Web Advertising 1 2/26/2013 CS190: Web Science and Technology, 2010

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Web Advertising

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Today's Plan

 Logistics

Understanding searchers (Commercial

Perspective)

Search Advertising

Next project: Google advertising challenge

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Logistics

• Project 1 feedback/review returned: by tonight

• Thursday: Quiz (web search, advertising basics)

• Today:

Project 2 details

(will continue on Thursday)

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Segway into Search Analytics

• Google trends

http://www.google.com/trends/explore

• Google Flu trends

http://www.google.org/flutrends/us/#US

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Understanding Website Audience

Who are these people?

1. Analyze URLs

2. Analyze Keywords

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Analyzing Referral URLs: Affinities

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Analyzing Keyword Queries:

the "intent funnel"

• What is the intent of customers that type such queries?

• Hint: What they searched before or after?

– Search Funnels:

http://adlab.msn.com/searchfunnel/

– How can you catch

customers earlier?

– What customers do

when they leave?

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Keyword Composition

• Classification of queries in search engines

– Navigational

– Transactional

– Informational

• Keywords with your brand are navigational

– In principle, there should be no competition

– Site should rank high

– Typically in the head of the distribution

• Non-branded keywords are the real target

Aware/Loyal Customers

Competitive/Searchers Customers

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Get Keyword Demographics

• Keywords have demographic signatures

– Microsoft adCenter Demographics Prediction:

http://adlab.msn.com/DPUI/DPUI.aspx

– Quantcast

http://www.quantcast.com/people.com#!demo

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Get Keyword Demographics

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What is Search Engine Marketing (SEM)?

• Search Engine Optimization (SEO)

– I

mprove “organic” result rankings on search engines

– A

djust elements important to search engine algorithms

• Pay Per Click Advertising (PPC)

– Also known as “sponsored results”, advertising that appears to the top,

bottom, or side of search engine natural results

– Typically cost is generated on a “pay-per-click” model, where advertiser

pays for each click a searcher makes on an ad, vs. the traditional online

marketing method of “cost per impression”.

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Search Marketing Facts

• 80.6% of searches use 2 or more words (current trend is 2-3

word searches)

• 87% of searchers do not search past the first page of results

• 33% of searchers believe that the top ranking is also the top

brand of the industry.

• 56% of retailers say that 10-40% of their total orders come

from PPC advertising

• 62% of users do not know the difference between paid vs.

natural listings

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Why Search Engine Marketing?

.

• Highly effective

and targeted

form of

advertising

• High

effectiveness

given the cost

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WEB ADVERTISING

Some slides adapted from DoubleClick, Yahoo!

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16 Spring 2009 Eugene Agichtein CS 190: The Web:

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The Million Dollar Webpage

http://www.milliondollarhomepage.com/

http://en.wikipedia.org/wiki/The_Million_Dollar_Homepage

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Web advertising

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• Banner ads

• Direct

advertising

(search ads)

• Focus:

direct

textual ads

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Ads as information

• “I do not regard advertising as entertainment

or an art form, but as a medium of

information….” [David Ogilvy, 1985]

• “Advertising as Information” *Nelson, 1974+

• Irrelevant ads are annoying; relevant ads are

interesting

– Vogue, Skiing, etc. are mostly ads and

advertorials

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Ads as information supply

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Ad Selection Platform

User profile

& context

Activity context:

Browsing a

certain content

Avail info supply:

Ads inventory

Matching

Ads

User action:

•Click-thru

•Action

Feedback

Economics

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Content Ads

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How it works

Advertiser

Landing page

search engine

I want to bid $5 on

canon camera

I want to bid $2 on

cannon camera

Engine decides when/where to show this ad.

Engine decides how much to charge advertiser on a click.

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Search Ads

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Anatomy of a Search Ad

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“Landing Page”

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Basic Revenue Models

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• – CPM= cost per thousand impressions

– Typically used for graphical/banner ads (brand

advertising)

• CPC = cost per click

– Typically used for textual ads

• CPT/CPA = cost per transaction/action a.k.a.

referral fees or affiliate fees

– Typically used for shopping (“buy from our

sponsors”), travel, etc.

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Keyword matching: issues

• For advertisers

– What keywords to buy?

– How much to pay?

– Spamming is an economic activity …

• For search engine owners

– How to price the keywords?

• Let the market decide: bidding!

• For both

– What are good performing keywords?

– What extra keywords to buy/sell?

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Digging deeper:

beyond keyword matching

• Relatively simple on bidded keywords What about queries on which there

is no bid?

• Advertiser can bid on “broad queries” and/or “concept queries”

– Suppose your ad is:

• “Good prices on Seattle hotels”

– Can bid on any query that contains the word Seattle

• Problems

• What about query “Alaska cruises start point”?

• What about “Seattle's Best Coffee Chicago”

• Ideally

– Bid on any query related to Seattle as a travel destination

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Finding the right ad (cont’d)

• Ads Database = Keywords +

Title + Description + URL

• Ad Query = Search Keywords + Context

• Search problem similar to Web Search, but

– Ads have different structure

– Ad database is (somewhat) smaller

– Ad database entries are “small pages” *+ URL+

– Ranking could depend also on bids

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Similarity to Web search

• Web search trend over the past decade:

– From syntactic matching (common strings between

query and document) to semantic matching (understand

the query intent)

• Sponsored search

– From ads driven directly by the bid phrase (syntactic) to

ads driven by the search context (semantic)

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Three sub-problems in

ad selection

1. Match ads to query/context

2. Order the ads

3. Pricing on a click-through

IR

Econ

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2. Order the ads

• For each ad we now have

– A query-dependent

score

and

– A $ bid from the advertiser that can be used to

compute an

Econ score

• Ordering of retrieved ads

– Most generally, composite

query

+

Econ

score,

e.g., expected revenue

• Original GoTo/Overture scheme:

– Order by bid

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How to price a click?

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• For the keyword emory, assume advertiser has a

value of $10 per click.

• How much should she

bid

?

• How much should she be

charged

?

– The value of a slot for an advertiser, what he bids and

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PPC Terminology

• PPC: Pay Per Click

• CTR: Click Through Rate

– Percentage of clicks to impressions

• CPC: Cost Per Click

– Price an advertiser pays for each click on his/her ad

• Daily Budget

– Amount advertiser is willing to spend, each day, on PPC

ads

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The PPC Auction Model

• Basic model

– Highest bidder gets highest slot

– Winner pays winning bid

– Not ideal! Why?

• Vickrey-Clarke-Groves (VCG) auction

– Second price auction

– Optimal for single slot

– Reveals true willingness to pay, no need to be strategic

– Winner for slot i pays maximum bid of bidder that get i+1 slot

• Still not the best for Google, Yahoo, MSN etc.

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Ad Quality Score + Landing Page Quality

• Search engine needs repeat customers

• Needs to improve user experience for long term

• Bid transformation:

– (Bid $ amount) x

(Ad Quality Score)

~ (Bid $ amount) x

(CTR rate + relevance)

In other words, rank by expected revenue for Google

• High quality ads → Lower bid amount

(incentive compatibility)

Details for quality score: https://adwords.google.com/support/bin/answer.py?answer=10215

Main

difference

between

Yahoo and

Google

until 2007

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Example Google AdWords Report

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Case Study: Cost per Click and Holidays

• CPC increases before the holidays

– Should advertisers refrain from bidding?

• How to approach the problem?

• CPC increases but conversion rate (CR) increases more!

• Cost per Acquisition (=CPC/CR) drops!

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Improving PPC ROI

The “Long Tail” Concept

• “The Long Tail” by Chris Anderson

– An aggregate of less popular products can sell more in the “long

tail” than the most popular products

• Same applies to PPC

– An aggregate of specific, less searched terms can provide better

ROI than highly searched terms

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Does It Really Work? YES.

• Major athletic retailer case study

– 80% of PPC sales come from long tail keywords

– Specific, product-name keywords

– Only 20% of sales come from broad terms, like “BRAND shoes” or

“BRAND jacket”

• Most “long tail” keywords are inexpensive

– [web hosting] $8.30

– [freebsd web hosting] $0.10

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Project 2: Google Ad Campaign

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 NOW:

– Pick your teams: 2 or 3people each. Preferably, not same as Project 1

– Pick a small business (or non-profit or student organization) with a website that has not

used google AdWords in previous 6 months

– Sign up for Google advertising challenge

• Today/tonight:

Setup Google AdWords account;

send your CID to me

• Monday 3/4

, send professor your campaign strategy (1 page, including website of

business you want to promote). I will give you feedback in class on Tue.

• Thursday (3/6)

Your

Advertising campaign starts

and continues at least through

spring break.

• Thursday 3/21

each group does

a short presentation

about campaign results.

• Wednesday, 3/27

, submit a

short (1-2 page) report

about your ad campaign.

 Note: If you want to be considered in the Google competition for fame, fortune, and