adCenter Sales Training 101 The Paid Search Industry

adCenter Sales Training 101: The Paid Search Industry June 2005 adCenter 101 Tuning In to Paid Search 1. I believe that paid search is a critical part of MSN‘s strategic future. 2. I know what I need to know to talk effectively about paid search within MSN and to customers/clients. 3. I am interested in learning more about paid search, adCenter, and plans for the future. First Exercise: What‘s it gonna take? • What‘s the characteristics that MSN will have to demonstrate or manifest if it is going to not just compete in search, but win! • Take two minutes to list out these attributes! Slide 2 | January 23, 2009 Workbook Pages 3 – 4 adCenter 101 adCenter Strategy • AdCenter is MSN‘s new end-to-end advertising platform that supports activities from pre-campaign planning all the way through to final billing and post-campaign analysis. • Algorithmic Search is the first system for which AdCenter will provide monetization. – E-mail, Messenger, Hotmail, contextual ads, and display ads will be future systems monetized by AdCenter. • AdCenter will be the largest and most sophisticated ad delivery system in the world. • AdCenter gets MSN in the paid for performance (P4P) game. • Forecasting Inventory and Pricing is even more difficult in a P4P model. Slide 3 | January 23, 2009 Workbook Page 5 adCenter 101 Agenda • Introduction • Review of precourse work • Module 1: Search Overview: vision, urgency, value proposition, business strategy, key terms • Module 2: Competition: players, market share, perception, bid management, optimization, comparative focus • Module 3: Be the Customer: positions AE to think deeply about customer‘s point of view, their challenges—strategy, positioning, threats, priorities, budget, branding • Module 4: Street Smarts: implementation of course content via structured situations to build ―street smart‖ readiness—six real-life role plays. • Wrap up and post-course assignment Slide 4 | January 23, 2009 Workbook Page 6 adCenter 101 Your Role: Setting Expectations • Know the basics. – Understand the terminology and language, – know where to go for help, – know how to get a customer live, – know roles and responsibilities with SMO and other teams • Not to be search experts who know more than Google reps and not to understand intricacies of P4P. Slide 5 | January 23, 2009 adCenter Training Rollout Overview Workbook Page 7 adCenter 101 Training and Product Rollout 6/22/2005 - 6/30/2005 adCenter 101 7/6/2005 - 7/14/2005 adCenter 102 7/20/2005 - 7/22/2005 MGB 8/1/2005 Begin Client Engagement 7/1/2005 6/15/2005 adCenter 103 7/22/2005 8/1/2005 August – Mid September 2005 Initial Client Contact September - October August - September Pre-Reg Pre-Load CSO Team Mid September – Mid October Client Information loaded into adCenter October - April Pilot Late October 2005 – Spring 2006 Sep-05 8/1/2005 Begin Client Engagement August Oct-05 End US SFS October Nov-05 Dec-05 Jan-06 US Pilot Feb-06 Mar-06 Apr-06 4/15/2006 US Beta Launch adCenterApril Begins Beta Late Spring Slide 7 | January 23, 2009 Workbook Page 7 adCenter 101 adCenter Sales Training Content • adCenter 101: I‘m a paid search expert. Focus on paid search landscape, competition and key players. • adCenter 102: I‘m an expert on adCenter. Focus on key features and benefits of adCenter, sales pillars, and building solutions. • adCenter 103: I‘m an expert for Pre-Reg/Pre-Load & Pilot. Focus on GTM strategies, objection handling, client engagement, and pre-reg/pre-load. Slide 8 | January 23, 2009 Workbook Page 8 adCenter 101 Course Material, Homework, and Quizzes Slide 9 | January 23, 2009 Workbook Appendix adCenter 101 From the Reading: Why is leadership of the search market urgent? • New territory—there is still time to upset the current market-leader‘s share • Incredible growth, large profit • Google impedes on Microsoft‘s core business--software that user go to first • Market share for MS relies on providing the first software computer-users prefer. Slide 10 | January 23, 2009 Module 1: Search Overview adCenter 101 Module 1 Objectives By the end of the Search Overview module, you will be able to: • Demonstrate knowledge of Internet search marketing. • Identify issues that drive MSN into the paid search market. • Explain key concepts of search succinctly and competently. • Correctly use search industry terms. Slide 12 | January 23, 2009 Workbook Page 9 adCenter 101 Search: Stupifying Facts • Over 80% of users that browse use a search engine. • In the U.S., four billion searches are done each month by 110 million people—35 per user. (Source: comScore Networks/ Interactive Advertising Bureau) • It is estimated that only 40% of the Internet‘s 10 billion pages have been reached by a search engine. (Source: Interactive Search Marketing 101. Performics) • More than 55% of Internet purchases begin with a search engine, and 93% of these consumers don‘t look past the first two pages of results. (Source: ―Google Re-Googled? ― Garry Grant, CEO. Search Engine Optimization, Inc. Slide 13 | January 23, 2009 Workbook Page 10 adCenter 101 Evolution of Paid Search Launch of MSN portal entry, msn.com Pending purchase of Ask Jeeves by Internet media conglomerate IAC (WSJ 3/2005) Overture and Google individually launch contextual advertising products Overture Acquires AltaVista Teoma launches SE using natural language processing Ask Jeeves acquires Teoma Mamma displays its advertisers’ banners on other Internet properties. Google launches premium sponsorship and keyword advertising Mamma sells search results rankings and mixes advertisers into natural search results LookSmart agrees to provide paid listings to MSN GoTo.com launches pay per click model Google launches. In beta answers 10,000 queries/day 2005 2004 2003 2002 2001 2000 1999 1998 1997 Algorithms developed, birth of search technology 1996 1995 Browsing software developed, released to public 1994 Slide 14 | January 23, 2009 adCenter 101 Future of Paid Search Where is it heading? • Increasing reliance on search tools • More relevant and user-focused • Room for five major players • Players become known for their specialties? – Information, consumer, verticals? Slide 15 | January 23, 2009 MSN: Winning In Search Workbook Page 11 adCenter 101 Query Share 13% 47% Other 18% Google MSN Yahoo Other Unique Users 22% 58% 34% 45% Source: Jupiter Research June 2005 Slide 17 | January 23, 2009 Workbook Page 12 adCenter 101 Industry Highlights The Efficiency of Paid Search $12.00 $9.94 $10.00 $8.00 $6.00 $4.00 $2.00 $2.00 $0.29 $Search Yellow Pages Banner Ads Direct Mail $1.18 The Market Potential Amt 12 10 8 6 4 2 0 2002 2003 2004 2005 2006 2007 1.3 3.9 2.6 5.6 6.9 8.9 10.8 Cost per lead across various direct marketing methods Amt 2008 Search industry WW revenue estimates ($ billions) Slide 18 | January 23, 2009 adCenter 101 Why Is Microsoft In Search? Customer Need Merchant Need Company Wide Focus Growing Category Slide 19 | January 23, 2009 Workbook Page 13 adCenter 101 Where Search Falls Short Average time from query to correct answers: 11 minutes Information beyond web hard to access and search not well integrated across applications Nearly 50% of complex queries go unanswered Little personalization or learning by service Words have multiple meanings and deliver different results Slide 20 | January 23, 2009 Workbook Page 14 adCenter 101 A Broader View Of Search 0.07 sec. = 10k results Query Retrieval Shift Context, Ask Question Filter & Refine Results Act on Answer 11 min. = find what you need Slide 21 | January 23, 2009 Workbook Page 15 adCenter 101 MSN Search Strategy Understanding queries & delighting customers Biggest, freshest, most comprehensive Core part of computing experience Enabling a 3rd party ecosystem Slide 22 | January 23, 2009 Workbook Page 16 adCenter 101 The New MSN Search Service More Precise, More Powerful Breadth and frequency: Five billion+ documents New algorithmic engine Instant Answers: Encarta & music, images & news Search Near Me Search Builder Category Search Multiple access points: Office, Messenger, Toolbar PC Search E-mail Search Slide 23 | January 23, 2009 adCenter 101 How Yu Can Help 1. Try it out – MSN Search service – MSN Toolbar Suite Help us improve – Give feedback at: http://searchfeedback – About service quality, relevance, requests – Internal discussion: ‗srchdisc‘ and ‗msndsfb‘ – Encourage others to send online feedback, e.g., spam Evangelize the service! – MSN Search—more powerful, more precise 2. 3. Slide 24 | January 23, 2009 Workbook Page 17 adCenter 101 Exercise: Winning in Search Your current SFS client is currently spending $5,000 a month with MSN. You speculate that they‘re spend on Yahoo and Google is 2x – 4x. While renegotiating the SFS contract, your client says: ―What‘s MSN‘s strategy for getting ahead in search? I use MSN search occasionally. But to be honest, I just end up using Google more times than not. How is MSN planning on growing search queries?‖ Take 10 minutes to create your response. Slide 25 | January 23, 2009 Algorithmic Search Workbook Page 18 adCenter 101 User-Reported Browser Activities Slide 27 | January 23, 2009 Workbook Page 19 adCenter 101 Algorithmic Search Paid Placements Paid Placements natural search results Slide 28 | January 23, 2009 Workbook Page 19 adCenter 101 How a search works: 1. 2. 3. 4. 5. User enters keyword or phrase into search engine interface. Search engine matches the words and phrases with those on web pages and on the search engine‘s database (paid programs). Search engine runs criteria that determine relevance. Search engine algorithm ranks relevant pages using as many as 100+ factors. Search engine returns search result to the user. Slide 29 | January 23, 2009 adCenter 101 Who say search is easy? Search Blueprint Slide 30 | January 23, 2009 Workbook Pages 20 – 21 adCenter 101 Basic actions of a search engine & a bad metaphor. Search Engine Crawler Gets Pages Search engine databases are selected and built by computer robot programs called spiders. Although it is said they "crawl" the web in their hunt for pages to include, in truth they stay in one place. They find the pages for potential inclusion by following the links in the pages they already have in their database. Indexer Organizes Sorts Hits Electronic, Human After spiders find pages, they pass them on to another computer program for indexing. This program identifies the text, links, and other content in the page and stores it in the search engine database's files. URL Resolver IDs Docs Generates Lnks Database The URLresolver reads the anchors file and converts relative URLs into absolute URLs and in turn into docIDs. It puts the anchor text into the forward index, associated with the docID that the anchor points to. Ranker Determines Relevance The links database is used to compute PageRanks for all the documents. This determines the core relevance of the link. Slide 31 | January 23, 2009 Workbook Pages 20 – 21 adCenter 101 Algorithms: the Heart of Search Engines 1. Defined as a complex formula used by search engines to determine what sites are included in search results for a query. 2. Proprietary. 3. Criteria differ—different search engines return different search results for the same keyword. 4. Specific criteria and formulas for the search engines are secret--a protection from tricks that could skew results. 5. Constantly updated. Slide 32 | January 23, 2009 Workbook Pages 20 – 21 adCenter 101 Types of Search Engines • Crawler-based. Relies on robots to index pages across the Internet. Google • Directory-based. Relies on human editors to index pages. DMOZ.org • Blended. MSN, Yahoo! Slide 33 | January 23, 2009 Workbook Pages 20 – 21 adCenter 101 Things to pay attention to in 2006 for consumers • Vertical search – Data-intensive jobs (doctors, architects, engineers) • Sowing the seeds of search – An interface and an index everywhere • The coalescing of services into a platform – With search as the core • Searching audio and video – A technology hurdle, to say the least Source: Jupiter Research 2005 Slide 34 | January 23, 2009 Paid Search Workbook Page 22 adCenter 101 Who‘s in charge here? Source: Bruce Clay, Inc. Slide 36 | January 23, 2009 adCenter 101 Paid Search: Buyer Landscape Profile Direct Advertisers • Internal focus Need Online branding expertise Examples Orbitz • Limited time, resources, technology Office Depot Small Biz Hobbyists Agencies Client focus drives urgency, ROI, bottom line Search expertise, ROI focus, technology solutions, high client volume • Copious reporting • Quick turn-around Avenue A/Razorfish Digitas Ogilvy Search Engine Marketers (SEMs) • Spendy clients to support technology • Service quality Performics Did-it 360i iProspect Slide 37 | January 23, 2009 adCenter 101 Engine/Agency Relationships are Strained, despite Progress • Feel that Google (in particular) sees SEO as ―evil‖, and therefore won‘t interact • Increasingly seeing engines going directly to their clients—concerned about being cut out • Agencies see their work as ultimately improving the index by ensuring that the right content shows up • Agencies want greater access to systems via APIs, enabling greater innovation • Want to create a notification system for changes • Google is notoriously slow with customer service Source: Jupiter Research 2004 Slide 38 | January 23, 2009 Workbook Page 23 adCenter 101 Paid Search: Why do it? • It‘s a low risk, high reward investment that consistently drives results that are: • Relevant • Scalable • Trackable • Auctionable • Manageable • Receive high response rates Value Proposition: What does paid search achieve? • Entices web searchers to visit specific websites. • Enables advertisers to place their ads more visibly in search results. • Enables advertisers to reach uniquely targeted audience and immediately measure the impact. • Is cost effective, highly competitive, and limitless in reach. Slide 39 | January 23, 2009 Workbook Page 24 adCenter 101 Paid Search Placement Strategies • Search Engine Optimization (SEO) – – – – – – • Google Also called, natural, editorial, or organic search Effected by site architecture, interpreted relevance ―Pray for Positioning‖ Pros: static fee structure, perceived as an unbiased information source by users Cons: no guarantee of positioning, long delay to impact, messaging is static Paid Inclusion – – – – – • LookSmart, Inktomi Effected by interpreted relevance, refresh factor ―Pay to be there‖ Pros: no keyword bidding, appears near ―editorial listings‖ Cons: no guarantee of positioning, URL-based fee structure adds up quickly for big sites Pay For Placement – Google Ad Words, Overture, FindWhat, Kanoodle, Looksmart – – – – URL listing bid environment ―Yellow Pages of the Web‖ Pros: real time results, guaranteed positioning Cons: keyword cost volatility, possible negative connotation Slide 40 | January 23, 2009 adCenter 101 Exercise: Click Cost Impact Assumptions: budget is $20,000, conversion rate is 2.2%, profit per conversion is $100. Discuss: What does this advertiser’s budget enable you to project about their online advertising strategy? Slide 41 | January 23, 2009 Workbook Page 25 adCenter 101 Elements of Paid Search Landing page Bid management Positions, tests, categorizes best position for each keyword Keyword selection Optimization Add, test, and track Embeds website copy Drives users to most word categories and with features and relevant pages combinations keywords that get indexed by search engines Page 28 Page 29 Page 30 Page 31 Slide 42 | January 23, 2009 adCenter 101 What is the #1 limitation of paid search? Slide 43 | January 23, 2009 Workbook Page 26 adCenter 101 Search Volume vs. Conversion Rate and Consideration Cycle Aware Bank Familiar Consider Purchase Intent Take Action Credit VOLUME Credit Card Credit Card Apply Chase Platinum Credit Card QUANTITY AND SPECIFICITY OF KEYWORDS Slide 44 | January 23, 2009 Workbook Pages 29 – 30 adCenter 101 How does keyword bidding work? • Advertisers determine how much a click is worth by their bid for a keyword. • The highest bid gets the first ad in search results, the remaining bidders are ranked in the results according to bid. • The winning bid includes criteria such as historical CTR, bid amount, and a targeting multiplier. A lower bid with an established higher CTR could win the placement. • Once the ranking is calculated CPC is worked out using a ‗second price‘ auction • CPC = Monetary value / Client click through rate Slide 45 | January 23, 2009 adCenter 101 CPC Algorithm (joke) Slide 46 | January 23, 2009 Workbook Pages 30 – 31 adCenter 101 In Class Exercise: Advertiser Adv A Adv B Adv C Bid Amt $2.00 $1.71 $1.50 Position 1 2 3 CPC $1.72 $1.51 $.10* *Estimation Only! Advertiser Adv A Adv B Adv C Slide 47 | January 23, 2009 Bid $1.71 $2.00 $1.50 CTR 0.7% 0.6% 0.5% MV 0.12 0.11 0.11 CPC $1.62 $1.76 $.05 Bid/CTR=MV CPC(a)=MV(b)/CTR(a) Bunch of Unknown Variables Workbook Page 32 adCenter 101 Exercise: Module 1 Review • Describe how MSN plans on winning in search. • Describe the difference between click-through rate and cost per click. • What is bid management and why is it important? • What are the differences among direct advertisers, agencies, and search engine marketers? • Why is it important for MSN to be a player in the Internet search market? Slide 48 | January 23, 2009 adCenter 101 End of Module 1 Slide 49 | January 23, 2009