate: 2.40%13Case Study: Clovis GroupIssue:Clovis Group has four main types of recruitingKeywords for one group not always pertinent to another groupHome page is crowded with lots of infoSolution:Changed landing page from home page to targeted website page Improved conversion rate by 100% in 30 days

Improving PPC ROILanding PagesSpecially-created landing pages often outperform website pages, even targeted ones, as the landing pageUse A/B testing (Clovis Group) or multivariate testing (Dale and Thomas)

Website Home PageAverage Conversion Rate: 1.17%

Targeted Website PageAverage Conversion Rate: 2.40%

Special Landing PageAverage Conversion Rate: 12.5%OKBETTERBEST14Case Study: Clovis Group -- continuedBy creating a specialized landing page (separate from the existing web pages), we were able to focus the ad respondent to only the crucial infoIncluded a form to allow signup directly on the pageImproved conversion rate by over 500%!Keyword Selection: What keywords to bid on?

Match by topic/relevance:Google Keyword Tool (Tools Keyword tool)WordTracker

Analyze keyword demographics(See earlier discussion)

Negative KeywordsE.g., Dove (soap) vs. Dove chocolates vs. Lonesome Dove (book) vs. Rita Dove (poet)

Association with desirable (sponsored) events, peopleCoca-Cola and American Idol / Simon Cowell / Carrie Underwood

15Keyword Selection: How much?Tools > Traffic Estimator

16Demographic Targeting: Honda ElementTarget Demographic: Young, single maleshttp://www.youtube.com/watch?v=fxPg7CwtG2w http://www.youtube.com/watch?v=lhkAGfS__mkhttp://www.youtube.com/watch?v=5k50lKeXeTI

Honda wanted to market to young male professionals (single, 20s, with college education, in their first job)

Bidding for car ads is rather expensive, overcrowded market

Created a whimsical campaign with strange commercials where the Honda Element talks with different animals (show YouTube ad)

The keywords associated with the campaign are much cheaper, and target the correct demographic

17Competition Waits ThoughFor every Honda Element, there is a GM Pontiac

TV Campaign from GM: Google Pontiac

Mazda bids on keyword Pontiac69% of Pontiac traffic goes to GM2.43% goes to Mazda according to HitWisehttp://weblogs.hitwise.com/bill-tancer/2006/01/google_pontiac.html

18Campaign Settings

RoadblockGeo-targetingDaypartTargetingRank TargetingAd Scheduling: Talk about Bud commercials, daytime targetting, end of work day, more intense on Fridays

Roadblock techniques for site targetting19Examples of Winning PlaysDaytime targeting: Budweiser

Roadblock + daytime: HollowMan DVDAds in as many sites visited by target demongraphicAds run during lunch time, and prime time of Friday

Geo-targeting: Multichannel play (many customers shop online, but buy offline)CompUSA: Displays inventory levels at local storesLuxury cars: Specific zip-codes + telephone of local dealer40% of car rentals ads, convert offline30% of job applicants saw online ad, submitted offline

Rank target: Mining behavior of customers

Geotargeting: pages 18-19 of OAP.

20Targeting Demographics: PRIZM

How different demographics behave online?Find which sites these customers target.Then find keywords that they use to go to these sites

21Demographics BehaviorBrewing Battle: Starbucks vs. McDonaldsWill McDonalds get the $4/cup crowd from Starbucks?

http://www.time.com/time/business/article/0,8599,1702277,00.htmlBill Tancer, HitWiseStarbucks: Urban Commuter Family, "college-educated households containing dual income couples."McDonalds: Struggling City Centers, "lower-income households living in city neighborhoods in the South."http://www.time.com/time/business/article/0,8599,1702277,00.html

http://weblogs.hitwise.com/bill-tancer/2008/01/starbucks_v_mcdonalds.html

22Improving PPC ROIThe Long Tail ConceptThe Long Tail by Chris AndersonAn aggregate of less popular products can sell more in the long tail than the most popular products

Same applies to PPCAn aggregate of specific, less searched terms can provide better ROI than highly searched terms23

The Long Tail Illustrated24Does It Really Work? YES.Major athletic retailer case study80% of PPC sales come from long tail keywordsSpecific, product-name keywordsOnly 20% of sales come from broad terms, like BRAND shoes or BRAND jacket

Most long tail keywords are inexpensive[web hosting] $8.30[freebsd web hosting] $0.10

Targeted at customers with specific needs, closer to purchase25PPC CycleKeywordsSearchVolumeOpportunityConversionRateDiscover/ResearchComparePurchaseBroad,approximately 50 keywordsex: shoesMedium,approximately 100 keywordsex: running shoesSpecific,approximately 1,000 keywordsex: Asics 2010 running shoesHigh,typically high cost per click,more competitionMedium,average cost per click,medium competitionLow,low cost per click,very little competitionFrame the buying decision;establish credibilityCompete on more specific criteria;capitalize on customer preferencesObtain a ready sale now;acquire a customer who knows what he/she wantsLowerMediumHigher26Alternative ModelsFirst-price Auctions (Goto.com, Overture)

Pay per Impression (Banner ads)

Pay per Action (PPA) (Newly introduced)

Pay per Dollar Revenue (PPR) (Amazon Associate)

Advantages and Disadvantages of Each Model?27