There are a number of options when looking into being more “mobile-friendly” with your company’s advertising efforts. Some of these include display/banner advertisements, mobile search, branded applications, SMS/MMS, and coupons— to name a few options. Even with the amount of options that are out there, many companies are still skeptical. The uncertainty in spending more on mobile advertising is something which results from many companies wanting to be immediately impressed by the medium’s effectiveness in reaching their target market. This is a reasonable concern, in their respect, but sometimes the way to get ahead of the competition is to, quite frankly, make that leap of faith.

Time is a crucial factor to keep in mind when rating a medium’s effectiveness. Most companies who choose to “go-mobile” do not allow their efforts enough time to produce the result that they wish to achieve. Many companies have dismissed mobile advertising as a highly-effective medium because of their rather “average” results in the short-run. If you look at advertisers who have been present in mobile for a while and/or have collectively used mobile platforms—such as Google mobile, AdMob, Admoda, etc.—there has been more of a positive response.

In 2011 especially, an increasing number of companies are realizing the importance of advertising in the mobile medium. Not only are the advertisers who have been successful in this medium increasing their spending for mobile platforms, but there seems to be a larger amount of new companies jumping on the mobile bandwagon. If this continues, companies will not only put serious consideration into implementing mobile advertising, but potentially have it as a staple approach in their overall advertising strategy.

Paid Search (PPC) Budget Allocation

Many companies, especially those without an ROI-focused strategy, tend to run PPC programs that barely tread water (in terms of profitability).  Are you using a portfolio approach to your program?  Simply, you should make sure the most profitable areas are maximized before providing budget to less efficient areas of the program.  By using this approach, you can rest assured that you’re running the most profitable program possible.

Paid Search (PPC) Bid Strategy

In terms of bid strategy, it may be time to take another look at your program.  Specifically, are you overspending for branded keywords?  Many companies want to ensure dominance for their branded keywords, and maximizing the position of branded keywords is a priority for such marketers.  However, if you consider that individuals seeking your brand are already likely to convert, you may want to test a lower target position.  Many clients achieve incredible savings by dropping their average positions by 0.5-1 places.  This is simple to test, and one all marketers should test at some point.

Match Types and Negative Keywords (PPC)

If your company sells Britney Spears posters, you want to make sure the traffic you are driving to you site is interested in purchasing said posters.  However, if you investigate your potential keywords (and better yet, your existing program), you might find some surprises.  For example, you may find the search query ‘roman spears’ is generating a lot of impressions and even clicks.  However, this traffic is highly unqualified.  Likewise, one of the most popular search queries you’ll find is for ‘britney spears topless’.  Unless your company sells this variety of poster, you’ll want to prevent this unqualified traffic as well.  In the former case, you could consider using phrase or exact match to prevent the unqualified traffic. In both cases, negative keywords can be used to prevent this wasteful spend.

Display/Banner Media Planning

If you’ve been running a display program for some time with the same cost targets (whether CPM, CPC or CPA-based), this may be a good time to renegotiate.  Take the time to review your program and look for areas where you might be able to negotiate better rates.  For example, has one of your networks achieved your target goals with little innovation or change?  If so, it might be time to challenge them a little.  Work with your networks to explore opportunities to improve volume and/or reduce cost in your display program.

Reconsider your Analytics

Many companies, large and small, are paying for analytics platforms that are unnecessary (and often quite expensive).  If you haven’t done so recently, take a close look at your analytics platform and determine if you’re using its unique capabilities or if you’re paying for a platform you simply don’t need.  If your reporting needs are fairly simple and can be achieved via Google Analytics (free) or another inexpensive platform, should you really be spending substantially more on another platform?  This may be a simple line item to remove from your marketing.

Final Thoughts

There are many ways you can look to save money in your Internet marketing program.  Make sure you take the time to review your program.  What steps are you taking to control cost?

We knew about this acquisition since last November, but the Federal Trade Commission began an investigation over concerns that the deal would give Google too much power in the mobile advertising market.  However, just over a month ago Apple unveiled iAd, its mobile advertising platform, which helped Google’s acquisition process move forward because iAd looks like it will be a solid competitor. After the federal government said the acquistion was approved last Friday (5/21/2010), Google wasted no time in closing the deal.

Google shared some statistics about mobile advertising that shed light on why they were after this deal in the first place. “Over the past two years, Google’s mobile search volumes have grown more than fivefold, at an accelerated pace. In the first three months of 2010, people with smartphones with “full” WebKit browsers (such as the iPhones, Android devices and Palm Pre) searched 62 percent more than they did in the previous three months.”

This definitely looks like another big win for Google. According to Gartner research, worldwide smartphone sales have leaped 49% over last year, and represent 17% of all phones sold. AdMob was one of the first companies to serve ads on the iPhone and Android platforms (close to 30% of  smartphone sales), and they will help Google bring more ads via interactive video ad units and expandable rich media ads to the market.

There’s no doubt mobile advertising will continue to grow as more consumers reach into their pockets to search for their needs instead of their desk, and with this acquisition Google has solidified its role as the advertising and search leader.

- Designed for Apple devices (iPhone, iPad, & iPod)

- Built into Apple’s OS

- An ad let’s you stay in the application while it’s still running

- Implements rich media

- Apple sells and hosts the ads

- 60% of Ad Revenues go to developers

What does this mean for Google’s acquisition of AdMob and other third-party advertising networks?

The unveiling of iAd potentially moves the mobile advertising industry forward because it creates a highly competitive market. This makes the acquisition of AdMob, another third party mobile advertising network, more acceptable to regulators trying to halt it because there are less chances of Google monopolizing the market now.

At the same time this could be Apple’s attempt at pushing AdMob (or other ad networks) out of the iPhone specific mobile advertising industry. According to Apple it will still allow “third party” advertisers to serve ads within apple apps. However, there is a new developers agreement, which states that “The use of third party software in Your Application to collect and send Device Data to a third party for processing or analysis is expressly prohibited.” AdMob would be hindered by this new policy reducing choice for developers who want to include ads on iPhones. The policy takes away any advantage that a developer or third party advertiser would have at collecting data on how users interact with the in-apps ads. The only real way that app developers can advertise on Apple devices (iPhone, iPad, & iPod) and collect usage data would be to opt in for iAd services.

Another thing to note about Apple’s iAd is that it hurts Adobe because it requires developers to program code in HTML5 to deliver the advertising content. This is another huge blow for Adobe because Apple devices do not support Adobe Flash, and the launch of iAd means they most likely won’t in the future even though Flash is currently the standard for much of the rich media ads on the web and mobile devices.

Ultimately, it opens up advertisers’ doors to Apple users in new ways. Even though iAd could push away mobile advertising networks like AdMob that would want to put ads on Apple devices, not all mobile users use the iPhone. This will still allow AdMob to tailor their services to non-iPhone users and other mobile devices.

Brand Metrics Calculator

So how does this work?  Let’s say the following is a list of potential brand touch points that could be achieved by multiple online marketing channels:

- website Visit
- Banner Ad View
- Video Views
- Lead Submission

First, let’s take the value of the most valuable touch point, usually a lead inquiry or transaction.  Then we assign a value.  Let’s assume that the value is $100.    Next we try to figure out the rough conversion rate of each touch point to our highest value conversion such as the following:

5 Video Views = 1 Lead Submission

200 website Visits = 1 Lead Submission

10,000 banner views = 1 Lead Submission

Now we have a common denominator, and we can determine the value of these touch points:

$20 per Video View

$.50 per Website Visit

$.01 per Banner Impression

From here, we can determine how to best spend our media budget to generate brand touch points.  Long-term, the objective is to constantly measure performance, incorporate historic data and recalibrate brand metric values to determine how to best allocate budget.  Happy branding!

However, this is not a safe assumption. Many advertisers not only do not know their CPA threshold, they don’t understand its value or how to calculate it for their organization. As an Internet marketing agency, we bring value to many of our clients by helping them establish just this. Given that, we thought many of our readers would find great value in the insight and guidance we can provide in regards to setting your CPA threshold.

Your actual CPA is determined by dividing total spend for a given time period by the amount of conversions during the same time period.  In Internet marketing this most often means media spend/conversions.  If you are using an agency or third party tracking tools you may also factor those variables into the numerator of the equation. A company’s CPA threshold is unique to its product and/or service offering and can be influenced by a variety of factors including their internal goals, the value of the final sale, average order value, close rate and profit margins.

The following is an elementary example of how one might determine their CPA threshold. Let’s say a realtor is selling a property at a non-negotiable price of $1,000,000 and that she knows she’ll make $50K in gross revenue when the sale is generated. Based on historical data, she is confident that she will close 1 out of every 10 leads generated (she’s really good!) and decides to invest $10,000 in a banner ad campaign to promote the listing.  Given her close ratio, she can safely set her CPA threshold at $1,000.

In comparison, consider a cosmetics retailer who sells a variety of beauty products at varying price-points. Assuming the average order value is $40 and they need to maintain a return on advertising spend (ROAS) of 500%, it can be determined they should not spend more than $8 (40/500%) to acquire a new sale.

Once you have determined your company’s CPA threshold, you can use historical data and/or assumptions to evaluate whether various channels will be within the spending cap. Say, for example, the above retailer is launching a cost-per-click paid search campaign. Let’s assume the campaign will receive 7,500 clicks and 10% (750) of those will convert. Additionally, the total campaign cost is $5,000. By dividing $5,000 by 750, we can now see the CPA is $6.66 for this campaign. Because they have already established their CPA threshold is $8, they know that this initiative will successfully contribute to their marketing mix. By using the below formula, we also see that this campaign yields a ROAS of 600%, which also meets the advertiser’s minimum requirement.

Revenue/ Advertising Cost =ROAS

[40*750]/5,000=6 (600% ROAS)

As you can see, it is fundamental that every organization establishes their CPA threshold in order to establish a benchmark for your marketing ROI. It helps marketers to make quick and informed optimization decisions, as they can quickly measure the effectiveness of a campaign and make the necessary adjustments to regain their ROI if need be. Additionally, if campaigns are acquiring conversions within your CPA threshold, and therefore are effectively contributing to revenue generation, marketers can shift more budget to the said medium and capitalize on the investment.

Why you may ask… well, do you like to pay for the same thing twice?  Most often when negotiating a CPA buy with the publisher networks, they will require that they get paid on view-through conversions.  A view-through conversion occurs when an Internet user who has seen your ad, but not clicked on it, completes the predetermined action on the advertiser’s website.  Basically the idea is that whether the Internet user was consciously aware or only subliminally influenced by the ad they saw, it affected their behavior and it helped lead to the conversion on your website.  This is a logical argument and I cannot disagree that the publisher network deserves to get paid under this scenario.  Where this gets messy is when your customer has seen and been cookied for two or more ads on different publisher networks and when the customer converts ONCE, the two ad networks come knocking for payment and you have to pay TWICE for one order.

Ad serving technology such as DART for Advertisers can solve the problem of having to pay multiple times for the one conversion.  The technology enables you to attribute the conversion to only one network by telling you who last cookied the converting user.  So if your ad was seen 10 days ago on publishing network A but 2 days ago on publishing network B – only network B will get paid.  It is very important that you have the publishing networks agree to bill off of your ad serving technologies reporting.  The bigger networks only tend to trust a few brands so you’ll have to make sure you’re investing in the right tool.  Beyond being able to tell you which banner publishing network last cookied the user, some technologies will also allow you to tag all other forms of paid Internet marketing as well.  In this scenario, you’ll know whether to attribute the conversion to your email marketing campaign, paid search effort, banner advertising, or affiliate marketing campaign.

I don’t know how many advertisers out there are double and triple paying for conversions but I guarantee you it is much more than a handful.  Beware when entering into multiple CPA deals across multiple networks.  You will get excellent exposure and reach but you might also get burned.  Make sure you are protected and invest in ad serving technology.

*Figure  1

1. Creative
The complexity of your message will largely determine the size and type (rich, static or expandable) of creative.  When developing creative, please beware of file size! Most networks will only accept up to a certain file maximum, usually 50kb, and will either charge additional for any overage or refuse to run your creative altogether.

Additionally, keep in mind that advertisements that take too long to load (typically rich creative) may negatively affect performance results. For example, CTA (Chicago Transit Authority) once invested in developing rich display ads that ultimately took too long to load and link to CTA’s website. The campaign results were therefore weak and money was wasted building out and implementing the creative.

2. Platform and Price
Specific ad networks and publishers enable your ads to appear on various sites. The networks, such as ValueClick, Platform- A and Google, negotiate for real estate on various Web pages in their network and populate that space with creative provided by their clients. This allows ad networks to bring publishers and advertisers together, enabling creative to appear on many different relevant sites through one ad buy. Out of these networks, Google has gained popularity on account of its competitive pricing and self-managed interface.  Each ad network will allow you to target your banner based on demographics, location and vertical, ensuring your message reaches the most qualified audience.

With each ad network, it is important to negotiate price based on one of three metrics, CPA, CPC, or CPM. CPM stands for cost per thousand, which refers to the cost-per-thousand page impressions. CPC, cost-per-click, is the amount of money an advertiser will pay publishers for a single click on its advertisement. CPA, cost-per-acquisition, where advertisers only pay when there is a direct conversion linked from the advertisement. Rise tends to prefer CPA based deals as they are essentially pay-for-performance in nature.

Ad networks also enable you to analyze click throughs and view throughs as well as providing the opportunity to perform behavioral targeting which we will discuss in future posts.

3. Tracking
Online marketings biggest advantage, be it display advertising or SEO, is the ability to track and record results. Regardless of which network you partner with, each should provide you with ample campaign reporting.

Be aware that tracking complexities do arise if you utilize multiple networks at once. Because numerous tracking pixels will be on your site, there may be issues with cross-tracking and one conversion being attributed to multiple networks.  To avoid this, Rise advises the use of Display Ad-serving technology which will be addressed in more detail in a future post.

*Beverage World Media Kit

4/4/2011: Please see an updated blog on Behavioral Targeting/Remarketing Strategies and Solutions