OnlyNaturalPet.com is an online retailer offering natural and organic food and supplies for dogs and cats. It’s a growing online business based in Boulder CO.

Commerce360 has just begun working with OnlyNaturalPet.com on the management of their paid search marketing, and OnlyNaturalPet CEO Marty Grosjean has kindly given us permission to use our work on his account as an ongoing case-study here on our weblog. Our plan is to showcase our methodology, the benefits and impact of our ClickEquations platform, and discuss issues and ideas about PPC campaigns based on situations and experiences from the onlynaturalpet.com account.

To kick-off the project, I spoke with Marty yesterday for the podcast listed below. We discussed:

• A business overview of www.onlynaturalpet.com
• The online marketing programs they’re current running
• Their history of managing paid search in house
• The goals they have for paid search marketing and why they decided to outsource to Commerce360

The podcast is about 7 minutes long. Listen to get a great introduction to the business and their experience in PPC. And watch for the inside story of our work improving the PPC results for onlynaturalpet.com in future posts on this blog.

This post is part of a case-study series on the Commerce360 management of paid search campaigns for onlynaturalpets.com. For your convenience, we’re keeping a list of all posts in the series.

Who are you playing against in the game of paid search advertising?

There are at least three candidates:

• Other Advertisers – It seems this is how most people think about it. You’re trying to get qualified traffic and so are ‘they’. You have to pick the right keywords, write compelling creative, and set the bids that get the clicks so they don’t.
• The Search Engines – These are the guys taking your money, deciding how much to charge you and where/when your ad runs. Their paid search algorithms are enabling you but also defining/limiting your success.
• Your Own Self - The reality for most campaigns is that limitations of expertise or resources (time, money, or technology) is what’s really holding them back. Neither engines or other advertisers matter when you’re overbidding for poorly chosen keywords with lousy creative and irrelevant landing pages.

The truth is that you have to consider and take actions based on each of these. The intensity of trouble you’re getting from any one of them probably depends a lot upon the status and stage of your campaigns, as well as the industry segment you’re in and your goals.

Interestingly I think that other advertisers are only a primary issue in very few cases. Across all of the campaigns we manage now or in the past, I can’t think of too many situations where competitors – other than the basic economics of the keyword cost to get on the first page to begin win – has been too much of an issue. Especially compared with getting the campaign configuration right, getting the necessary work on to provide appropriate landing pages, and dealing with the ways the engines and their rules impact nearly everything.

It was announced today that Commerce360 and our ClickEquations Search Automation Software has been selected as one of seven finalists in the Amazon Web Services Startup Challenge.

According to Amazon: “Amazon Web Services (AWS) is searching for the next hot start-up that is leveraging AWS to build its infrastructure and business. The grand prize is $100,000 in cash and services, and a seed investment offer from Amazon.” Finalists were selected “based on their entry form and using the following judging criteria: (a) implementation and integration of the AWS Paid Services; (b) originality and creativity; (c) likelihood of long-term success and scalability; and (d) effectiveness in addressing a need in the marketplace.”

Commerce360 was selected from among over 1000 applicants as one of the finalists. We’re looking forward to the final judging and award presentation in Seattle on December 5th.

Congratulations to Bruce Ernst our VP Products and Toby DiPasquale our Sr Director of Technology and Chief Architect, as well as their teams and everyone at Commerce360.

While at Ad-Tech a few weeks ago, I had the chance to talk to Webmaster Radio about Commerce360, paid search marketing, and our ClickEquations software. You can listen to the full interview below. (Note there are a few commercials before the interview begins)

	WEBMASTER RADIO
	Commerce 360 Show: ad:tech Channel: Conferences

It’s proven hard for most companies and people to really grok the end of interruption marketing. The natural inclination seems to be to try and interrupt people in new ways. Certainly if you read most of the frothy press and comments about the new FaceBook Advertising Scheme (FAS) (best ones I’ve found are ones are here, and here, and here, and here and here) the undercurrent and fear is that ‘the cluetrain has left the rails’.

So how do you do it right? Here’s a short simple guide and self-test. It’s based on three phrases picked up from a few of the masters.

1. Markets are Conversations. Doc and the Cluetrain boys first explained this to us all – it’s about listening as well as talking, understanding the power that always has lived out with people and the implications that the internet and other new tools give them to exercise this power. One party can’t control a successful conversation. Test: Are you preaching or talking?
2. The Best Conversation Wins. Hugh much later added this nugget. Interesting conversations grow and spread and grab attention. Weak or fake or forced ones die an agonizing and quick death. It’s effectively required that you’re genuine, reasonably transparent, and worth the time. Test: Is this really compelling information that should interest me more than other similar content?
3. Targeted Advertising is Just Information. Dave Winer nails the ending with this one yesterday. A market conversation that isn’t perfectly relevant and interesting to me is still advertising. One that is perfectly targeted is information. And advertising is something I’m increasingly trained and able to avoid and ignore – and something that will increasingly leave a bad taste if it chases, fools, penetrates me despite my efforts. Of course, only I as the consumer can define when something is targeted and interesting to me, and I get to do so at each stage. Peter Drucker said ‘help is defined by those receiving it’ and the same goes for information. Test: Will I truly be glad you told me?

Thus the bar for social marketing is really high and quite clear. You have to communicate in a human voice in a compelling way that I find personally relevant. If you do my brain will automagically turn your marketing message into just plain interesting information, which I’ll then accept and probably act upon and even share. And if I share it with friends it will be done in a conversational, interesting, and perfectly targeted way – these same three criteria define why pre-trademarked word-of-mouth always worked.

Bonus Link: Doc himself on the whole issue. Worth reading.

As conversation becomes yet another overused buzzword there’s a grave danger that it will (somewhat ironically) lose meaning. Have a ‘conversation with your market’ starts to become a code word for marketing in all its typical vague glory rather than a specific break from the past. Witness the term ‘web 2.0′ which now means everything and nothing.

The opposite of conversation is lecture, which makes listening the difference. A conversation is bi-directional. Being over-literal seem to throw some folks in their efforts to understand this – how can a company talk to a market?

Apple this week offers an excellent example of conversational skills, in their new TV commercial which they found on youtube – it was the homemade product of a 16 year kid in Warwick England. Now it’s been re-shot by Chiat/Day and goes national on Sunday.

Neither the actions of the kid nor Apple nor Chiat/Day would/could have taken place 5 or 10 years ago. He’s a brand advocate but now he’s got corporate kudo’s and dollars behind his vision (and the agency presumably didn’t kick and scream against it). Company, customer, and partners working together to drive a message where nobody should need to feel like they want to take a show. Undoubtedly the press (as the NY Times article highlights) and large numbers of other Apple devotes will further spread and accelerate the buzz.

While not many could expect to duplicate this example, it should serve to reinforce the idea that the point of conversation marketing is working together toward a common goal. The idea that a company would go to its customers to figure out the best way to promote its products is a great application.

The Google paid search marketing juggernaut continued, driving $4.23 billion in revenue in the third quarter. Since this money is supposed to be earned delivering performance-based results for advertisers, it’s funny that they don’t simultaneously report on increases in click-through-rates, conversions, ROAS or better yet revenue or ROI for advertisers. (Obviously they don’t have any or all of this information for most advertisers, but via Google Conversion Tracker and Google Analytics they should know enough to provide visibility and insight.)

In an interesting analysis earlier this week, Kevin Kelly pointed out that Google makes on average $0.27 for each and every search yet their expenses-per-search are only $0.0028, giving them an ROI of over 10,000%. (Note that Kevin clearly disclaims the approximate nature of his numbers which are based on simple calculations from the publicly available numbers. He also wrote an interesting follow up post)

I’d add to his numbers that since only about 1 in 5 searches is reported to result in a paid click, that means Google is earning about $1.35 per PPC click, although that sounds extremely high, but maybe not.

My favorite line in Kevin’s story is this from ‘a Google insider’:

“Since the advertisers are paying for the ads, they must find that search gives them additional profit. Since customers are clicking on the search-based ads, they must get additional value.”

I think I’d reword it this way:

“Since the advertisers are paying for the ads, they must hope that search gives them additional profit. Since customers are clicking on the search-based ads, they must not mind free access to potentially useful information.”

Historically the growing revenue and profits at Google have been taken as proof of the growing power and success of paid search marketing. At some point Google’s growing profit needs to start being thought of as proof that a lot of advertisers are bidding irrationally and/or managing their campaigns really poorly and/or completely lacking in tools to adequately understand the economics of their activities.

Don’t believe it? Then riddle me this: if Google were driving an equivalent (or even proportional) revenue increase for all their advertisers wouldn’t the stock price of these advertisers, adjusted for their industry segment, be going up as fast as Google’s?

As the Adwords system continues to expand and adjust to both changes in the marketplace and those driven by Google’s own tinkering, a trend is emerging. Changes which claim to be aimed at benefiting either advertisers, publishers, or searchers – and may provide some level of such benefit – but much more clearly benefit the economic interests of Google itself at the expense of advertisers.

Three that come to mind are the recently revised ‘bid-ask’ system, ‘max-bid for top position’ requirements, and now the ‘adsense probation period’.

• In ‘bid-ask’ Google raises minimum bid prices by up to 60x (in our experience) for an unspecified period of time.
• In ‘max-bid for top position’ an invisible surcharge is levied in order to get ads out of the right gutter and up to the top center of the page.
• And ‘adsense probation’ offers lower fees to new publishers during the initial time they display ads.

In each of these cases (reviewed in more detail later in this post) Google appears to be getting/charging more money with slim to no advertiser, publisher, or searcher benefit.

According to Wikipedia, economist Adam Smith launched the notion that ”in a free market, an individual pursuing his own self-interest tends to also promote the good of his community as a whole through a principle that he called “the invisible hand”. He argued that each individual maximising revenue for himself maximises the total revenue of society as a whole, as this is identical with the sum total of individual revenues.”

Pay-per-click advertising is popular in part because it appears to works on the same principal. Advertisers bid on visibility to potentially interested prospects, but only pay when someone clicks as an expression of genuine interest. The price of the click is set by the market (via competitive bidding for the advertising slot) and if the advertising network (Google for instance) is syndicating the ad to run in someone else’s space rather than their own (publishers like The New York Times for example take ads from Google and run them on their pages) then the publisher gets paid a portion of the fees representing the value of the space and clicks they provide.

It’s a win-win-win–win for advertisers, consumers, publishers, and the ad network itself. Money changes hand throughout, but most of the fees and percentages should be self adjusting. Advertisers pay less if they and other bidders collectively lower their offers on price for space. The networks make more if they deliver ads the visitors find relevant (as expressed by clicks) or less if they don’t. And publishers similarly should see both click volume and their revenue per click increase based on the quality of their visitors (as expressed in their delivery of ad responses) in both absolute terms and relative to other publishers offering similar space.

But self correcting economic systems require two attributes to avoid compromise and collapse – transparency and fairness. If the participants don’t have enough visibility into what’s going on they can’t trust the system or make good self-interested decisions. If the system gives favor to one player over another, in measures beyond reason or acceptability, the self-interest of some becomes not to play.

It appears that Google is treading further and further onto thin ice in both categories. Let’s look at the above mentioned changes for examples:

[Read more →]

A portion of the political and online marketing worlds are fired up about Google’s refusal to run ads from Republican Senator Susan Collins due to conflict with the Google Trademark policy regarding MoveOn.org. This policy allows any trademark holder, to prevent other people or organizations from using their trademarks in the headline or the 2 lines of copy in a paid adwords ad. Trademarks are only protected if the trademark holder has filed the correct request with Google.

But there is a very simple work-around that will enable Sen. Collins to run her ads.

Place the trademarked terms only in the visible URL.

Google does not apply trademark protection requests to the visible URL.

We have had this discussion/argument with them over the rights of clients who had filed for and been granted trademark permission before. While Google would immediately stop any ad running using the trademarked terms in the headline or body lines, they would not stop running ads that put the trademarked terms in the visible URL. They claimed, clearly and repeatedly, that their policy did not apply there.

In our case, it was a clever affiliate who was using a prominent retailer’s name in the visible URL but linking the actual link to their site. They got tons of traffic for many days until we could cancel their affiliate contract, taking the profit out of the activity. But until then, Google refused to stop running the ads. The situation was exacerbated by the fact that Google will only run one ad with any visible target URL at one time, so in our case the faker actually blocked the trademark owner from running ads for their own trademark. Yet Google steadfastly refused to do anything.

Below are the ads Collins tried to run.

Here’s what she should run. In fact, I’m running it for her right now (keyword ‘Susan Collins’). At least as long as my $20 lasts.

To be clear to those not familiar with running Google Ads, the visible display URL (www.moveon.org) can be completely different than the actual URL to which the ad links. In the ads above, the actual traffic goes to www.susancollins.com, not to moveon.org.

I’m making this post primarily because I think the current Google policy, as it has been explained and enforced in campaigns which we’ve managed, is stupid. Either ban the trademark terms from use in the ads or allow them. Don’t treat the visible URL differently than the headline or body lines.

Personally, I don’t believe that you should be able to prevent the purchase of trademarked terms. It should be illegal to mislead, which ironically is exactly what the current policy allows, but not to compare or condemn. And on one last note, I’d personally donate to moveon.org long before I’d do anything to support Sen. Collins. So my $20 is being spent in the interest of online marketing, and I’ll give $40 to moveon.org just to even things out.

Update: Here’s a screen shot of my ad running:

Update 2: 12-hours later (Sat 10/13 9:30am EST), ads still running with 21 impressions, 3 clicks.

Apparently between all that songwriting, touring, and DJ’ing, Mr. Bobby Dylan has been working on his search optimization. And he wrote a little number to help you too.