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The State of Paid Search in the U.K.

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A special report from Search Engine Strategies London 2007.

At the Search Engine Strategies London event last month, the Search Advertising Forum session provided an overview of the current state of paid search in the United Kingdom. Representatives from Google, Yahoo and Microsoft, along with top experts from U.K. paid search agencies, shared their perspectives.

Yahoo Panama Expectations

Present to speak on behalf of Yahoo U.K. was Richard Firminger, Yahoo's regional sales director for Northern Europe. Stepping up the podium, he confirmed the expected Q2 launch of Project Panama in the UK, noting they were roughly 80 percent of the way through the migration in the U.S. With the project involving 2.5 years in planning and some 400 engineers, he likened it to a jumbo jet flying at 30,000 feet, that needed a complete new wiring system and couldn't land until it was fixed.

Firminger noted that U.K. advertisers will find seven new features to look forward to in the new Yahoo Search Marketing platform:

  1. Dynamic Account Structure
  2. Ad Testing Tools
  3. Geo-Targeting Capabilities.
  4. Improved Forecasting/Clickshare numbers
  5. Quality Indexing
  6. Optimization Tools and Advanced Analytics (Project Gatineau)
  7. Fast activation (within 1 hour time) – no more manual review up front.

Dixon Jones, an Internet marketing consultant working for Receptional Ltd, left much of the talk of Panama to Firminger, but did note that he had been participating in a beta test of Yahoo's new management interface, and praised its functionality.

Richard Gregory, COO of Latitude, pointed to one expected change coming with the new Yahoo platform: a minimum bid decreasing from 10p to 5p (Pence). The 'tail' just got significantly cheaper, he noted, providing a great opportunity to reactivate low-converting keywords.

Gregory had a warning for search marketers: make sure your bid management software can handle PPC bids under 10p, and that it can work with the new Yahoo platform in general. He encouraged paid search advertisers to not only bid low and take advantage of this reduced minimum, but to "collude with your competitors to keep bid prices low" in your target market.

Six Months In: Microsoft AdCenter Europe

Mel Carson, adCenter's community manager for European customers, said that "being last to market gave Microsoft new and distinct opportunities."

When planning for adCenter, Microsoft discovered that advertisers wanted three key things:

  1. Better Systems: Simple user interface and API access;
  2. Better Service: Timely response and telephone support; and
  3. More Insight: Data, more data, and then more data...

Carlson said Microsoft has been relatively successful by all three measures so far, and noted that advertisers' use of adCenter allows them to make better campaign management decisions using other paid search tools as well. The key advantage for Microsoft is demographic targeting, where advertisers pay a premium bid price to reach a target audience, based on Passport and Windows Live ID information.

The proof is in the pudding, he noted, highlighting a case study by the MORE TH>N, who reduced CPA by 76 percent though demographic data. Overall, the case study indicated the quality of the click is much higher with Microsoft's targeting. For U.K. advertisers, a Windows Live searcher is 70 percent more likely to convert than the average searcher, and more than twice as likely to convert as a searcher driven by Google.

Carlson ended his talk by encouraging everyone to check out the latest tools in development at Microsoft AdLabs, and said advertisers could look forward to seeing several new features in adCenter in the near future:

  • AdCenter accreditation in 6-12 months.
  • Improved navigation
  • Full-text search
  • One-click account download
  • Bulk campaign management
  • Integrating DeepMetrix analytics

For Jones, the biggest question surrounding Microsoft's Live.com and adCenter is "how important is it for people in paid search to be mindful of (Microsoft's) query share?" Jones said that advertisers who know their audience will likely be willing to make a significant increase in spend on MSN once they see how it performs, saying, "traffic is there to be had and is converting well." However, Jones warned that advertisers need to be mindful of significant implementation time when it comes to adCenter's different interface and operations.

Defending Google Mobile Ads in the U.K.

During his talk, Jones noted that Google had begun aggressively promoting mobile ads in the U.K., which he recommended testing, but lamented the current lack of inventory available. Jones said there simply are not enough PDA/mobile searches going on to justify the effort involved to create program.

David Thacker, senior product manager for Google, defended Google Mobile Search by highlighting the fact that it is not all about mobile Web searches, but includes ads placed on general internet searches done via mobile devices as well. He advised advertisers to use a different ad format for these kinds of searches, because they are used for a different purpose than general Web searches. For instance, advertisers can use click-to-call to generate immediate conversion.

He noted that mobile users specifically search for mobile content: ringtones, games, news, weather, sports, local business and product information. Mobile users also use 1-2 word queries, and are typically broad, generic keywords. Therefore campaigns should be created separately and managed independently, as Jones also recommended. Thacker said U.K. advertisers overall are happy with clickthrough rates and conversions on the mobile ads.

Gregory agreed that mobile ads could offer cheap clicks, but he agreed with Jones that volume, as well as conversion, is still too low to warrant the effort.

Thacker also spent some time discussing Google's local business ad products, which launched in Europe last fall. Thacker shared some best practices for advertisers using these ads:

  • Use images or logos whenever possible.
  • Write a targeted message.
  • Keyword list should be geared towards a map searcher.
  • Be sure to upload phone number

General Search Recommendations

The speakers also shared some general advice for paid search marketers and providers in the U.K. Jones warned search advertising providers to be careful not to dilute the overall quality of the SERPs with too many search ads. Gregory urged advertisers that knowing their audience and using demographic targeting well is vital. He stressed the importance of making landing pages appropriately match the ads for a specific audience segment, and encouraged advertisers to be realistic about the size of the network they are advertising on, and to be prepared for low volume.

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