Jigantus.com

I’ll be heading to the CES show this week. It will be my first time there so I am looking forward to it. I have spoken to some people who have attended and it sounds daunting. I have been to Las Vegas before and it is a massive place.

In leading up to the show, I definitely notice the difference in attendance. I almost went last year and noticed the hotel rooms are sometimes going for less then half of what they had in the past. Also, incentive offers are abundant as well as cheaper and more available flights.

This does appear to be the year where only the core people are going, which looks like the theme of 2009. Only things that need to be done, will be done in a no frills kind of way. We will be no different.

It will be key to identify future trends, when scouting products, I will have to choose wisely so energy in 2009 will be spent marketing products that people want, where we can make money on with less service and hassle.

I’ll let you now how it goes.

CPM advertising stands for cost per thousand ad impressions describes a type of ad where the an ad space is sold for a fixed rate over 1000 impressions.

These ads are usually presented to a general audience, not specifically targeted to a key word. For example, an advertisers banner would show when a user visited the home page of a web site. The visitor may be looking at a web site on cars and be served an ad selling travel deals.

The effectiveness of a user clicking on these ads is reduced as the ad is not highly targeted. Advertisers, depending on the ad broker, may place ads on sites that draw the most likely demographic to their product offering, but may not find the visitor in a specific mindset for the travel ad and therefore waste the impression.

The advertiser hopes that over 1000 impressions or more, a percentage of those visitors will be interested in the ad and click on it. Also, CPM ads are a great branding opportunity allowing an advertiser to get it’s name out on a mass scale.

CPM ads are usually cheaper then more targeted ads, allowing the advertiser to spread its message accross a broad spectrum.

Unless you have a massive budget or a large brand to build or maintain, CPM ads are not for most businesses.

In Lesson 1 I will describe the basics of CPC from a new advertisers perspective, how does it work, where do I start?

Cost Per Click (CPC), also known as Pay Per Click (PPC) marketing describes a method of advertising on the web where you pay only for “clicks” you get to your web site. The amount you pay per click is determined by a number of factors. Whether it is successful or not is also determined by your offering. I’ve spent millions on CPC ads, so I have learned a few things that I will pass on to you.

So how does it work? CPC advertising is structured on a bidding system, meaning you bid for specific key words that you want to target. For example, an advertiser who sells “digital cameras” can bid on that key word. When someone clicks on your ad and goes to your web site, you pay for that click.

CPC advertising allows you to highly target the audience you want , even geographically. The theory is, only someone who is looking for a digital camera would type the word in and therefore be someone you want to show your web site to in hopes that they visit your store and eventually buy, or in a local case a hope to visit the store or call.

This differs from the CPM (Cost Per Thousand) newspaper style model, where you buy an ad for a fixed price and hope that its designed well enough that people click on it or read it. This ad is usually served to a general audience, not targeted by key word, so they are less likely to click on your ad.

The CPC model has become extremely popular for advertising on the Internet, as it produces a highly targeted visitor to the site that you only pay for when they do. The main advertisers that offer this are:

Google Ad Words

Yahoo Search Marketing

Microsoft Advertising

Google is the biggest followed by Yahoo and MSN. In fact, I would say Google has more volume in ads then Yahoo and MSN combined at the time of this article.

So you want to try? What do you do?

1. Set up an account with one or all. If you are starting, just pick one.
2. Determine where you want to advertise. What countries do you ship too? If you only sell local, you don’t want to advertise around the country, otherwise your ads will be clicked on by people who you can’t sell too. 
3. Determine the key words you want to bid on. I would recommend you to start with the most competitive products you sell, or the strongest part of your business. CPC ads do not just have to be product based, you can advertise a service as well. All the ad systems have a key word tool that will help you identify relevant key words. A tip here is to keep the words more specific. For example, if you select “digital cameras” you will be paying a fortune for this word, as there is a lot of competition and searches done for this term. However, if you select “Panasonic Lumix” you will get a more targeted buyer and a higher conversion rate.
4. Determine where you want to link to. Once the user clicks on your ad, where does the link go? Linking to a relevant page would be ideal. Don’t link to your home page when you can link direct to the Panasonic Lumix camera page, you’ll get better results.
5. Bid. The higher you bid, the higher your ad gets placed. If you bid really high, you will be at the very top. But be careful, you will also get the most clicks.
6. Set the budget. If you are experimenting, make sure this stops you from getting into trouble. If you don’t know what you are doing, you could end up spending a fortune before you know what happened. Set a monthly budget (NOT daily), so you don’t exceed the money you’ve put aside, you can always increase it, but not decrease. Get you feet wet first. Daily budget’s are in some cases really just a monthly budget, so if you set your daily budget at $30, it is really $30 x 30 days = $900. Your spend could reach $900 in ONE DAY!!! So watch out.
7. Determine time of day. Ads can be targeted by time of day (not in all systems). This is useful as you don’t always want to display ads when you are not there to answer questions. This could result in you loosing the customer.
8. Start small, keep it simple. Master the basics, learn the system, there is plenty of time to expand. If you don’t, you could bite off more then you can chew. Also, keep experimenting, most people don’t get it right the first time.

These are the basic minimums. I could go on all day about other things related to CPC. Your page, web site design and policies also have a large influence on your success but this will have to do for now. Stay tuned for more.  

CPC advertising is a highly competitive game, with lots of competition, veterans have a vested interested in keeping newbies away, after all it eats into their bottom line. There are cons to this system as well, but if you want quick targeted traffic at a controlled budget, there are not many other choices you ha

The e-commerce environment is, in many respects, simply a new geography for the market economy and for this new market economy to take root firmly it has to overcome the same institutional obstacles as the offline economy Key among these is trust.

• Secure check out
• Phone number
• Address
• Written policies including a friendly return policy
• Trust seals

I like reading Techcrunch articles because they seem to be on the pulse. I read one today that Google is tweaking their Adword system to recognize quality more.

Google Tweaks AdWords To Reward “Quality” (And Juice Revenues)

In it they talk about the Adwords Blog:

To appear above the search results, ads must meet a certain quality threshold. In the past, if the ad with the highest Adrank did not meet the quality threshold, we may not have shown any ads above the search results. With this update, we’ll allow an ad that meets the quality threshold to appear above the search results even if it has to jump over other ads to do so. For instance, suppose the ad in position 1 on the right side of the page doesn’t have a high enough Quality Score to appear above the search results, but the ad in position 2 does. It’s now possible for the number 2 ad to jump over the number 1 ad and appear above the search results. This change ensures that quality plays an even more important role in determining the ads that show in those prominent positions.

What I see here is that Google is making it easier for Ads that “meet” the quality score to be displayed in the top section of their web site above the organic search results. In the past, it used to be a combination of quality and bidding. If the bid was high enough it would make it. Sometimes no ads would show on the top, all the way up to 3.

As most marketers know, the most clicks happen on the top results, with less on the side. So by allowing more ads to be placed on the top, more clicks will happen resulting in more revenue for Google.

While increasing quality content is always a good thing, ads are not really considered content per say. Because the move increase revenue to Google, its good intention seems to be diluted by the revenue grab.

Ultimately the market will decide. PPC advertising is extremely competitive, with advertisers struggling to find the fine line between winning and losing. This will make it even harder.

In the past model, advertisers that had good quality ads but didn’t want the “looky loo” traffic, could strategically place themselves on the side ads on Google. This would result in “filtered” traffic, customers who actually wanted to click on the ad because they sought it out.

In the new model, advertisers thrust to the top will see increased spending due to the additional “looky loo” traffic, traffic that won’t convert as easily.

The market will have to adjust, but I see it as another squeeze on a PPC model that will be difficult to maintain in the long run.

According to Wikipedia:

“An economy is the realized social system of production, exchange, distribution, and consumption of goods and services of a country or other area. A given economy is the end result of a process that involves its technological evolution, civilization’s history and social organization, as well as its geography, resource endowment, and ecology, among other factors. ”

Economies are often referred to when you talk about Countries, but in fact the web has become an economy of its own, with certain sites providing further sub economies.

Let’s put it to the test and look at EBay. EBay has a system of production (third party applications), exchange, distribution, and consumption of goods. It has technological evolution, social organization (feedback system, discussion boards, EBay etiqutte, cult following) and geography (wordlwide) . Third party developers building applications for EBay users like Esnipe, Paypal, and other marketing tools can be argued as using “code resources” to fuel the economy.

EBay is not selling goods, it makes money from fees and services, (much like a government tax) and puts it back into making improvements for it’s new economy. The environment it has created, the eco system, allows the economy to thrive. EBay must nurture, care and continue to improve the economy, or it goes down.

Other sites like Facebook and MySpace, are growing to become economies as well. Originally started as a social network, the environment being created motivates third party developers to build applications to service users thus promoting commerce.

Craigslist has tapped into the exchange of goods, services and social exchanges between local people.

Amazon.com , Buy.com have also created a system that allows third party sellers to sell on their web sites. They no longer sell just direct.

Second Life, a virtual reality game takes it a step further where it has created a fictitious world where real people play their self developed characters and pay real money for fake land, goods or services created by other virtual people. In fact real life companies create a presence in this system to market their goods outside the real world.

The Internet has allowed businesses to create new economies that are fostered and promoted inside each URL. Jignatus.com hopes to be one of those new economies.

Of course, we still have to live in the “real” economy, the one where we have a physical place to live, but what a powerful place the web has become.

I recently read an article on improvements to Google Analytics tools on Techcrunch. There are a number of changes that will improve an advertisers understanding of their customer. This will help advertisers more efficiently focus their ad dollars, and help Google squeeze more out of their ad model.

Pay Per Click advertising is a huge business, generating billions for the online ad market. Below is a chart from Lehman Brothers, notice “Search Advertising” is the largest form of revenue right now at over $11 billion in revenue. 

Projected Online Ad Revenue

Google recently announced (Sept. 16, 2008) that they would have a new judging system for AdWords. AdWords of course, is their PPC (Pay Per Click) system that generates them billions in annual revenue.

Google changed the way they calculate the Quality Score and that they will analyze the landing page less frequently then before. They are also opening up ALL keywords for bidding, whereas in the past they restricted it to more “active” keywords.

The most significant change was that they are now replacing what used to be “minimum bid” prices, with “first page bid estimates” which will likely result in higher prices as lack of clarity on bid position and will “force” uneducated bidders to run the bids up.

It will take some time to see the impact as advertisers absorb the changes. However, this is an example of how Google is squeezing everything it can out of PPC. PPC is a great tool to generate traffic to your web site, but only a few businesses can make it. These changes will make it even harder.