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
How a Once in a Century Financial Event will Impact Digital Advertising
The Internet Strategy Forum October 23, 2008
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
Study Overview
• Covario high tech customers (B2B and B2C)
• Represents estimated $225-250M in 2008 spending
• US/Canada-based firms
• Conducting global advertising programs
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
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%)
Regional Spend Analysis
• Spending in US accounted for 82% of total
• Allocation to EMEA trimmed to 20% —consistent with 2007
• APAC spending at 10%
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
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%)
Regional Spend Analysis — APAC
• Baidu did not see any appreciable growth given Olympics
• Google surge is largely Olympics related
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
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
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
Better Leveraging Organic
#1 Organic
#1 Paid
What does our PvO analysis do?
Paid Organic
Con
vers
ions
100
20
85
ROIpaid = 20ROIincremental = 5
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
Maximize Traffic
Optimize Bookings
Optimize Ad Revenue
Optimize Ad Revenue
Building an Integrated View of Marketing
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
Universal Search Results Making SEO More Complex
News
Books
Video
Shopping
Web
…And Changing the Value of the Real Estate
Heat mapregular results
Heat map blended results
Source:
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%
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
Thank you!Craig MacdonaldVice President, Products and Marketing
858-397-1500 [email protected]