Yesterday, Google announced the roll out of their new +1 button to both organic and paid search results. Whether you want it or not, these new ad annotations are going to appear on your ads when someone has +1′ed.
In my April Search Engine Watch column, I explored how Google will come to understand social media and relationships and monetize not just what you’re looking for, but who you are. The article is reposted below. I recommend you read the Q&A with Google towards the bottom in particular.
How Social Media Affects Paid Search
The recommendations of our friends and colleagues have always been one of the most influential drivers of sales and the same is true online. Consider the research:
- When asked what sources “influence your decision to use or not use a particular company, brand or product “71% claim reviews from family members or friends exert a “great deal” or “fair amount” of influence. (Harris Interactive, June 2010)
- 90% of consumers online trust recommendations from people they know; 70% trust opinions of unknown users. (Econsultancy, July 2009)
- 53% of people on Twitter recommend companies and/or products in their Tweets, with 48% of them delivering on their intention to buy the product. (ROI Research for Performance, June 2010)
We all have limited time. Relationships are a way to help us quickly figure out what is most relevant and trustworthy. Our friends and the online community are helping us make decisions.
Just as you’re more likely to buy from a trusted merchant, you’re also more likely to click on an ad from an advertiser you like or whom your friends like.
Google took their first step towards monetizing relationships with the addition of the +1 box on text ads:
This is a natural evolution of AdWords. But, it’s only the tip of the iceberg of how social media will impact paid search advertising.
Google is starting to monetize not just what you do, but who you are.
Where Google Find Relationships
In order for Google to be able to expose information for your network of relationships, they first have to find those relationships.
As they say, “We actually do try to map one true person,” Mike Cassidy, Director of Search Product Management, Google said. “The more we can do to associate content to a person, the better,” he added, calling this “AuthorRank.”
That’s no small task and it’s complicated by the way people express their relationships online. While we in the tech community are accustomed to creating online networks and participating in communities that mirror our personal relationships, we are the exception to the norm.
The landmark research presentation The Real Life Social Network, by current Facebook employee and former Google User Experience Architect Paul Adams, underscores this point with this eye-opening chart:
(Source: The Real Life Social Network)
While we’re rightfully fascinated with the implications of social media, we are still living in a time where relationships are most frequently created and maintained through more basic mediums, like the phone and email.
Think of it as a variation on the 100:10:1 rule, which says that:
- 1% of the visitors to a website will create new content or contribute content.
- 10% of the visitors will interact with the content by writing comments or say rating the content.
- The remaining (a very large majority by the way) will merely read the content
We build and express relationships online primarily by communicating and so on down to a minority who will create:
In order to understand relationships, you need to have data. Google has data and it comes from 3 sources:
- Primary Products
- Secondary Products
- External Accounts
Primary Products are the Google products we use to communicate, namely Google Voice, Gmail and Google Talk (aka chat). What is a better indicator of the people you care about than those whose calls you take and the ones you email and chat with most regularly?
Secondary Products include anything from the universe of Google’s free tools where you can share, review, comment or make other kinds of connections, including:
- Explicit social networks, like Buzz, Orkut, and Groups.
- Sites designed around consuming and sharing different kinds of media, like Picasa Web Albums, Google Reader, YouTube, Blogger and Docs.
- Local and mobile networks in Google Places / Hotpot and Latitude.
Our relationships aren’t limited to Google, however, and they’re attempting to connect those relationships to your Google profile by linking External Accounts, or accounts from other services:
Right now, this includes services from Facebook, Flickr, LinkedIn, Quora, Twitter, and Yelp. But, there is room to expand and some have reported exposing the ability to connect additional networks like MySpace, Foursquare, Digg, Microsoft, and AOL.
The result is a network (not called Google Circles) that mixes what Google calls Direct Connections (or strong ties), Secondary Connections, such as friends of friends (or weak ties) and Temporary Ties (such as those with an online reviewer).
Establishing that “one true person”, as Cassidy put it through these products and networks is partly done through what people explicitly say about themselves, such as when they link accounts.
Google is also inferring relationships based on publicly available data:
“If you’re signed in to Google, you may see a message beneath a search result when Google algorithmically detects that a public profile from a social website may be yours. If the profile is yours, you can connect the account to your Google Account to improve the search results that you see.”
It looks like this:
In that case, the relationship is inferred and confirmed.
They’re also learning about relationships based on based on usage data that is not explicitly stated or even confirmed. Take the Priority Inbox feature from Gmail, for example:
To predict which of your incoming messages are important, Gmail automatically takes into account a number of signals, including:
- Who you email (For example, if you email Bob a lot, it’s likely that messages from Bob
- Which messages you open (Messages you open are likely more important than those
you skip over.)
- What keywords spark your interest (If you always read messages about soccer, a new message that contains those same soccer words is more likely to be important.)
- Which messages you reply to (If you always reply to messages from your mom, messages she sends you are likely to be important.)
- Your recent use of stars, archive and delete (Messages you star are probably more important than messages you archive without opening.)
The collective data about who you are means ads that reflect not just what you do (search), but who you are.
How Google Monetizes Relationships
Google is a publisher. Their content is search results pages and inventory on the display network. Their goal is to maximize their yield for the ads they use to monetize that content.
To do that, Google incorporates a variety of signals based on what you’re looking for and what you’re likely to respond to.
What you’re looking for, as expressed by your search query, is by far the greatest signal of your intent. One of the strongest indicators of the best possible answer for what you’re looking for is what others have responded to, based on past query/keyword/text ad performance. When it comes to the Display Network, they also look at what you’re interested in, as expressed by your actions on sites (e.g. Interest based ads) and demographics.
Relationships are a relatively new addition to the signals used to maximize yield, but they’re based on two old tools of influence: Social Proof and Liking.
- Social Proof – People will do things that they see other people are doing
- Liking – People are easily persuaded by other people that they like
These principles are well documented in Dr. Robert Cialdini’s fascinating book, Influence: The Psychology of Persuasion.
The interaction of relationships with social proof and liking creates ways for Google to monetize based on the implicit and explicit data from those relationships:
- Implicit: Identify preferences based on relationships; monetize the preferences
- Explicit: Incent people to take some action their network can see; monetize the actions
Right now, they’re looking at:
- Endorsements from who you’re closest to, i.e. Direct Connections
- What others like or say, i.e. Secondary Connections and social proof from weak ties
They’re social extensions for your ads.
Social Extensions in Paid Search
Since the summer of last year, AdWords has automatically included a social feature called seller rating extensions on all eligible ads. It appends aggregated reviews and stars (ratings) from Google Product Search:
Seller ratings extensions are applied automatically and you can’t opt-out.
Two weeks ago, Google introduced the “+ 1” button, their version of a Facebook like. While it’s primarily for spreading content socially within the organic results, +1’s will be available for text ads as well. The result is a new 5th line with photo and endorsement.
Like seller ratings extensions, +1 buttons will eventually show up near all ads and +1’s will be applied automatically without the option to turn them off.
Potential Future Social Extensions
I think local and mobile searches have the greatest short-term potential for Google’s social extensions in paid search. Consider this interesting statistic from Marissa Mayer, Vice President of Location and Local Services at Google:
“She pointed to the fact that 20% of all Google searches are for local information.”
This presents an opportunity for monetizing relationships around business reviews and product reviews. Google is already including relationships in organic social search results, as is the case with Google Hotpot recommendations:
Adding social extensions related to review for geo-targeted ads, similar to how they currently append a location, or Google Boost would be a natural fit.
Similarly, mobile searches are even more local:
• 53% of mobile searches on Bing have a local intent
• “1 in 3 queries from smartphones are about where I am.” Eric Schmidt – CEO, Google
This fact hasn’t been lost on Google, which introduced check-ins and offers on Google Latitude. I wouldn’t be surprised to see Latitude be renamed Google Places Mobile and for check-ins, +1’s and reviews from mobile to spread across social search results, both paid and organic.
Preferences Based on Relationships
In any discussion of social media and paid search, it’s worth noting the new Gmail ad targeting that Google is rolling out:
Soon we’re going to try a similar approach to ads: using some of the same signals that help predict which messages are likely to be important to you, Gmail will better predict which ads may be useful to you. For example, if you’ve recently received a lot of messages about photography or cameras, a deal from a local camera store might be interesting. On the other hand if you’ve reported these messages as spam, you probably don’t want to see that deal.
They’re not clear on which of the signals they us. I suspect they’re looking at keywords in text messages (since AdWords and the Display Network is primarily text driven) and which commercial emails you open, essentially creating an Interest or Topic based profile for you based on email activity.
Gmail fall into the Display Network, not strictly paid search, but ad buys targeted at that placement are also managed through AdWords and 3rd party tools.
What Social Media Means for Paid Search Marketers
As paid search advertisers, we’re fundamentally trying to as efficient as possible and narrowly targeted relevance is the easiest way to do that. In AdWords, relevance is still primarily defined by someone’s search query (intent), but that is still only one of many signals, which include who searchers are:
At the end of the day, having lots of +1’s is not going to save a crappy ad, a bad landing page, irrelevant text or a bad offer. It’s also not going to fix bad targeting.
The fundamentals of paid search are still the most important part of a successful campaign.
Specific to +1, Google’s PR team answered some of my questions in Jonathan Allen’s coverage of the announcement.
- How will +1 on ads impact Quality Score?
+1 does not change how we calculate Quality Score. As always, we look at an ad’s performance relative to that of other ads for the same query, position, and UI treatment. However, while advertiser performance will of course vary, we believe that +1′s may increase CTR, which would positively affect high quality ads.
- Will advertisers ever be able to opt-out of it?
The +1 button and personalized annotations are the default experiences for all signed-in Google.com users searching in US English. If advertisers have a serious concern about these features, they can submit this form for our review.
- Will +1 only apply to text ads, or will it also be available on Display Network text and image ads and on new ad formats such as product listing ads, product extensions, and Media Ads?
We’re certainly looking at how the +1 button can add user value for lots of different types of ads, but don’t have anything to announce just yet.
- Will +1 shares on landing pages impact the landing page component of Quality Score?
- Will +1 votes on products or landing pages impact the bidding algorithm for products that rely on prediction of conversion rate, such as Enhanced CPC?
I appreciate Google’s answers. Next, they need to give advertisers greater control over when and how social extensions are applied to their ads. Right now, it’s a fifth line of advertising automatically controlled by Google. Reporting and analytics should communicate when our ads included +1 and how that impacted performance. While I’ll concede Google’s decision to opt advertisers into the program to increase the adoption of +1, we do need the option to turn it on or off.
Just as relationships are nuanced, the way relationships affect paid search will be nuanced. As Paul Adams points out in his presentation:
- Not every social connection has equal weight
- Not every social connection is useful for the same information
Maximizing relevance with social extensions means accounting for those differences.
Social media is founded on relationship. Relationships help us discover new things, remove risk from our decisions and affirm our choices. Paid search advertising is about satisfying intent as efficiently as possible and this is a new layer to that goal.
Today, I’ll present on the “SEO vs. Paid search: Balancing the two to raise the total tide” panel at the Online Marketing Summit. Along with Jamie Smith of Engine Ready, I’m representing the PPC side of the table with SEO heavyweights Chris Boggs of Rosetta (and President of SEMPO) and Rand Fishkin of SEOMoz on the organic side.
It’s a well covered topic and we on the panel all agreed that an “either/or” argument was too cliché. Let me suggest there are 3 fundamental things that form the basis of any PPC + SEO discussion:
- Everyone should be building search engine friendly websites and, as their resources allow, doing SEO in its proper form (content development, research, link building, etc.)
- Most businesses will find paid search to be a profitable way to acquire customers, because of the high degree of intent from searchers and the ability to target, value and satisfy that intent on a granular basis. A simple pilot to measure incremental profit from the channel will tell you.
- Having an organic listing when you have a paid list is probably a good thing. Having a paid listing when you have an organic listing may be a good thing. Your mileage may vary and there are ways to test and measure if you don’t trust people who have done it before.
My focus is on one trend that is changing the nature of the search engine results pages (SERPs): the shift in the balance between paid and unpaid listings.
Consider this search for “anti virus software” as an example*:
Paid search ads dominate the search results. In fact, the only organic listings you can see are AVG and avast! (I’m counting the Shopping results as ads).
The total number of possible ads hasn’t changed. Given adequate advertiser interest, bids, ad quality and the commercial intent of the search, ads could always fill the top 3 slots (aka premium position) and the right column.
What has changed is the space taken up by, and visual dominance of, the ads in several ways:
- Most notably, there are now display ads in the SERPs. Google’s Product Listing Ads show product images on the top 3 positions in the right column.
- As of last week, ads are now showing longer titles that pull in the first description line, mimicking the title tag of organic listings
- Most ads in the premium position will show site links, effectively adding another line and 4 more calls-to-action to the ads
- Retailers with an sufficiently high number of positive ratings will get a call out with stars and the number of reviews, distinguishing the ads again and contributing yet another line to the text ad
- The background of the ads has switched to pink. Personally, I find this harder to distinguish vs. white than the previous yellow and blue incarnations.
This is the most dramatic example, but we see it in other searches as well:
I have always thought of Google as a publisher and each search results page simply as content they need to monetize. These changes are similar to a news site stacking on more ad slots or increasing the size of their ads.
But, where a traditional publisher’s ads don’t really compete with the content, Google’s ads do. Paid search ads may now draw attention away from organic listings and push natural results further down the page.
In essence, paid listings may be getting clicks at the expense of organic listings at an increasing rate.
At the very least, it puts more pressure to be among the top organic listings as they lose prominence in the results. It also adds important context for your SEO analysis, essentially a new set of competitors with new tactics.
On the flip side, paid search ads now offer an increasing number of ways to advertise in the SERPs. There are more levers to pull, formats to try and offers and messages to test. If you’re weak in the organic listings, these new controls may give you an edge.
One final note: not every industry will be affected by these changes equally. In some cases, there are few, if any, paid competitors. For example, media and entertainment searches such as “justin bieber” or “somewhere movie” are dominated by video, image, news, and real time results among the usual organic listings.
*Screenshots are from my Dell D620 laptop. Your experience may look different based on screen size and personalization of search results.
This post originally appeared as my column in Search Engine Watch.
As paid search marketers, we generate profit by minimizing our cost (CPC) and exposure (keywords) to those that are most valuable.
As a publisher (search results are just page views that need to be monetized), Google generates profits by maximizing page views and their profit per page view. It works like this:
The friction between our goals versus Google’s is concentrated at the point of their profit per page view. We want to get as many profitable clicks as possible at the least possible price. Google wants to sell as many clicks as possible clicks to us at our minimum acceptable profit, which in turn maximizes their revenue per click and page view.
We want to limit our targeting and decrease our cost.
Google wants to expand our targeting and increase our cost.
There are 2 barriers in Google’s path to higher profit per page view:
- The keywords you choose. The narrower your scope, the fewer ads displayed per page view
- What you pay per click. The lower your CPC, the lower their margin per click.
In this article, I’m going explain you how Google is systematically trying to remove these barriers to their profit, show you how it impacts your business and give you options to respond.
The Old Way: Asking You To Increase Your Exposure
Traditionally, Google has used two levers for increasing your targeting.
First, they can expand your targeting with your grudging consent. When you choose to use broad match, you are willingly accepting Google’s imperfect matching algorithm to save time. Case in point: they have recently increased the types of queries your ad shows up for when you use broad match. They’re already doing this with session-based retargeting (here, and in my article The Rise of Universal Paid Search). There’s no way to opt-out of that option, though there’s a limit to what they can do.
Alternatively, Google can also try to persuade you to broaden your targeting yourself. This is the thrust of the AdWords opportunities tab. Here, Google presents you with a list of potential keyword additions with the caveat that your mileage may vary. By facilitating the process of keyword expansion with the Opportunities tab or the Search-query Based Keyword Tool, they hope to get you to volunteer to expand your reach.
Neither of these methods is particularly efficient at growing Google’s profit per page view. Expanding broad match still anchors your potential reach to your basket of keyword and facilitating keyword research relies on the advertiser to do something.
Imagine, instead, that keywords were taken out of the equation entirely. Think about a scenario where Google could show your ad for any keyword related to broad descriptions of your business and target audience or even a scenario
This isn’t some farfetched idea. It’s actually happening right now with Google Product Listing Ads.
The First Step in Paid Search Without Keywords
Google Product Listing Ads shows image of products, without text ads, in search results, thereby disrupting the standard presentation of just text ads on the search results page. What’s most interesting is that keywords don’t determine when the image ads appear:
“Product Listing Ads requires no keywords or additional ad text. Whenever a user enters a search query relevant to an item in your Google Merchant Center account, Google will automatically show the most relevant products along with the associated image, price and product name”
Here’s what they look like:
Even more revolutionary, Google doesn’t charge a cost-per-click. The ads are sold entirely on a cost-per-acquisition basis (more on that in part 2):
“Product Listing Ads are charged on a cost-per-action (CPA) basis, which means that you only pay when a user clicks on your ad and completes a purchase on your site.”
Our Keyword-Less Future
The idea of keyword-less paid search isn’t new. In fact, Nick Fox introduced the idea at Search Engine Strategies last year. His interview with Web Pro News offers a recap (more here):
It shouldn’t be a shock that Google is trying to remove keywords from the equation. They are an inefficient way to get advertisers to spend money.
What is surprising is just how quickly Google has integrated a keyword-less version of paid search among more standard text ads. And, they did it without the opportunity for image ads driven by keywords or detailed reporting and analysis.
Google is creating two AdWords ecosystems: those who rely on Google to manage their paid search and those who don’t.