PetSmart acquired Pet360 for $130 million in cash and up to $30 million more in future performance-based payments.
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It`s a scenario that could soon leave online marketers facing the prospect of managing separate paid search campaigns on at least four of the top five engines, territory they could cover previously by dealing with two engines. And that doesn`t even count smaller engines looking to differentiate themselves with strategies such as ad delivery by user segment.
Though pay-for-performance search marketers needn`t pay up unless there`s a click, the sheer labor of managing campaigns across more engines stands to create a potential resource issue. For some marketers not already automating campaign management with bid management tools and services, it could accelerate a move in that direction. "You`re not going to be able to do this with a spreadsheet," says Marckini. "There are still people with significant budgets trying to manage their campaigns manually."
The engines themselves are aware that managing campaigns across more search engines and the different proprietary technologies attached could mean more competition for marketers` budgets. "Resources aren`t unlimited," says McAteer. But McAteer and other search engine operators also know what will win in any resource squeeze, and online marketers will find that answer in their own experience. "Building a better search tool, having more relevant ads showing up against more relevant searches, and continuing to drive ROI for advertisers--that`s really the only differentiator that has value to a marketer," McAteer says. l
Desktops v. notebooks at HPshopping.com
For HP Direct Inc.`s b2c e-commerce site, HPshopping.com, the demographics of the customers it acquires through paid search campaigns at Google and at Yahoo are much the same, with little difference apparent across basic audience attributes such as income level, gender and age. On certain keywords, however, what are generally very similar campaign results across both engines start to diverge. The buyers that come in through Yahoo, for example, tend to be more frequent purchasers of customizable desktop computers, while Google buyers skew toward customizable notebooks.
HPshopping.com director of consumer marketing Catherine Paschkewitz can`t prove precisely why that`s the case, but she and her team have developed a pretty good theory. Snap on the filter of a different kind of audience attribute--in this case, an affinity for technology--apply it to particular keywords, and the picture starts to become clearer. Noting recent Jupiter Research findings that Google is the preferred engine among the more sophisticated users of online search, Paschkewitz postulates a match between those users and users more likely to buy notebooks online than through other channels.
"We see that the people who buy notebooks from HPshopping online tend to be more technologically savvy--they tend to buy their products more on the web than through the call center, for example, versus what we see on desktops," she says. To support the theory, Paschkewitz checked it against keywords associated with other high-tech products such as handhelds and iPods, and found similar results; in fact, finding even higher conversion rates and average order size from those keywords on Google than on Yahoo.
And that`s information HPshopping, which uses the search engine marketing services of Performics Inc., taps to guide its search engine strategy. Managing its paid search campaign across engines to an overall cost per acquisition target, it already dials bidding on different keywords and different engines up or down, based on their performance, so as to stay within that target range. Where data such as the better performance of Google on keywords that attract the tech-savvy comes in especially handy is when HPshopping can harness it to additional business objectives.
"Say we suddenly needed to find additional growth in a particular category; notebooks, for instance," says Paschkewitz. "What we`d potentially look at is, if we have additional dollars to put on the table, should we invest them in Google versus Yahoo because we tend to drive more online notebook sales from Google?"
A search engine strategy geared to another difference between the engines--the bid model and how it affects the performance of different types of keywords--might even help find those extra dollars. Yahoo`s keyword auctions are straight bid-for- position; Google`s AdRank formula incorporates relevancy as determined by the volume of user click-throughs in how ads are ranked in results listings. The net effect for HPshopping is that while both engines produce similar results on brand keywords in terms of conversion and average order size, brand keywords are a more efficient spend on Google.
"On Google, you don`t necessarily have to bid as high to get that better position because of the relevance factor. On our own brand terms we are always going be very relevant," Paschkewitz notes. By spending less for a high position on Google than on Yahoo when it comes to brand keywords, she adds, HPshopping frees up budget it can use to bid more aggressively on other keywords or categories.
As HPshopping is finding, identifying differences between search engines--even at the seemingly small level of a difference in the performance of individual keywords--can give search marketers more flexibility in campaign planning, and the opportunity to drive more return out of the same search budget. "A total CPA across our interactive program is what we look for," says Paschkewtiz.
For the Guide to Search Engine Marketing Products & Services click here.