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Persuasion and Internet Advertising

David Rodnitzky – Founder and CEO

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3Q Digital Overview

Types of Online Advertising

Influencing Behavior Online

Tools to Measure Behavior

Deep Dive – Alpha Beta Process

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About 3Q Digital

• Founded 2008 as PPC Associates in a coffee shop

• Offices in San Mateo, Chicago, San Diego, & San Francisco

• 80 employees

• 80 clients

• 95% annual growth rate since inception without sales!

• $220M+ annual media spend under management

• Our Core Principles:“Don’t work with jerks”Over-communicate, over-deliverBe proactive, not reactiveOptimize long-term relationships, not short-term profit

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We Provide Integrated Online Marketing

SEM

Social

Display Mobile

SEO

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3Q Digital Overview

Types of Online Advertising

Influencing Behavior Online

Tools to Measure Behavior

Deep Dive – Alpha Beta Process

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Branding

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Demand Generation - Display

Key Metrics• Click-through rate• View-through

conversions• Click-through

conversions

• Goal is “Distraction”• Good resource:

moat.com

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Demand Generation - Display

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Demand Generation - Social

Key Metrics• Likes/follows• Virality coefficient• ROI?

• Goal is “Interaction”• Good resource:

optimalsocial.com/portfolios

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Demand Generation - Social

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Demand Generation - Video

Key Metrics• Views• Clicks• ROI?

• Goal is “Engagement”

• Good resource: http://www.adweek.com/videowatch

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Demand Generation – Native Advertising

Key Metrics• Clicks• CPC• ROI?

• Goal is “Clicks and Confusion?”

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Demand Fulfillment – Search Engine Marketing

Key Metrics• Conversion Rate• ROI or ROAS

• Goal is Profit!• Resource:

SpyFu.com or SEMRush.com

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Demand Fulfillment – Search Engine Optimization

Key Metrics• Conversion Rate• ROI or ROAS

• Goal is Clicks and Profit

• Resource: moz.com

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Demand Fulfillment – Affiliate Marketing/Lead Gen

Key Metrics• Revenue Per Click• Earnings per

Thousand Impressions (eCPM)

• Goal is Profit• Resource: cj.com,

affiliatesummit.com, leadscon.com

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Demand Fulfillment – Retargeting

Key Metrics• Conversion Rate• Attributed Revenue

• Goal is to Close Incomplete Funnels

• Resource: adroll.com, adexchanger.com

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3Q Digital Overview

Types of Online Advertising

Influencing Online Behavior

Tools to Measure Behavior

Deep Dive – Alpha Beta Process

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Overview – 7 Habits of Highly Effective Online Marketing

Key Persuasion Influencers

• Ad Text• Landing Pages• Targeting

• Source: http://3qdigital.com/how-we-think/#whitepapers

Bid Management

Ad Text Optimization

Keyword Selection

Landing Page

Optimization

Channel Selection

Account Structure

Targeting

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Ad Text• Call to action (What do you want them to do?)

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Ad Text• Four human emotions

–Fear–Greed–Exclusivity–Vanity

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Ad Text• Ad Text Should Target the Query – Answer a Question

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Ad Text• Test, test, test – CTR X

Conv. Rate

Source: http://www.amazon.com/Direct-Mail-Copy-That-Sells

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Landing Pages – Call to Action• Strong Call-to-Action

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Landing Pages – Benefits Not Features

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Landing Pages – Important Stuff Above the Fold

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Landing Pages – Less is More

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Landing Pages – Escalation of Commitment

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Landing Pages – Credibility Matters

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Landing Pages – Avoid Distraction & Anxiety

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Case Study – WrinkleCream.pro

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Regressive Data Analysis – Day Parting

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Regressive Data Analysis – Geography

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Regressive Data Analysis – Device/Carrier

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Regressive Data Analysis – Psycho/Demographics

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Regressive Data Analysis – Placement

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Regressive Data Analysis – Query

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3Q Digital Overview

Types of Online Advertising

Influencing Online Behavior

Tools to Measure Behavior

Deep Dive – Alpha Beta Process

We Use Attribution to Go Beyond the Last Click

Attribution Includes Offline Influencers Like TV

Dynamic Retargeting campaign

CSE

Runs search comparing

phones and buys product

Clicks on ad because

friend likes brand

Searches for brand after

TV commercial and again following

retargeting ad

First sees TV commercial

TV Display Search Social

Lifetime

Value

Landing Page Testing

Ad Text Testing - BoostCTR

Demographics Analysis

Media Planning

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3Q Digital Overview

Types of Online Advertising

Influencing Online Behavior

Tools to Measure Behavior

Deep Dive – Alpha Beta Process

Improper keyword selection and match type costs advertisers millions annually

Account structure mistakes also results in unnecessary cost

The Alpha-Beta process and structure will help you identify and optimize winners and exclude losers = more profit!

Executive Summary

A keyword is a word or a phrase that a marketer buys on Google

A query is a word or phrase that a user types into Google

Google matches keywords to relevant queries

Keywords vs. Queries – A Crucial Distinction

Keyword

Query

Query

Query

Query

Query

Query

Keywords vs. Queries - A Crucial Distinction

Queries

Keyword

A Quick Way to Measure Query Quality

The Lin-Rodnitzky Ratio (L-R Ratio) is the ratio of total query CPA divided by converting query CPA

Use the “Filter” functionality to find all queries with at least one conversion

Divide the total CPA by the filtered CPA to get your score

A good score is generally between 1.5 to 2.0

Important Point #1Google will match your keywords to a lot of irrelevant queries if you give them the latitude to do so.

This results in profit to Google and cost to you!

Match Type – Broad Match• Match type allows marketers to control how

aggressively Google matches keywords to queries– Broad Match: Dragon Tattoo Poster

• Dragon Picture• Tattoo You• Fantasy Island

– Broad match gives Google almost total discretion

Match Type – Broad Match Modified

• Match type allows marketers to control how aggressively Google matches keywords to queries– Broad Match Modified: +Dragon +Tattoo

+Poster• Used Poster of Dragon and Tattoo• Sell Dragon Tattoo Poster

– Broad match modified prevents synonyms

Match Type – Phrase Match• Match type allows marketers to control how

aggressively Google matches keywords to queries– Phrase Match: “Dragon Tattoo Poster”

• Buy Dragon Tattoo Poster• Dragon Tattoo Poster in Spanish

– Phrase match requires a complete phrase

Match Type – Exact Match• Match type allows marketers to control how

aggressively Google matches keywords to queries– Exact Match: [Dragon Tattoo Poster]

• Dragon Tattoo Poster– Exact match will only show the exact phrase

Match Type – Negative Match

• Match type allows marketers to control how aggressively Google matches keywords to queries– Negative Match: -Picture

• Dragon Tattoo Poster is Ugly• Fantasy Island Tattoo Guy

– Negative Match excludes any word or phrase

Important Point #2• We recommend using:

– Broad match modified to discover new and profitable queries

– Exact match to isolate your top performing queries and bid accordingly

– Negative match to exclude unprofitable queries– Broad match and phrase match rarely, if at all

• BUT WAIT – YOU NEED TO UNDERSTAND ACCOUNT HIERARCHY FIRST!!!!

Basic Account Hierarchy• Account = Billing, Time Zone,

Login Info• Campaign = Networks, Devices,

Geography, Day-Parting• Keywords, Ad Text

When Account hierarchy & Queries Collide

• When two or more keywords in an account match the same query, Google must choose which keyword to enter the auction– Keyword #1: +Dragon

+Poster– Keyword #2: +Dragon

+Tattoo– Query: Dragon Tattoo

Poster

Which keyword will Google

choose?

Google’s Official Policy

Source: http://adwords.google.com/support/aw/bin/answer.py?hl=en&answer=66292

Google’s Actual Policy• We have observed

numerous occasions where Google does not follow its own policy for matching keywords to queries

• Translation: to truly control keyword to query matching, you need to create iron-clad account structure

Example of where it costs you money to have Bad structure Exact match keyword with targeted ad copy and

landing page is bumped by broad match with generic copy and LP

Negative keyword you added to one campaign is not included in another campaign – keyword gets served

Same keyword with same match type in different campaigns but with different bids – most expensive keyword shown

Account structure mistakes are sometimes caused by user error and sometimes caused by Google algorithmic errors/decisions

Important Point #3

• Failure to carefully plan out your account structure will cost you profit – I guarantee it

A Beta campaign is designed to quickly identify profitable search queries and eliminate unprofitable ones

An Alpha campaign is designed to isolate profitable queries into ad groups with targeted ad text and landing pages

The overall objective is to take 100% control of your keywords and queries!

The 30,000 Foot View of Alpha Beta

• Step One: Create the Beta campaign “The Bait”– All keywords should be on

broad match modified (+broad +match +modified)

• Step Two: Run raw search query analysis on Beta campaign

• Step Three: Identify winning queries and losing queries

Creating & Analyzing The Beta Campaign

• Step Four: Create an Alpha campaign. Move winning queries into SKAGs in the Alpha– SKAGs = Single Keyword Ad

Groups– Put all Alpha queries on Exact

Match– Create targeted ad text and

landing pages for each SKAG• Step Five: Add all losing queries

to the Beta campaign as Negative Exact Match– -[free dragon tattoo poster]

Creating the Alpha Campaign, Refining the Beta

• Step Six: Add all Alpha queries to your Beta campaign as Exact Match Negatives!– This prevents Google from

matching a bait keywords to your profitable Alpha query

– You control bid, ad text, and landing page for winners!

• Step Seven: Continue to identify winners and losers in the Beta campaign. Move winners into the Alpha

The Air-Tight Account Secret

L-R Score – Before & After Alpha-Beta Structure• Before: 1.4 (June 2011)

• After: 1.84 (August 2011)

• Before: 2.93 (November 2010)

• After: 2.11 (March 2011)

A Virtuous Cycle

Create Beta Test

Keywords

Identify Winner and

Loser Queries

Move Winners to SKAGs in

Alpha

Add Losers *and* Winners as Negatives in

Beta

Identity New Test

Keywords

Queries are the lifeblood of AdWords campaigns, not keywords

Match type is a limiter on Google’s discretion to expand your spend

Beta campaigns use broad match modified to test Google’s algo; Alpha campaigns use exact match to lock-in profit

Use the Lin-Rodnitzky Ratio to measure account health

Summary

Thank You!

david@3qdigital.com@rodnitzky