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The Business of Search An Insider Perspective on the Search Engine Business and How This Shapes Our Approach

Nichola Stott - Manchester SEO Mini Conference

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Nichola Stotts opening presentation from the Sascon Manchester SEO mini-conference held in Manchester and hosted by Holistic Search founder Peter Young

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Page 1: Nichola Stott - Manchester SEO Mini Conference

The Business of Search

An Insider Perspective on the Search Engine Business and How This Shapes

Our Approach

Page 2: Nichola Stott - Manchester SEO Mini Conference

@NicholaStott

Disclaimer

All figures shown with source credits are drawn from publicly available sources.

All non-credited data is assumed, based on similar published sources and managed client data, and is purely for illustrative purposes only.

Page 3: Nichola Stott - Manchester SEO Mini Conference

We’re Going To Cover...

• Why Me?• Search Business Metrics • Which Metrics Matter Most?– Coverage– CPC– CTR

• The Page One Objective

@NicholaStott

Page 4: Nichola Stott - Manchester SEO Mini Conference

About Nichola

• Founded theMediaFlow 2009• Yahoo! UK head of search partners• Insight to global search metrics• Managed Guardian, ITV, Orange, EU domain,

EU arbitrage etc• Traffic Quality and Pricing Discounts rep

@NicholaStott

Page 5: Nichola Stott - Manchester SEO Mini Conference

The Business of Search

Search Business Metrics

Page 6: Nichola Stott - Manchester SEO Mini Conference

Search Business Metrics

• Searches• Coverage• CPC• CTR

@NicholaStott

Page 7: Nichola Stott - Manchester SEO Mini Conference

@NicholaStott

Search Business Metrics

???

Page 8: Nichola Stott - Manchester SEO Mini Conference

Search Business Metrics

S x Cov x CPC x CTR = $$$$$$$$$$$$$$$$$$$$

@NicholaStott

1000

= RPM

Page 9: Nichola Stott - Manchester SEO Mini Conference

Search Business Metrics

1M x 85% x 0.18 x 15% = £22,950 /RPM - £22.95

If this figure were exact...

“Google Sites Accounts for Two-Thirds of 131 Billion Searches Conducted Worldwide in December” Comscore Global Search Market Growth Report – 2009

@NicholaStott

Page 10: Nichola Stott - Manchester SEO Mini Conference

Search Business Metrics

UK December 2009 = 6,245,000,000*Google share = 90%/1000 = 5,620,500x RPM (£22.95)

= £128,990,475* Comscore Global Search Market Growth Report – 2009

@NicholaStott

Page 11: Nichola Stott - Manchester SEO Mini Conference

Search Business Metrics

@NicholaStott

GBP to USD 31 day average December 09 – 1.62388www.oanda.com

= $209,465,052.54

Google Q4 Earnings 2009

Page 12: Nichola Stott - Manchester SEO Mini Conference

Search Business Metrics

@NicholaStott

October 2009 November 2009 December 2009

$281,267,473.73 $281,267,473.73 $209,465,052.54

Page 13: Nichola Stott - Manchester SEO Mini Conference

Search Business Metrics

@NicholaStott

Which metrics matter most? Which do search engines want to grow?

Page 14: Nichola Stott - Manchester SEO Mini Conference

The Business of Search

Which Metrics Matter Most?

Page 15: Nichola Stott - Manchester SEO Mini Conference

Coverage

Coverage? Imagine a 6% increase...

1M x 90% x 0.18 x 15% = £24,300RPM = £24.30

Would it happen like this?...

@NicholaStott

Page 16: Nichola Stott - Manchester SEO Mini Conference

Search Business Metrics

@NicholaStott

Page 17: Nichola Stott - Manchester SEO Mini Conference

Coverage

@NicholaStott

Additional 6% of covered terms @ 0.05p

1M x 90% x 0.1722 x 15% = £23,247RPM = £23.24

Would it happen like this?...

Page 18: Nichola Stott - Manchester SEO Mini Conference

Coverage

@NicholaStott

Additional 6% of covered terms @ 1% CTR

1M x 90% x 0.1722p x 14.01% = £21,712.70RPM = £21.71

Worse than when we started at £22.95!

Page 19: Nichola Stott - Manchester SEO Mini Conference

The Business of Search

Which Metric Matter Most?CPC?

Page 20: Nichola Stott - Manchester SEO Mini Conference

CPC

CPC? Imagine a 6% increase...

1M x 85% x 0.1908 x 15% = £24,327RPM = £24.33

Would it happen like this?...

@NicholaStott

Page 21: Nichola Stott - Manchester SEO Mini Conference

CPC

CPC controlled by...

Macro-economic factorsSmart Pricing

@NicholaStott

Page 22: Nichola Stott - Manchester SEO Mini Conference

CPC

@NicholaStott

Page 23: Nichola Stott - Manchester SEO Mini Conference

CPC

CPC up 6%, CTR down 1%

1M x 85% x 0.1908 x 14% = £22,705.20RPM = £22.70

Back to square one...

@NicholaStott

Page 24: Nichola Stott - Manchester SEO Mini Conference

The Business of Search

Which Metrics Matter Most?CTR?

Page 25: Nichola Stott - Manchester SEO Mini Conference

CTR

@NicholaStott

Page 26: Nichola Stott - Manchester SEO Mini Conference

CTR

How can we improve CTR without compromising UX/SX?• Improve match technologies• Reduce search abandonment rate• Improve total result relevance

Shift the distribution of all CTR activity to P1

@NicholaStott

Page 27: Nichola Stott - Manchester SEO Mini Conference

The Business of Search

The Page One Objective

Page 28: Nichola Stott - Manchester SEO Mini Conference

The Page One Objective

1M x 85% x 0.225p x 15.5% = £29,643.75

RPM = £29.64

@NicholaStott

Page 29: Nichola Stott - Manchester SEO Mini Conference

@NicholaStott

The Page One Objective

New SERP with greater universal content focus

Mayday, Mayday!

“Yes it has effected the long tail, on poorer quality sites”

“Yes it is a quality win”“Yes it passed all the tests”

(@54 secs)

Google Instant - more impressions, more relevant,

more 1st page action

Page 30: Nichola Stott - Manchester SEO Mini Conference

The Business of Search

Final Point – Just for Fun...

Page 31: Nichola Stott - Manchester SEO Mini Conference

Google Q4 UK Revenue 2010

UK Searches 6,245BN (35% YoY on 2008)Up 25% YoY = 7806BN Google 90% = 7025BN@RPM £29.64 = £208,221,000GBP – USD 30 day average (Sept) = 1.55576$323,941,902.96October, November up 25.5% on December ($406,547,088.21)

= $1,137,036,079.38

@NicholaStott