PPC Without Pity

Here’s a neat little trick I’ve used to get a slight edge over ad competitors.

If you use granular geotargeting settings in Google or Yahoo (i.e. targeting to the state, metro area, or city level), the search engines append an extra line of ad text to every text ad to indicate the area you’re targeting. Here’s an example:

Note the addition of “Texas” as the last line of ad text. It works in Yahoo, too:

So what does this mean for advertising? Keep in mind that just because you aren’t in a physical location, it doesn’t mean that you can’t use geotargeting to make it appear that you’re a local vendor. People may be more likely to click on your ad if they think you’re a local. Also, any time you can get some additional factor in your ads that distinguishes you from the other results, it will generally get more eyeballs on your ad instead of the others.

A simple solution is to take off the default “United States” setting for your geotargeting, and target all 50 states at the state level. That way, you get nationwide coverage, but you also get that neat little line of geographic ad text on all of your ads.

Last week, I wrote about some changes going on with Yahoo demographic targeting. This week, I wanted to follow up with some more specific reasons why I think demographic targeting for pay-per-click campaigns is less useful than the search engines would have you believe.

There are three main reasons why I think web demographics are unreliable:

1. The inaccuracy of demographic statistics online – a great deal of user demographics that search engines use is pulled from third party data vendors, opt-in data, and algorithms that provide “estimates” of user data (source, source). None of these sources could possibly provide information with 100% accuracy. Third party data providers have an incentive to overestimate the value (and accuracy) of their data, opt-in demographic data is by definition incomplete (since you’re not gathering information on 100% of users), and I’d be surprised if my life could be quantified by a computer program. These are the building blocks that you would base your ad planning assumptions on. If you’re targeting 35-40 year old females, how can you be sure that any of these methods could accurately estimate the actual person who is seeing your ad fits into those categories? That brings me to…
2. One computer DOES NOT equal one person – I’m sure that there are plenty of households out there that share a computer. How many times have you looked up something on someone else’s machine? Despite all the big talk about demographic targeting, there’s really no way to truly target the person. Our ad process ends at the computer screen – you can’t control who is using it. You have no certainty that the user viewing your ad through the lens of the computer monitor is actually the owner of the machine, or the person that all of these fancy demographic programs have data on.
3. Reliance on voluntary data – Of the three sources mentioned in point #1, two of them rely on voluntary data – the third-party data (probably) and the opt-in data (definitely). For starters, you only reach a small percentage of people who will actually take the time out of their day to volunteer this data. I’m willing to bet that a vast majority of people prompted for this information either are too busy to fill it out correctly, or choose to provide inaccurate or invalid data due to privacy concerns. Then, you have to take into account the people who filled out the information, but provide misleading information either through carelessness or willful inaccuracy.

After you take all of this into account, what percentage of your audience do you think has completely accurate demographic information? Ten percent? Five? Maybe less? There’s probably no way to even know. Instead of relying on these vague demographics, do yourself a favor and spend more time analyzing the data that you know is correct – historical keyword reports and analytics tracking. These sources will provide a much greater wealth of insight than the lazy demographics put out by the search engines.

This week, Yahoo announced some significant changes to its search marketing platform. Here’s a brief rundown of what’s new, along with my snarky commentary:

• Major changes were announced for ad targeting settings, specifically geotargeting, demographic bidding/targeting, and ad scheduling (or day-parting, if you prefer)
• You can set these new targeting settings at either the campaign or the ad group level. This is probably the most significant change, or at least the one that separates them most from their competition. This extremely granular targeting would be really awesome if the actual settings you can change were more useful. Keep reading…
• Under the new geotargeting system, you can now target zip codes (woohoo!), but you can only target a 3-6 mile radius around them (d’oh!). Normally, I’m all about highly targeted ads, but limiting your targeting to only 3-6 miles around a specific location is kind of silly. Why can’t we decide on our own radius distances, Yahoo?
• You can also make bid adjustments to make higher bids in specific geotargeted areas. Oddly enough, you can’t bid down if you need to. Seems like yet another Yahoo cash grab to me.
• You can also adjust your bids to go after a specific demographic. However, Yahoo admits they don’t know how accurate their demographic information is (“we get it from our partners and third-party vendors!”), so I remain skeptical about this strategy. I don’t think that demographic analytics are robust enough to try this in any search engine, much less Yahoo. They should have put the software development hours into better reporting, instead of a fluff feature that maybe only 10% of their customers will ever use.
• Speaking of reporting, Yahoo did add some additional reporting features, but they all revolve around geographic, demographic, and ad schedule performance to match up with their new features. You’re still limited to a scant few months of data, and you’ll miss out on the report granularity we all know and love in Google.
• There were a few changes to the Yahoo content network as well. You can now set content network budgets to be only a percentage of your total campaign budget to ensure that content clicks don’t monopolize your budget. Of course, this is assuming that you’re combining your search and content distribution in one campaign, which is a rookie mistake. It’s well known that the best practice is to separate these distribution methods into separate campaigns, so I think it’s silly that Yahoo would come out and endorse this method. Of course, they are more interested in making money for themselves than making money for their advertisers, so I guess I understand.
• Yahoo rolled out some improved forecasting for content network clicks, but they still don’t have a way to accurately review past content network performance with any sort of granularity. A content network campaign is useless unless you can gauge performance on which specific websites your ads showed on. I don’t use Yahoo content distribution, and I still won’t use it until they fix their reporting.

Basically, Yahoo announced a bunch of features that Google and MSN have been doing for at least a year now. The campaign/ad group level targeting is nice, but Yahoo reporting methods are still sorely lacking. Until they fix this, they’ll always be playing catch-up to the other guys.

I just came across this interesting article on TechRadar that has some pretty thought-provoking ideas on what to expect from search engines in the near future. Since this is a pretty salient topic for PPC geeks like us, I felt I just had to put in my two cents.

The article goes over a few things that are old hat in the PPC realm – the rise of local search (you are using geotargeting, right?), the increasing sophistication of image and video search, etc. There was one point that got me thinking, though. The author, Paul Douglas, proposes that we’re in for a new revolution in long-tail keyword phrases. Next-generation search engines will be able to process queries like “I want to buy a laptop that has a 15 inch screen, a 400GB hard drive, and costs less than $800″ and deliver relevant results. Compare this to our current situation where one would need to type in “discount laptops,” make some notes, revise their search, and generally spend all afternoon browsing around.

Naturally, this would cause a revolution in pay per click strategy. It also raises some interesting questions. How could you even bid on a phrase that specific? If two-to-three keyword phrases become obsolete for information seekers, how will the search engines modify their ad sales models accordingly? Will we start bidding on users intentions rather than their exact keywords? How could you even do that?

Douglas also points out that a leap in technology would be significantly hindered by the users themselves – we’ve been trained to seek information in small-keyword phrase bursts. Even if we implemented this new advanced search algorithm tomorrow, it would take a while for people to adjust to the new style of searching for information on the web. All of this speculation just further drives home the point that in order to be a successful PPC manager, you have to stay on the bleeding edge of information technology, and predict these trends while they’re still on the horizon.