As I’ve mentioned in my recent post on Google’s first quarter result in 2008, Google is making changes to its AdWords algorithms to combat click arbitrage and the existence of advertising pages of poor content quality. As a result of these new policies, many of AdWords customers are dropping out of AdWords.

Some people call this “Google Slap”

At first, these changes sound like a bad news for advertisers. But, as always, there is a positive and a negative side to every story. If you look a little deeper, the positive side is that if you know how to manage the Adwords program properly following the new rules, the chances are that you can achieve the same level of traffic as before the changes, but
with a smaller advertising cost.

How?

Basically, this benefit rests on two main techniques:

• Build a quality landing page for your AdWords Program, with content highly relevant to the keywords used in your AdWords account.
• Whenever possible, use keywords for more “niche” sub-categories refined from your niche group. For example, if you are selling shoes, go for sub-categories such as sports shoes, dancing shoes, etc. You should try to make your keywords even more niche by targeting keywords such as “leather dancing shoes”or “marathon sports shoes.” The more niche your keyword is, the less the per-click cost you need to pay for your targeted keywords.

The main idea is to produce much more focused content, and then promote it using Google Adwords with highly focused keywords. Google will reward you by charging you a lower per-click cost.

Ryan Deiss has introduced a successful method for mastering this technique. You can visit his website to watch the video for his techniques here: http://www.wholesaletrafficsystem.com

Tip: I went straight to get the written report because I don’t have the patience to watch the video. You can get the same idea by watching the video or reading the report. It’s your call.

Tags: pay-per-click

This article combines two reports written by my students after going over the Standard/Poynter Eye-Tracking Project’s results posted here: http://www.poynterextra.org/et/i.htm

Stanford/Poynter Eye-Tracking Project

In 2000, Marion Lewenstein (Professor of Communication, at Stanford University) and the Poynter Institute researchers initiated the Stanford/Poynter Eye-Tracking project on online news reading behavior. It was the first project to introduce the idea of using eye-tracking equipment (SMI Eyelink system) to measure the eye movement over areas on a computer screen in conjunction with the application software for collection and analysis of observational data, which was written by the Advanced Eye Interpretation Project at Stanford University.

There were 67 subjects (with only 66 subjects’ data used, one was discarded because of unreadability) enrolled from two cities, from the states of Florida and Illinois. All participants were set up with head gear that recorded eye movement data while they read online news web pages. The research team collected images 60 times per second, and recorded each fixation point, the length of time for each fixation, and the order in which each fixation was generated.

The results of this study surprised many people in the industry. In fact, one of the findings was that a large percentage of the study participants look first to text, especially for news briefs and captions, which was just the opposite of the generally accepted notion that graphics and photos represent the first entry point for readers.

Other findings of the study are highlighted here:

Text Attracts Attention Before Graphics:
Of users’ first three eye-fixations on a page, only 22% were on graphics, and 78% were on text. In general, users were first drawn to headlines, article summaries, and captions.

Banner ads fared quite well.
Banner ads indeed did catch online readers’ attention — a notion that went against current thinking. 45 percent of banner ads were viewed by test subjects and the average fixation period was 1 second. This time is long enough for readers to perceive the banner’s message.

Online news users “do know how to scroll”
For articles on a news site, if a Web user has clicked to get to the page, chances are high that the article will be read, because the headline or blurb that led the user to click to the page gives enough information to the user that he/she knows in advance it’s something worth reading.

Visitors do have the habit of Interlaced Browsing
Users frequently alternated between multiple sites:

• they would read something in one window

• then switch to another window and visit another site

• and then return to the first window and read some more on the first site; possibly to turn to the second window again later in the session

Insights gained from the study

Improve Headlines and Briefs
Be straightforward and efficient with headlines. Recognize that getting too cute may actually turn off online users, who just want to quickly discern if a story is worth reading.

Edit online photos and graphics
Use an appropriate photo with a single focus or single subject, or crop the image tighter to help the user focus on the main detail.

The best of both worlds
It may be necessary to deliver two versions of the story: a high-end graphically intense presentation and one that is bare-bones and designed with both wireless and low-end computers in mind.

Reconsider animated banner ads
If a banner is animated, every animation frame must have the brand name included. Not doing so can mean the consumer will look at the ad but not comprehend who placed the ad, because the average fixation period only one second.

Conclusions:

The results of this study echo what Google has experimented with on the Internet ever since it launched its Google AdWords Program (Google’s own online advertising program) by using text-based advertisements rather than graphical ones. Google’s results do indicate that the effectiveness of pay-per-click text advertisements is higher than graphical advertisements for the click-through rate because online visitors tend to read text rather than look at graphics. In my view, this can be explained by the fact that the primary motivation of people going online is to “search and collect” information, and so they tend to “read” more on this medium when compared with other medium like TV and magazines.

My challenges to the test results:

One of my criticisms is that objects in this experiment are too focused in two cities within one country, and no information on how they were recruited. The failure to achieve “random sampling” in the experiment defeats the possibility to generalize the results to the general online population.

It is suspected most of the subjects are frequent online news readers and thus already have the tendency to “read” text rather than looking at other graphical elements of a website. Therefore, the test results are not conclusive.

Tags: banner advertisements, banner advertisements Vs text advertisements, Google AdSense, text ads, banner ads Vs text ads

To SEO or to PPC?

That is the question . . .

In today’s ever-growing online marketplace, with companies constantly jockeying for top position to grab the attention of potential customers, two different methods of promoting websites have emerged: SEO and PPC.

So, what do those letters mean, and which method is best for your goals?

Search Engine Optimization (SEO)

This method works to position your website as far near the top as possible in search engine results, by embedding certain “keywords” throughout your site’s content. The presence of these keywords (words that users might type into a search engine such as Google in order to find information on a given subject) in your site is what causes search engines to find your site and list it in search results.

Many people consider the SEO tactic for web promotion to be a “free” method of bringing customers to your website, since they are not paying a fee for it. However, it’s not actually free. It takes a lot of time and effort to optimize your website and build content, and that can be very costly. You can learn more about SEO at this link:

http://www.imarketings.net/internetmarketing/category/seo/

Also, check out my e-book on this topic here:

http://www.jdcnet.com/index.php/free-ebook-download/

get-ranked-high-in-search-engines.html

Pay-Per-Click (PPC)

PPC is an advertising technique that is gaining popularity on the Internet. PPC advertising involves sponsored links that are typically in the form of text ads (appearing both in search engines’ result pages or their affiliates’ websites) and graphical ads (usually appearing in affiliate websites only). Advertisers pay per visitor who clicks on the advertising link, hence the term “pay-per-click.”

PPC is the fastest and easiest way to set up in your advertising campaign. Take Google’s popular Google AdWords program as an example. With Google AdWords, you can go to http://adwords.google.com to set up and register an account. After creating a simple text ads message for your website and choosing your targeted keywords, you are ready to start your campaign immediately.

In most pay-per-click programs, you can control the daily budget to be spent, and through the Internet, you can easily track your campaign’s effectiveness by taking measure of the visitors’ activities on your site and tracking their behaviors using website software. Google now offers a very popular free service called Google Analytics to track visitors. To access this service, simply go to http://www.google.com/analytics/indexu.html and start your online tracking.

Which method is right for you?

That depends on your goals at this point in your development.

In short term, if you are in a hurry to bring customers to your site and test the effectiveness of your newly built web page(s), go for pay-per-click. There is no easier or faster way to set up an advertising program than PPC, which you can use immediately to bring your website to millions of Internet visitors all over the world. And you can also target specific niche customers by using carefully chosen keywords, regions, and languages. But remember, it is a recurring expense that could eat up a lot of your advertising budget.

In the long run, try your best to capitalize on your efforts in using SEO techniques to build your website to receive free referral traffic from search engines. This method can be costly at the beginning, but your effort will pay off in the long run.

Tags: SEO Vs PPC

Google once again demonstrates its exceptionally innovative power, as we have discussed in other posts, by stunning analysts with its greater-than-expected 30% increase in its first quarter report. Google’s share price in after-hour trading jumped 17% to 525.96 last Thursday night. Again, this demonstrates how important people are, as assets of a company.

Before this news broke, analysts worried about the “paid clicks,” or the number of times users click on Google advertisements and its affiliated websites slowing down. Among these critics, the loudest warning voice came from Comscore (Nasdaq: SCOR) whose share price slipped 8% because of Google’s unexpected good news. People now question the accuracy of Comscore’s survey, on which it based its cause for worry.

Google’s explanation of its success rests on the fact that more than 50% of its business is conducted outside of the US, which it says attributes to its ability to withstand a slowdown in US economy. Google achieved more than 20% growth in clicks worldwide last quarter.

In my view, Comscore might not be wrong. The paid clicks rate has dropped overall. Google’s growth in paid clicks was 30% in Dec 2007 and 45% in the preceding quarter. Obviously, there is a trend of slowing down. But the paid-click rate represents only one factor of paid advertising. The other factor people often overlook is the price per paid click.

Google does not have a standard price list for its pay-per-click Google Adwords program. It uses an auction model to determine pricing, where advertisers bid for “keywords” they use their advertisements, that they would like to appear in Google’s search results and its affiliated websites. The more competitive a keyword is, the more expensive a click could be. With some popular keywords like “web hosting,” the charge per click could be as much as several dollars.

In my experience using Google Adwords, there is a solid growth trend in the average per-click price of keywords in the past few years. With some of the popular keywords that I use, I have noticed that the increase in price is as much as several hundred percent within a three-year time frame. It is increasingly difficult to find effective keywords that are “cheap” now.

This can be explained by the fact that more and more businesses are entering the market, using online advertising media to promote their products and services. In the past, small business owners were the major players in this market. But now more and more big guys are coming in. More competition for keywords drives up the per-click price, and that helps to compensate for the drop in growth rate of number of clicks.

And Google makes continuous efforts to combat click-frauds and click-arbitrage by some website affiliates, by refining its Google Adsense program. This effort pays off in improving the quality of leads brought to Google customers. Advertisers are more willingly to pay for the clicks if the customers are of good quality. This also explains the increase in Google’s average paid-click price.

In my view, the recent setbacks of Google’s share price are largely due to the general market sentiment. Google’s value is not totally reflected in its current share price.

To invest in a company, you need to consider the market, the industry, and the company’s management. As far as the industry goes, the online advertising industry is still budding and there is a lot of room to grow. As for the company, I always opt for Google’s exceptional management team that can attract and retain smart people to knock down its competitors (read my post about Microsoft Acquires Yahoo!). And with its ability to withstand the recession in the US economy (as proven by its first quarter results), it seems that Google is very likely to keep its momentum going in the coming years.

Tags: Google first quarter results

When people talk about keyword density in SEO (Search Engine Optimization), they usually limit themselves to saying, “use the exact the same keyword throughout your web copy to stress the related keywords”. And the general rule is: the more repetitive the keyword is, the more it looks relevant to your site from the standpoint of search engines.

However, search engines have become even cleverer now. They do not simply index your page by keywords in your site. They also use applied semantics technology to aid the work.

Applied semantics is a technology that teaches search engines to group variations of your targeted keywords into meaningful clusters. What this means is that synonyms and other related, relevant words are counted into the calculations of the keyword density of a particular keyword.

It is not an easy job to apply the semantic technology to different articles using the exact words. Let’s look at an example to illustrate what I’m talking about. Search engines have to distinguish the word “Apple” in a website discussing Apple, Inc – the manufacturer of iPod and iMac – from that of the site that discussing farming technology or agriculture.

Here’s another example of what could be a headache for you. Search engines have to understand more than a dozen variations of the same word, “design”. According to Thesaurus.com, design could also refer to:

• Architecture
• Arrangement
• Blueprint
• Chart
• Composition
• Conception
• Constitution
• Construction
• Diagram
• Draft
• Drawing
• Idea
• Layout
• Makeup
• Method
• Model
• Outline
• Paste-up
• Pattern
• Perspective
• Picture
• Plan
• Rough draft

And that’s just 23 variations. There could be many, many more! So do you see why I say that it could be a headache?

In 2003, Google acquired Applied Semantics, giving it a new platform for its contextual pay-per-click Google Adwords and Adsense Program. However, what I have been watching closely since then, is that its adoption of the semantic technology can effectively be put to use in their search engine technology.

Many SEO forums are discussing the changes in the past few years in Google’s ranking algorithm. However, few of them are able to attribute it to this acquisition of Applied Semantics

What I conclude is that the tactic of using a carefully planned list of identical keywords in a single passage is no longer a good strategy. You now need to use a variety of synonyms of the specific theme in your website copy.

So is this good new or bad? The good news is you are no longer tied in your copy to using the identical keywords just because you want to build keyword density in your article.

However, the bad news is that you don’t have a simple formula to calculate the keyword density of your website copy any more.

Perhaps there is one conclusion can be drawn: Search engines are getting smarter. The SEO game is becoming more difficult to play.
Related Topics: SEO, Search Engine Optimization, Search Engine Optimization, Applied Semantics, contextual advertising, pay-per-click advertising, keyword density, Google Adwords, Google Adsense

Google has just acquired YouTube for $1.6 billion US, one of the largest acquisitions in Google’s history. It is creating the same exciting feeling as we used to experience in the dot.com era in the ’90′s. However, the move is not really well understood.

If we take a look at the background of YouTube, it lacks the very successful elements of previous successful dot.com companies. It does not have proprietary technology nor does it possess customer lock-in capability – a very important element for a market leader to keep on dominating market.

In study of successful dot.com companies like eBay, we have to go back to a special network utility phenomenon called Network Externality Effect. Its basic argument is a network’s utility increases exponentially with the number of users in the network, making it more valuable in due course. For explanation of this phenomenon, refer to another post here:Â Metcalfe’s Law and Network Effect.

Theoretically if you run a similar auction network service like what eBay started to do more than 10 years ago, it’s unlikely you can knock down eBay because it has already had so many buyers and sellers entrenched in its network. Its network utility is so high that you have no way to attract new users to your service, no matter how hard you try. When a new user (irrespective of whether he/she is a buyer or seller) is looking for an online auction service to join, their most likely choice will be eBay.

The network effect keeps boosting the increasing network dominance power of eBay, making it virtually invincible. Sometimes we call this phenomenon “The Law of Increasing Returns”.

But we don’t see this in YouTube. It has no customer lock-in capability. Theoretically, let’s say that if you have sufficient capital to start with a server farm facility as big as YouTube, you can start offering services to public like they do, allowing users to upload their videos and share them with others. A new user can select your service or YouTube. YouTube has no immediate advantage over your new service to this new prospect.

YouTube model actually works on the viral marketing effect – the marketing effect that takes place to boost its exposure by people’s word-of-mouth. For a further discussion on viral marketing, refer to this post – Viral Marketing: A Powerful But Free Marketing Tactic. The new service can definitely take this viral marketing approach. It doesn’t matter if it’s a late comer.

Let’s go back to the discussion of eBay. The only way you can knock down eBay is to start a new service that rests on a new technology that eBay does not have. And that technology must truly benefit the new and current users of eBay in a way that can pull them away to try your service. This is the only way you have chance to succeed.

To put it another way, the way to win and keep your market position is to possess new technology, if you do not have the network externality effect that helps like companies like eBay.

We cannot see this in YouTube either. The video broadcast technology is neither new nor exclusive to YouTube. Although we know that they claim to have proprietary technology to identify copyright protected material, but that is not the main theme of this deal.

Google spent $1.8 billion US to acquire this company. The same amount of money (perhaps much less) can definitely be used to build broadcast facilities that resemble the power of YouTube. This is addition to the fact that Google already started its own video service years ago.

The only advantage we can see for this deal is its immediate access to its vast number of broadcasting page views, and that it can put to use for its famous and profitable Adwords’ service customers.

Even though it represents only a tiny portion of its vast market capitalization of $131 Billion US (as of stock closing at Oct 10, 2006), is it really worth the $1.6 billion US expenditure?

Related Topics: Google , YouTube, Google Acquires YouTube, YouTube is acquired by Google, Google Acquired YouTube, Network Externality Effect, Law of Increasing Returns, Network Effect, Market Capitalization of Google, Market Capitalisation of Google, Viral Marketing, The Law of Increasing Returns, network utility, customer lock-in capability, Google Adwords

A study held by Stanford University and Poynter Institute confirmed that text is the preferred “entry point” of a webpage for web surfers.

Is it surprising? It may be as many people regard graphic should be more visually appealing than text to normal web surfers.

I’m not surprised, however. Why? There is a much larger experiment on earth that confirms the finding in this research. It is the Google Adwords program.

When Google first launched its Google Adwords program, there was an intense internal debate whether it should go for the format of banner-based advertisement or text-based advertisement. Though with much uncertainty, it decided to go for the text-based one.

And the rest is history. Google becomes the number one online advertising company. Web users are attracted to click on the text-based advertisement showing at the right hand side of the search result page that helps boosting Google’s online revenue. As a frequent web surfer and Google’s search user, I click on those advertisements many times where I’ve found interesting or useful and I guess you have done similar thing as me.

So it confirms that “text” is more important than graphics in your webpage.

Would that conclude Banner Advertisement “dead” in the present finding? Unlikely if you read carefully the research results of the Stanford’s study: Here is the link:
http://www.poynterextra.org/et/i.htm

Today I reviewed what has been published two years ago about how to select and implement the keywords strategies in using Google Adwords program.

I think this guide is still worth to take a look. It is available at

The Maximum Effect, written by Google Team members of Adwords

Best Pay-Per-Click Selling

Damen

Related Topics: The Maximum Effect