New tweaks by Google are on the way to “improve” the quality score metric to help with relevency. It’s being rolled out in phases so you should see the results in your search campaign shortly. Read the rest…

Keeping up with the new tools Google launches can be a full time job, but this tool seems worth looking into. It gives advertisers insight into user keyword behavior by verticals, geographic locations and time periods.

http://www.adotas.com/2008/08/google-launches-search-insight-tool-for-advertisers/

The article also gives a refreshing perspective on Google. They have not created the world’s best tech company, but rather they have created the world’s best marketplace, which stemmed from having the best search technology back in the day.

Nowadays however, having the best search technology alone is not enough. I mean really, how many of us have actually gone to live.com?

 This may be interesting: My guess is if you set a CPA target similar to what you are getting from Google Adwords, your going to get less volume. There may also be an issue of Affiliate Fraud to be cognizant of; from my experience with other affiliate networks. JL.

As part of Google’s integration of DoubleClick, the DoubleClick Performics Affiliate network is now part of Google. To consolidate our offerings, we will be phasing out the AdWords pay-per-action beta in the last week of August 2008. The Google Affiliate Network, previously known as DoubleClick Performics Affiliate, has been in operation since 1998. Through the network, advertisers can open their ads to all publishers in the network, or select specific publishers that match their criteria. You can set a CPA for your entire campaign or establish custom payment schedules for specific publishers — such as a higher CPA for a particularly optimal placement. The Google Affiliate Network is currently a separate product from AdWords and AdSense. As with AdSense, publishers must apply and be accepted into the network.If you’re interested in learning more about the Google Affiliate Network, please visit our website.Posted by Trevor Claiborne, Inside AdWords crew

Here’s the low down from one of our Google reps. Now we wait and see if it passes muster and the feds:

Thanks for asking about this deal with Yahoo. Yesterday, we announced a
non-exclusive advertising agreement that give Yahoo! the ability to use
Google’s search and contextual advertising technology through its AdSense
for Search and AdSense for Content advertising programs.  Under the
agreement, Yahoo! has the option to display Google ads alongside its own
natural search results in the U.S. and Canada.  In addition, Yahoo! can
serve contextually targeted ads on its U.S. and Canadian web properties as
well as on its current publisher partner sites.

If you’d like to learn more information, please feel free to check out our
official press release at
http://googleblog.blogspot.com/2008/06/our-agreement-to-provide-ad-technology.html.

As for what this means to our advertisers, this deal will not change the
way Google’s ad auctions will run. Google doesn’t set the prices manually
for ads; rather, advertisers themselves determine prices through an
ongoing competitive auction.

Also, advertisers will not be able to target Yahoo searches. Yahoo will
simply be treated as a part of Google’s partner network, and advertisers
will only be able to decide whether their ads should only be served on
Google web properties or also appear on partner websites.

Hot off the Press:

http://seattletimes.nwsource.com/html/businesstechnology/2004473897_webyahoogoogle12.html

The AdWords system doesn’t recognize most symbols (i.e., non-letter characters) when they appear in keywords. The two exceptions are ampersands and accent marks. 

I. Valid Symbols

 Our system recognizes two kinds of symbols in keywords: ampersands (&) and accent marks (e.g., á).

 The following terms would be treated as different keywords:

 ’bed and breakfast’ is distinct from ‘bed & breakfast’

’sidewalk cafe’ is distinct from ’sidewalk café’

 II. Ignored Symbols

 You can add keywords containing periods or dashes to your account, but the punctuation will be ignored. For example, our system would treat the following keywords as identical:

 ’T-rex’ is equivalent to ‘T rex’

‘Fifth Ave’. is equivalent to ‘Fifth Ave’

 If your account contains more than one equivalent keyword, such as in the examples above, only one of the keywords will be allowed to trigger an ad per search query. Learn more at http://adwords.google.com/support/bin/answer.py?answer=66292&hl=en_US.

 We recommend deleting keyword duplicates to make your ad groups more manageable. Learn how at http://adwords.google.com/support/bin/answer.py?answer=6271&hl=en_US.

 III. Invalid Symbols

 You’ll see an error message if you try to add keywords containing the following symbols to your account:

 ! @ % ^ * () = {} ; ~ ` <> , ? \ |

 IV. Capitalization

 Finally, please know that the system does not consider differences in capitalization when delivering your ads.

Second session of Business Track I attended.

Same Moderator Chris Elwell, President of Third Door Media

Panelists: Sean J. McMahon, President of EngineWorks Bruce Clay, President of Bruce Clay, Matt Naeger, Executive Vice President Operations at Impaqt.

Sean McMahon: What is Value? - A fair return for something or a monetary worth. One acts to gain or keep. (favorite author Ayn Rand.) Talked about co-founding TrafficLeader, which was later sold to Marchex, first certified paid inclusion. Talked about how out of need for Best Buy, Home Depot, others with 1000s products and pages wanted to include and regularly update organic listings. Made it a “win-win” for search engines. Inktomi was first partner - monetize natural search and improve index relevancy through direct feeds.

If you focus on creating value into every client engagement, value in marketplace will follow. Marchex saw value of TrafficLeader - instant access and credibility.

EngineWorks provides value to mid tier clients, who want the sophistication of high end mgmt, but don’t necessarily have the budgets. Talked about creating value from paid search by keyword research then rolling out learnings to other channels in marketing mix (beyond search and online). Lisa Kline example - went from hollywood related kws to celebrity kws, traffic increased 7X. Then used it in other media. Using search as a test platform for messaging in other channels. Another example - Martha Stewart Online pale green buckets (keyword) turned into MS Living cover after learned popularity in search. Using kw research and search testing to identify market trends.

Bruce Clay: Started out as one man from dining room table in 96. Now has 39 employees and 11 openings. (made jokes about tax requirements if over 50 employees…) 5 year growth - 40 - 70% compounded. Worldwide offices - London, Cape Town, Sydney, Tokyo, China and looking at Brazil. His business is based on referral; quality over quantity.

Assets are STAFF, tools, TRAINING, and methodologies. Internships are required for staff. Training is REQUIRED for staff and CLIENTS. Employee retention is crucial.

Intention is that every client becomes a testimonial. They make clients take their 3-5 day training course or they refuse to take the contract. Knowledge transfer is important, not have to constantly re-train client. Projects go 4X faster. Clients totally understand what they are buying. Min contract term is 2!! years. Every account has a 4 person team.

When want to sell an SEM company, actual valuation is 4.3 x Revenue or 11.3 times EBITDA. (later when questioned, said he got these from newsletters and market indices he reads and stays on top of….but not looking to sell his company because he loves what he does.)

Matt Naeger: from Impaqt. Matt says you need to decide what kind of company you want to be, and what kind of clients do you want to work with (Enterprise, SMB or boutique.) Then you have to decide what your are comfortable in managing. Only take on clients that fit the size of your company. Keep your reputation in mind. The client is interviewing you but you should be interviewing them at the same time.

Don’t be afraid to share knowledge with clients and the industry. Blogs, articles, etc. help accomplish this. Let your clients in on what you know and what you are doing.

Impaqt - started in 1999. 6 people, didn’t target anyone - took every client. 99->04, rapid growth, like search space itself. Too many clients, too little time. Grow for growth’s sake (Jupiter Constellation). Decided to focus on Enterprise clients, which they felt they could service best.

Employee retention is the most important thing you can do. (All panelists chimed in when questioned later) Employees who are there the first 5 years, give them some ownership. Create a reward event. Never stop innovating. Now they (Impaqt) hire young people out of school with “good pedigree” who are out to change the world. Give them mentors and let them add value to your company.

Chris Elwell, President of Third Door Media - moderator

Panelists: Ken Jurina, President of Epiar
George Michie, Principal of Search Marketing at Rimm-Kaufman Group
Paul Wilson, Chief Revenue Officer at iProspect.

Ken Jurina: His co. does SEM — SEO + paid search + paid inclusion. Needs analytics to prove value.

Client profiles by size: Small - + buy in quicker but will have (-) small budgets. Mid size companies provide (-)some level of stickiness. +Can get exec approval easily. Large companies +sometimes but not always have large budgets. (-) multi dept approval layers, legal and brand issues limits, slows things down.

Typical industry pricing models include 1) retainer based, 2)pay for performance, 3) fee for service and 4) hourly consultation. One pitfall on hourly is that you are probably never getting the best reward.

Ken’s company uses the “fee-for-service” model most often for SEO. Have branded core services which include keyword research and analysis, landing page optimization, inbound link building and reporting/analytics on all these factors.

Sticks to the model 75% of the time, have to customize 25% of the time for virgin domains or established sites which are SEO mess. Web site audits are a very good way to get your “foot in the door.” Different services may be needed for specific client projects.

Diff levels available - audits for $5500 or $9500 for full

Some disadvantages of the fee-for-service model include no residual payment for years of good ROI. Also the constant education and reeducation of process for clients. Finally having to adjust deliverables over time. Market changes - what’s included or not included has to change too. May be helpful breaking pricing into phases rather than a one price for all as it allows clients to “taste the goods.”Detailed and comprehensive proposals and solid contracts strongly recommended - show seriousness and professionalism and lay out what is expected of each party. They define work without necessarily having to provide a guarantee. Offer transparency.

In differentiating services, you have to be able to offer a value proposition, not focus on price. Define what your competitive advantages are. Focus on organizational strengths and tangible deliverables. Keep focus on your niche service. Offer flexible payment plans. $25K proposal met with sticker shock, so break it down to phases and variable costs and then $9500 seems reasonable if prove value and ROI.

George Michie: Paid search only — no organic search marketing. 100 clients. Spend betw $10K-$1M/mo in media. They wrestled with pricing issues in the beginning. The idea was to charge a fair price where the client feels like they are getting value. Of course there is also the goal of actually making a profit. They wanted to create incentives that would motivate client to “do the right thing.” Aslo important was to build a scalable model.

When they started out, they expected to be the highest priced and highest quality service provider in the space but discovered they were actually very low priced. They actually have lost accounts because their pricing was too low - scared off big clients.

Why not Rev Share pricing model? First of all there is too much easy money on brand keywords, disincentive to dig deeper. He also didn’t want to dicker with clients over credit allocation or in other words — who is responsible for what. Also didn’t “invent Christmas” - shouldn’t profit from holiday spending when it’s not that much more work.

Why not straight cost mark-up? On the low spend end, they did not make any money. Also didn’t want to get paid for wasteful spending, and for larger clients, fees become divorced from the cost of providing the service. He warns that if your fee structure gets way out of line with the service that is provided, it may encourage your clients to shop around. For example, client is spending a million a month and you are charging 15% or $150,000/mo. !!

Solution: Charge a percentage of ad spend with a minimum monthly fee and also a maximum monthly fee. This keeps fees in line with service that is provided. Their pricing is as such: 12.5% of ad spend, minimum monthly fee - $3,000/mo.; maximum monthly fee - $12,500/mo.

Benefits of their model is clients are profitable for them, they are able to attract Marquis clients, clients who are “capped” are kept super happy (there is no incentive to waste money), and finally there is stability as no single client determines their bottom line. Some huge clients opt for more coverage than their cap which they are happy to do.

Analysts handle 4-6 clients depending on the size. Some with huge clients only 2. KPI = rev/analyst and then Analysts as a ratio of Admin people which don’t contribute directly to billable hours.

Paul Wilson from iProspect. Compensation based on performance with Bonus targets. Does it with a team approach (NASCAR and Indy images)

Bonus targets, incremental fees and percentages of revenue are all aspects of this type of pricing model. Advantages: goals are aligned, incent partnering, maximize performance, and protects against bad performance. Cons - constant monitoring, accurate tracking data, goals may change, challenges measuring SEO and paid media, over and under performance.

Get started by define conversion metric, define value of conversions, then factor in all costs as service provider, and finally pressure test and play around with diff scenarios.

Look at 12 mo historical data to establish a baseline. Establish real value of conv metric. Do “what if” analysis and adjust metrics accordingly. Spell out EVERYthing contract form. Many times do a hybrid - mgmt fee plus perf based model.

Lessons learned: Need to re-establish baseline if faulty data, have to say no to a lot of changes, if long sales cycle need to establish measurable conversion metric.

What’s arguably becoming the premier industry trade show landed in our fair city yesterday and we greeted the world with, what else…showers!  Why Seattle? I spoke with Sean Moriarty from Third Door Media yesterday and he said Danny Sullivan did not hesitate when picking Seattle prior to last year’s show. With Google, Microsoft and a slew of world beating high tech and ecommerce companies, not to mention some up and coming search marketing companies, Seattle was a no brainer. The venue? That might be a brainer. Although the Bell Harbor Int’l Convention Center is all about location on the waterfront; size and layout are not ideal. Each session is on another floor of the building and the show sold out quickly; leaving money on the table for Third Door.  They had considered the Seattle Convention Center, but I think they made the right decision. This show is about quality not quantity and that was evident from the speakers, sessions, attendees and grilled salmon. Even the Wifi worked throughout the building, a constant source of frustration at most SES events.

If you’ve attended sessions, please post notes here.  Jon