Blind Five Year Old

Yahoo is serving ads at the top of email alerts.

Most of my alerts are with Google, but a few of my legacy alerts still reside at Yahoo. So I’m not sure exactly when this began but it seems like it started as of December 1st.

Both search giants are looking for ways to sustain growth in a maturing market. Sponsored search and network search just aren’t going to move the needle in eyebrow arching ways anymore – particularly in a weak economic environment.

This is an interesting move by Yahoo in light of Google’s advertising extensions via Feedburner (FeedSense) and Google Friend Connect (FriendSense).

Remember, Yahoo still dominates news by a nearly 3 to 1 ratio. It’s nothing to sneeze at.

If we use traffic as a proxy for number of alerts it’s easy to see how Yahoo could quickly increase its reach. Effectiveness, well that’s another issue.

But with this move by Yahoo, can AlertSense be far behind?

Now is the time when bloggers go on the record with their thoughts for the year ahead. Place your bets! Stake your claim! Here’s mine.

Facebook Becomes A Portal

Realizing that social media and advertising is like oil and water, Facebook repositions itself as a portal leveraging Microsoft’s Live Search as the revenue model. This also might result in the potential acquisition of Netvibes to provide a more robust offering to compete with Yahoo!

Identity Systems Fail

Confused about the difference between OpenID, Facebook Connect and Google Friend Connect, users throw up their hands and decide not to use any of the above.

Video Advertising Succeeds

The adoption of video is surging faster than many expected. Longer formats and better quality will bring even more eyeballs who will grudgingly accept advertising.

Microformats Go Mainstream

Why they aren’t already is shocking. Nevertheless, in 2009 we’ll see microformats become a standard and search results will become far more robust as a result.

Banner CTR Becomes Obsolete

Brands will finally realize that measuring success by click through rate (CTR) isn’t working. Measurement ‘beyond clicks’ will be the new yardstick, whether that’s through new brand advertising measurement services like Vizu or through monitoring services like Brandwatch and Trackur among a gaggle of others.

RSS Adoption Spikes

Someone will (finally) figure out how to market RSS to ‘the masses’ who will grasp the sublime benefits of having content come to you instead of the other way around.

Kindle 2.0 Flops

Amid a weak economy Amazon releases the newest version of Kindle. Other readers have gained ground where Kindle has not and at the core Kindle is a solution without a problem.

Google Search Share Stalls

The move by Facebook (see above) causes a radical change in the search landscape. Microsoft passes Yahoo! for second place and talks about a Microsoft Yahoo merger are (unbearably) reignited.

FriendFeed Surpasses Twitter

FriendFeed adoption increases at an accelerated pace due to quick innovation, uncluttered design and an interface that lends itself to communication.

Someone ‘Dies’

Users reach social media overload and VCs get even more nervous about revenue creating social media shrinkage. In this instance ‘Dying’ means a company goes under or is purchased for a song. My short list includes Plurk, Twitter, Digg and Seesmic. This isn’t a reflection of the people or product but the inability to truly reach the mainstream with a service that has a profit model.

There are plenty of other things that I believe will happen in 2009, but they seem more obvious or an extension of current trends. Instead I tried to be a bit more bold, at least on a few of my predictions.

We’ll check in this time next year to see how I fared. In the meantime, feel free to comment and provide your feedback and reaction to my predictions.

In my time as a search engine marketing consultant, I’ve found that many overlook phrase match and exact match in their Google AdWords campaigns.

What’s the difference between broad match, phrase match and exact match?

Broad match

The AdWords system defaults to broad match which will serve your ad based on the loosest of requirements. For instance, let’s say you’re bidding on the keyword ‘bird bath’. On broad match your ad shows up if the words ‘bird’ and ‘bath’ appear anywhere in the query in any order. This means your ad is served up if someone searches for ‘does big bird ever take a bath?’ It’s not always relevant.

Phrase match

With phrase match your ad shows up only when ‘bird bath’ appears together, in that order, in the user query. Other words may still appear before or after, but the phrase must appear. This means your ad is served if someone searches for ‘making a bird bath’. Use phrase match to ensure your ad is shown to more relevant queries.

Exact match

To be precise, use exact match, which is … exactly what it sounds like. Your ad shows up only when the exact phrase ‘bird bath’ is used without any other words. The volume is low but you can be assured you’re reaching the right audience

Why is using phrase match and exact match so important?

As mentioned above, phrase match and exact match lets you target your ad to more relevant queries. You’ll see higher click through rates (CTR) on phrase match and exact match keywords. A high CTR isn’t just metric window dressing, it can actually help you reduce your CPC while maintaining your advertising position.

Read that last sentence again because it’s that important.

Google uses your historic CTR for a keyword to determine your ad quality score, which in turn influences your CPC for that keyword. Don’t believe me? Believe Google.

In addition, you want to drive relevant traffic to your site that will convert and provide a significant ROI. Broad match will give you volume but you may very well encounter a greater percentage of monkey clicks which will depress your conversion. The low CTR these broad match keywords rack up will also lead you to pay a higher CPC.

Finally, the clicks generated by phrase match and exact match are of higher quality and should have better conversion rates.

Can I use all three match types at the same time?

Yes. There’s no reason why beginners shouldn’t load up all three match types for all of their keywords. More advanced users may even choose to have different bid strategies for each match type, paying less for broad, a bit more for phrase, and a premium for exact match.

How can I add phrase match and exact match to my existing campaigns?

Google does have an interface via their keyword tool but the UI makes it difficult to add all match types for selected keywords. Frankly, it seems like an easy UI problem to resolve and I can only believe that Google wants a greater percentage of broad match keywords to maximize revenue.

Of course you can also do this using AdWords Editor but that’s not for the beginner. Instead you’ll likely be using the standard Edit Keywords interface.

To Google’s credit they do make a good case for adding phrase match and exact match (as well as negative keywords) in this interface. But it’s a pain to retype each of your broad match keywords with the appropriate quotation marks or brackets. From experience, you also often make mistakes and typos.

Use Excel to quickly add phrase match and exact match keywords

Create a new Excel spreadsheet with five columns. In the first row you’ll have the following in each column: keyword, “, “, [ , ]

As you can see, you’ll copy and paste your broad match keywords into the first column, labeled keyword. Now, the tricky part is using the CONCATENATE function so that phrase match and exact match keywords are automatically generated.

The formula you’ll type into the cell to the right of ‘bird bath’ (Column B) is =CONCATENATE($B$1, $A2, $C$1) and the one to the right of that (Column C) will be =CONCATENATE($D$1, $A2, $E$1)

Then simply copy those formulas down each column and you’ll have a phrase match and exact match generator. Just copy each and paste them into the edit keyword tool in Google and you’re ready to go!

Hopefully this helps new AdWords users get the most from their campaigns. Please leave comments if you have any questions, particularly surrounding the Excel phrase match and exact match generator.

Yesterday, Google updated the AdWords alcohol policy to loosen restrictions on hard alcohol and liqueurs.

… in response to advertiser feedback we’ve received over the years, we’ll permit the advertisement of hard alcohol and liqueurs that target the U.S.

It’s not as straight forward as the beer related policy though. You can’t outright sell Bombay Sapphire. Instead you have to play a bit of semantic dodge ball.

To comply with the updated hard alcohol and liqueurs policy, advertisers must promote the information about hard alcohol and liqueurs that their websites contain, such as recipes and brand messages.

For example, under the hard alcohol and liqueurs policy, you might market to individuals searching for helpful and relevant alcohol-related information by promoting holiday cocktail ideas or the caloric content of popular spiked beverages.

Google isn’t doing this simply to appease advertisers. Feedback wasn’t the motivating factor, not by a long shot. Google is looking to boost revenue for a maturing product in an increasingly tight economic environment. Growth in paid search is projected to slow according to eMarketer.

A recent Citi Investment Research report from Mark Mahaney had this to say after attending the Search Insider Summit.

Q1 And 2009 Could Be Materially Challenged – We sensed specific nervousness about the Q1 outlook and the possibility that Q1 could actually be the real inflection point quarter – i.e. the first negative sequential growth quarter ever for Search. We also interpret recent statements by GOOG execs and company actions as an acknowledgement of this material challenge.

As search matures, Google realizes they’ll need to do more to achieve substantial growth. Alcohol is clearly a vertical with lots of pent up ad dollars. It’s a smart move by Google.

Hey, we all might need a drink the way things are going. Google’s just making sure it cashes in when we do.

Google’s share of US searches continues to rise according to a recent comScore press release. In October 2008 Google led with 63.1% of all searches conducted. The resulting pie chart shows that Google is closing in on a Pac-Man like position in the search market.

It hasn’t been this way for that long though. Following is the historic comScore data I’ve cobbled together showing Google’s share of the search market.

October 2004: 34.8%
October 2005: 39.0%
October 2006: 45.4%
October 2007: 58.5%
October 2008: 63.1%

So, in five years the search market went from a dog fight to a laugher. If Google continues on this path the pie chart will take on true Pac-Man dimensions.

Now, I’m not sure who’s Inky, Blinky, Pinky or Clyde but Google certainly has the other search players on the run.

None of them seems to have the right medicine to reduce the Google fever that has swept the country. Acetaminophen (AOL), ibuprofen (Yahoo!), naproxen (Ask) and aspirin (MSN) have all failed to bring the temperature down. And upstart homeopathic remedies (Powerset, Cuil etc.) haven’t made a dent either.

Would mixing some of these medicines together help? Some Yahoo! and MSN with a dash of Powerset? Not likely. And in some cases mixing medicines can prove lethal.

Last week Google rolled out new AdWords metrics that provided advertisers a look at performance on Google versus Google Search Partners. These search partners include AOL and Ask but also a group of anonymous others of varying size and quality.

Many search engine marketers have been concerned that the performance on Google’s search partners might be substantially less than those on Google itself. The mentality is understandable since Google’s Content Network has such comparably poor performance. Yes, that can be explained by the difference between passive and active searches but you can’t blame folks for being skeptical. Could Google be hiding poor performing partners by combining Google and Google Search Partners together?

The verdict? Among the accounts that I monitor and manage the results from the Search Network seem solid, which is likely why Google agreed to this level of transparency. A few campaigns index above ‘The Google’, a few index below. Perhaps it’s always been this way, or perhaps Google has quietly gone about optimizing the Search Partner Network. I’m guessing this is in response to a rising trend of advertisers who were avoiding the Search Network.

Savvy search engine marketers will turn off poorly performing Search Network campaigns, but will also opt-in to the Search Network more readily now that they have this level of detail. Since this setting is at the campaign level it may force advertisers to split or divide their campaigns to toggle appropriate ad groups in or out of the Partner Network based on performance.

The net result of this change will be more advertisers participating on the Search Network but doing so when it makes economic sense. Another potential side effect will be greater competition within the Search Partner Network which could increase CPCs and decrease volume.

The thing is, there’s still a lot we don’t know. We don’t know which partners/sites are contributing to these metrics. Sure, we get to see the aggregate data, but we don’t get anything more. So you won’t be able to selectively block ads from appearing on certain partners based on performance, whether real or perceived.

As an aside, I find it interesting that they chose to feature an account which showed a low CPC (under ten cents), but also a very low CTR (under 1%). It seems like a not-so-subtle way to show that AdWords can be inexpensive. Never mind that a low CTR contributes negatively to your ad quality score.

While I would prefer more detail, it’s a step in the right direction and gives advertisers a new way to target and optimize their programs.

When I started managing my first search engine marketing (SEM) program at Alibris I quickly found that being the first ad on a Google search result wasn’t working. It seemed a bit counter-intuitive. The volume was great but the conversion was atrocious. But I had a theory for this phenomenon that I quickly dubbed MonkeyClicks.

My MonkeyClicks theory is that a user tends to click on the first result on the page regardless of whether it really meets his or her needs. It is plain ol’ human behavior. A knee jerk reaction of sorts. So you get a tremendous amount of volume. However, that first click doesn’t always match the needs of the user and even if it does they will often return to the search results to determine whether other options exist.

If you think of this outside of the small world of search engine marketing it makes perfect sense. If I’m looking to buy a car I’m likely not going to look at the first advertisement I see and then run off and buy that car. If I’m looking to buy a new bicycle on Craigslist I’m going to look at a number of matching results, not just the first one.

This makes sense but lets back it up with some data. (I like data!) Back in 2006 AOL accidentally released a chunk of user search results. It showed that 42% of all clicks on the first page of results came from the first position. In comparison, the second position racked up a distant 12% of clicks.

Another eye tracking study by Cornell, and reported by seoresearcher, showed the disparity in the % of clicks and % of time spent on each search result.

The ratio of clicks to time spent on the first position is a classic example of MonkeyClicks behavior. The first position garnered 56% of the clicks but only 28% of the time spent.

All of these studies are done with natural search results, but I’d argue that the paid results will look very similar. Not to mention that I’ve seen this time and again as I manage various SEM programs.

However, your mileage may vary! So don’t take my word for it, do a quick review of your own SEM program. If you’re running a Google AdWords program and Google Analytics, simply take a look at your Keyword Positions report.

And … beware of MonkeyClicks.