Synopsis — There have been lots of changes in the online advertising arena over the past few months, chief among them the fulfillment of the Yahoo! and Bing merger. Although it will take quite some time before the true impact of this partnership is seen, those involved in pay-per-click advertising online can’t afford to wait until the dust clears.
Andrew Bernero, in his article “The Online Advertising Race: Who Should Small Businesses Bet On?” provides insight into the top three contenders — Google AdWords, Microsoft adCenter (which by the end of 2010 will completely replace Yahoo! Search Marketing), and Facebook. Google, of course, is a known contender and is currently running in first place. Microsoft remains in second place, but will start to close the gap on Google as they integrate Yahoo! Facebook, once considered an extreme long shot, has upped the stakes considerably with its strong interest-based ad targeting. Like a horse race, the eventual outcome is uncertain, but advertisers are placing their bets via their ad dollars every day.
Bernero not only provides details on why each of the three is strong in its own way, but in a section of “hedging your bets,” he discusses the weaknesses of each as well. It’s all designed to help you choose the best program for your individual needs, so you can make it to the payout window at the end of the race.
The complete article follows …
The Online Advertising Race: Who Should Small Businesses Bet On?
Online marketing is no longer reserved for large companies and niche stores – it is an advertising channel that most small and mid-sized businesses should consider. For companies new to online advertising or those who have run campaigns in the past with disappointing results, understanding the available advertising networks and the advantages and disadvantages of each is vital. As if you were placing a bet on a horse running in the Kentucky Derby, you need to examine distinguishing features, past performance, strengths and the challenges associated with each potential entrant. The top entrants in this race? Google AdWords, Microsoft adCenter, and Facebook Ads.
WIN – Google AdWords
Google is the clear leader in terms of search market reach and innovation. With 66% of search share, Google gives an advertiser the potential to drive more traffic, leads, and sales than any other network. Due to the sheer volume of search reach on Google and its partner sites, a successful AdWords account should yield a significant return, and often the largest share of traffic and sales for an online advertiser.
Another advantage advertisers can leverage is Google’s contextual network, which allows them to target and retarget ads on Google partner sites, depending on the context of the page content in relation to the ads. The contextual network allows advertisers to drive more volume outside of traditional search traffic.
For example, a guitar store advertising on Google’s contextual network may see their guitar ad displayed next to an article about guitarist Eric Clapton on a Google partner site. The criteria for display on a partner site are based on the context and relevancy of the content, instead of displaying the ad via a keyword search for “guitar dealers.”
The contextual network is, in essence, a large display network without the usual barriers of negotiating contractual language, credit applications, fixed pricing, and minimum commitments. Advertisers can choose to run text and/or banner ads in one of eight standard graphic sizes. Google even provides a free online tool to help advertisers create banners.
Retargeting or remarketing is another feature available through Google AdWords. This is a powerful — but often underutilized — feature allowing advertisers to cookie users visiting their site, and then enter an auction to display ads to them when they visit other Google partner sites. This enables advertisers to target users who have expressed some degree of interest in their site in the past, reminding them of their site and services. They can even provide a special offer or incentive to help convert them.
Hedging Your Bets — Google AdWords
Despite the huge potential reach of Google AdWords, many advertisers find it challenging to successfully run ads there, partly due to Google’s Quality Score. Quality Score is a numeric value (from 1 to 10) assigned to an advertiser’s keywords based on an ad’s clickthrough rate, landing page content, and keyword relevancy, among other factors. A low Quality Score usually means higher CPCs, limited ad serving, and low positions for advertisers — all of which make sustainability and success an unlikely outcome. Therefore, it is crucial to follow best practices when launching an AdWords campaign which means creating tightly structured ad groups and campaigns, matching ad copy, carefully chosen keywords, and relevant landing pages.
Those new to online advertising simply do not have the necessary experience of — and may not take the time to learn — the fundamental best practices of managing a Google AdWords account. As a result, newbies advertising without the help of an optimization tool, agency, or SEM consultant often face failure. Furthermore, even when best practices are followed carefully, there is no guarantee that ads can compete in keyword auctions without being penalized.
Google does not provide phone support for new advertisers. Email support is available until the account is “identified,” usually met by spend thresholds, a financial obstacle for many small businesses.
PLACE — Microsoft adCenter
Contrary to popular belief, there is quality search volume outside of Google AdWords. Right now the best place to find it is through Microsoft adCenter, the keyword advertising platform powering sponsored results on Bing.com, MSN.com, and even Facebook.com. By the end of 2010, its ad platform will replace Yahoo! Search Marketing and power the sponsored search results on Yahoo.com and its partner sites.
Although the sheer number of searches performed on Microsoft search properties is a distant second to Google, the quality of traffic is on a par with AdWords and the auctions are often less competitive. Advertisers therefore may enjoy a lower average cost per click and produce a better return on investment.
Like Google’s Quality Score, adCenter has an algorithm that determines costs and position, which takes into consideration an ad’s clickthrough rate, content relevancy, and maximum bid amount. It is generally much easier to run ads on adCenter without being penalized, so long as fundamental best practices are followed.
New advertisers can take comfort in the fact that Microsoft provides both email and phone support to all of its advertisers.
Hedging Your Bets — Microsoft adCenter
Like Google AdWords, Microsoft adCenter provides advertisers with an option to contextually display their ads on websites with relevant content. Unfortunately, there has been little-to-no product development of this feature, so in reality there is limited contextual reach. Advertisers are restricted to text-only ads and there is currently no way to retarget ads to Microsoft and Yahoo! properties. If advertisers are interested in banner display targeting, it must be negotiated and purchased through a Microsoft or Yahoo! sales agent, which requires a minimum commitment.
SHOW — Facebook Ads
Both Google and Microsoft offer basic demographic ad targeting; however, Facebook’s demographic targeting options allow it to take third place in this virtual horse race. With access to self-reported user information, advertisers on Facebook can target users not only by age, gender, and location, but also by education, relationship status, workplace, and their likes and interests.
Advertisers can use a self-service platform with Facebook Ads to upload images, ad text, and set their bids and targeting. Consider a sports apparel company, for example, interested in setting up a campaign to sell Chicago Blackhawks jerseys. They can optimize a campaign to target male users who live in Chicago, who are 30 years old and over, and who have expressed interest in hockey, the Chicago Blackhawks team and/or a specific player on the team.
While this essentially excludes females, students, residents of Illinois not currently living in Chicago, and Blackhawk fans in other states, it still creates a tight advertising profile. This provides the advertiser with an opportunity to generate a competitive clickthrough rate, a lower cost per click, and a greater return if they do a good job with their creative messaging, offer, landing page, and targeting.
With a greater return on investment, an advertiser can reinvest their earnings by creating a national campaign in parallel — perhaps targeting both men and women of any age expressing an interest in hockey. This may come at a lower return of investment, but when blended in parallel with a tightly targeted campaign, it can potentially drive more incremental customers and sales within their budget. Facebook also allows advertisers to create their own Facebook profile to help blend their advertising costs even more with free viral traffic.
Although Google is the leader in search traffic, Facebook surpassed Google earlier this year in traffic and is continuing to grow at an impressive pace.
Hedging Your Bets — Facebook Ads
Even with a firm understanding of customer profiles, many advertisers have a difficult time starting off on Facebook. Like Google and Microsoft, Facebook incorporates clickthrough rates and bid amounts to help determine the impressions an ad will receive. Consequently, it is important to create a well-planned ad before going live, as failure to do so may result in ads that receive little to no impressions over time.
Although there is a large component of science involved with a Facebook Ad campaign, art is also vital for success. Compelling ad copy, a highly creative offer, and the use of eye-grabbing images can make or break a campaign regardless of how well the campaign is targeted. The optimization efforts have to be strong on all levels in order to maximize opportunity with Facebook advertising and receive as many clicks and impressions as you can afford. Mastering all of these areas is something that many small business owners and large companies alike fail to address.
Another challenge with managing Facebook ads is obtaining insight into which campaigns and ads are driving conversions and which are not. Tracking parameters in destination URLs or using a conversion tracking solution with a third party provider such as Clickable or Omniture can accomplish this.
Like Google Adwords, Facebook does not provide access to phone support for new advertisers and payment by credit card is the only option for most new advertisers.
And, they’re off! Win, place, or show? To be sure, the results will depend upon how well prepared each of these three contenders are. But, as they race to the finish line, the tactics each employ and the strengths they bring in their individual programs will ultimately decide the final placement. At least for now, because in this race, there’s always another chance to take the lead over the current front-runner.