Google and the Microsoft Yahoo Merger

The Microsoft Yahoo merger is again receiving interest. A nice article Can Yahoo save Microsoft? in the Los Angeles Times describes how Bill Gates “finds himself facing a network effect more powerful than his own — Google. Google is changing the way people buy, use and pay for software in ways as revolutionary as Gates did a generation ago — and Microsoft has been caught flat-footed”.

As Google makes available software like Gmail and Google Apps all for free, Microsoft feels a cool breeze. Especially since Google make their profits from the online advertising business, an area where Microsoft have struggled with only a loss to show for their efforts.

Some of the top Hi-tech CEOs offer Yahoo, Microsoft merger advice as if the Microsoft Yahoo merger is so simple, it’s not. There is enormous risk for both companies, who individually have been losing market share of the online advertising business to Google. Advertisers are interested in reaching the biggest audience; neither Microsoft nor Yahoo can match Google.

Company’s using PPC (Price Per Click) do not want to maintain advertising across three different platforms. Running a PPC campaign is very time consuming and needs constant analysis to preserve position and keep up with the competition. In running Excalibur’s PPC campaigns, I concentrate all my efforts on Google Adwords.

I had a very interesting conversation with Josh, a friend who owns a couple health food stores. Josh has decided to go online and found some friend to setup his web site. (Josh did not consider asking a consultant and was not aware of my involvement with the internet and web marketing). Similar to many business owners and executives Josh knows very little about business planning and even less about running an online business. They think all you need to do is put up a site, and customers will start buying. No thought is given to where the customers are coming from or the kind of products to sell online.

They understand having a store in a prime location in a busy mall will generate many potential customers who will pass by the shop window. Having an eye-catching window display will entice customers to enter the store and convert into paying customers. However, In the online world most customers will never know you exist and it is very unlikely the site will show in the top 2 pages of search results. Research shows must searchers only look at the first two pages of search results. As David Viney reports in his new book Get to the Top on Google

“84% of searchers never make it past the bottom of page two of search engine results”.

Getting to the top two pages requires a lot of time, patience and hard work. Josh has heard of Google, but has no understanding of search results, ranking, PPC(Pay Per Click) or SEO (search engine optimization). The whole process of site development, optimization and web marketing are completely unknown to him.

Josh’s approach is typical of many business owners and managers and is unlikely to lead to success. Most likely they will come running to consultants in 6-12 months when the site is not working out as “planned”.

Here are a few questions I asked him.

Shia: Does the “friend” who is setting up your site have experience? Have you seen sites he has created?

Josh: Yes, they are quite “good”.

Shia: How do know they are good? Have you seen sites they have created?

Josh: The sites looked nice!

Shia: Have you compared his prices and experience with other companies?

Josh: No

Shia: Has he setup similar sites with shopping carts and online payment gateways use PayPal?

Josh: No the sites shown were quite simple, just a catalog with no online purchasing.

Shia: Will the site have CMS – Content Management System?

Josh:???? (no idea what a CMS is)

Shia: A CMS – Content Management System is a database where you can add and update details about your products. Items like photos, information, prices. A CMS system allows you the site owner to update without the need of a programmer.

Josh: I will have to ask the guy who is setting up the site!

Shia: How many items are you planning to offer online?

Josh: 2-3000 to start, after which I will increase to 10,000 items.

Shia: Do you have backend setup, ordering, stock control, and shipping?

Josh: I have a few students to help.

Clearly, Josh has no idea about how to start an online business and has done little or no thinking about optimizing his new site or taken the time to investigate how the completion is playing the game. The story reminds me of Webvan an online grocery business that went bankrupt in 2001, read eBoys: The First Inside Account of Venture Capitalists at Work. Webvan had a lot of financing with some highly rated consultants giving advice. However, they decided to expand too fast and offer a huge range of products. If they were a little more conservative and adopted a more modest plan they may have succeeded.

Josh runs a couple health stores, he has no idea how online customers will buy, and is not even aware of the cost of a conversion. (Conversion Rate). Josh should plan to start selling only a few items on line to test his system No more than 50 items to start. Sounds bad advice? Especially when he already has 2000 items in stock in his stores? Josh needs to understand buying online is not the same as selling to walk in customers. They will behave differently and their expectations are not the same as selling to customers in a store. Josh needed to consider whether he wants to sell to the local market, or aim for the national or even international market.

There are many online health stores, why should a customer buy from Josh? Josh should find reasons why customers will want to buy from his site. Here are a few possibilities:-

• Convenience
• Price
• Quality
• Fast Reliable Delivery
• Expert Knowledge about Health Food
• Recipes

Google
Google stock has taken a plunge in recent months with $70 billion dollars wiped off the stock as reported by Seekingalpha. Although Google Apps are continuing their advance of Google Sites, Web Design For The Masses, I expect to see major advances in the features offered during the coming year.

iPhone
Timesonline and Informationweek report Apple are gearing up to release a 3G version of the iPhone in June. Mr. Jobs has been doing extensive travel lately with expectations of new markets opening for the iPhone in Europe and Asia.

Microsoft bid for Yahoo
A report in Timesonline says Microsoft is planning a hostile takeover of Yahoo’s boardroom.

SEO, Link Building, PPC, Social Media, Affiliate Marketing and Blogging
A useful summary or articles about Beginner and Comprehensive Guides to SEO, Link Building, PPC, Social Media, Affiliate Marketing and Blogging

If you are about to buy an iPhone. Engadget “reports we’ve been hearing that Apple may lower prices on the iPhone and iPod in the next few months”, so maybe wait a little. Many counties still have no official access to the iPhone even Canadians as reported by Mobile Magazine. Here in Israel we have the same problem, however I must admit I am thinking of taking the plunge and going through the jailbreaking process to unlock the phone.

An interesting article from the Financial Times reports Google said it had seen 50 times more searches on Apple’s iPhone than any other mobile handset. Search Engine advertisers take note of the enormous potential market opening up for mobile advertising, SEO consulting and PPC campagns.

Yesterday was a very exciting day for the SEO/PPC community in Israel. The event the first sphinncon held Jerusalem to packed audience, moderated by Barry Schwartz Executive Editor of Search Engine Roundtable & News Editor of Search Engine Land. Barry is also President of RustyBrick, Inc.

There were 3 SEO panels:-

• SEO Panel - Paid Links & Penalties

• PPC Panel - Will the PPC Model Hold Up as Click Prices Rise?

• Social Panel - Should You Social?

Each panel led to a very lively discussion the only problem was not having enough time for all the questions.

I found the SEO Panel - Paid Links & Penalties particularly interesting with an explanation of how Google do their best to discourage paid links. One can argue that Google are only looking out for their own interests, but a person searching the web wants to find good accurate information. Is SEO about “fooling” the search engines just to get a good rating and a lot of visitors to your site? Or is SEO about building long term business and establishing a relationships with buying customers. Most business’s are looking for repeat business and referrals. However, good SEO is a long term time intensive process needed a lot of patience and endurance.

For more details look at Barry’s article on Search Engine Land and Ophir Cohen, for more information and nice links.

There is a lot of information on the web, it is impossible to read everything and most of the information is probably not relevant to you. Just take a look at Advertising Age. They have a list of over 500 sites for media and advertising, but if you have a small business and you want to get into Web marketing, where do you start?

Web marketing is only one part of a company’s marketing strategy. True the Web has developed into a major part of marketing, with traditional advertising media print, radio, TV and local publications losing their share of the advertising budget. An overall marketing strategy is required to focus on which products your company wishes to promote. How are you going to get the message across to potential customers and to utilize maximum Return On Investment (ROI). The plan should take into consideration the advantages of each advertising medium and how it will help increase market penetration.

The first step is to analyze your current customers.

• Who are your customers?
• How do they buy? On line, walk into store, phone orders…..
• Age Range? Children, Teenagers, Adults, pensioners …..
• Location? Local, City, State. Country….
• Which group brings in the best sales and the most profitable business

Once you have this information you can start to plan where to target your marketing effort.

Next article – How to start your PPC campaign.

I just set up the Web marketing department for a hi-tech company which sells to a specific customer base. The company has been online for ten years and active with Google Cost Per Click for the last 5 years. The CEO was not happy with the company’s ranking in search engines with competing companies coming up higher in both the PPC and in the actual search results.

My Analysis of the Situation:

• Advertising on Google’s Content Network was consuming 85% of the company’s on-line advertising budget. The Content Network is an option when advertising with Google that is enabled by default. If you do not want this option, you have to turn it off.

• One keyword was attracting a lot of clicks for a product that the company did not sell.

• Keywords were poorly selected.

• The names of competitors’ products and companies were not included in the keyword list.

• The PPC ads were not showing up on European Google sites like France, Germany and Russia.

• The same ad was used for about 20 products.

• The ads had URLs pointing to the home page and not to the appropriate landing page.

• Web site was not optimized.

Action Taken:

Set Clear Goals

What is the desired result of the campaign?

• Buy Something?

• Sign up for a subscription

• Ask for a quotation

• On line order?

Establish a tracking procedure.

Google Campaigns

• Turned off Google Content Network. Removed the keyword attracting worthless clicks.

• Added names of competitors companies and products to the Campaign settings.

• Added European languages to the Languages setting which was set to only to English. If you are targeting France you may want to create an ad in French.

• Comprehensive Keywords analysis
  • Searched for keywords using Google’s Keyword Tool and Wordtracker.
  • Studied competitor’s sites and keywords.
  • Brainstormed with team members for keyword ideas.
  • Built new list of keywords.
  • Daily tracking of impressions, CTR and rankings.

• Setup different ads targeting specific products.

• Directed URLs to the appropriate landing pages for each ad.

• Suggested Search Engine Optimizations to improve the ranking of the site.
  • Added more keywords to content.
  • Refreshed current content.
  • Designed new landing pages for each product.
  • Enhanced the site with new content, pictures and regular updates to” News and Events section”.

Watch the Numbers

Making changes a campaign is only the first stage; you must watch the numbers and keep track of the results. This requires a lot of time and effort:

• Watch which keywords are getting the most clicks.

• Exclude poor performing keywords.

• If your campaign is international keep track of which countries are generating the most interest.

• Are some days better than others?

• Which adds are the most effective?

• Track clicks, impressions, CTR and Average CPC.

• Start with a low daily budget and gradually increase as you learn which keywords are effective.

• Watch the Conversion Rate and ROI.

• Use Google Analytics.

Summary

This company is not alone in using a marketing team who have very little experience with PPC advertising and do not have the technical skills needed to perform a good job. However, just knowing the techniques needed to run a PPC campaign is not sufficient, the PPC consultant must also have an in depth understanding of the client’s business and industry.

Therefore, conducting good PPC campaigns requires a combination of PPC skills, industry knowledge and marketing skills.

A very interesting article Top 10 challenges interactive marketers face by Aaron Kahlow gives some very useful tips. If you are using SEO “tricks” to get high ratings take a look at 7 SEO Techniques That Google Smashed in 2007.

There has been some interesting discussion about Gene Marks article Tech ‘Solutions’ Your Small Biz Can’t Use take a look at Marks Misses the Mark on “Tech Solutions” and Marks Post Link Bait?

A lot of businesses are overwhelmed by the Web; they panic under pressure to build a web presence. They do not understand there are many tasks involved – Web designers, Web developers, Content Writers, SEO and PPC consultants. Having a good well designed, optimized site requires a lot of time and hard work.

Many of the best web designers know very little about SEO, they know how to make stunning sites, but will they be found by the search engines? AdWords and the whole PPC advertising industry need an expert who not only understands AdWords, but also SEO and how your business works.

Mobile phones represent an enormous window of opportunity for Web marketing. Mobile phone companies have long waited to expand by offering internet services. The iPhone release by Apple Inc. finally opens the door for users to use mobile phones for Web surfing as reported by the Financial Times. Until the release of the iPhone, no device proved popular for the majority of users for Web surfing. The iPhone successfully combines a mobile phone, an iPod, an email client and a Web browser. Apple, under the management of Steve Jobs the legendary founder of the company, set the standard for PC’s in the 70’s with the Apple II and later with the Mac in the 80s.

Since its release in mid-2007, Apple has sold over one million iPhones, albeit with some criticism:

• Third party software cannot be used
• The network is slow
• No GPS

Many of these drawbacks will be fixed in the next version of the iPhone due in 2008. A report by Bloomberg says a 3G iPhone will be released enabling faster downloads.

Techcrunch has a nice comparison of the iPhone and the Blackberry - a phone popular with business executives.

What do These Developments Mean to PPC and SEO?

More and more users will be browsing the Web from their mobile phones. The iPhone has a great looking screen, but at 3.5 inches it is a lot smaller than a standard computer screen. This means PPC advertisements will look different on an iPhone, with advertisers needing to find a way to catch the users’ interest. There is also a significant opportunity for businesses to offer their services to a new group of potential customers. Commuters can shop on-line while travelling to and from work or just standing in line at the checkout counter.

There is a very nice article by SEMGEEK discussing why industry leaders want to stop SEO and concentrate only on PPC.

“My gut feeling is that even today, many execs and VPs out there just don’t understand the value in it, especially the long term investment it provides.”