Web Search & Marketing Newsletter - October 2008

Welcome to the October issue of our monthly newsletter, covering news and trends in online and search engine marketing that can have an impact on your business.

This month we look at the use of different pricing models that are commonly offered for the management of PPC advertising campaigns and how these can benefits or disadvantages for advertisers. We also report on the launch of Google's new web browser, called Chrome, and what impact this may have in the increasingly competitive browser market. Finally this month we review LinkedIn, the social networking tool for business people worldwide and consider how this can be used effectively by members and advertisers.

Read more about these stories below, or you can also browse through previous editions of the newsletter, either by month or by subjects covered.

On to this month's edition...

PPC management pricing models

With pay-per-click (PPC) advertising becoming more popular, there are now a growing number of marketing companies springing up to offer campaign management services with a choice of pricing packages and levels. However, which one will be best for your business?

Whether your business is starting to consider running a PPC advertising campaign - using services such as Google AdWords or Yahoo! Search Marketing – or if you have tried this already, it can usually be most cost-effective to outsource the set-up and management to an established and experienced agency, since the added management fees can be easily offset by the more efficient running of the campaign that will generate a higher ROI (return on investment).

However, the management fees being charged by the agency need to be fair and transparent so that you, as the client, are able to see what you are paying for. Historically there have been 3 basic types of fee structure being charged by search marketing agencies – a fixed fee based on management time spent on the campaign; a percentage fee based on advertising spend; or a commission fee based on the defined outcome or sales achieved.

The final option is probably the least common as this requires a good degree of data sharing between the client and the agency to reveal sales and revenue figures. In addition, the agency may not want to work on this basis if they have no control or influence on how a client's website is designed, since there may be usability or conversion issues that can impact the ultimate success of a campaign.

The model where a percentage of the advertising spend is charged follows the more traditional advertising agency fee structure, with anything between 10-20% of spend being charged to the client. However, this can only work effectively for campaigns of a certain size to make it worthwhile for the agency, or for the client to avoid a high management fee that may not be justified with the time spent managing the account.

Therefore the fixed set-up or management fee is perhaps the simplest and most common method of fee charging, with costs based on the actual time spent working on the account. Although there can be fluctuations in this management time from month to month, the agency can charge a realistic price to reflect effort and experience, whilst the client can budget their spend and know what they are paying for.

There are examples of agencies charging a fixed monthly fee that combines both the PPC advertising spend and their monthly management fee. However, in these cases the access to, and information supplied about, the client's PPC campaign is usually limited so that the client is unsure what the mix of spend between advertising funds and management fees will be. The reality of any PPC campaign is that spend will fluctuate each month based on bid strategy or competitor and seasonal activity, so this method of charging is unsatisfactory and also results in more limited information being supplied about the campaign by the agency in order to protect their fee margin.

As our clients know, we encourage complete transparency about each PPC campaign so that the mix between fees and advertising funds is clear. This means that we can provide full information to advertisers to enable them to also have complete awareness and understanding of what their spend is giving them, how well the campaign is working, and what they are paying for our expertise.

If you'd like to know more about PPC cost structures and how your search advertising would benefit from our cost-effective management, please contact us now for details.

Google launches new web browser

Last month started with the announcement by Google of their new Internet browser that will challenge Internet Explorer and the growing popularity of Mozilla's Firefox. Called Google Chrome, the new tool is an open source browser that has been made available for free download across more than 100 countries.

The web browser is the core software tool that all web users need to view websites and to navigate through the web. Not surprisingly, as Google has been developing an expanding range of online tools, a new browser from them has been expected for some time. The company says that they are introducing this new browser to 'add value for users and, at the same time, help drive innovation on the web'. The official Google blog that reported the launch said that the web browser in general needed a rethink as the web has developed to one of rich, interactive applications and so the new browser aims to cater for this market.

Google Chrome's browser window is 'streamlined and simple' so that it takes a back seat position to provide web users with the tools to get the most from their online activities. Each browser tab is kept in an isolated "sandbox" to prevent one tab from crashing another and to provide improved protection from rogue sites. Google claims that the browser offers improved speed and responsiveness and includes a powerful JavaScript engine to manage the next generation of web applications.

Initial responses to the browser have been positive, although there are no traditional menu options and the search and bookmarking functions aren't as intuitive as with existing browser products. There are some interesting tools being developed for this new product and the Google Toolbar will be one application that needs to be adapted for users. However, it will surely take time to establish any kind of foothold in the browser market, where Firefox has been gradually chipping away at Internet Explorer due to the range of plug-ins and other applications being made available.

Interesting, the Title tag text line, which is displayed for each web page across the top of the browser bar for most existing products, is shortened to only a small number of characters on Google Chrome. Here the text appears in the short tabs for each website view and this text disappears further as more new tabs are opened.

The beta launch of Google Chrome is designed to generate feedback and further development as the initial Windows browser is also adapted for Mac and Linux. As an open source project the new browser uses components taken from Apple's WebKit and Mozilla's Firefox plus all the code is provided as an open source tool to encourage online collaboration to develop the product in the future.

If you'd like to know more about Google Chrome and how it can be used to view websites, please contact us for further information.

Using LinkedIn for business networking

As one of the leading 'social networking' sites that have developed rapidly over recent years, LinkedIn is now the primary business network on the web and an increasingly powerful source of new business, both for members and advertisers.

LinkedIn now claims to have over 25 million members from 150 countries and has easily become the more serious 'Facebook of the business world'. Users can register their details for free, post information about their business background and experience, link to contacts, join groups and interact with the extensive business communities who have joined the site – some being more active than others! There is a potential to find jobs or new employees, or to source potential new business contacts, either through your existing network of contacts, or from searching for suitable people with the right skills, experience and location.

LinkedIn has become tainted in some markets by executive searchers continually contacting prominent specialists in a field, but it is also being used as a convenient and powerful business tool by many users. In the same way that social networking sites are providing easy ways to establish new contacts or reconnect with old ones, LinkedIn offers many opportunities to expand your network of contacts if it is used well (read about 10 ways to use LinkedIn from their own blog).

Basic access to LinkedIn is free and allows for a standard level of access and searching across the network, although the number of 'Introduction Requests' are limited to groups of 5 as a user builds up their profile. There are subscription options for more active users who want to develop their membership and usage of the service in more depth, although the free service will be sufficient for most users who want to get more familiar with the service and how it can be used.

Press reports last month revealed that LinkedIn is to launch its own advertising network to enable marketers to reach niche business sectors. This is part of their move to increase the 'monetization' of the site so that although LinkedIn currently runs some targeted advertising related to information that members publicly share in their profiles, this new network will help advertisers to focus on pre-defined audience segments such as corporate executives, small businesses and IT professionals. The non-personally identifiable data available to advertisers includes job function, seniority, company size, gender and geography.

LinkedIn is also reportedly planning on introducing foreign-language versions and expand into other international markets later this year, as well as developing a number of new mobile applications for users. There are many other business networking sites developing which have strengths in particular business or geographic sectors, but LinkedIn remains the market leader in this field and looks set to build on that position.

If you'd like to know more about LinkedIn and how it can be used effectively, please contact us.

Recent articles from The Marketing Workbench

The Marketing Workbench is our regular web marketing blog covering news and comment on Internet marketing events and trends. If you want to keep track of current stories you can visit this section of our website on a regular basis, or set up an RSS feed. These are just some of the items posted over the past month:

• Google AdWords amends privacy link
• Google and search evaluation
• New geographic report included in AdWords
• Google's '10 Steps to Online Promotion'

We hope you've found this month's issue useful. Please contact us if you need any more information on the items covered, or our advice on any aspect of your website's performance. Also, if there are any issues you would like to see in future editions of this newsletter, please submit your suggestions to us.