Last year, I made three PPC predictions for 2010, and last week I reviewed how accurate I was in those predictions. By my count, I got two out of three right. So I think it’s only fitting that I give it another go for 2011 – I’ll go three for three eventually, even if I have to try this every year.
Prediction #1 – PPC effort increases, although spending does not.
Projections show that online ad spending is set to increase in 2011, continuing an upward trend we’ve seen over the past couple of years. Analysts predict that most of this increase will be centered in local search and social media, so pay per click advertising may not be a part of this total ad spend increase. This figure is a bit misleading, though. PPC advertising is strange in that the better you get at it, the cheaper and more efficient it becomes due to increased quality score, lower CPCs, and better cost per acquisition. I think that the decline in projected PPC spend indicates not a decrease in popularity, but rather an increase in the professionalism in the area. When AdWords got started, most accounts were created by small business owners who didn’t have a good idea of how to work the system. Now, the bulk of PPC accounts are managed by agencies and in-house professionals who know how to optimize their accounts for maximum ROI. This increase in expertise in the space leads to smarter bids in the auction system and less wasteful spend all around. So, even though more and more people are drawn into PPC advertising every day, removing their dollars from offline advertising mediums, the spend numbers don’t necessarily reflect this trend.
Prediction #2 – Microsoft makes significant improvements to AdCenter to compete better with Google.
It’s pretty clear that Microsoft is really gunning for Google in the search space, judging from the time and effort they invested in Bing over 2010. And with this year’s search alliance merger with Yahoo, Bing is a bigger presence than ever on the web. Bing-powered searches from both Yahoo and Microsoft web properties account for about 25% of all searches on the web. Even though Google is still at a dominant 70% search share, that’s still a pretty big chunk of searches and an awful lot of PPC ads to show. Now that Bing is such a big player in the PPC space, I think that Microsoft is about to invest a lot more in improving their tools for advertisers. They no doubt had their hands full with the transition in 2010 and were too busy to innovate. But now that the dust has settled and the transition went relatively smoothly, I bet that Microsoft is going to start rolling out new features to entice marketers to spend more in AdCenter. Expect improvements to reporting, targeting, and account management features to AdCenter in 2011. Maybe we’ll even get a less-buggy version of AdCenter Desktop?
Prediction #3 – Facebook PPC gets big.
Last year, I predicted that social network PPC advertising was going to peak and then plateau. I’m pretty sure I was wrong about that one. According to a recent Experian report, Facebook is now the #1 most-visited site on the web, taking the top spot away from Google. And with people spending more time on Facebook than anywhere else on the web, there’s no doubt that marketers are going to want to be a part of that valuable ad real estate. So, I’m switching my position to being bullish on Facebook PPC this year. Advertising on social networks certainly has it’s advantages – you get super-accurate demographic information for targeting, and users are likely spend a lot of time on the site catching up with their friends and sharing info. But the downside is that users are there to be social, not make purchases. Can marketers find a way to mitigate this fact? Facebook may not be all that great for generating conversions due to this lack of intent to buy, but it could be a gold mine for branding and awareness campaigns. I expect that 2011 will be the year that marketers figure the system out for maximum efficiency, and you’re going to see a lot more ad dollars find their way into Mark Zuckerberg’s pocket.
Happy new year, and good luck to all of you out there in the PPC trenches! 2011 is going to be a good year for us, I can feel it.