5 Killer SEO Insights from Analyzing a Billion Dollars in AdWords Spend |
| 5 Killer SEO Insights from Analyzing a Billion Dollars in AdWords Spend Posted: 31 Oct 2012 07:54 PM PDT Posted by larry.kim This post was originally in YouMoz, and was promoted to the main blog because it provides great value and interest to our community. The author's views are entirely his or her own and may not reflect the views of SEOmoz, Inc. Last week, I analyzed a Billion dollars of annualized AdWords Spend.
Woot! No kidding. Over a billion dollars (USD). That's a lot of clicks! Earlier last week, I published my findings in an infographic. In my article today, I’ll share with you my top five SEO insights and strategies from having poured over all this paid search data for nearly an entire week. Why should you care? By understanding what’s happening on the paid search side of the Google SERP, you can better understand and anticipate trends in organic search. Kind of like how that Sun Tzu guy says to keep your enemies closer in his art of war thing! (Not that paid search is the enemy or anything - but you know what I mean - it's just good to know.) So without further delay, drum roll, please … 5.Global Average Cost per Click Data by IndustryMost SEOs will inevitably be asked, at some time by an employer or client, what the value of their work is. It’s a legitimate question, but can be challenging to quantify. In my study, I calculated the global average CPC’s for Q3, 2012 for the top 10 industries in Google in US dollars. Now, at a minimum, you can now tell your stakeholder how much it would cost to buy those organic clicks, on average. Here they are ordered by cost:
You might be thinking, wait - aren’t paid clicks worth more like $50+ per click? Those are the outliers in highly competitive markets. On average, paid clicks generally cost less, particularly when you include clicks from outside of the US into the mix as I did. If your industry wasn’t listed here, I found that global average cost per click on Google Search (including the Google Partner Search Network) worked out to $0.53 USD in Q3, 2012. Also, this isn’t to say that the value of SEO is limited to just the cost of paying for the clicks that get generated; there are other business benefits of SEO beyond just clicks. For example, blogging and content marketing can help establish thought leadership, and the value of the sales and leads derived from those clicks. Think of this as just one additional way to quantify the value of your SEO work in a very concrete way. 4. Local, Mobile Search Highly Effective for SEO?When Google released their "disappointing" Q3 Earnings this month, their stock was crushed - down by 10% in a single day. According to Google, CPC’s were down by “approximately 15%” and year over year advertising revenue growth rates declined from 21% to 16%. Industry analysts are placing the blame for slowing ad revenue growth rates squarely on mobile search, which is said to monetize on average at roughly half the value of a desktop search. Why? Mobile ad engagement is lower in comparison to ads on the desktop, which intuitively makes sense. When you’re doing a Google search on your smartphone, you’re likely on the go somewhere, and probably less likely to be tempted to click on an ad that isn’t absolutely critical to what you’re looking for in that moment. There’s also considerably less real estate for ads compared to the desktop. These issues are most certainly impacting Google revenue growth as mobile search volume is expected to exceed desktop search volume by the end of 2014. The upshot of this trend from an SEO perspective is that if a mobile search is monetizing at half the rate of a desktop search, then we can deduce that an organic search listing from mobile search has a greater chance of being clicked on than the same search executed on the desktop. Furthermore, since one in three mobile searches have location based intent (for example, finding a nearby business), I’d argue that there is a tremendous opportunity to be had in SEO on mobile devices, particularly for searches with local intent! 3. A Huge Increase in Paid Clicks and ImpressionsUnfortunately, this one isn’t as good of news for the SEO industry as the last one. (I’m trying to be balanced here!) If you don’t want to hear any bad news, I’d recommend just jumping ahead to the next item in the list. According to Google, average CPC’s fell by “approximately 15%” (they didn’t give a precise number), My own research pegged that number at far higher a value (down 16.5% on Google Search and down 18.2% on Google Display Network over just the last two quarters!). I also found mixed click-through rates: down 12.4% on Google Search, and up 13.8% on Google Display Network in the last two quarters. Yet despite these strong headwinds, Google’s total advertising revenues were still up around 3% for the quarter and 16% for the year. How did they manage to pull that off? By growing clicks and impressions like crazy, that’s how. By my estimates, clicks were up 21.6% in the last two quarters for Google Search and up 29.1% for Google Display Network in the last two quarters. Now, here’s where the math gets really crazy. Assume that in order to keep Wall Street happy over the next 12 months, Google needs to keep their revenue growth at or above their historical average 20% growth rate. If CPC’s continue to drop by another 15% in the next year (which I believe it will as huge increases in available ad impressions reduces competition and impacts cost per click), then Google will have to grow clicks and impressions in a big way to make up for the revenue hit. How big, you ask? Paid clicks from Google Search would have to grow from my estimated 193.2M clicks per day today, to 273.6M clicks per day – that’s up 41.6%. The number is incredibly high because it’s required to both grow ad revenues while simultaneously offsetting lower average cost per click prices. But wait, there's more. In order to get those 273.6M clicks per day if CTR’s fall by 15% as they have in the last year (naturally, with more ads being shown per search, the likelihood that any one ad gets clicked on by definition must fall), Google would have to have to grow ad impressions from my current estimate of 5.6 billion impressions per day, to 9.2 billion impressions per day – that’s up a whopping 64.3%, again to drive both the needed additional clicks while simultaneously making up for the decrease in average click through rates. So, where are these searches going to come from? Probably from more of the same of what we saw in the last year, including:
The takeaway here is that I expect to see more and more share of clicks being accrued to the paid search column, and from that perspective, it just becomes harder and harder to ignore paid search. 2. Average Paid Search CPC’s are Going DownAs previously mentioned, Google reported that the average CPC dropped by “approximately 15%” (they did not provide an exact figure), and my own calculations found a similar decline. Many marketers believe that channel diversification is an important element of any marketing plan; to not have all your eggs in one basket is key. If your company already leverages paid search, the change means that you can expect on average to have access to a larger available inventory of impressions, combined with lower CPC, which means that advertisers can literally get more customers for less money. For those of you who are not doing paid search, last month I wrote an article on using AdWords Data for SEO, explaining how it’s potentially an incredible treasure trove for SEO Keyword Research. If you were on the fence about giving that a try, it should be, on average, cheaper and faster to execute that strategy today. 1.Google Display Network Incredibly Effective and Complementary to SEO EffortsIn my study, I found that the average conversion rate for Google Search in Q3 2012 was 5.63%, compared to an average conversion rate for the Google Display Network of 4.68%. (Wow!) I was surprised to see just how effective conversion rates were on the Google Display Network, so I calculated and compared conversion rates for all of the top 10 industries for both Google Search and Display (see below). Notice how there are some industries where the Google Display Network had higher conversion rates than Google Search.
Intuitively, combining SEO and remarketing makes a lot of sense. After all, we work so hard on developing our content to get people to the site, but conversion rates are generally in the single digits. Retargeting enables us to In the Travel Industry, Google Display Advertising had a higher conversion rate than Google Search. I recently listened to Rand speak at a conference in Boston. In his talk, he said that SEOmoz uses search retargeting on the Google Display Network and concluded that (and I’m paraphrasing here – apologies to Rand if I didn’t get this exactly right): “What can I say, it works for us!”. I think he’s right, and now I have some additional data to prove it. For more information on Search Retargeting on the Google Display Network, see:
A Bonus Insight: Find Your Next SEO Job or Client!Looking to land your next SEO job or agency client? Here’s an approach: start with the industries and companies that are spending the most on search. It shouldn’t be too hard to convince them of the value of something they’re already spending so much on. As part of my research, I calculated the top 10 industries that spent the most in paid search in Q3, 2012, and used publicly available spyfu data to approximate the top 5 spenders in each of the industry. They are:
In addition to these companies and industries understanding the value of search, I’ve also found that it can be a lot more fun working at or with companies where search plays such a critical element in their overall their marketing strategy, as opposed to industries or companies that are completely clueless when it comes to search. Your Turn: What Are Your Thoughts? So there you have it, my top five SEO insights from having analyzed over a billion dollars in AdWords spend. Plus, by having read my article today, I just saved you from having to spend a Billion dollars of your own to figure out these little gems! That’s got to be at least worth a thumbs-up, right? :) Now it’s your turn. Were there any other nuggets you found interesting in my research? Anything else you’d like me to look up? Let me know your thoughts and questions the comments below. Thanks! Copyright Notice: Austin Powers property of New Line Cinema.
Larry Kim is the Founder/CTO of WordStream, provider of the AdWords Grader and the 20 Minute PPC Work Week. You can follow him on Twitter and Google+. Sign up for The Moz Top 10, a semimonthly mailer updating you on the top ten hottest pieces of SEO news, tips, and rad links uncovered by the Moz team. Think of it as your exclusive digest of stuff you don't have time to hunt down but want to read! | ||||||||||||||||||||||||||||||||||||
| Posted: 31 Oct 2012 07:03 AM PDT Posted by Joel Day Greetings to you, fans of SEOmoz. A merry All Hallow's Eve to you and yours. . Chester A. Arthur here to present the winners of this Draw Roger contest. When Joel asked me to step in and write this for him, I was, at first, beguiled! Why would I, the 21st present of these United States, be a fit author to such an auspicious announcement? I may only have been president a short time, but I believe my fine political track record and honorary doctorate in both Art and Robotics gives me the necessary credentials to deliver this fateful news. But first, I've got an extra special announcement. SEOmoz has started their very own Pinterest account where we've set up a board just for these submissions. You can see all the entries here. (And don't forget to join us in the Pinterest-y fun.) Now, without further ado, I deliver unto you: The Winner of SEOmoz's First Annual Draw Roger Contest!The winner of the adult group is Nicholas L. from Minneapolis, MN. Congratulations! For second place... Tamsin S. from London And, in an unprecendented fashion, we have a tie for third place! Chris L. from Philidelphia, PA and Bruno R. from Madrid The Winner of the Bairns!Everett N. from Fargo, ND Your second place winner is... Tenesea B. from Edmonton, AB And the third place winner: Elias N. from Fargo, ND We'll be emailing all of you soon to let you know about your prizes! Thanks for participating in the first ever Draw Roger Contest. We had a ton of fun seeing all your entries, and we were awed by your incredible artistic talents. They warmed Roger's robotic heart! Sign up for The Moz Top 10, a semimonthly mailer updating you on the top ten hottest pieces of SEO news, tips, and rad links uncovered by the Moz team. Think of it as your exclusive digest of stuff you don't have time to hunt down but want to read! |
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