DoubleClick Introduces the “Performics 50,” a New Search Engine Marketing Index
The index introduces average cost per keyword as a gauge to measure the effectiveness of search engine marketing campaigns over time
New York, August 8, 2005 – Performics, the performance-based marketing division of DoubleClick Digital Advertising Solutions, today unveiled the Performics 50, the first index of actively-managed, ongoing search engine marketing campaigns. In a DoubleClick Search Trend Report released today, Performics provides trending data for cost per keyword (CPK) from April 2004 through June 2005.
The index is a subset of the more than 150 search campaigns currently under management with Performics. The campaigns included in the Performics 50 are a mix of ecommerce and lead-based campaigns and the names of the advertisers included in the Performics 50 will not be released but will be recalculated on a quarterly basis. The campaigns analyzed and included in the Performics 50 provide a representative sample of actively managed, direct-response oriented and mature but growing search campaigns.
“Performics is uniquely positioned to provide an index to evaluate trends because of the scale, volume and tenure of our paid search clients,” said Chris Henger, vice president of marketing and product development at Performics. The Performics 50 provides a stable platform for benchmarking, against which trends in search marketing metrics can be analyzed.
With the release of the Performics 50, Performics proposes CPK, a new metric to measure the quality of growth in a search marketing campaign. CPK addresses the total cost of “ownership” for the average keyword.
The search marketing industry looks to cost-per-click (CPC) as a primary metric, but CPC addresses only half of the equation. It does not capture the overall search media costs associated with click volume in a given month. A keyword with a CPC of $.80 that receives ten clicks in a month, for example, costs an advertiser less than a keyword with a CPC of $.50 that receives 20 clicks. Performics’ CPK metric incorporates both the supply and demand components of all keywords in a campaign, measuring what an advertiser actually paid for their keyword positions and resulting click traffic. Using the index as a benchmark and monitoring Cost per Keyword, advertisers can compare their individual return from search (sales and ROI metrics) against the directional movement of keyword costs, similar to comparing the individual performance of a stock against the broader performance of the Dow Jones Average.
CPK is a scalable metric, which can be used to evaluate the performance of individual keywords, groups of keywords or an entire search keyword portfolio. The Search Trend Report is available at http://www.doubleclick.com/knowledge_central.
Key Takeaways:
The Performics 50 is a representative sample of actively managed, direct-response oriented and mature – but growing -- search campaigns.
§ Actively Managed: The campaigns that comprise the Performics 50 are primarily managed to an ROI metric set by the advertiser. These ROI metrics are managed down to the keyword level.
§ Direct-response oriented: Search is a powerful advertising vehicle for all marketing objectives including branding; most of the advertisers in the Performics 50, however, have direct-response results as their primary objective.
§ Mature: Because newly-launched campaigns exhibit significant volatility, only mature programs (those under management for at least four months) are eligible for inclusion
§ Growing: The campaigns that comprise the Performics 50 are ongoing, but they are growing in number of keywords, media spend and revenue.
§ Cost per Keyword (CPK) speaks to the total cost of “ownership” for the average keyword in a given month and illustrates how actively consumers are searching and clicking for that keyword and how marketers are valuing that keyword, rather than just how the most aggressive competitors are bidding on the word.
§ CPK vs. CPC: Keyword prices within the Performics 50 showed a gradual rise from the end of Q2 through the holidays and then began to drop. With one of the most persistent themes in paid search being the near-constant increases in keyword CPC prices, it is important to keep in mind that the context of the Performics 50 is fundamentally different, because it considers the price for all results generated within a campaign, not just the price of top results.
§ Both average campaign size and click volume of the Performics 50 have been steadily increasing, while CPK has remained stable (excluding the Q4 holiday season). Advertisers have received increased click traffic and sales/lead opportunities, while maintaining a relatively stable CPK. This illustrates balanced, quality growth, coming from the addition of both high- and low-cost keywords.
About DoubleClick Digital Advertising Solutions
Performics is the performance-based marketing division of DoubleClick Digital Advertising Solutions and is a leading provider of Affiliate, Search and Data Feed Marketing Solutions.
DoubleClick Digital Advertising Solutions, an operating unit of DoubleClick, provides technology and services that empower marketers, agencies and Web publishers to work together successfully. Our focus on innovation, reliability and insight enables clients to improve productivity and results.
Since 1996, DoubleClick has empowered the original thinkers and leaders in the digital advertising industry to deliver on the promise of the rich possibilities of our medium. Today, the company’s DART and Performics divisions power the online advertising marketplace. Tomorrow, we will continue to enable clients to profit from opportunities across all digital advertising channels as consumers worldwide embrace them.
DoubleClick Digital Advertising Solutions is an operating unit of DoubleClick Inc. that together with DoubleClick Email Solutions provides agencies, marketers and publishers the ability to successfully profit from their digital marketing investments. DoubleClick has global headquarters in New York City and maintains 21 offices around the world to serve its more than 1500 clients.
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