If you manage $50,000 or more per month on paid search advertising, evidence suggests that as much as one-third of it is wasted due to sub-optimized search marketing campaigns. Does this mean you are a bad search marketer? The answer is, unquestionably, no. However, the following statistics are sobering and suggest you may want to look at how you manage and optimize your campaigns:

· Paid search advertising is getting increasingly competitive. It makes up nearly 45 percent of all global online advertising expenditures, and JPMorgan forecasts that spend to reach $30 billion in 2008.

· Keyword inflation continues to rise due to competition and the market. Industry studies show Google has surpassed 70-percent share in searches for the first time, and a likely deal between Yahoo/Google may increase Yahoo’s pay-per-click search rate by 22 percent.

· Optimized campaigns can achieve the same results at 69 percent of the cost. WebTrends clients—who previously used a combination of manual methods and bid management tools—experienced an average return on advertising spending improvement of 44 percent only 90 days after switching to WebTrends’ new automated SEM optimization solution. In the past, they essentially wasted 31 percent of their paid search spend.

What’s a retail search marketer to do? In order to continue generating positive returns, today’s search marketers must be smarter, faster and more efficient than their competitors. They must continue to experiment with new campaign variables (ad text, landing pages, geotargets and many others), build a long-tail keyword inventory and stay on top of messaging. Search engines themselves are offering more sophisticated user segmentation and targeting options, resulting in the typical paid search program now having almost limitless possibilities for testing different variables. Each new variable exponentially adds to the number of factors and mathematical performance data that must be tracked. For example:

· 10 keywords, 10 positions, 1 creative = 10^2 combinations

· 1000 keywords, 10 positions, 5 creatives = 5 x 10^4 combinations

· 1000 keywords, 10 positions, 10 creatives, 2 landing pages = 2 x 10^5 combinations

· 1000 keywords, 10 positions, 10 creatives, 2 landing pages, 3 networks = 6 x 10^5 combinations

The real problem, and underlying opportunity, with search engine marketing optimization is that today’s methods and solutions rely on a human to do most of the heavy lifting, from a/b testing, reporting consolidation and results analysis to the seemingly never-ending bid rules creation and adjustments. The expansive keyword portfolios and the sheer number of campaigns that large advertisers manage require a new way of doing things. Forward-thinking marketers will need to discover the optimal balance between what machines do best—handling the constant cycle of analysis, testing and updates across an organization’s paid search portfolios—and the insight and perspective into external industry events and business drivers that humans can bring. In the future, automated SEM optimization solutions will help strike this balance.

Alex Yoder is WebTrends’ president and CEO.

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The home shopping networks we all know and love have sold numerous products over the years using detailed, well thought out demonstrations. However, with live television, mistakes are bound to happen. Robin Barr put together “The 7 Greatest Home Shopping Screw Ups of All Time” for Cracked.com. Enjoy!

Katie White is ERA’s retailer relations manager

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Some say that ERA appears to have abandoned its original DRTV members in favor of online technologies and advancements. I want to say without any qualms that ERA has not abandoned the DRTV segment of the membership at all. Indeed, DRTV is alive and well at ERA and the association’s commitment to it is demonstrated in many of its offerings, from education and research to the self-regulatory program, and to government affairs advocacy.

At the Annual Convention last September, the Opening Session was dedicated to three celebrities who use television to sell their products primarily through infomercials, as well as interviews with the CEOs of HSN and ShopNBC, both live television shopping channels. In the third quarter of the year, ERA commissioned a research study on The Evolving Role of Direct Response Television in Multichannel Marketing Execution. The research demonstrated that DRTV continues to grow as a marketing medium, but concludes that it has evolved into a driver of multichannel marketing. More significant, in order to make DRTV profitable on the front end, while also driving a multichannel marketing strategy, it shows that DRTV marketers are accelerating their adoption and customization of emerging technologies, especially in the interactive sphere. (more…)

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