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Tuesday, February 28, 2006

Tornado in Reverse: What's Hot at SES

Gauging by attendance, everything.

But particularly hot sessions this morning seemed to be the one on tuning & optimizing landing pages, and one on click fraud. I left the packed landing page session a few minutes early for a lunch appointment, and had to wade through a sizeable spillover crowd in the hallway, taking in the session on "auditing paid listings" (campaigns, for click fraud). Luckily the conference here at the New York Hilton is actually set up to anticipate spillover crowds, with screens and sound set up for attendees relegated to the hallway.

The session I presented in yesterday -- on "contextual and other non-search ads" -- was well attended, more so than in previous years. It also gave me a clue into the evolving sophistication of marketers, and the uptake of content targeting. I polled the audience for how many were currently running content ads within the Yahoo or Google platforms -- nearly all the hands went up. I asked how many were spending 20% or more of their paid search budgets on contextual -- most of the hands stayed up. I asked about 30% or more. Most of the hands came down. So it's right there around 25%. Sharing a cross-section of available client data from small to midsized companies we've worked for and have good data for over the past year, I noted that we're generating 16.4% of our clicks from contextual channels. Since we often bid less, the overall share of spend accounted for by contextual ads is less than 10%. That's current reality -- over the past twelve months, remember. Moreover, a couple of our larger clients (excluded from my study) are choosing to keep content ads disabled entirely. From the above, I'd conclude that many companies are needlessly scared of contextual ads, *but also* that many are still spending too much on it out of ignorance. In most cases, with some exceptions, a well-managed campaign won't generate more than 10-15% of its spend in contextual. That's bound to change as new channels open up.

Anyway, back to the landing page session. The audience for this type of material is not only getting larger, but more sophisticated. Above all, what strikes you about the whole field of sophisticated multivariate testing of landing pages is that it's focused on profit maximization. That may seem obvious to say, but the laser focus on conversion -- regardless of what user experience "principles" might suggest -- stands in contrast to some approaches to user testing and the user experience. And if you're a marketer/advertiser... it becomes an absolute imperative to maximize conversions if your competitors are also doing so.

In essence, the competition for keywords is a driver of change. As prices rise, sites must optimize, sales processes must be optimized, and profit must be optimized. It's a tornado in reverse... blowing through a dilapidated town and fixing it up. While that might sound rather idyllic, it's also a bit creepy, like the time we broke into a buddy's pig-sty-messy dorm room and tidied it and cleaned it within an inch of its life. The fact that users are going to be getting better online experiences and finding what they want more quickly is an unalloyed positive outcome. But what about the fact that, on average, they'll be more likely to *convert* to a customer who spends money? Do people have unlimited money? Of course not. Eventually, then, the laws of economics (and time) apply, in the sense that everyone can't be buying something all the time. Thinking about this too hard will lead you into all sorts of philosophical questions about whether search engines are leeches, whether most advantages of optimizing user experiences in highly competitive industries are bound to be temporary from a profit standpoint, etc. Usability and testing aren't, after all, defensible business advantages. They're just tablestakes, on the way to becoming commodities of implementation and commodities in the labor market, aren't they? This is why maybe the best move -- now as always -- is to find unoptimized, bad businesses, and fix them.

Or maybe it's just easier to keep your head down, focus narrow, and optimize your pages! That philosophical stuff'll kill you if it's your job to maximize profit this year.

Posted by Andrew Goodman




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