In case you’ve been buried under a rock and hadn’t heard, Google on February 19 made a substantial change to its search engine results page that I believe will fundamentally affect the way most businesses do pay-per-click marketing.
Instead of ads on the right sidebar and on the top and bottom, Google search results pages will now feature only the ads on the top and bottom.
Instead of three desktop ads placed at the top of the page, a user will sometimes see four. But that still doesn’t make up for the number of ads eliminated on the right sidebar. With the overall reduction of above-the-fold ads, CPC (cost-per-click) bids are likely to increase significantly. And with more paid ads on top, natural search results will be less likely to appear above the fold.
So what are the implications of the change for PPC advertisers when it comes to attribution and proper budgeting?
If search becomes too expensive, what do you do with that freed-up budget?
At the end of the day, it could mean that your ads are less likely to be seen by a potential customer. Not showing means no clicks — which, in turn, means no budget being spent, which means no sales.
Recent research, like some done by Wordstream founder Larry Kim on Search Engine Land, has shown some interesting results from the changes made. I’m pleased to see that CPCs have not yet jumped the way some expected.
But I still think that as marketers adjust to the new SERP, prices will continue to rise. In Kim’s example, one “loser” advertiser saw its CPC increase about 30 percent while it took an 80-percent hit in the number of impressions. Now, perhaps this advertiser is currently benefiting from higher placements and more qualified impressions, but eventually, fewer impressions may lead to fewer clicks, meaning less budget will be spent on search and more budget will be available for other channels.
Marketers and consultants everywhere agree that it’s the time to make updates. But, as always, the challenge is how to shift those budgets in appropriate ways. Advertisers need to move quickly in order to avoid falling behind competitors.
What does this all mean? It means it’s time to think about an attribution solution.
An attribution solution
The new Google display represents a huge opportunity for attribution to step in. With attribution, marketers can assign credit to each marketing touch point.
Highly commercial queries, like “San Francisco Hotels,” are already dominated by the aggregation sites, so how should a smaller hotel or individual chain properly use its marketing budget to drive the highest number of conversions?
If you were already spending $5,000 on position five and don’t have the budget to get to position three, you now need to reallocate that money to something else that will drive users to your website.
By employing a real-time attribution solution, marketers can effortlessly see which search terms are driving value and which are costing too much to be efficient players.
It’s also probably worthwhile for marketers to see where value can be gained from other channels, like display and video, and where opportunities to drive more efficient value may be present with the seismic change Google has wrought.
Visual channels will need to be re-evaluated, and moving some of the PPC costs over to another channel might prove to be more fruitful. But the only true way to prove it is through attribution.
There are a few companies out there, like Visual IQ, Adometry and Abakus (my employer), that provide tools that show your cross-channel marketing effectiveness, the top paths to user conversion and the most efficient players, so marketers can determine the best places to deploy their resources.
Attribution tools all work the same, but using different methodology. A good platform is going to be able to show you the incremental value of each piece of your marketing, how your marketing is drawing new versus returning users, and how your different pieces of marketing overlap with each other.
Further, these tools identify where you should shift budgets to take advantage of marketing inefficiencies in order to drive more revenue and conversions to a client’s website.
I think that many marketers, thought leaders and bloggers will continue to monitor how Google’s change affects rates of conversion and recommend the best way to shift budgets around to produce the most effective combination of digital marketing. I want to stress that I don’t think Google or SEM is at all dead, but I think it’s a good time to evaluate how effective your digital marketing spending is.
Now is the time to make sure you have these tools available for your company. If you haven’t begun your move to next-generation attribution yet, it’s time to start.
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