The debate over behavioral targeting (BT) was stoked this week by the FTC Chairman who threatened to regulate an advertiser’s ability to show relevant ads to consumers. In a recent AdAge piece, the “Federal Trade Commission Chairman Jon Leibowitz, told members of the Senate Commerce Committee in a hearing Tuesday that ‘we are gravitating to an opt-out of behavioral targeting [for multiple sites] through a single entity.’”

Now, an opt-out option for behavioral targeting already exists from the main publishers and users of BT - Google, Yahoo and Microsoft - as well as 3rd party data providers like BlueKai. Still, our regulators feel something more formal would alleviate consumers’ fears that they are being cyber-stalked by ad servers.

But why is this necessary at all? What possible ill-will could an ad server perpetrate on some unsuspecting internet browser? It’s certainly true that an inappropriate adult ad could be shown to a minor or some other offensive piece of content could be shown to an innocent Web surfer. But most advocates of regulation just think BT is “creepy,” as Senator Claire McCaskill said in the AdAge piece.

However, in general there is no incentive for an advertiser to waste impressions on a consumer that has no interest in their product. I’ll say it again, because therein lies the advertiser’s and publisher’s case for light regulation on behavioral targeting: there is no incentive for an advertiser to waste impressions on a consumer that has no interest in their product.
At its best, BT only shows the most relevant ad to the fewest number of interested consumers. Consumers only see ads they’re interested in, publishers get a higher premium from advertisers for their content, and advertisers pay more to reach those interested consumers.

What’s ironic about this debate is consumers have been willfully enduring irrelevant ads on television for decades. How many millions of women have seen “Hair Club for Men” ads? How many millions of men have seen make-up or feminine hygiene ads? And more importantly, how many billions of dollars have advertisers wasted showing these ads to totally disinterested consumers? The internet can eliminate that inefficiency and can remain not only the free and thriving content and communication channel it’s been up until now but it can actually improve to a point where consumers see nothing, not even ads, they don’t want to see.

The debate is still raging with this follow-up piece on AdAge. Whether you think BT is good or bad for the overall future of the internet, I encourage you to join in the debate and make your voice heard.

My early impression is that they will. Twitter has maintained a focus on click through rate (CTR) that has been the workhorse for search engines since the early days. No matter what the engines tell you, in addition to the actual bid price CTR has been the primary metric for determining where paid search ads rank. So it’s nice to see Twitter take a page from Google, Yahoo and Bing’s books.

Twitter takes it a few steps further though by using a few new metrics to determine how effective a Promoted Tweet is. Twitter will measure how often a Promoted Tweet gets

• Replied to
• Retweeted, and
• Favorited

These concepts will be familiar to anybody who’s ever tweeted but they’ll be considered new metrics to online advertisers who are buying and optimizing Promoted Tweets. At Omniture we love new metrics, particularly metrics like these that can be clearly measured and optimized.

Other nuances I found interesting were that Promoted Tweets would only show up on search results pages and there would only be one Promoted Tweet per search results page. Furthermore, stale Promoted Tweets would come down after a period of time, though Twitter didn’t say when. They simply stated, “Promoted Tweets will also be timely. Like any other Tweet, the connection between you and a Promoted Tweet in real-time provides a powerful means of delivering information relevant to you at the moment.”

Interestingly, early reviews of Promoted Tweets were somewhat neutral though the comments section of this Ad Age piece had a lot of “don’t be evil” and “please get this right!” comments, indicating an expected but healthy skepticism by the advertising community. On Twitter itself, Promoted Tweets are not resonating well. According to Twitter Sentiment, 71% of tweets that used the hashtag #promotedtweets were negative, though I don’t see this as a major problem. (Yet.)

I think Twitter is off to a good start with their new advertising model and I look forward to finding ways to test and optimize Promoted Tweets. They’re taking a user-centric approach by focusing on CTR, replies, retweets and favorites that will, by design, weed out inane Promoted Tweets. They’re viewing Promoted Tweets as content which gives Twitter the best chance of keeping their users happy and, we hope, actually provide “a powerful means of delivering information relevant to you at the moment.” If they succeed, the early negative sentiment we’re seeing on Twitter today will fade and Twitter will run a healthy, perhaps phenomenally successful business. We’ll see how it goes and we’re excited at this new addition to the online advertising ecosystem.

The following post is an article that recently appeared as the cover story in SES Magazine.
Search marketing has been one of the few advertising channels that has weathered the recession with flying colors. The accountability of search marketing, especially with retail and transaction driven businesses, makes the return of the expenditure easily justified. But at the end of the day, what do your actions really tell your CEO about business performance? Sure, you have a report that says your expenditure of $10,000 drove 200 conversions and it’s great to point to top line revenue growth. However, what that report does not indicate is how many dollars and cents your efforts have driven to the bottom line of the company’s P&L statement. Today’s cutting edge search marketers are doing just that.

We talk endlessly in this industry about conversions being the holy grail of our efforts. Conversion rates, and increasing them, will occupy much of our discussions here in San Jose this week. And this is certainly a good place to hone our efforts. But with today’s ever discriminating CEO, we need to do better. We can’t just indicate we drove 200 sales, as it may turn out that the sales we drove were not the types of sales we’re after. Not all conversions are worth the same to your business. In fact, some conversions will cost you money, while others will generate rich returns.

Only by tying the online search activity and resulting conversion to our CRM and sales databases can we truly establish a story around how profitable our search activities really are. For example, it may turn out that certain keywords are efficient at driving conversions, but upon further analysis, we find that those conversions are of relatively low value due to high return rates, credit card failures, small order size or low margin products being purchased repeatedly. It could also turn out to the exact opposite scenario, in which case there may be a business case to justify a higher CPA for certain types of conversions.

Marrying search data with sales and CRM platforms is not a futuristic dream, but a reality today. We do it everyday here at Omniture for search marketers, and there are other companies doing the same. We’ll layout a basic framework to follow should you think about taking your search marketing efforts to the next level.

Technology

The first order of business when planning to roll out a profit optimization strategy is what will be required from a technology perspective. Obviously, you are going to need to establish a way of feeding your traditional order fulfillment systems some parameters around which keyword drove the sale, which engine it came from and how much you paid to acquire that customer.

Some rudimentary ways of doing this are with custom tags, unique phone numbers and dynamically generated landing pages. While these types of efforts don’t scale particularly well, it can get you started. In this type of scenario, you are flagging each sale with some of the rudimentary search data that will be required for your analysis. For example, order 112 came from Yahoo! for the keyword “flat screen tv”.

A better way of solving this need is through an automatic data sync, done with APIs. This allows for richer data to be collected and analyzed in real-time. Some of the more common platforms that have already been solved for include SAP, Oracle, and Salesforce.com. This allows for the full power of the technology platform to be leveraged, along with the enhanced intelligence brought to the sale through the acquisition parameters.

Reporting

Getting systems connected is important, but perhaps even more important is extracting actionable insights from the connection. Today’s profit optimizers want to know which of the conversions are high value and which are low value, so that they may quickly make crucial decisions. It’s an extra data set to look at, for sure, and we all know how much data there already is to analyze out there. This is why the reports need to be simple, updated in real time, and most important of all, actionable!

Optimization Tactics

Now that you have your systems talking and you’re getting good reports, what do you do next? From the reports, you should be able to do some basic segmentation work around stratifying your conversions into “high value”, “average” and “low value”. Much like in traditional search marketing, you’ll want to identify outliers, trends and commonalities amongst the groups. For example, are certain keyword categories generally driving more profitable sales? Is there a way to expand keyword sets, and reallocate budget in order to attempt to capture more of the “high value” sales. Most of us deal with an annual budget allotment and we’ll want to make best use of that budget as the business year progresses.

You will also want to modify your bid rules in order to capture more of the “high value” traffic. Many bid management platforms allow for complex If/Then bid rules which allows the marketer to incrementally (and cautiously) get more aggressive with bidding, providing certain performance criteria is met (order size, product skus, etc). This allows for true scale, and puts the power of bid management into your profit maximization practice, without risking your daily budget with unproven tactics or black box optimization systems, particularly if those black box systems are running off of incomplete, on-site-only data.

We are constantly amazed at how smart and aggressive our customers are getting in this space. One of our clients, Vintage Tub and Bath, utilized profit optimization strategies in order to get much smarter about their search efforts. Essentially they tied their search marketing efforts to their phone center, where most of the sales occurred due to the high ticket nature of the business (not a lot of people buy bathtubs online, as you might imagine). This allowed them to double down on keywords that were producing the more profitable sales through their call center and minimize those that were driving small orders.

“Our call center is responsible for a significant amount of revenue. If someone is putting in thousands of dollars for an order, they want to make sure they’re buying what they need,” explains Allan Dick, Chief Marketing Officer and Senior Plumbing Evangelist for Vintage Tub & Bath, a top 500 online retail site. “We needed to understand our ad spend not just on the keyword level, but on the revenue and profit level. And we needed to understand how our online ad spend drove offline revenue.”

The ability to connect offline costs and revenue with online ad spend, all the way down to the keyword level, has given Vintage Tub & Bath valuable insight not only into which specific keywords drive revenue, but which keywords drive profit.

While search marketing remains an exciting and dynamic field, we are even more excited about profit optimization. Those marketers who understand the bottom line results from their efforts are those that will be in the best position to win in these tough and trying times. We wish you the best of luck with your profit optimization efforts.

In case you hadn’t heard, Yahoo! and Microsoft are combining their search businesses, at least for the next 10 years. Microsoft is acquiring Yahoo!’s core search technology and Bing will be the core algorithmic and paid search platform, while Yahoo!’s sales force will continue to sell enterprise paid search programs globally for the combined entity.
The jury’s still out, but this should be great news for the search industry. As long as the combined entity (what should we call it? Yahoo!/Bing? Ying? Bahoo? Bing?) does not lose market share and Bing continues to pick up speed in the market advertisers will, over time, be less dependent on Google. Although Google’s stock price only lost about 1% of its value on the news (basically nothing), more competition needed in the search space. More competition is a good thing for advertisers.

So how can Bing make this a success?

Thanks in large part to their dominant market share, Google’s RPS (Revenue per Search) is much greater than Yahoo! and Bing. This allows Google to outbid those competitors on all of the best search partnerships. This, in turn, increases Google’s market share which generates more revenue for Google and further increases its ability to outbid its competitors for search traffic.

So will Microsoft’s next step be to throw huge sums of money at Google’s distribution partners?

Well, way, way back in the early 2000’s Google’s distribution strategy was to do exactly that. Their main competitor was Overture (now Yahoo!) and Google outbid them time and again for search deals. In 2005, Google did the same thing to Microsoft when they paid AOL $1 billion and picked up a 5% stake for their AOL’s massive volume. (Interestingly, much of that $1 billion funny money was spent by AOL on Google to increase awareness of AOL as a Web destination rather than an ISP.)

The Yahoo!/Bing search relationship’s biggest fear is that its combined market share will actually shrink to a level lower than the combined, separate market share of Yahoo! and Bing. Aside from its $80-100 million ad blitz, the biggest way to increase its market share is to start outbidding Google, regardless of the lower RPS. Over time, the Yahoo!/Bing RPS will increase - just as it did for Google - and, if it continues to improve its market share, it will eventually catch up to Google’s. As I’ve said before, Yahoo/Bing could start by trying to win the search business from AOL, Google’s biggest partner.

Lingering Questions

• What will happen with Paid Inclusion (Yahoo! SSP)? This is a roughly $100 million business. Will it be extended to Bing? Will it be shut down entirely? I’d like to see it increase as it can be a very effective way to target consumers.
• How will Yahoo!’s sales force feel about selling this combined search inventory? Will we see a staffing exodus or will applications at Yahoo! skyrocket now that reps will be able to sell much larger and therefore more interesting (and lucrative) enterprise search packages?
• What exactly does this mean for Microsoft’s display inventory? It doesn’t seem likely that there will be a subsequent deal linking the two companies’ remnant inventory in a single ad exchange, but it’s possible.
• Will Yahoo!’s global sales force sell more display/search campaigns? I’d expect to see products like Smart Ads pick up steam as advertisers may be able to pick up increased reach and effectiveness by purchasing a larger portion of their search along with their Yahoo! display. Yahoo!, remember, is still one of the largest publishers on the planet, and are now - in a way - one of the largest search engines.

All in all, this is exciting news for the search world. We’ll keep Omniture customers posted on any changes we see coming, and any advertising opportunities to take advantage of.

I like the catchy name, I like that they’re calling themselves a “decision engine” and I like the way the ad campaign tied in the recent financial meltdown, but most importantly I like the way they’ve targeted “head” queries. It’s true they do not do as well on “tail” terms if you’re looking for a very specific response (their database is clearly not as large as Google’s), but I like how they categorize results for queries like “San Francisco” by showing top results then Weather-related results…

…then Hotels, Restaurants and Maps below that.

To truly compete with Google and gain 30-50% market share, they’re going to have do a lot more. I’d like to see them do the following and really change the Search game:

• Buy Twitter: real-time search is here to stay and would be a welcome addition to Bing’s search results

• Integrate Display ads into their search results

• Introduce CPM pricing to the Search world for brand campaigns: many search marketers simply want impressions on high volume queries or to support large brand campaigns, why not give them what they want?

• Maintain their high quality content network but get into the long-tail content network Google is currently dominating

• Fight more aggressively on distribution relationships - they may never wrest AOL from Google given the Tim Armstrong relationship, but if they’re willing to spend $100MM on an ad campaign they should be willing to pay publishers higher rates than Google

• Compete more aggressively for mobile search volume

• Integrate Bing all throughout the Microsoft product suite: I’d like to see a search box on every Windows desktop, a search box in the top right corner of Excel, Word, Powerpoint, Outlook and so on, a search box in the Windows Media Player and on and on. People want to search the Web from whatever application they’re in so let’s get the Bing people to walk across the Microsoft campus to the Windows building and integrate Search into everything Microsoft does

• And finally, they should buy Yahoo! Search: this last move would certainly make the game more interesting and provide a viable threat to Google

Let’s hope Bing is more than just a flash in the pan and continues to make interesting, aggressive moves in the next year. The Search market needs diversity and so far Bing is showing they came to play.

For more on how Omniture has quickly responded to the Bing launch, see this great post from Ben Gaines.

Dylan wrote, “When you ain’t got nothin’, you got nothing to lose,” but when you’re spending real dollars on search engine marketing you have plenty lose. And yet, according recent survey of 500 marketers, most search marketers still use the most basic metrics in evaluating the performance of their programs.

How basic?

While marketers picked conversion as their most important metric to optimize search campaigns, click through rate and cost per click, relatively less meaningful metrics, still ranked second and third.

These are certainly important metrics, but what about something slightly less basic, like revenue, leads or CPA? Well, even though 85 percent of our respondents said their primary goal was to sell products or services online, 31 percent cannot measure cost per customer (or sale) nor return on ad spend, and 40 percent do not know how to accurately measure profit per customer (or order).

Far too many search marketers are still making campaign decisions based on superficial metrics, such as click through rates and cost per click, and can optimize campaign effectiveness by increasing focus on deeper revenue-impacting measurements, such as profit per order, cost per unique customer and activity measurements such as time spent on site or click path.

Additionally, the survey indicated the majority of search marketers are manually managing keywords using Excel, limiting their ability to effectively scale search marketing campaigns.

According to the survey:

• Marketers picked cost per click and click through rate as among their top metrics to optimize search campaigns instead of deeper metrics such as return on ad spend, cost per customer (or sale) or profit per order

• 43 percent of e-commerce respondents do not know how to accurately measure profit per customer (or order)

• 67 percent of respondents indicated not having enough time to effectively manage campaigns as their top issue in search marketing, while only 35 percent use an automated bidding solution

Incorporating bid management solutions will enable customers to utilize both the most common metrics they need to optimize their campaigns like cost-per-customer and return on ad spend, and advanced metrics like profit per customer and lifetime value per customer.

Search engine marketing has been around for over 10 years now. Let’s help each other move beyond the basics and propel the industry forward.

The survey was conducted by Omniture as a part of the Omniture Online Marketing Research Report. Because the survey is ongoing, results over time may change. These results are as of April 8, 2009.

Eric Enge: Let’s start by talking about a basic overview of Omniture, and then move into an overview of Omniture SearchCenter.

Bill Mungovan: Omniture focuses on online business optimization and is the largest software company focused on the CMO. Our Online Marketing Suite includes our web analytics tool, SiteCatalyst. It also includes 9 other products, such as Genesis, an integration tool that pulls in data from other sources and Test&Target, a landing page optimization and a multivariate testing tool, and of course SearchCenter.

Eric Enge: Is Test&Target based off the acquisition of Offermatica?

Bill Mungovan: Yes, Test&Target is basically based off of the Offermatica technology. It is a dynamic Landing Page Optimization with Multivariate Testing on its landing pages.

SearchCenter was basically built in the context of that marketing suite. SearchCenter is what we call a search management tool, in that it accesses each of the major search engines from a single location and provides automated bid management and portfolio optimization. You can access all sorts of different reporting functionalities through the SiteCatalyst integration.

We think about SearchCenter as a tool for search marketers, but given the fact that we have Genesis, we can pull data in from other sources, like an email provider, an ad-server, a CRM system like SalesForce.com or a client’s custom, internal database.

Eric Enge: Right. Pulling in data from other sources is one of the big challenges with bid or campaign management. People are so used to treating everything like they are direct response marketers. But a company that has physical locations, and a web site, is likely going to have interactions with people going to the web site and buying offline, and vice versa. So, being able to pull in data from other sources allows you to credit those campaigns in a meaningful way so that you can more effectively manage your bidding strategy.

Bill Mungovan: Yes. That’s the heart and soul of the way we think about search, which is obviously the hot topic. We use SiteCatalyst to collect all of that data. So, in your example, you could pull in point-of-sale data or data from a call center. There is really no shortage of examples there. Then we can generate bid rules and bid strategies based on that data.

That’s how Omniture thinks about the world, given the fact that we have SiteCatalyst as an underlying platform. We can pull data in from all these different sources, and then use that data not just for attribution, but also to improve bid strategies.

We have clients whose web sites generate more sales over the phone than they do on the actual site itself. Say they sell complicated items that people want to talk through over the phone. We need to be able to tie back exactly which keywords led to sales over the phone, and how much those sales were worth. So, it’s not just attributing a sale to the correct channel, it’s actually determining bidding based on that data.

Eric Enge: You made reference to portfolio management, and there is an aspect of that that I’d like to dig into a little bit, which is the notion that if you are bidding on a very high volume keyword it’s really easy to get enough data to make decisions about whether that keyword is profitable or not.

But, we have the long tail, where the data is scarcer. It’s maybe only a few clicks a day, or maybe it’s a large pay-per-click account that has hundreds of thousands of keywords that get a few clicks every a week. So, by portfolio management, do you mean a strategy for looking at those keywords in a more holistic group fashion?

Bill Mungovan: Yes, that’s exactly what it is. It’s just an option for us to have two types of bid management in the system. One is the bid rules, which are basically just if-then statements. So, if you are getting this much revenue from a keyword, then you should increase the CPC by a little bit. But we also have portfolio optimization on the other side, which is just another option for marketers.

We found that having both presents more options to our advertisers. Now, with respect to the question of not having enough data to actually understand what’s happening on a keyword by keyword basis for long tail keywords can happen. That’s the biggest fundamental problem with portfolios of keywords.

I think the portfolio optimization approach does not have enough data, and our tool projects it out based on what limited data we have and what we think may happen in the future. If there is no data, there is only so much we can go on. After a certain point, we just assume that that keyword is just not going to generate any clicks. But, that’s one of the problems that we see. We do mathematical projections for the future based on the limited data that we have.

What I am getting at is that our approach to search is the opposite of complicated mathematical Black Box formulas. We also have that built into the tool, we just don’t believe fundamentally within Omniture that you can click a button and your entire search marketing program will be quickly taken care of. That’s a Black Box approach that we feel has run its course in the market.

We just don’t believe that there is any single approach to bid management or search marketing that’s going to work for many different clients. It speaks to the broader vision in which we view search, which is that we are not an agency, but we have agency services within Omniture.

Our goal is really to be as transparent as possible to our customers. Transparency is a key issue for us, as we have many clients who have us manage their search program for a very short period of time, about three to six months. Then we coach them along the way on how and what we are doing.

We get them up to a certain level of performance, and then give that over to them in-house. So, not relying on service revenue the way an agency might works to our advantage, because we can give full transparency to our clients. And that model has been working pretty well for us.

So, to get back to the portfolio question, the idea of us being able to take care of the whole thing for you is just impossible in our mind.

Eric Enge: Right. Can you give me a set of things that you are managing? There may be ten keywords that are producing great volume, another fifty that are producing marginal volume and then some that produce less than 10% of the volume of the high-volume keywords. You still want to be able to manage those less than 10% keywords at some level, correct?

Bill Mungovan: Yes, and that’s an area where you would apply different rules to the different types of keywords. One thing we tell clients a lot is there is no faster way to lose money in search marketing than to set up the wrong portfolio or to really have poor performing keywords dragging down the average of some of your best performing keywords.

Similarly, you wouldn’t necessarily want your highest volume keywords in the same portfolio as your lowest volume keywords. You may, depending on what the keywords actually are. But you may not, and we want our clients to be fairly careful about how they set up the rules in their portfolios if they are, in fact, using that particular feature. You may actually give more credit to certain keywords because those at higher volumes are doing all the heavy lifting.

Eric Enge: Let’s dig a little bit into the announcement you had recently with Scotts MiracleGro.

Bill Mungovan: In general, we are doing more and more deals within Omniture, both in the SearchCenter business and in other pieces of our business that involve multiple products. And Scotts is a good example of that, because essentially there is only so much you can do if you just think about search engine marketing as a silo. So, by bringing in data from other sources and using it effectively, we opened up a lot of different options for search campaigns. That’s what Scotts is trying to do.

We don’t have results for this particular example, just because it’s a new announcement for us. But, in general they were having a hard time understanding exactly how email marketing campaigns could be used to remarket. And they also want to know how email marketing may have impacted or not impacted what happened on their site and what happened in their search marketing program.

Scotts was trying to take a more holistic view of their online business optimization efforts. They made the choice to stop thinking about email as one silo and search as a separate silo. And so, by using SiteCatalyst as their platform, they used Omniture Genesis to pull in the ExactTarget data, and SearchCenter for their search data, and measure it all in one place.

Eric Enge: Right. So interactions can be more easily understood.

Bill Mungovan: Correct. And, on a related note, they had problems with what they called Post-Click Behavior, which is basically visitor engagement and what happens on their site once they attract a customer. They’ve stopped thinking about email and search as just visitor acquisition tools, and started to think about the whole thing holistically.

They can see what happens when somebody clicks on a keyword and comes to their site, including where go, how much time do they spend on each page and what are they engaging with on the site. And they can do the same thing with email as well. Once someone opens the email and clicks through to their site, what they do and what is most important to them can be determined.

By using all those products in one place, and using SiteCatalyst underneath it all, Scotts was able to gain that level of insight. These are relationships that we are pulling together these days, because people want to start to look at online marketing more holistically.

Eric Enge: I believe ExactTarget is the email platform that Scotts is using, and there is an integration of data between email and the search campaign. What are some of the other data sources that can be pulled in and integrated in a fashion like this?

Bill Mungovan: Omniture Genesis is the name of the product that is designed to pull in data from third-party sources. So, ExactTarget is one of many, many email providers we know of.. There is also ad-serving data, which allows display data to also be pulled in.

Another very big category for us is CRM data. By tying actual backend CRM data to upfront advertising, or search engine marketing in particular, you can start to learn a whole lot more about what people do after the lead has been generated. You can also include call center data.

That can be anything that people do with an SAP or an Oracle database, any of those enterprise-level systems which may be point-of-sale data, such as data from a system of kiosks. There are really two types of data: marketing data including online data, such as email and display advertising, and offline marketing data. So, data from the television marketing or any kind of offline media can also be pulled in depending on how it’s structured in whatever system it’s currently in. That’s the one side of the advertising data. The other side would be backend sales data, which is the CRM, Kiosk call center data and the other enterprise systems that may live in an SAP or an Oracle database.

Eric Enge: Right. And there has to be some pretty interesting things going on there to pull in CRM or call center data, which clearly can be massive in size.

Bill Mungovan: Yes, and we have a product called Discover OnPremise for when it does get too big. It’s something we got from Omniture’s acquisition of Visual Sciences. For example, we have a rental car customer who is trying to figure out exactly how many people book online. Then they’ll go to each individual location around the country and observe how many people actually show up to pick up the car they reserved online versus people who don’t. Then they see what people actually buy, how far they drive and all other sorts of data like that. As you can imagine, it just gets absolutely massive at that point.

So Discover OnPremise is a much more powerful and robust tool for when integrations get well beyond the needs of a standard advertiser. But, we do have advertisers who have millions of keywords in SearchCenter and are tying some of those actions back to the systems that don’t have anything to do with what happens on their actual site. So, it starts to get pretty interesting at that point.

Eric Enge: Are there ways to create ties into TV advertising, print advertising and radio advertising?

Bill Mungovan: Well that’s really the million dollar question that every advertising agency in the world is trying to figure out; exactly how does offline data impact online behavior and visa versa? And what we propose to people is to pull that data into SiteCatalyst, start to figure out your own correlations and, if possible, figure out the causality between different marketing programs.

For us, we just provide the repository for the data, and then we allow agencies and advertisers to actually start to figure out what is occurring on a campaign-by-campaign basis. But yes, you can pull that data into SiteCatalyst.

Eric Enge: What are some of the strategies for how you provide the data to SiteCatalyst? And what kind of data is it that you are providing in some of those more difficult scenarios?

Bill Mungovan: I believe CRM data is the right place to focus the discussion because it’s just a little bit more tangible and measurable. For example, Omniture uses SearchCenter for our own marketing efforts in order to get more Omniture customers. A really common scenario for us would be to run an online advertising program and then generate a lead on a web site. But what actually happens to that lead, at least in our case, is that it then goes to a sales force.

The sales force follows it up, and some percentage of those leads actually turn into customers. We track it all the way down to how much we spent to acquire that customer, both online and through our sales team, and then we figure out what we’ve got in return for that. In our case the CRM system we use is Salesforce.com. But there are any number of CRM systems from which we can pull the data.

For us, Cost-Per-Lead is a pathway to one very small piece of the full picture, which will actually help us figure out Profit-Per-Click. So, if you are able to figure out how much you spent on all operating costs, you can pull that data in through CRM integration, and then actually bid on the keywords that lead to the highest profitability for your business.
Those are some of trickiest, but most interesting and most progressive features.

Eric Enge: Let’s talk a little bit about some specific tactics. For example, you know your paid search campaign results in phone call orders. And one tactic you can implement to make tracking much more effective is to give everyone that comes to your search from a paid search ad a custom 800 number. This way you can know the results of your paid search campaign just based on what number they call into. That’s a tactic that is designed to give you much more accurate data.

Bill Mungovan: Yes that makes sense. And another tactic that one of our clients is doing is automatically generating codes on the site itself. This way the customer can actually see that code, so each customer who visits the site from a given campaign will be identified. And we can actually get it all the way down to the keyword level. We know what keywords they came from that led to a call.

Customers see a certain code on the site and then make a phone call and either make purchase or not. Then we have the call center actually take that code in from the customer, so we can record where that customer came from and what they did on the site. Then we can pull that data back into SiteCatalyst and make bidding decisions based on what happened.

Eric Enge: You can also give customers that walk into a physical store a rebate as a part of some promotion that the store is holding. Then they collect the rebate by going online, filling out a form and plugging in the rebate number. Then the web site can check cookies to see if the person came in from a search campaign of some sort.

Bill Mungovan: Yes. But we wouldn’t necessarily be able to tell what specific keyword they came from. It is still a good example, but we’ve actually seen the opposite happen as well. When people come online from a specific keyword they come through to a page and have to print out a coupon that contains a bar code with information in it such as the keyword they searched on, bring it into the store and then redeem it in the store.

What we can see there are two things; how many people print out the coupon and do not go to the store, and how many people print it out and actually redeem it. So that’s just another way of understanding what’s driving people to make offline transactions.

Eric Enge: Exactly. Try to discover every aspect of the interaction that you can.

Bill Mungovan: That’s something really cool that we’ve seen with a retail client. It’s pretty complicated, but it’s very interesting at the same time. The client is able to look through SiteCatalyst as they are running geo-targeted campaigns. Again, these are big box retailers with stores in many different locations, and they are running different ad campaigns for the different geo-locations. And they can see what people are purchasing online and, more importantly, what products people are bundling together in a given geo.

So, there might be a video game and CD on sale in the upper Midwest, and that particular bundling may be very, very different from what people are bundling in Los Angeles. So what they’ve done is taken all the online data and figured out what products people are bundling online. Then they rearrange the actual placements in the store based on what’s happening in that geo. So, when you walk into a store, you would see two products next to each other on the shelf based on what people are doing online in that geography.

Eric Enge: So you basically isolate the best way to put together bundling based on how people are behaving in different areas?

Bill Mungovan: Yes. We figure out what they are buying based on the digital shelf and apply that knowledge to the actual store and rearrange products accordingly.

Eric Enge: What would you recommend to someone running a TV campaign?

Bill Mungovan: It is absolutely critical to pull your TV data into the same system where your online advertising data is running. You should at the very least make sure that you are actually measuring apples-to-apples in one place. So, it’s not an easy question to answer in terms of what TV campaign yields the highest possible return online. That’s a very complicated thing, and it will be different for every customer.

But our advice to the market on that is to pull the data into the same place and then start to run reports on correlations between media in a given geo and what’s happening online.

Eric Enge: You can also try things like Vanity URLs, but things like that are very uncertain.

Bill Mungovan: We have seen a lot of studies that tell us that very few people actually remember your URL address from the end of your television or radio ad, and even fewer go on their computers and actually type it in. For us it’s more interesting to just let the campaigns run separately. So, you have your search campaign online, a display campaign, and then a TV campaign. Then pull the data into one place and use analytics to figure out the correlations.

Say you saw a bump on the 21st of January, you can find out exactly what media was running in which geo, and then you can start to make correlations between the two. So, I think that those tricks of Vanity URLs and things like that don’t work in every case.

Eric Enge: Right. Well, I would think that there is a risk of actually lowering the actual return in return for trying to figure out how to measure it.

Bill Mungovan: That’s right.

Eric Enge: Can you outline how the pricing model works for SearchCenter?

Bill Mungovan: We typically charge as a percent of ad spent so the more you spend, the lower the percentage. We have customers in all shapes and sizes. We’ve had clients take it in-house and then they just felt like they really couldn’t handle it for a while, and they then requested the additional help of our services group.

So we manage it for them for a while, or on an ongoing basis, for an additional percent of ad spend fee. Then after a while we can give it back again when they are ready. We have some flexibility as part of that offering.

Eric Enge: Can you say anything about some other well-known customers that you have using the service, and the total spend you have under management?

Bill Mungovan: Sure. We have 600,000,000 in spend under management. One example of a large customer that I am allowed to disclose is Delta Airlines. They are using an agency called . We have both agencies and direct clients using the tool. And we have other retailers, like Backcountry.com, using the tool as well.

Eric Enge: Thank you Bill!

Bill Mungovan: It was good talking to you, thanks a lot!

This will NOT impact Omniture SearchCenter clients. SearchCenter advertisers will continue to see proper conversion tracking and will see no change in SearchCenter performance, reporting or functionality. All automated bid rules will continue to function properly.
Here’s the official response from Google:

“We’re continually testing new interfaces and features to enhance the user experience. We are currently experimenting with a javascript enhanced result page because we believe that it may ultimately provide a faster experience for our users. At this time only a small percentage of users will see this experiment. It is not our intention to disrupt referrer tracking, and we are continuing to iterate on this project. For more information on the experiments that we run on Google search, please see: http://googleblog.blogspot.com/2006/04/this-is-test-this-is-only-test.html.”

We are in discussions with Google to get a better understanding of exactly what this means for Omniture SiteCatalyst users. We’ve got a very strong relationship with Google, as do many other big SEM vendors and analytics companies, and we don’t believe Google will intentionally jeopardize these relationships by implementing a change without a clear plan and without giving ample notice to their partners.

We will continue to keep you informed as we learn how these limited tests impact our customers.

At Omniture we believe search engine marketing sits in the middle of a larger chain of events. For example, we know search volume is influenced by other media, such as email marketing campaigns or television commercials, so we encourage our customers to measure their search campaigns alongside those other programs. How can you be a successful search marketer if you have no insight into your company’s other marketing efforts?

Search marketers can no longer afford to run their search marketing programs in a silo. In fact, we like to think of search marketers as the quarterback of their marketing departments. They have a unique view into marketing data and we recommend they get outside of their cubes and help the other marketers in their organization become more successful.

In this interview with Greg Jarboe from SEO-PR, Josh discusses his keynote address, including a few recent case studies we’ve seen at Omniture:

The Standard Oil Of Online Advertising?
Henry Blodget writes in Silicon Valley Insider that Google is going to “continue an inexorable march to 80-90% share” of the search market. As of November 2008, they controlled 63.5%, up from their October share of 63.3% while Microsoft, Ask and AOL have all seen their shares decline. Seriously guys, pull it together or Blodget’s ominous prediction may come true.

On the display side it’s more of the same. A recent Attributor study shows Doubleclick (owned by Google) and AdSense (ditto) control a collective 57% of the display market. Granted, AdSense displays three text ads per unit so those numbers are inflated, but by comparison Yahoo! - a premier publisher and one of the most visited sites on the planet - has only 9.7%. Microsoft, which owns Atlas, has a meager 4%. As I said earlier, pull it together (or merge once and for all) or you’re toast.

What’s An Advertiser To Do?
It goes without saying that advertisers reach the most targeted audience they can find at the best possible price. However, one of the many downsides to this consolidation is rising CPC and CPM costs. We can’t afford to pay more for the same amount of traffic we were getting yesterday, simply because the publisher market is consolidating.

Advertisers need to dig a little deeper than just following the eyeballs. They need to take an objective view on where they spend their money. What’s converting the best? How are you measuring social media, mobile, video, email, affiliate traffic, paid search, organic search and so on? How are you attributing your conversions across all of these channels?

Don’t just blindly follow the market trends and overpay for ads. Measure, test and optimize. This may already be the advertiser’s mantra, but as the market forces work against us in the coming years it will need to become our way of life.