Who Should Own Marketing Technology?

Marketing technology is becoming increasingly important in organizations as online marketing becomes a larger part of the overall marketing strategy. Yet getting anything done for marketers in many of these organizations is becoming increasingly difficult. Marketers typically do not have insight into the technical underpinnings of the systems they rely upon and the IT department is tasked with other projects and simply do not have time or staff to support the marketing department. So what is the solution?

Scott Brinker is the CTO of Ion Interactive and a self-described marketing technologist. In his blog, Scott calls out the the pain point for organizations and proposes that many organizations should consider instituting a new department of marketing technology, complete with its own C-level delegate, the Chief Marketing Technology Officer. When you consider the political struggles within large organizations, its not a bad idea.

Meanwhile, a recurring theme at the online marketing conferences, are solutions for marketing teams to work around IT. Tealium and Enisghten for example, provide a tagging management system, whereby IT only needs to be requested to drop a single JavaScript tag into the footer of a site, and marketers can then login to a management system and add the tags for whatever else they want such as 3rd party analytics packages. And while the solutions provide obvious appeal for marketers, many people on the IT team rightfully resist these solutions as ‘trojan horses’, citing poor and excessive choices by marketers as to what all to include once they have the ability to do so, not realizing the effect on site performance.

Then there is the reality of the evolving online medium itself. Only a couple years ago we were talking specifically about websites and search engine rankings. Now, brand management has moved outside of organization’s website and to the social sphere (Facebook, Twitter, LinkedIn); even the physical media by which we consume online media is changing with the ever increasing prevalence of mobile and alternative devices such as iPads. All of these things require technical facilitation. To build a simple Facebook app isn’t so simple any more with Facebook now requiring even the most trivial customizations to be run through an ‘app’ and registered in its developer’s center. Mobile requires sophisticated device-specific applications. Meanwhile the changes are just beginning and the past of change areas such as eCommerce looks poised to explode with innovations such as eBay’s X.commerce platform and where.com’s Geo IP fencing technologies.

The more I’ve pondered this dilemma, the more I’m inclined to agree with mr Brinker’s thesis that organizations now require a dedicated department for marketing technology. All of these challenges are entirely outside of the scope of support and fields of expertise for both traditional marketers and IT. When you look at what’s happening with technology, its no longer an entity separate from the marketing message; the technology is becoming the expressive media itself! Imagine a songwriter who cannot play an instrument, or a skilled pianist who doesn’t understand music theory – neither one is going to be effective at composing good music. What’s really needed is a group of people who are both analytical and technical; they sit somewhere in the middle, and right now, there is no room for these individuals in the normal corporate structure, so they typically go to work for advertising and digital agencies instead!

So, instituting an online marketing department seems a natural direction that corporations will evolve, particularly those doing a lot with online marketing. In the meantime, the optimal solution for many organizations may simply be to partner with an agency capable of bridging this gap. These agencies can take ownership over marketing technology and operate at a more organic level, creating the types of solutions not capable within organizations who require solutions such as tag management to succeed.

Online Marketing Strategies for SMBs

Through a convergence of recent events, local small businesses (SMBs) are beginning to flock to online advertising. Businesses and consumers alike are making substantially less use of the Yellow Pages and other print directories to discover local merchants, in favor of more efficient tools search tools such as Google and Bing. Traditional rating and review directories such as Zagats have been bought and aggregated into Google’s Local platform, and other sites such as Yelp!, FourSquare and mobile apps like UrbanSpoon are making it even easier to find qualified leads for restaurants and entertainment venues.

Online marketing however is a big topic and requires an understanding of the online landscape to position one’s small business appropriately. Perhaps adding to the confusion, is the deluge of phone calls SMBs have been receiving from advertising agencies (reports of 4-5 calls per week on average) offering to help with their own brand of online marketing, some even claiming to be acting on the behalf of Google; an exaggeration at best. While these agencies do represent a conduit for local merchants to quickly get online, how does one know if they are offering the right services for your business or that they will receive a positive return on ad spend?

I took a little time to review the more prominent SMB agencies and I found that by and large they fit into one of three categories:

Local SEO (Presence Focus)

These are companies that focus on getting a company listed in Google and Bing’s maps and local search results. You may have noticed recently that if you type in “Pasadena plumbers”, you now see a map and a list of local merchants next to the map. If you search simply for “plumbers”, you will see a similarly local-biased result set on your phone. This is not to be confused with traditional SEO in which optimizers acquire links to establish relevancy for specific keywords. Rather, they are acquiring citations and reviews on behalf of the local merchant, in the authoritative local directories and registering the business as a local entity directly with Google and Bing.

Search Engine Optimization companies are notorious for selling their services over that of paid advertising by saying their listings are permanent and the listings are free, saving a lot of money in the long run. Sometimes it is true that you can save a lot of money by going the SEO route instead of paid advertising, but it is rarely free. There is a lot of time and effort that can go into getting your business listed properly and staying on top of the search results takes continued effort.

These companies also typically provide website development, design and social presence services, since these efforts are largely related to the effort of better online visibility and reviews.

Paid Advertising (Sales Focus)

Paid advertising companies essentially buy ads and search placements (pay per click) on behalf of the local merchant; a practice sometimes referred to as lead generation. Most often paid advertising companies are purchasing text ads from the search engines, and mostly from Google. In fact, it would not be uncommon for 80% of a local merchants ad spend to go directly to Google. There is also value to be found from Bing and Facebook, and perhaps some specialty niche sites and increasingly from ad banner retargeting, if there is enough volume and budget.

For the local merchant, it is worth understanding the eco-system a little bit, if considering working with a lead generation company. Google AdWords can be rather complicated and some spend years perfecting the art and nuance of managing keywords and maximizing ROI for campaigns. Google however does offer the Local platform for SMBs, a simplified and watered-down version of their standard AdWords interface. Local merchants can in fact run their own campaigns and save the premium that is being paid to agencies to work on their behalf (sometimes as high as 40%!), but its not as rosy as it first appears. First, many of these larger agencies get reseller discounts allowing them to source for a lower cost right off the bat. Second, if you don’t have the skills, you will likely pay more and get less qualified traffic than you’d pay the agency, and third, if can take more of your time that you’d think it should, even using the simplified Google Local platform.

These agencies often do offer a website but it is typically a very simple 1-5 page site, focusing on a sales landing page and a prominently displayed 800 phone number for ad-to-call tracking purposes. Some companies such as ReachLocal may even insist to mirror or overtake your site in order to be effective at running their ads.

Lead Incubation (Relationship Focus)

Finally there is a third type of marketing agency which works with longer-term relationships that may not convert into a sale immediately. For example, Realtors, B2B sales, and other high-cost transactions may first be introduced to a prospect months before they buy. Compare that to the nearly instant transaction of someone looking for a plumber. In these cases, lead incubation experts may use a blend of SEO, paid search, and perhaps even social channels to generate the leads, but take an extra step of staying in contact and following up with the leads periodically, to ensure that business prospect is not lost through the course of the longer sales funnel.

Lead Incubation is typically achieved using a Customer Relationship Management (CRM) system that tracks relationships and stays in touch via email, following up at strategic opportunities to check in with the prospect and potentially provide more value. In the case of real estate, the CRM may be integrated with the IDX data feed which provides a listing of houses for sale and email alerts can be sent to prospects, when a new listing is added that matches the search criteria of that prospect. This is typically referred to as a Drip campaign. Some companies such as TopProducer for Realtors and Eloqua for B2B sales, provide the tools for sales professionals to orchestrate and manage their own “auto responder” follow up emails, while others may automate and manage the effort as a service for their clients.

These companies typically provide a backend CRM and/or DRIP campaign system. There is often a front-end website option or website integration form, to facilitate lead and email capture. Frequently additional information is provided in the form of whitepapers or deeper search query reports to incentivize completion of the form, which enables later follow up by the CRM/Drip system.

Comparison

As you can see from the above descriptions, these companies and their strategies may very significantly. How does a local business know which is right for them? Fortunately, a lot of this translates to the real world and may be self-evident with a little analysis. For local merchants considering working with an online marketing agency, be sure to understand their focus and if it is a correct fit for your business:

Companies for whom their product or service is generally not differentiated by quality (aka a commodity), will tend to be more sales-oriented. For example, if I am the local seller of bicycles or the local locksmith, people need not qualify me, and so its more of a sales game to get the business. For these companies, a paid averting specialist (lead generation) may be the right fit.

For companies that are a lot more discernible by quality and reputation, paid search may not be effective, since customers are interested to see ratings and reviews first. Examples might include restaurants or doctors. And finally, for real estate agents and B2B sales professionals selling expensive product that typically would not be a cash transaction for a consumer, lead incubation is a must.

Advice

At the end of the day what you are really looking for is the best Return on Ad Spend (ROAS). Your ROAS will vary by (a) having the right strategy to match your business, (b) how much you paid for the advertising, and (c) how effectively it was executed. Fortunately most small businesses should already have a sense for the right strategy based on what’s already working for them in the offline world. It may be tempting to reduce cost of ad spend by doing it yourself but remember there is not only opportunity cost in having to learn this stuff yourself, but you likely will not execute as well as experts of the field, if you are new to online marketing. That’s not to say you shouldn’t learn about or dabble in it yourself but those are two counter-weights to consider.

No matter how you choose to proceed, just get started! And plan to set aside 10-20% of your marketing budget for testing and exploring new online opportunities such as social or mobile marketing. There are always new opportunities popping up online and invariably, the largest bounties go to those who are early to the party.

 

Optimizing AdWords Campaigns

Assuming you are already running AdWords campaigns, you are probably looking for opportunities to improve your Return on Ad Spend (ROAS).  Since AdWords is a mature marketing channel now, you’re going to have to be efficient and run optimized accounts whenever possible, simply to stay profitable with your ads.  Fortunately, there are a few things you can do that will wildly improve your results, without necessarily requiring a great deal of time or effort.

 

Converison Funnel1. Integrate Analytics Reporting

First and foremost, have you integrated Analytics with your AdWords account yet?  By doing so, you allow data to flow between your AdWords and Analytics accounts, and open up many more opportunities to see helpful data that will drive your optimization efforts.  For example, setup conversion funnels that show precisely where in the conversion flow that users are leaving your site.  You’ll also be able to see certain truths about who is visiting your site, from when, and when and can factor these details back into your account.  The data that Analytics can provide is truly invaluable and should be considered a first step in any optimization effort.  So  get this setup now if you haven’t already done so!

Quality Score2. Mind Your Quality Score

Make sure your Quality Score for each keyword is ranking 7 or higher.  If you’re running ads with lower quality scores, you are undoubtedly paying considerably more than you need to and receiving less traffic for your budget to boot.  Remember that a quality score is multiplied by your CPC to determine your placement (CPC X QS).

To improve your quality score, make sure your AdGroups are tightly themed and kept relatively small.  Have a customized landing page for each AdGroup, and make sure the search phrase appears on that landing page.  In another article I go more in-depth into Quality Score, but this is the basic idea.  Keep your landing pages and ads highly relevant to the keywords you’re bidding for, and optimize your landing pages for conversions.

3. Precision Targeting

Google allows you to filter traffic to your ads by a number of criteria now, including location, language, and device.  Use these wisely to dramatically reduce the number of people who are exposed to your ad that shouldn’t be.  For example, don’t show your ad for local plumbing on a national basis, and don’t display ads for Spanish speaking legal services to a dominantly Mandarin speaking audience.  You may also want to not show ads for B2B services on mobile devices, since mobile is mostly a personal surfing device for off business hours.  But using targeting in a smart way, one could significantly improve their CTR, Quality Score, and consequently their CPC. This is an example of where those Analytics integrated reports can help drive decision making on how best to target your campaigns.

4. Dig Into Your Placements Reports

There are a number of seasoned AdWords professionals who will tell you to outright avoid the Display network.  But I’d also heard from a few people that Display worked exceptionally well for them; I even heard from one guy who specialized in only Display network advertising.  The truth is probably that it has a lot to do with what you’re selling and how you’re using it.  Keep in mind that display traffic is more passive and higher in the funnel than search traffic. You need to bid and message accordingly.

But equally, consider there is a lot of MFA (Made For AdSense) just content floating around out there that wont serve you well.  For this reason, it is imperative to regularly review your Display Network Placement Report, and see where your ads are showing up.  Use Placement exclusion tools to eliminate poor performing or bad-for-brand sites that you’re placing on. And similarly, you may even discover a few real gems that you’d like to do deeper sponsorships for.  You may even consider doing direct placement deals when you find them.

5. Schedule Your Spend (Day parting)

If you’ve setup conversion goals via your integrated Analytics tools in AdWords, then you’re going to be able to product a pretty nifty multi-line graph allowing you to compare visits to conversions on an hourly basis.  If you sift through this data closely enough, patterns are going to emerge.   You’ll begin to see certain hours when clicks convert better into sales.  You can then using a technique called Day Parting, and set different CPC bids based upon the hour, or pause your campaign accordingly.  This is the kind of granular precision you need to really control your custom acquisition costs, and is another example of where Analytics can drive decision making.

Day parting

6. Use Conversion Optimizer

If you have a mature campaign that has been running a while, then you might consider enabling the Conversion Optimizer tool.  Given enough historical data on your account (and assuming conversion tracking is enabled), Google can make predictions about the conversion of your ads in the future, relative to specified CPC, seasonality, etc, and it will adjust your bids accordingly, to maximize your Return on Ad Spend (ROAS).  Note – you need a minimum of 15 conversions in the past 30 days for Conversion Optimizer to be effective.

In summary, optimization is more about diligence with details than anything mysterious.  Use the Integrated Analytics features to expose more data and just spend some time with the data, looking to expose patterns and trends that you can optimize around.  Sometimes this means changing page flow when you expose a bottleneck in user flow, and other times, it simply means sculpting your AdWords bids to eliminate areas of waste.  In both cases, one just needs to get comfortable with the details and take action to improve upon them.  As laborious as it may sound, these steps are often the key to a profitable AdWords campaign.

Website Optimization Tips

Optimizing a site can mean many things.  If you’re an eCommerce site, probably means optimizing your landing page, hiding your navigation so as not to distract, and pushing visitors toward the goal of a transaction receipt page.  For small business and service professionals, it may mean getting someone to fill out a form.  Or if you’re a publishing site, it very well might mean something nearly opposite of those two focused goals – perhaps you actually do want visitors to traverse your navigation, discover and engage with your content or community.  No matter how you describe it though, these things all have one thought in common:  you’re looking to maximize the value of each visitor to your site.

Although this practice is typically referred to as Website Optimization, Landing Page Optimization (LPO) or Conversion Rate Optimization (CRO), it is part of much broader schools of thought.  Many universities now offer interdisciplinary programs called Human Computer Interaction (HCI) that combine the study of Psychology and Information Systems, to better understand how to create systems that do a better job of servicing and assisting the humans that the systems were built for.  Usability and User Experience are two more common terms now used in design circles, to describe how to improve a user’s interaction with a system or website.  In many ways, landing page optimization and conversion optimization are applied marketing concepts, as much as Usability and User Experience are applied design concepts; but they’re all drawing up HCI which simply seeks to create better interfaces that accomplish the goals of the system. For the purposes of this blog post, I’m focusing on the marketing prerogative, but many of these thoughts can be applied to overall system design and usability as well.

Improving Efficacy
So how does one maximize value from their visitor? For the purposes of this discussion, let’s assume we’re talking about the easy to understand and quantify, eCommerce model.  With eCommerce, there’s typically a large spend on PPC and that spend is usually in pursuit of directly-quantifiable direct sales; not long-term fuzzier metric brand building. So our goal in this case would be to get users to our site for $1 and get as many of those visitors to buy something as possible, to increase average profits above the dollar we spent to acquire their attention.

Website Optimization
We’ll ignore the efficacy of the ads themselves for this conversion and focus purely on what happens after they arrive at the site.  Onsite, there are really two things that matter:

  • Focusing attention in the direction we want them to go.
  • Reinforcing trust and removing doubt and fear.
  • Keep attention focused and directed at the goal line (the receipt page).

If we keep those strategic goals in mind, the tactical implementation is relatively straight forward at a high level.  Obvious optimizations would be:

  • Remove the navigation bar on the landing page
  • Use very large submit buttons that are hard to miss
  • Use simple bullet points for details, not long-form text
  • Don’t present too many choices; match exactly the one product they searched for.
  • Use a headline that excites the user.
  • Use trust signals such as testimonials or credential logos on landing and checkout pages.
  • Minimize extra steps that could be hurdles to checkout such as the always-favorite required membership signup.
  • Remove barriers such the form that goes blank and requires refill if one piece of required information is wrong.
  • Don’t ask for more information checkout than is absolutely necessary.
  • For God sake, do NOT use Captchas!

Beyond those basics, there are a number of more subtle opportunities for optimization that simply require a “feel for the art” of it all, and proper domain knowledge, to match the culture of your users.  Catching their attention is key but authenticity and trust are also very important and cannot be sacrificed for a cheap thrill, or they’re not going to give you their credit card number.

Tactics that might work well would include using a larger checkout button with appropriate messaging.  Perhaps something exciting such as “Check it Out!” works for an entertainment product but a move conservative “Get Started” is more appropriate for insurance or financial institutions.  Color choices, images and titles work the same way.  Focus on finding a way to grab attention and infuse emotional excite, without compromising authenticity or trust.

Testing Methodology
As with any advice, there are many half truths in optimization.  What works well for many sites may not work for yours.  A lot of this comes down to culture and the issues f authenticity and trust I mentioned above.  For this reason, you may start with certain known principles as described above and broader usability heuristics, but the only way to truly know what works best for your own audience, is to test.

Testing in fact, is at the basis of most sophisticated online marketing operations today. We should start with a humility that we never absolutely know truth, we can only approximate it, and should always seek to evaluate truth through objective and empirical evaluation.  As such, most online markets today user an iterative approach to their online marketing and optimization strategies.  Continual testing and revision is baked into the on-going process.

To test your overall conversion funnel, you just need to setup goals and funnels in your analytics tools to be able to track and observe where bottlenecks are and results of changes. The efficacy of a specific landing page however, is better instrumented with a tool specifically designed to track changes of that one page, and track the goals against those changes.  There are tools such as Unbounce, Optimizely, and the free Google Website Optimizer (WSO) for that; WSO optimizer in particular is handy due to its one-click Google Analytics integration.

There are two types of tests that you might consider running for landing page optimization – an A/B test, or a Multivariate test.  An A/B test compares two or more separate pages, to determine which is more effective. This is a simple test to setup, requires less traffic, and is great for comparing entirely different versions of page layout.  If you instead want to focus on testing more subtle changes within a page such as title messaging, or button color, or featured image, a multivariate test would be appropriate.

A/B Testing
Using a tool such as Google Website Optimizer (WSO), you’d either setup redirection for the randomly served variants of yourA/B test, or you’d embed a few JavaScript hooks so that you can manage your variations from the WSO tool, if running a multivariate test.  Once setup, just wait for enough sample data to collect and let WSO do its thing.  Over time, you’ll see a percent-likely determination for which page is more successful. For example, “This page is 95% likely to outperform”.  Once you reach around 90-95%, WSO will determine the variant to be a “highly significant” improvement.  From there, you’ve confirmed which variant is more effective and can make your changes, as well as consider the next round of tests based on your findings.  This process can be repeated enlogica as you focus more and more on exactly what works.

For anyone new to optimization, I cannot stress enough, how important these methods are; you’re likely leaving a substantial amount of money on the table.  If you’ve never thought about optimization before, its quite likely that you can increase your Return on Ad Spend (ROAS) by 100% or more. I personally have had experiences in which small changes such as making a checkout but big, green and changing the messaging on it, with a single test, increased conversions by almost 40%.  So, while this form of methodical and detail-oriented optimization may not be the most sexy part of running your online business, it could easily be one of your most important!

Google Quality Score Demystified

Ah, quality score!  We’ve all probably had that experience of creating AdWord campaigns, spending hours teasing out our keyword lists into proper ad groups, and waiting for Google to start sending us traffic.  We check back the next day only to find the traffic did not come.  But what happened?   Provided that you didn’t violate Google’s TOS (think poker, pills, or porn), and provided you’ve accounted for the obvious possibilities such as potential traffic volume for your terms, and your competitive CPC (cost per click) bid, that only leaves one possibility – your quality score.

Beginning in 2005, Google started using a sliding scale to determine how valuable an ad is, both in terms of user experience and in terms of maximizing value of the website real estate used for the ads on Google.com and their search partner sites.  Rather than simply allowing the highest bidder to appear in the top position, they decided it was better for their own profits and brand, as well as the profits of their publisher partners (AdSense) to begin curating the ads a bit better.

As a result of applying quality score, ads that are deemed to be higher quality will rank better with a lower required CPC than ads with a lower quality score.  Ads are places and priced based upon “ad rank” which is essentially a multiplication of your Cost Per Click (or bid) x Quality Score.

The Quality Score is a rating (1-10) provided to each keyword in your AdGroup.  To see what the current quality score of your keyword is, roll over the speech icon on the static column of your keywords list.  You’ll see both the 1-10 score and a feedback on relevance and landing page quality.  Conversely, you can also add a column to your keywords list that will show the Quality Score inline for the report.

Quality Score

So what is Google looking for and encouraging with Quality Score?  

i. Relevancy – The basic premise is they want to see highly relevant ads for the key term you are bidding for.  This applies both to your ad text as well as the landing page you link to. So if you bid for the term “blue widgets in Los Angeles”, your ad text should be closely related to blue widgets and your landing page had better make it clear that you’re talking about blue widgets in Los Angeles as well.  This addresses the relevancy portion of quality score, but there are other implications too.

ii. Landing Page Optimization – Quality Score also is heavily weighted on other factors related to your landing page such as  ease of navigation, load time, and how many links (too many?) are on the page – usability issues.  The algorithm is now reportedly also looking to see if your landing page provides a mobile-friendly version since so many ads are showing on mobile phones now. So as unrelated as it might first appear, you’ll want to make sure you’ve spent a little time on the interface, loading time, and accessibility (mobile) aspects of your landing page, or it very well might be costing you money!

iii. Historical Performance – Another dynamic also considered when calculating quality score, is historical performance.  They’re looking particularly at the CTR of the ad for that particular keyphrase but also look at overall account performance.  This is a particularly frustrating one actually.  The burden of proof is automatically upon the advertiser  as you’re “guilty” until you prove yourself innocent, meaning that you’ll end up over spending for a month or so, while you work to establish enough CTR data to establish good history for the keyphrase.  I understand the goal here, sort of, but it makes test marketing tough and provides a clear advantage to bigger spenders and entrenched competitors.  I suppose the positive side however is that it allows Google to bias toward trustable relationships in order to ensure quality.  I suppose any small business would do the same.

So there you have it, these are all things known to effect conversion rates of ads and Google is essentially prodding users to follow better practices.  Perhaps their goal here is force advertisers to follow better practices in order to realize higher profits so they’ll spend more money on AdWords!  Or less skeptically, perhaps they want to provide a cohesive user experience such that even advertisements seem highly relevant and purposeful for the user, whenever a search begins with Google.  Or yet another possibility, perhaps they needed to improve overall profitability of AdWords ads in order to introduce the CPA (cost per acquisition) cost model that is preferred in lead generation.

Quality Score is an important part of campaign and bid management for Google AdWords today.  An effective AdWords campaign should be just as much about conversion optimization and optimizing relevancy, as it is about managing budget and ad spend…and historical performance .

Tech Innovations That Are Creating New Opportunity

There is a common expression in tech entrepreneurship – do things that weren’t possible 3 years ago.   The reason for this is the accelerated innovation and thus the accelerated commodization of technology.  A product might go from ground-breaking and unique to absolutely commodity in 10 years or less.  If you accept that, then you must assume competition starts spiking by around year 5 and your ability to to build a bran and break through the noise, will be diminished thereafter.  You also will have less than half the window remaining to capitalize on your investment.  So if you get started around year 3, then you’ve at least got momentum and have built a brand before peak competition is reached.

So that said, what are a few innovations that we could possibly leverage that only only 3 years old, as of this writing.

1. Cheap bandwidth – It use to be that hosting accounts metered your account and limited you to 100s of megabits per month.  Now you can get unmetered pipes (as much as 100 mbps) for a mere $100 per month. Imagine how that might pave the way for streaming and online storage.

2. The Cloud – Everyone knows about the cloud and how this is changing business models such as software which is changing to a software as a service model (SaaS), in which you pay for the service per month, instead of buying it up-front.  Remote sharing of data is now easier than ever too.  What impact might this have?  Remote location, remote collaboration, and better use of corporate capital/cashflow come to mind.

3. Smart phones – Perhaps the single biggest impact of the smart phone revolution has been the GEO-intelligent ‘apps’.  Now you can find anything, anywhere, anytime – relative to where you are.  Imagine the future impact of this upon advertising and device intelligence.

4. Social graph – Facebook as proposed an open social graph which is perhaps the first and most ambitious application of the semantic web. Their goal is to tie together all of your interactions, comments, locations etc, into one single usable data stream.  This is both scary and full of possibility; especially when combining it with GeoIP smart phones.

5. SaaS Business Model – I mentioned this one above but ‘cloud computing’ has given rise to an entirely new software licensing model in which the use pays per month rather than an up-front fee.  This is innovative from a financing perspective when you consider how cash-strapped many startups and small businesses are.  But more interestingly, many SaaS companies are beginning to position themselves as hybrid *services* companies that automate a service for their customers; not simply virtual product vendors. That’s a major philosophy change in what software businesses are, and a huge benefit for small business.  This is likely the beginning of the adoption of  automation tools by small businesses en masse.

6. Tech Startup Incubators (Y Combinator) – Mark Schuster made an interesting point recently about how massively much less capital is now required for a startup and how this is driving the exponential rise in small business startups. We went from millions of required capital (hardware, software) in the late 1990s, to $10,000s, or even $5,000 in some cases now.  That is the lowest cost in history to start a small business, which is good seeing how high unemployment currently is!   It will be interesting to see how those two converging trends shape the future.  But layer on top of that all of these startup incubators now such as YCombinator, TechStars, The Foundry, Founders Institute, etc – and it is enabling young entrepreneurs to get access to capital and mentorship like never before!  Actually, for me considering startup of a small business, I find this to be a real concern frankly; an explosion of competition!

7. Information Overload – Google has succeeded in indexing billions of records and making them easily accessible to the masses.  Search engines are not new, but having ready access to all this data any time and from anywhere (smart phones) and taken for granted even by high schoolers now, should surely have some near-term future impact. I personally believe that this commoditization and saturation of data is what will drive the coming Semantic Web movement.  When documents are properly and semantically tagged, we will enable software and appliances to consume the data automatically and this will automate much of our lives.  So this secondary effect of search and information innovation I think will give way to yet an even bigger *applied* impact.

8. AdSense is Saturated – I hear there are over 400,000 websites joining the Google AdSense network every month now.  And that gave way to the explosion of ‘junk’ content and networks that creative junk content on massive scale, that Google has recently been trying to defeat with its Panda update (aka “Farmer”).  I think this business model of creating massive content to generate ad revenue is at a near-term end. But that creates a vacuum – what is it?  All those site owners will be looking for a solution.

9. Interest in Optimization (CRO/LPO) – Starting in 2006 it seemed like webmasters all woke up to the power of SEO at the same time.  A huge new consulting niche was born overnight.  In 2002 an explosion of PPC advertising was born and it took 3-4 years thereafter, for ad cost to catch up with their value.  Now we’re in a mature market for both of these ‘easy money’ search advertising options.  The free organic traffic people are now binging on Social media as a sort of SEO 2.0, and meanwhile PPC is finally discovering landing page and conversion optimization by which they can dramatically increase their ROI by improving how their site intakes visitors, creating a sort of Renaissance for them too.  The consulting world seems ripe for both Social and Conversion Optimization at the moment.

As I look around, I see plenty of changes and opportunities but ironically I am a bit underwhelmed by the opportunity.  I feel like we are in the remnant phase of some pretty massive innovation from 5 or 6 years ago. What I’m seeing now are mostly secondary effects of innovation that first occurred a few years ago. I recall there was a lull in innovation that seemed to occur in 2000-2003 and it feels similar to then, to me.  I wonder if this is a natural cycle and we’re in the lull just before the next major innovation opportunity?  Mark Schuster recently suggested we’re on the precipice of the Internet television revolution for example.  Now THAT could be interesting.

Google Competes Directly With Advertisers

Anyone that has had a conversation with me about Google in the past few years is surely aware of my paranoia that they want a direct advertising relationship for all marketing that occurs on Google in the coming years.  In other words, affiliate marketers and lead generators should be weary of what Google is up to.  Even service resellers should be concerned.

I first observed Google’s attitude toward affiliate marketers in 2006. There were rumors in the discussion forums that they were penalizing sites with affiliate links from the obvious hubs such as CJ and LinkShare.  Then came the issue of bridge pages on the AdWords platform, which penalizes websites for reselling the same product that another website is already selling.  Then maybe a year ago i saw this for the first time when I Google’d for “mortgage rates”:



It seems I was not too far off with my assumption that Google wants those direction relationships. Hmm, so what happens if you follow this link?


It seems Google is already competing directly now (against leadgen resellers), in most major areas of finance.  Well, given that advertising is significantly less expensive for them, they automatically get top placement, and they can leverage significantly better commissions than others, I’d say its safe to say this is a tough position for a leadgen company to be in; how do you compete?

Now look a little closer at their title.  Notice it is “Google Advice”.  That is nice and broad and suggests a proclivity to review and comparison marketing of many other projects.  I’d be weary if I were Capterra, SoftwareAdvice.com, or NextAdvisor.com.  Too bad because I rather admired SoftweAdvice as a business model, in particular.

So perhaps Google wants to stay in the information and search space and won’t venture beyond that, right?  I recently came across a post on SEOBook talking about a new site that Google owns called Prizes.org, which they are promoting in top positions for the Making Money Online space.  And if that weren’t curious enough, the post points out the hippocracy that two sites owned by Google in this case are allowed in the same search terms, whereas generally it is not allowed per AdWords TOS. Can you spot the other one below?  Actually, at the time I took this snapshot, you can see Prizes.org and the Google Adwords Express ad at the top, but there is yet a third at for YouTube (also Google owned) on the right.


Google Dual Ads
Other things I have been noticing lately involve the local space.  Google recently launched local listings with a massive map and local search results that push down the traditional organic results “below the fold” on any local searches such as “Portland attorneys”.  This is heavily promoting their Google Places product, which is their answer to the Yellow Pages, that no one uses any more.

Local Search Results
Shortly after they introduced AdWords Express, intended to make it simpler for a small business (SMB) to list themselves.  And just last week they announced businesses no longer need to create their own Google Places listing for it to exist; they’ll create it for you.  And finally worth mentioning on this topic, I was in Portland over the Summer and observed a massive advertising push for Google Local (google.com/city/Portland).  It is a city guide with local deals similar to those of Group or LivingSocial.

Google's Portland Site

It seems to me they are in the process of creating the building blocks for a massive local search platform.  If I were a local search marketing firm, I’d be quaking in my boots right now!  Companies like eGumball should already be highly concerned at the announcement that Google Places no longer requires their services (they’re purely about NAP (name, address, place) citations now), and ReachLocal should be seeing the writing on the wall that their primary channel provider is about to become a direct competitor and introduce a massive local marketing platform in the coming year or so, by my guess.

And so where is all of this ultimately going?  I believe Google wants to have a direct relationship with businesses for all advertising and lead generation solutions.  They want to remove any middle men that they regard as polluting their marketplace and eating their lunch. Thus as an entrepreneur, I’d be inclined to avoid building a business around offering any sort of solutions that involve arbitraging or repackaging search solutions for my clients, as that is precisely who Google will compete against.  It will be interesting to see just how far they can get in closing the loop with online advertising dominance before the FTC inevitably steps in.

Are Older People Better Targets for Facebook Ads?

A site called SocialCode recently did some research on how age is affecting Facebook usage patterns.  In a nutshell, they found they younger users were more likely to click on the like button whereas older users (50+) were more likely to engage with advertising and click through the ad campaign.

I found this a little bit interesting since I often hear wildly conflicting reports as to whether Facebook is a viable marketing platform.  On one hand, I hear some people say they’re “killing it” on Facebook and its AdWords circa 2003.  Then I hear others say no one clicks the ads and nothing sells.  It seems to really depend on what you’re selling … and perhaps this is one of the reasons why.  Here are a few of the highlights from the study:

  • 50+ year-old users, the oldest segment in the study, are 28.2 percent more likely to click through and 9 percent less likely to ‘Like’ than 18-29 year-old users, the youngest group observed.
  • Versus the rest of the younger population on Facebook, 50+ users see a 22.6 percent higher CTR and 8.4 percent lower ‘Like’ rate
  • Overall, women are 11 percent more likely to click on an ad
  • ‘Like’ rates are almost even for men and women; men are actually 2.2 percent more likely to ‘Like’ an ad than women
  • For women, CTR is 31.2 percent higher for the 50+ age group versus 18-29 year olds, men only see a 16.2 percent difference between the age groups
  • Versus all age groups, 50+ women’s CTR is 22 percent higher versus a 16.4 percent difference for males
  • The oldest male segment has an 11.7 percent lower ‘Like’ rate than the youngest segment, and 9.5 percent lower ‘Like’ rate versus all age groups.  Women only see a 7.2 percent and 7.9 percent difference respectively

PPC Research Tools

When building a Pay Per Click (PPC) campaign, it can be very useful to know what your competitors are doing.  Imagine if you can see exactly what terms they’re bidding on, what they’re spending, how long they’ve been running those campaigns, and even what A/B tests they’re running.  You could save immense amounts of money by learning from their efforts instead of having to spend and learn the hard way.

Or from another perspective, imagine the competitive implications if you’ve done all this work and your competitors are learning from YOU!  As you start to think this through, you quickly begin to realize how critical it is to have competitive intelligence for your PPC campaigns.  Below are my favorite resources in this space:

1. Ispionage – See which keyterms and search engine combinations present the best opportunities in your niche.  You can also see competitive score for your competitors to see who is the best, so you know who’s ad copy and landing page to mimic. You can also see their split testing output.

2. KeywordSpy – Review the Google Adwords campaigns on competitors.  They approximate adSpend based on the position an advertiser is in, for each key term they were found to be ranking for.  They also deduce which keywords are working well for an advertiser based on how long they’ve been paying for those key terms.

3. KeyCompete – can tell you which key terms your competitors are using.  Similar service to what espionage and keywordSpy can approximate, but costs are considerably less.

Note – there are many other tools out there in this space (MarketSamurai, SpyFu, etc), but I haven’t used those; only did a cursory review and decided these were the best tools for my needs.