case study adwords: googlization of advertising! · use google adwords to electronically advertise...
TRANSCRIPT
CASE STUDY
AdWords: ‘Googlization’ of
Advertising!
STUDENT NAME: Aurembiaix Puigpinós and Jillian Traver
STUDENT NUMBER: 10-205-722 and 10-206-084
COURSE NAME: Electronic Business
DEPARTMENT: Department of Informatics COURSE CODE: Current - eBusiness SUPERVISOR: Luis Terán
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DATE OF SUBMISSION: 27 May 2011
Abstract
With the rise of Internet use, there is a subsequent increase in the need for electronic
based advertising. More specifically, marketing trends prove that many businesses
use Google Adwords to electronically advertise on the world’s most popular search
engine, Google.
Increased Internet use leads to a subsequent rise in digital marketing. Digital
marketing started off as obnoxious, banner/excessive email advertisement and was
deemed unsuccessful. Seth Godin [Godin 1999]1 was the researcher who realised
that marketing needed to be “anticipated, personal and relevant”. The Google search
is a leading online destination in every country in the world. 99% of Google’s $ 21
billion annual revenues are currently derived from advertising. [Goodman, 2008]2.
It is important to acknowledge the fact that AdWords is now and always has been a
work in progress and will continue to be this way since eBusiness is ever changing.
Today, search marketing is the second most popular marketing technique to email
marketing.
1 [Godin 1999] Godin, Seth: Permission Marketing: Turning Strangers into Friends, and Friends into Customers. In: Godin, Seth: , Simon&Schuster, 1999. 2 [Goodman 2008] GOODMAN, Andrew: Winning results with Google AdWords. McGraw-Hill Professional, 2008.
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Key Words
Google AdWords
Google Analytics
Pay Per Click (PPC)
Bounce Rate
HTML
IP Address
Traffic
Organic Traffic
Referral Traffic
Date Range
Search Engine Optimization (SEO)
Search Engine Marketing (SEM)
Online Marketing
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List of Contents
1. Introduction 1.1 Problem statement 1.2 Objectives
1.3 Outline
2. Internet Marketing 3. Search Engines Marketing 3.1 Origin and definition
3.2 The listings
3.2.1 SEO
3.2.2 SEM
4. Google AdWords 4.1 Functioning
4.2 Optimization
4.3 Legal issues
4.4 Competitors
4.4.1 Yahoo! Search Marketing
4.4.2 Microsft AdCenter
4.4.3 Facebook
5. Corporate examples and recommendations 6. Conclusions 6.1 Summary
6.2 Critical assessment
6.3 Outlook
7. Bibliography 8. Appendix 8.1 Survey 8.2 Interview transcription
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List of Figures and Tables
Figures
Figure 1. Advertising expenditure. Standards Authority
Figure 2. Organic and paid results overview on Google
Figure 3. Results for the question which kind of advertising do you like the most?
Figure 4. Results for the question which kind of advertising do you think is most
effective?
Figure 5. Appearance of Google Analytics
Figure 6. Insigths for Search overview
Figure 7. Keywords tool overview
Figure 8. Social Networking - UK - April 2010. Appendix – Competitive Context
Figure 9. USTA remnant advertising
Figure 10. Goldfarb Properties mobile site
Figure 11. Google Search: sports
Figure 12. Google search: motor repair Connecticut
Tables
Table 1. Controversies of search engines laws (Grimmelmann, J.)
Table 2. Total unique visitor numbers to Google and Facebook UK, June 2008-
February 2010 (comScore/Mintel)
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1. Introduction
1.1. Problem statement
With society’s sparked interest in virtual means of researching, there is a subsequent
increase in the need for electronic based advertising. A multitude of businesses use
Google AdWords to electronically advertise.
1.2. Objectives
1. Why is there an increase in the use of online advertisements?
a. What are the main differences or improvements?
2. How does AdWords function?
a. What are the main differences or strengths?
3. Who advertises with Google?
a. Is there any difference between Google and other media advertisers?
Overall Objective
The main objective is to discover whom, why, and how companies choose to or to
not advertise with Google.
Specific Aims
• To give a general overview about online marketing (banner, opt-in, viral etc.)
and a specific overview about search engine strategies.
• To understand the functions of AdWords.
• To discover how a company can have a successful AdWords campaign.
1.3. Outline
Research Design and Methods for Collecting Data
Both primary and secondary research is conducted. Primarily, this is qualitative data.
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Design of the sample
A non-probability survey will be how the sample is presented. In particular, this will be
a convenience sample. The individuals interviewed will be selected subject to
availability and our limited resources for the research.
Strengths and weaknesses
As weaknesses, it must be established that this is an ever-changing subject since it
is constantly being updated and thus all of our research is subjective to when it was
written. Therefore, both print and Internet sources will be used in an attempt to have
an accurate case study.
As strengths, a multitude of both primary and secondary sources is included in this
study. As exchange students, diverse backgrounds are present, which will contribute
to a diversified research perspective.
SEM
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2. Internet marketing
The increasing move of consumers from the mass media to the online media has
forced the general public to reconsider the way marketers previously promoted
products and services. As a graphic example, the chart below shows the decline in
newspaper and the rise in online expenditures, over the past decade.
Figure 1. Advertising expenditure. Standards Authority
Thanks to the evolution of technology, marketing has expanded to new areas, in a
process that Damian Ryan and Calvin Jones [Ryan; Jones 2009]3 explain as:
1. New technology emerges and is adopted by technologists and early adopters.
2. It becomes more popular and marketing is aware of it.
3. First innovative marketers endeavour online strategies.
4. The technology is generally adopted as a standard marketing practice.
Indeed, this trend has lead to a rise of the marketing strategies and tactics over the
Internet channel. The result is well known as Internet marketing or also known as
digital marketing, web marketing, online marketing, search marketing or e-marketing.
It includes communicating with customers, promoting business or products online,
and making sure that website content is useful and up to date [Lindsay]4. One of the
most striking benefits is the opportunity to target a global audience with a cost- 3 [Ryan; Jones 2009] Ryan, Damian; Jones, Calvin: Understanding digital marketing: Marketing, Kogan Page, London 4 [Lindsay] Lindsay, Stephen: Techniques for online marketing. Digital Kindle.
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effective tool. In addition to this, there is an opportunity for increased dialogue
between consumer and marketer and the accuracy in the segmentation process.
Internet is an ever-changing world so its involved tools are as well. This feature
becomes complicated when the attempt is to classify the digital commercial
strategies. In considering this, only the most implemented ones will be identified:
- Search engines marketing: It increases the visibility of a certain website in
search engines via two main strategies:
o Search Engine Optimization (SEO): Optimize websites with the goal
of getting higher ranking in search results.
o Search Engine Marketing (SEM): Increase relevancy of a website
through paid forms of advertising.
- E-mail marketing: Considered as a direct marketing technique, it is the use of
electronic mail with a commercial communication purpose.
- Social Media Optimization (SMO): Social media tools are used to get in
touch with consumers and influence them to partake in ecommerce.
- Online reputation management: It supervises the reputation of a company in
order to minimize or delete negative mentions.
- Others: Mobile, gaming, blogging, affiliate marketing…
Internet marketing has developed a broad set of tools, which offer immense
possibilities for marketers. As Alexander Halavais [Halavais 2008]5 stated, “Search
engines emerged as the epicentre of the early web, and represent a nexus of control
for the future”. In that sense, it is important to consider the centralised role of search
engines in any online strategy because they are not only a tool, but also when these
are implemented they potentially can create a more successful outcome.
5 [Halavais 2008] Halavais, Alexander: Search Engine Society, Polity Press, Cambridge, 2008.
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3. Search engine marketing
3.1. Origin and definition
Today, the general public understands that a search engine is a platform where a
user can search for information on the World Wide Web and FTP servers. However,
it is imperative to first explore how search engines initially began and developed.
The history of search engines started with Archie [Alan Emtage, Bill Heelan and J.
Peter Deutch, 1990]. At that time, there was no World Wide Web, so the program
operated in a system called File Transfer Protocol (FTP). Its functions were limited to
downloading the directory listings of all the located files without indexing the context.
Nevertheless, the first search engine was not considered until the release of
Wanderer [Matthew Gray, 1993], a web robot designed to track the growth of the
web sites. It captured URLs and stored them in the first ever web database, Wandex.
So the most important change brought by Wanderer and afterwards improved by
other web robots (such as Galaxy, Lycos or WebCrawler) was the categorization of
web pages in databases, instead of just crawling and listing them.
During the following years, many search engines were also established, including
AltaVista, Excite, Inktomi and others. A remarkable website introduced an innovative
directory organized in a hierarchy, later renamed Yahoo (David Filo and Jerry Yand,
1994). It also provided the first successful pay-for-placement search service, Yahoo!
Search Marketing, after acquiring Overture Services, Inc. (formerly GoTo.com) in
2003. The company is currently one of the biggest online search providers (5,88%
[Net Marketshare 2011]6).
Initially, search engines ranked results by counting how many times the search terms
appeared on the web page. An important change was introduced when two PhD
students considered the relationship between websites. They first called it PageRank
and, then, renamed it as Google (Larry Page and Sergey Brin, 1996). “Google exists
because Larry and Sergey found the algorithm that made possible the best Search
Engine in the world and they decided to share it with the world free of charge. Then
they realised, not only users could benefit of that, but companies as well. And as
6 [Net Marketshare 2011] Net Marketshare: Usage Share Statistics for Internet Technologies. Available: http://marketshare.hitslink.com/search-engine-market-share.aspx?qprid=4, accessed 4th May 2011
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companies would be making profit, it made sense to charge them. Since then, new
features have been added, Google Maps was launched, Youtube acquired, but the
idea remains intact: let the user search and try to be there when he’s looking for
something you can offer” [Sarasa 2011]7. Nowadays, Google is the biggest search
engine over the Internet (83,82% [Net Marketshare 2011]8).
3.2. The listings
When doing a search engine research, the user types a concept (also called a query)
into the search engine bar; and, as a result, a display of results is shown.
These can be classified in two groups:
- Organic listings: Based on the proprietary algorithms of the search engine
and listed due to their relevance for the user’s query.
- Paid listings: Purchased by an advertiser, either through paid inclusion or
paid placement programs.
Figure 2. Organic and paid results overview on Google
The relevance of the site is calculated in a different way for each search engine. On
Google, both listings come from the same query but they use independent
measurements. Whereas organic listings are determined by over 200 factors, paid
7 Sarasa 2011] Castelló / Google Dublin, Eduard Sarasa. "Google's Perspective on Google AdWords." E-mail interview. 6 May 2011. 8 [Net Marketshare 2011] Net Marketshare: Usage Share Statistics for Internet Technologies. Available: http://marketshare.hitslink.com/search-engine-market-share.aspx?qprid=4, accessed 4th May 2011
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listings organise results based on the user interest, as well as other factors, including
location, language and demographics.
Each listing has a specific marketing approach that takes into account their
characteristics. They are known as Search Engine Optimisation (SEO) and Search
Engine Marketing (SEM) and both will be introduced in the following sections.
3.2.1. Search Engine Optimization (SEO)
The Search Engine Marketing Professional Organisation (SEMPO) has defined the
Search Engine Optimisation (SEO) practice as ‘the process of editing a web site’s
content and code in order to improve visibility within one or more search engines’
[SEMPO 2011]9. In other words, if a certain company improves its rankings on the
main search engines (such as Google, Yahoo or Bing), it will increase the traffic on
its website and, as a result, it will also have a better change to augment sales.
According to David Hughes [Hughes 2009]10, there are three basic areas of expertise
that work together in order to get an optimal indexation and ranking in the organic
search results:
• Architecture: Providing an efficient site structure to allow the search engines
to find and assess the content of the site. This includes:
o Clean internal links
o Accurate site map accessible from all pages.
• Content: Once a search engine reaches a site, it reviews on page tips to rank
the page or the keywords. In that sense, to achieve full optimisation the
following aspects must be considered in order to get a better ranking position
of the website:
o URL naming
o Title tag
o Meta description
o Meta words
o Alt Text for image optimization
9 [SEMPO 2011] Search Engine Marketing Professional Organisation: Glossary of terms. Available: http://www.sempo.org/?page=glossary#s, accessed 27th April 2011. 10 [Hughes 2009] Hughes, David: SEM and SEO: Core Drivers of iDirect Success. Reinventing Interactive and Direct Marketing In: Rapp S.: Reinventing interactive and direct marketing: Leading experts show how to maximize digital ROI with iDirect and iBranding imperatives. McGraw-Hill Professional, United States, 2009, pp.77-94.
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o Static URL
o Headings
o Valid HTML
o Robot. Txt
o Sitemap XML
o Body text to read
o Internal link
• Linking: Search engines also measure the number and quality of external and
internal links to each page. Search engines view external links as a “vote of
confidence” for the specific pages. Links from outside sites, deemed to be an
authority on your subject matter, are given more weight than links from
unrelated or less authoritative sites. o Inbound links to site (IBL)
o Get sites to link with the site, with consistent anchor text
o Directory listings
According to Ron Berman and Zsolt Katona [Berman; Katona 2011]11, SEO (also
considered as the ‘white hat’) brings a better site content, which can improve the
visitor satisfaction and make the site more relevant in the display results. In that
sense, it is important to cite the results of the iProspect Search Engine User
Behaviour Study [Jupiter Research 2006]12. This survey estimated that 92% clicked
on the first three pages of the displayed search results. Moreover, 39% believed that
if a site appeared in top search results, this meant it was a leader in the field.
3.2.2. Search Engine Marketing (SEM)
Following the SEMPO’s glossary, it defines the Search Engine Marketing (SEM) process as ‘a form of Internet marketing that seeks to promote websites by
increasing their visibility in search engine result pages’ [SEMPO 2011]13. Following
this, SEM methods would include: search engine optimization (SEO), paid placement
(either cost per click –CPC- or pay per click –PPC-), contextual advertising, digital
asset optimisation and paid inclusion (or sponsored listings)’.
11 [Berman; Katona 2011] Berman, Ron; Katona, Zsolt: The Role of Search Engine Optimization in Search Marketing, University of California, Berkeley, 2011. 12 [Jupiter Research 2006] iProspect Search Engine User Behaviour Study, Thailand, 2006. 13 [SEMPO 2011] Search Engine Marketing Professional Organisation: Glossary of terms. Available: http://www.sempo.org/?page=glossary#s, accessed 27th April 2011.
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David Hughes [Hughes 2009]14 proposes some strategies in order to improve the
measurement of the digital advertising channel effectiveness:
• Comprehensive, integrated data: Link between search engines data and
internal accounting systems and bid optimisation platform, in order to test ROI
and allocate expenditures.
• Efficient account structure: Keywords management through defined groups
around a common theme, product, type of consumer or buying cycle stage.
• Targeted creative: Effective writing should consider words from the query, the
value proposition and the competitive advantage within 95 characters.
• ROI-based bid management: Establish the proper bid by taking into account
the key metrics and business objectives.
• Optimised landing pages: Guarantee a well-design landing page to match
the keyword query and the promise in the advertisement.
• Test and measure: Continuous tracking and adjustment of advertisement with
the aim to achieve the highest effectiveness.
Some benefits linked with SEM strategies are the faster testing and ranking, dealing
with budget issues (both are specially useful for small and medium companies with
less time and resources), and also the availability of reports about the campaign
together with recommendations about how to optimise the ads.
Different search engines offer different advertising products: Google has Google
AdWords, Yahoo! has Yahoo! Search Marketing and Microsoft (Bing) has recently
released Microsoft adCenter. During the following sections, a closer look to the
Google platform will be discussed and also an overview of Google’s competitors will
be established.
14 [Hughes 2009] Hughes, David: SEM and SEO: Core Drivers of iDirect Success. Reinventing Interactive and Direct Marketing In: Rapp S.: Reinventing interactive and direct marketing: Leading experts show how to maximize digital ROI with iDirect and iBranding imperatives. McGraw-Hill Professional, United States, 2009, pp.77-94.
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4. Google AdWords
Google AdWords is user-friendly and has a multitude of components that make it the
preferred way to search for users and customers alike. Mehta et al. describes online
advertising mechanisms, such as AdWords, as “large auctions in which businesses
are able to bid for individual keywords, together with limits specifying their maximum
daily budget” [Mehta; Sabery; Vazirani; Vazirani 2007]15. Then, the search engine
makes profit when the advertisements are displayed on searches and clicked by
users.
Patrick Pichette, CFO of Google comments on the past quarter success and the
importance of search ads, “we had a great quarter with 27% year-over-year revenue
growth. These results demonstrate the value of search and search ads to our users
and customers, as well as the extraordinary potential of areas like display and
mobile. It is clear that our past investments have been crucial to our success today –
which is why we continue to invest for the long term” [Google Inc. 2011]16. Google’s
First Quarter 2011 Results informs the general public of the success of Paid Clicks,
this includes clicks related to ads on Google sites and AdSense partner sites; there
was an increase of about 8% over the first quarter of 2010.
Google is different in many ways to its competitors. When bidding, Google does not
inform a client as to how much they will pay per click and does not disclose to its
clients their competitors or how much the competition is bidding [Campbell 2005]17.
For example, if client A bids $2.00 per click, he/she can pay anything from $.05 to
$2.00. Google’s maximum bid is $100.00 and its minimum bid is $.05. Despite the
fact that Google is the apparent market leader, it does have competition in the
industry.
4.1. Functioning and optimization
When a user does a search on Google, AdWords ads are displayed either alongside
or above the results and under the tab ‘sponsored links’. They can also appear on
the Google Network, meaning related sites matching the keywords. In both cases, 15 [Mehta; Sabery; Vazirani; Vazirani 2007] Mehta, Aranyak; Sabery, Amin; Vazirani, Umesh; and Vazirani, Vijay: AdWords and generalized on-line matching. Journal of the ACM, Vol. 54, Issue 5, New York, 2007. 16 [Google Inc. 2011] Google Inc. Google Announces First Quarter 2011 Results. Google. Google.com, 14 Apr. 2011. Web. 14 May 2011. 17 [Campbell 2005] Campbell, Shawn: Yahoo SM v. Google AdWords. K. Clough Inc., 2005.
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the advertising will be suitable to the audience interest thanks to the keywords
selection.
During the survey implemented, we ask respondents two similar questions: which
kind of advertising do you like the most? Which kind of advertising do you think is
most effective? In the online search engine advertising case, the results improved
from 8% to 10% when ‘effectiveness’ was applied. Moreover, when directly asking do
you think Google AdWords is effective?, the positive answer amounted to 35%.
Figure 3. Results for the question which kind of advertising do you like the most?
Figure 4. Results for the question which kind of advertising do you think is most effective?
In order to create an AdWords ad, the following steps should be implemented
[Google 2011]18:
1. Create an account: In order to create an ad, it is necessary first to create a
Google account. This gives access to a set of free or paid products such as
AdWords.
2. Create the campaign (Focus on one product or one service)
18 [Google 2011] Google: AdWords Learning Centre. Available: http://adwords.google.com/support/aw/bin/static.py?hl=en&page=examstudy.cs&rd=1, accessed: 11th May 2011.
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• Set time zone & currency: One time administrative first step that will report
AdWords statistics and billing.
• Targeting: There are two ways to focus an AdWords advertisement: either
using keywords or location and language characteristics. The first one targets
the users considering the typed search whereas the second one takes into
account the domain or IP address.
• Create the ad: AdWords advertisement includes a headline, two description
lines and a URL. In order to create effective ads, it is strongly recommended
to write a clear and specific text, include call to action as well as prices and
promotions, and make sure the proposal is accomplished once entering the
website. Finally, a key use is the proper selection of keywords, which mean
specificity, suitability, and variability. It could be also useful to consider
negative keywords to prevent from undesirable searches.
• Bidding and budgeting: In order to properly distribute money and assure
return on investment in any AdWords campaign, it is important to understand
the relationship between cost and quality. There are three main ways to
control the budget and get a better performance: daily budget (amount you
want to spend in AdWords daily), cost per click (maximum amount you want to
pay for a potential customer click on an ad) and ad quality (where your ad will
show on the page: the more targeted the ads are, the better they will perform).
4.2. Analysis and return on investment (Google Analytics)
Google Analytics is a free Google tool that allows clients to formulate an Internet
strategy for their particular Internet needs. Google AdWords is a pay per click (PPC)
advertiser and thus Google Analytics does an adequate job of analysing the data.
Hughes says that “what separates an adequate SEO/SEM effort from an exceptional
one is constant referral to actionable data analytics and a commitment to ongoing
testing and measurement” [Hughes 2009] 19.
In particular, Google Analytics covers three key issues:
- Measure and evaluate the ROI of your marketing efforts
19 [Hughes 2009] Hughes, David: SEM and SEO: Core Drivers of iDirect Success. Reinventing Interactive and Direct Marketing In: Rapp S.: Reinventing interactive and direct marketing: Leading experts show how to maximize digital ROI with iDirect and iBranding imperatives. McGraw-Hill Professional, United States, 2009, pp.77-94.
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- Evaluate visitors navigation to identify site improvements
- Track e-commerce metrics such as revenue, cost and conversion rates
Hokunson discusses the importance of analysing marketing strategies and why
companies should use Google to advertise. It is important to distinguish the
difference between visits and hits as well as to determine what the bounce rate of a
website and to do whatever is necessary to get the bounce rate as low as possible.
The industry average for bounce rates is 50%. To accurately analyse, with Google
Analytics, it is necessary to filter out the IP addresses of the computers that are
within the company as these may skew the accuracy of results. Companies must
strive to create business from both organic and referral traffic. A good balance
between the two will increase the chances of user interest. When using Google
Analytics, it is necessary to look at the broadest range of data possible. Typically,
Google Analytics uses 30 days as a starting point and while this is the most recent
information, it does not show significant trends in the data. It is better to compare the
same period of time year to year as opposed to comparing quarters as the time of
year can often be dependent on traffic [Hokunson 2011]20.
Figure 5. Appearance of Google Analytics
20 [Hokunson 2011] Hokunson / Site-Seekers Inc., Kathy. "Navigating Google Analytics." Rocky Hill, Connecticut. 6 Apr. 2011. Web-seminar.
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Even if Analytics is a really great tool to track users behaviour within a website,
Sarasa [Sarasa 2011]21 refers to additional options that could be helpful to
understand the user behaviour.
Basicaly, he points out two tools:
- Insights for Search (http://www.google.com/insights/search/ ): It compares
search volume patterns across specific regions, categories, time frames and
properties. For example, when typing ‘Japan’, one can observe the evolution
of search query along the time line (with a high peak during the earthquake in
March), among others.
Figure 6. Insigths for Search overview
21 [Sarasa 2011] Castelló / Google Dublin, Eduard Sarasa. "Google's Perspective on Google AdWords." E-mail interview. 6 May 2011.
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- Keyword tool (https://adwords.google.com/select/KeywordToolExternal): This
gives a client ideas on related search queries, so if he/she is trying to expand
his/her business he/she can track the user interest. Coming back to the Japan
example, competition is apparent and also the number of global and local
monthly searches are visible.
Figure 7. Keywords tool overview
4.3. Legal issues
The increase of the search engine industry has led to some questions being raised
about the legal issues to be implemented. With this goal in mind, governments have
already adopted some measures in order to protect the interests of all the parties
involved.
In general terms, the key aspects that the specified laws should concern are as
follows: Constituency Interest Information flows Sample legal theories Users Privacy Queries Information privacy,
contract Quality Results Consumer protection
Providers Costs Indexing, content Trespass, content Unfair competition Content Copyright, trademark,
contract Placement Results Trademark, business
torts Third parties IP Content Copyright (incl. DMCA)
Reputation Content Defamation Privacy Content Information privacy Virtue Content Direct regulation
Search engines SEO/Click fraud All Fraud, contract Innovation All Intellectual property Competition All Antitrust
Table 1. Controversies of search engines laws [Grimmelmann 2007]
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In order to clarify the previous chart, Grimmelmann states ”every dispute involving a
search engine is, at a deeper level, a dispute between or within the other three
actors. They are attempting both to capture the gains created by search, and to use
search engines to gain greater leverage over each other. Both goals could at times
be considered legitimate, or illegitimate, depending on the particular details.
Recognizing when one, the other, or both are at work illuminates what is really at
stake in any given legal battle over search” [Grimmelmann 2007]22.
Essentially, Google itself has developed some guidelines (named AdWords policy)
oriented to ads, keywords, websites and accounts best functioning. The main goal is
to ensure great user experience which in turn will create positive revenue for the
advertiser.
4.4. Competitors
What makes Google different is access to information [Sarasa 2011]23. Moreover, he
states “Google’s main strength is making accessible information to any person in the
world. No more no less. There are other Google products that are hitting high but, so
far, nothing beats our search engine”. Search Engine Watch, the authoritative guide
for searching industry, confirms this sentence. When asking for ‘the most outstanding
search’, users chose Google in the first place followed by Yahoo and Bing. In our
survey, 100% of the sample responded ‘Google’ (among Yahoo, Bing, Ask and AOL
Search) to the question: which search engine do you most often use?
When discussing the question of competitors, Sarasa responds “Facebook is by far,
the strongest competitor we now have. Targeted advertising in the social media is
growing faster and faster. Only time will leave us all where we should be, the user
has the power so whoever makes the online experience more relevant for him is
going to win the jackpot. So far Google has been stronger because of the offer, but
relevancy is key, and lately the battle is in the social relationships: whom you trust
and what they say” [Sarasa 2011]24.
22 [Grimmelmann 2007] Grimmelmann, James: The structure of search engine law. University of New York, New York, 2007. 23 [Sarasa 2011] Castelló / Google Dublin, Eduard Sarasa. "Google's Perspective on Google AdWords." E-mail interview. 6 May 2011. 24 [Sarasa 2011] Castelló / Google Dublin, Eduard Sarasa. "Google's Perspective on Google AdWords." E-mail interview. 6 May 2011.
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In that sense, both perspectives must be considered when analysing the competitive
environment.
4.4.1. Yahoo! Search Marketing
Yahoo is the oldest search ‘directory’ and, nowadays, it has the second position
among search engines. In the beginning, searches were organised into categories by
human editors, which changed to software-located listings. Its advertising product is
Yahoo! Search Marketing.
Yahoo! Search Marketing (SM) is an advertising service provided by Yahoo! that has
innovative ideas to attract people to use its search engine. During bidding, Yahoo!
SM allows for a client to bid 1 penny over the next lowest competitor. For example, if
client A bids $2.00 per click and the next highest bid is $1.25 per click, client A will
only pay $1.26 per click. Additionally, Yahoo! SM allows a client to see exactly who
their competitors are and where they are in comparison to other competitors. Their
maximum bid is $999.99 and their minimum bid is $0.10 [Campbell 2005]25.
4.4.2. Microsoft adCenter
Microsoft’s search engine is known as Bing and came into the market in 2009. This
occupies the third position among search engines and it is characterized by three
main factors: automatic, human and index generator. Its advertising division based
on pay-per-click is named Microsoft adCenter.
Microsoft adCenter technology uses the maximum amount an advertiser is willing to
pay per click (PPC) on their ad and the advertisement's click-through rate (CTR) to
determine how frequently an advertisement is shown. This system encourages
advertisers to write effective ads and to advertise only on searches, which are
relevant to their ad. Moreover, the system has the unique characteristic to allow the
restriction to a set of demographics and increase their bids whenever a user of a
certain demographic sees the ad.
4.4.3. Facebook
Despite the search-market competitors, the most relevant competitor is not a search
engine; instead it is the social network, Facebook. Facebook does not have any
relevant competition in the social network market but instead is competing with 25 [Campbell 2005] Campbell, Shawn: Yahoo SM v. Google AdWords. K. Clough Inc., 2005.
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Google. Facebook had approximately one half of the amount of unique visitors in
2008 and now it only has 23% less than Google. In terms of length of stay on the site
though, Facebook far exceeds Google by over four times [Webster 2008]26.
Facebook has an innovative way of targeting its users; they use pages which users
are a ‘fan’ of, his/her applications, group affiliations and his/her birthday. Facebook
has a non-intrusive means of advertising that is deemed effective since it targets
specifically what users are interested in. Facebook has had huge success
internationally and is Google’s first relevant competitor. In response to Facebook
being a significant competitor, Google came out with its own social networking tool,
Buzz; which was launched in February 2010. Mintel claims, “While Buzz is not yet a
credible threat to Facebook, the search engine giant has deeper pockets than
Facebook’s other rivals. It also has a track record for innovation that will prove useful
in growing future market share” [Webster 2008]27.
Figure 8. Social Networking - UK - April 2010. Appendix – Competitive Context
In the above graphic, the positive and negative aspects of social networks are
established. Some of these components can be applied specifically to the
competition between social networks and search engines like Google. The growth of
26 [Webster 2008] Webster, Karen L.: A guide to making friends and making money. Maket platform dynamics, 2008. 27 [Webster 2008] Webster, Karen L.: A guide to making friends and making money. Maket platform dynamics, 2008.
24
mobile social networking Google has recognized with its new implementation of its
social network Buzz that may potentially become a threat to Facebook. The other
relevant part of this chart is how long competitors will hold out against Facebook.
This is a negative for Facebook however this could be seen as a positive outcome for
Google. Google Facebook 2008 Jun 30,060 16,132 Jul 30,337 17,029 Aug 31,039 17,896 Sep 31,207 18,410 Oct 31,728 19,492 Nov 32,566 20,286 Dec 32,332 21,165 2009 Jan 32,787 21,911 Feb 32,648 22,656 Mar 32,951 23,295 Apr 33,000 23,454 May 32,969 23,860 Jun 32,474 25,276 Jul 32,766 26,148 Aug 33,058 26,938 Sep 37,380 30,931 Oct 38,134 32,125 Nov 38,362 32,491 Dec 38,583 32,628 2010 Jan 39,224 32,000 Feb 38,643 31,299
Table 2. Total unique visitor numbers to Google and Facebook UK, June 2008-February 2010 [Mintel
2008]28
The above figure displays the number of unique visitors to Google and Facebook in
the United Kingdom from June 2008 until February 2010. In 2008, Facebook had
significantly less unique visitors amounting to only 53% of Google’s total visitors. This
graph show how the virtual world is ever changing because less that 2 years later in
February 2010, Facebook had 80% of the amount of unique visitors as Google. It will
be interesting to continue to observe this to see future trends.
28 [Mintel 2010] Mintel: Social Networking – UK – April 2010, 2010.
25
5. Corporate examples and recommendations
Success with SEO or SEM can be achieved one of two ways: organically or by
paying lots of money to be present. According to Charlie Callahan, CEO of Bright
Spot Creative (a full service advertising and interactive marketing agency), content
on a sight is key. When doing SEO, one cannot cheat the system SEO must be done
ethically. For example, if done improperly one can be penalized by the search engine
if they perhaps alter their meta data as to become more present on the search
engine thus this will not affect the website but will increase the activity to the site
[Callahan 2011]29.
5.1. United States Tennis Association (USTA)
The USTA is a non-profit organization that has a strategic
marketing style that differs from many other marketing styles.
USTA not only uses pay per click but also uses remnant
advertising. Remnant advertising is when another site has
advertisements of sites that one has previously visited in order to
promote their site. This is a common form of advertising that is an
intentional way to drive traffic. Pay per click works especially well
for USTA because it is a non-profit that wants to drive
membership.
5.2. Goldfarb Properties
The real estate market in New York City is highly competitive and Goldfarb
Properties is one of many no-fee apartments for rent companies in New York City
and Greater New York. Goldfarb initially had trouble diversifying itself in this
competitive market and turned to Bright Spot Creative to aid its struggle. First and
foremost was the need for SEO and to decide whether or not SEM would be a viable
solution. Goldfarb uses both methods and this is successful because of the market it
is in. Goldfarb after the renovations to its site and the new marketing scheme
experienced a 130% increase in traffic to its site. The company chose to
29 [Callahan 2011] Callahan / Bright Spot Creative, Charlie. "E-Commerce, Most Effective E-marketing
Tactics." Telephone interview. 16 May 2011.
Figure 9. USTA remnant advertising
26
geographically market to target the exact clientele they were interested in reaching.
Additional components that were changed were custom 1800 (toll-free) numbers and
recoding of phone calls so the calls could be sorted for qualified versus non-qualified
customers and whether or not it was a lead. It is important to recognize that it is not
only important for a customer to click on the link because this is useless if they do not
contact the company thus Goldfarb additionally created a mobile version of its sight
as to make it more convenient for clients.
Figure 10. Goldfarb Properties mobile site
As seen above, the mobile version of their site is simple but convenient thus being a
practical solution for their marketing. Google Adwords, while an important part of their
marketing strategy, is not deemed successful just by throwing an ample amount of
money at it. If implemented with as part of a marketing strategy it can be a highly
effective tool.
5.3. Entertainment Sports Programming Network (ESPN)
One such example of an enterprise that does not use SEM because it has a large
enough public interest that it does not need to pay for online advertisement is ESPN.
ESPN does not have any pay per click advertising and only uses content to promote
its online traffic.
27
Figure 11. Google Search: sports
As seen in the above graphic, without any SEO, ESPN comes up as the third item
when searching sports on Google. Thus, ESPN’s marketing team felt it would be
beneficial to work from the content perspective and to tackle it from this perspective
as opposed to paying for online advertisements. This is one such example of a large
corporation that does not need Google AdWords or any other SEM tactic to be
successful in the market.
5.4. Traver IDC
A large corporation like ESPN does not need to pay for advertising, however, this can
be juxtaposed with a small business. Charlie states that the most successful Google
AdWords campains are for medium-size corporations that are doing E-commerce. As
opposed to doing Google AdWords, for small business owners it is most feasible to
hire a professional to do a marketing campaign as opposed to doing Google
AdWords. Often there is a 20% fee of the total marketing budget, however, this is
often well worth the cost for a small business owner. Traver IDC is a company in
Connecticut, USA that does everything electrical for industrial businesses. This is a
specific target market and thus Google AdWords would not be an intelligent
marketing scheme. CEO of Traver IDC Jack Traver supported this argument by
stating, “Being a small business owner in Connecticut, with a very specific target
28
market, I have found the most successful means of marketing is to build a marketing
campaign centered on brand recognition including both online and conventional
marketing techniques. After hiring a marketing firm to aid in our brand identity
campaign, I felt SEM was not a viable solution for our company” 30.
Figure 12. Google search: motor repair Connecticut
As seen in the above Google search, Traver IDC (also known as Traver Electric
Motor Co Inc) comes up as the first search when searching for motor repair in
Connecticut. This was not the case before the change to the company image and
thus Google AdWords or other SEM techniques would also not be a practical solution
for Traver IDC’s marketing strategy.
30 [Traver 2011] Traver / Traver IDC, Jack E. "Traver IDC - Small Business' Approach to SEO and
SEM." Telephone interview. 17 May 2011.
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6. Conclusion
6.1. Summary
With the increase in popularity of Internet marketing, there is a subsequent need for
companies to electronically advertise. Google AdWords is an attractive option for
clients and users alike. It is also imperative to consider Google AdWords functioning,
optimization and legal environment. Additionally, a diverse range of case studies are
analysed to look for a practical overview of the matter. This research has taken into
account a triple perspective: users, companies and Google. The main reason a triple
perspective was incorporated was to find the strengths and weaknesses of a search
engine marketing strategy and to therefore reflect and provide an outlook.
6.2. Critical Analysis
After the analysis was conducted, there are many significant aspects of the market
that must be considered. First of all, each company is different, however, it can be
assumed that SEO is an effective tool for almost all industries; while SEM is more
stereotypically successful for small to medium size companies often who engage in
e-commerce. In regards to Google, it is a user-friendly tool, which is easy to manage
and has a relative low cost so it is attractive as well as efficient.
Second, Google AdWords is currently the leader in the market and thus will need to
work hard to continue to be attractive to its clients. With this being said, Google is not
a monopoly and instead does have competitors. The most perilous competitor to
Google is Facebook, which is becoming more and more of a threat. Facebook will
most likely become an imminent threat to Google once Facebook is able to find a
marketing tactic that will be a viable solution to have users want to be solicited by e-
marketing. The main reason Google is more successful is because normally when
searching someone is looking for something specifically, with Facebook, although
there is more known knowledge about the users, the users are not looking to do e-
commerce when on a social network.
Finally, it is important to remark the increasing relevance of Internet as a source of
opinion. People are moving their attention to the online media so companies have
already been aware of this. In that sense, the e-marketing strategies will continue to
evolve and marketers should consider future plans. Search engines are and will
30
continue to be a core issue and so companies should continue or begin to show their
presence.
6.3. Outlook
Since this is an ever-changing market, there are adaptations that must be made
constantly to be effective and efficient for the general public. Google has made
acquisitions into a multitude of components including search engine, web browser,
phones, products, Buzz and thus it must be closely monitored to ensure it does not
spread itself too thin to the point that its profits may be in danger. According to
Sarasa, he responded to this remark by saying, “Google has expanded by increasing
the teams behind every product. Never by splitting teams. Search has been the main
product so far, and the fact the company has invested in others does not mean they
stopped taking care of this one” [Sarasa 2011]31.
31 [Sarasa 2011] Castelló / Google Dublin, Eduard Sarasa. "Google's Perspective on Google AdWords." E-mail interview. 6 May 2011.
31
7. Literature
Books
[Godin 1999] Godin, Seth: Permission Marketing: Turning Strangers into
Friends, and Friends into Customers. Simon&Schuster, 1999.
[Goodman 2008] Goodman, Andrew. Winning results with Google AdWords.
McGraw-Hill Professional, 2008.
[Lindsay] Lindsay, Stephen: Techniques for online marketing. Digital Kindle.
[Hughes 2009] Hughes, David: SEM and SEO: Core Drivers of iDirect
Success. Reinventing Interactive and Direct Marketing In: Rapp S.:
Reinventing interactive and direct marketing: Leading experts show how to
maximize digital ROI with iDirect and iBranding imperatives. McGraw-Hill
Professional, United States, 2009, pp.77-94.
[Mehta; Sabery; Vazirani; Vazirani 2007] Mehta, Aranyak; Sabery, Amin;
Vazirani, Umesh; and Vazirani, Vijay: AdWords and generalized on-line
matching. Journal of the ACM, Vol. 54, Issue 5, New York, 2007.
[Ryan; Jones 2009] Ryan, Damian; Jones, Calvin: Understanding digital
marketing: Marketing, Kogan Page, London
Articles
[Berman; Katona 2011] Berman, Ron; Katona, Zsolt: The Role of Search
Engine Optimization in Search Marketing, University of California, Berkeley,
2011.
[Campbell 2005] Campbell, Shawn: Yahoo SM v. Google AdWords. K. Clough
Inc., 2005.
[Google Inc. 2011] Google Inc. Google Announces First Quarter 2011
Results. Google. Google.com, 14 Apr. 2011. Web. 14 May 2011.
[Grimmelmann 2007] Grimmelmann, James: The structure of search engine
law. University of New York, New York, 2007.
[Halavais 2008] Halavais, Alexander: Search Engine Society, Polity Press,
Cambridge, 2008.
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[Jupiter Research 2006] iProspect Search Engine User Behaviour Study,
Thailand, 2006.
[Webster 2008] Webster, Karen L.: A guide to making friends and making
money. Maket platform dynamics, 2008.
Resources from the World Wide Web
[Google 2011] Google: AdWords Learning Centre. Available:
http://adwords.google.com/support/aw/bin/static.py?hl=en&page=examstudy.c
s&rd=1
, accessed: 11th May 2011.
[Net Marketshare 2011] Net Marketshare: Usage Share Statistics for Internet
Technologies. Available: http://marketshare.hitslink.com/search-engine-
market-share.aspx?qprid=4, accessed 4th May 2011.
[SEMPO 2011] Search Engine Marketing Professional Organisation: Glossary
of terms. Available: http://www.sempo.org/?page=glossary#s, accessed 27th
April 2011.
Interviews
[Callahan 2011] Callahan / Bright Spot Creative, Charlie. "E-Commerce, Most
Effective E-marketing Tactics." Telephone interview. 16 May 2011.
[Sarasa 2011] Castelló / Google Dublin, Eduard Sarasa. "Google's
Perspective on Google AdWords." E-mail interview. 6 May 2011.
[Hokunson 2011] Hokunson / Site-Seekers Inc., Kathy. "Navigating Google
Analytics." Rocky Hill, Connecticut. 6 Apr. 2011. Web-seminar.
[Traver 2011] Traver / Traver IDC, Jack E. "Traver IDC - Small Business'
Approach to SEO and SEM." Telephone interview. 17 May 2011.
33
8. Appendix
8.1. Survey
1. Where are you from? Please, specify country. [Open question]
2. How old are you?
3. What best describes you?
4. If a student, what are you studying? If an employer/employee what industry do you work in? Which methods does your company use to advertise? [Open question]
5. What search engine do you most often use?
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6. On a regular basis, do you click on advertising when searching?
7. Which kind of advertising do you like the most?
8. Which kind of advertising do you think is the most effective?
9. Do you think Google AdWords is effective?
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10. Which advertisements do you remember recently clicking on? How was it advertised (ex. Email, search engine)? Which company/product was it? [Open question]
8.2. Interview transcription
Eduard Sarasa Castelló
He works as an Online Media Associate in Google Dublin since January 2011.
Previously, he worked as branding consultant in Barcelona and studied
communication in the same city. He also had some international experiences as
student in Belgium and Denmark.
Background: Advertising, PR, branding, communication and innovation.
1. Why does Google use the marketing style they do to advertise? Because they are effective for the product and target Google has: AdWords is
based on Search. The style though varies quite much depending on the product.
So while Search has been advertised on TV on Parisian Love
http://www.youtube.com/watch?v=nnsSUqgkDwU, other products keep a lower
profile oriented to a particular target audience.
2. Can you please give us some insight as to why this is the most effective
means to market? Google communicates in a very effective way because allows the user to come
first. By giving freedom of speech to any person exposed to one of our products,
we sit apart and wait till clarifications need to be done. Transparency is a must in
the online business. Act and don’t lie; after all, Google’s motto is “Don’t be Evil”
for a reason
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3. Why do you think all companies should market with Google? Google offers a wide range of channels and platforms to advertise and
communicate in the online media. Online communication is now compulsory for
all brands that want to develop a relationship with its stakeholders instead of
trying to convince them of what to do. AdWords, for instance, is a very effective
and measurable way of advertising that allows companies to target user as that
are proactively looking for their services. Given that Google is the Top 1 Search
Engine in the world, not being there does not sound like a smart move.
4. What are your main competitors? (Search engines, e-mail marketing and so on) Facebook is by far, the strongest competitor we now have. Targeted advertising
in the social media is growing faster and faster. Only time will leave us all where
we should be, the user has the power so whoever makes the online experience
more relevant for him is going to win the jackpot. So far Google has been stronger
because of the offer, but relevancy is key, and lately the battle is in the social
relationships: who you trust and what they say.
5. What differentiates you from competitors?
Access to information. Google’s main strength is making accessible information to
any person in the world. No more no less. There are other Google products that
are hitting high but, so far, nothing beats our search engine.
6. ‘AdWords is and will be a work in progress’. What could you tell us about
it? What does this ‘work in progress’ entail? Work in process means AdWords reflects Google’s Search Engine, so it is
advertising made for that. Whenever the user requests something different, we’ll
have to switch into it. Meaning social and collaborative could be a key factor for
success. +1, for example is something we’ve recently added and is going to
change the way we interact with the search engine:
http://www.google.com/+1/button/.
7. Is Google Analytics enough to track consumers’ behaviour? Or do you use
other methods?
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Analytics is a really great tool to track users behaviour within a website, but
there’s other tools that help us understand the general user behaviour. Insights
for search you can compare search volume patterns across specific regions,
categories, time frames and properties: http://www.google.com/insights/search/#
Keyword tool gives you ideas on related search queries, so if you are trying to
expand your business you can track your user interest:
https://adwords.google.com/select/KeywordToolExternal
8. Could you explain to us in a nutshell the evolution of Google Advertising from the beginning until now?
Google exists because Larry and Sergey found the algorithm that made possible
the best Search Engine in the world and they decided to share it with the world
free of charge. Then they realized, not only users could benefit of that, but
companies as well. And as companies would be making profit, it made sense to
charge them. Since then, new features have been added, Google Maps was
launched, Youtube acquired, but the idea remains intact: let the user search and
try to be there when he’s looking for something you can offer. It’s just that we’ve
added so man
9. How does AdWords function? What are your main differences or strengths?
Mostly answered Putting together relevant content with relevant product and
service offer. Strengths: every search is unique, so the auction will define where
is your ad ranked. That makes small advertisers opt in.
10. Do you think Google will spread itself too thin to the point that it will no
longer be the dominant Internet Company? (Phones, products, browser –Chrome-, etc.) I don’t think so. Google has expanded by increasing the teams behind every
product. Never by splitting teams. Search has been the main product so far, and
the fact the company has invested in others does not mean they stopped taking
care of this one.
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11. Do you personally think the current advertising style of Google is effective as it is? Do you think it will need to change in the future?
It’ll have to evolve as it has done. But if the focus is kept on the user, it will.
12. Why is there an increase in the use of online advertisements?
Because it is effective, has barely any competition and the online today is a must.
o What are the main differences or improvements? It has more and more settings. Any kind of business can advertise, even
the ones without a website.
13. Who advertises with Google?
Everyone. From the greatest brands in the world to the smallest company in a
little village lost in Russia.
o Is there any difference between those and other media advertisers? Not with the big ones. The difference is most of the small ones couldn’t
afford advertise in other media channels.