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Paid Search Trends and Predictions For 2013

Mike Essex

by Mike Essex on 21st November 2012

Video Transcript

You can see Mike speak on this topic at the next Digital Pond meetup.

With the Panda and Penguin updates causing massive changes to the world of SEO sometimes it can feel like an easy suggestion to go to paid search and to use platforms such as Google AdWords and Facebook and Twitter to get those customers you’ve lost through organic search.

But actually the world of paid search changes a lot too, and what I’m going to do today is just go through some of the changes that I think are going to happen in 2013 and if not then in the next two to three years. These are all things that really need to happen, and there’s good precedence for why they’re going to happen. So I’ll just run through them now.

The first one is remarketing in search, which is on Google AdWords. That’s currently in beta. If you’ve not seen remarketing before, it involves putting a small piece of code on your website and then Google AdWords has that list and anyone who’s viewed that specific page or set of pages you can give them specific adverts. It works great on other websites, and typically it’s done with banner adverts on the display network. I think it’s definitely going to be something that’s going to happen in 2013 if the beta is successful. Remarketing already works great on other websites, so why wouldn’t you want to use it?

The only thing that’s restraining about this is you’re not allowed to say on your ads that you’ve retargeted someone. You can’t make it clear what they search for on your site and why you’re showing them the ad even though you can do that in banner ads as many show you the products you’ve searched for before and a tailored advert. That’s going to be a little bit restrictive because you’ve only got so many words to make that connection that they’ve seen your site before. It’s definitely going to be something we’ll try here when it launches.

More interestingly is actually that Facebook are getting into remarketing. That’s going to come out next year as well. It’s been said that by changing their ad inventory to remarketing Facebook could charge up to three times as much for an ad. We’re paying around about 20p to 30p for an ad, so it’s going to be a significant cost increase. But if you look at Google AdWords, their remarketing costs a lot more than non-remarketed adverts.

The other thing to factor in as well is that this is going to be exactly the same setup as Google AdWords. You put a bit of code on your website, and then when people see those pages, you can target them specific adverts. Facebook ads generally get a really low click-through rate compared to even the Google display network. Hopefully by being able to have targeted adverts it should help that go up and should help Facebook really see not only their advertising profits increase but their share price as well, and that’s really what they want. So expect to see more of that in 2013.

Increased prices and competition. So we’ve said that Facebook remarketing is going to allow them to charge a premium for adverts. That’s going to cost you more. Google AdWords as well charges more for remarketing and that kind of advert than before, so you can expect that to go up. Year on year the number of people using AdWords increases, and the prices increase. Even in really small niches that you would expect to have no competition, the prices are still going up even though no one else was bidding. That’s because of the overall demand for Google AdWords as a whole.

So if you work in paid search, you need to increase your budgets next year or you need to anticipate that you’re going to get less conversions unless you cut away some of the wastage in your campaigns. Before the New Year starts is a great time to do it or even in January when the Christmas sales period is over. You need to start thinking about how you can streamline your campaign now to save money that is going pay for these increased costs that come in. Or you need to go to your boss and get your paid search budget increased based on all the success you had last year.

More AdWords extensions. Last year there were quite a few AdWords extensions added on. These are the extra bits that appear below an advert and really help them stand out. Google+, I think that’s probably going to be a big area for more extensions. There’s a social extension now, and I see them expanding that out with more information about you and your profile. I think that’s going to be the next one. But we’ve had things like Live Chat, which is currently in beta which will hopefully be rolled out next year. Also email subscription is a new one that’s just come in that not everyone may have access to yet.

Keep an eye out for that. Check out the extensions tab of AdWords to see what’s coming up. If you’ve got a Google rep, then always speak to them because they’ll usually tell you about these things a few months before they come out to the public, and then you can get on the beta and try them out before your competition.

Google+ adverts, I’m pretty sure this is going to happen. Obviously, Google do get a lot of social information out of Google+, which kind of pays for it for them, but if they never add adverts to Google+, I will be very, very surprised and disappointed as well because I want to use those suckers to target people right now. So yeah, come on Google, let me  advertise on Google+.

Paid Google Shopping Centre, this has already happened, but it’s going to have a knock on effect in 2013 and beyond. Previously you could list anything in Google Shopping Centre for free by uploading a CSV, and now you’ve got to pay per click and it’s the same pay per click model (as AdWords). It makes sense why they’ve done this because, after all, those are really commercially sensitive keywords. Why would they want to give them away for free?

But if you’re operating in that space, you can expect competition to go down, but also you’re going to have to start paying for clicks. So if you’ve got products on there that are quite cheap, like £2, £1 and you’re only making pennies in profit off them, then you really can’t have them on a cost per click model. So you should really look to your high margin products for Google Shopping Centre in the future and cleanse everything else out of there that’s going to lose you money if it’s on a cost per click basis.

More sponsored results, this is on Google AdWords. They recently purchased a car insurance company, and they have that in the search results as a sponsored box, which isn’t quite AdWords. It’s below them, but it’s also higher than organic. Of course, Google aren’t going to pay any money for the clicks to that. It’s not even a paid search ad technically. But if you’re competing in the paid search or the organic spaces, you’ve  suddenly got this weird new box there that draws people’s eye and makes them want to see what this new entity is.

Now, if Google were to buy up another company, let’s say they got into the financial industry with loans or credit cards, in fact they do credit cards, but other properties like recruitment, let’s say, Google could decimate a lot of industries simply by buying successful properties and then putting them on there with a sponsored result and appearing right at the top. So it’s one to watch out for really if Google do buy a competitor in your space. I guarantee they’re going to do this. Why wouldn’t they? So keep an eye out or make sure you’re the company that Google buys. Then you’d be okay.

Cheaper entry point for Twitter ads. At the moment Twitter adverts are really appealing, but the problem is that they cost thousands of pounds a month as the minimum spend. So they’re really not accessible for everybody. Whereas Google AdWords you can set up an account with £5 and give it a go. The problem for Twitter is that you’re got services like sponsored tweets that allow you to pay people money to say a tweet for you. Or even Fiverr will let you pay $5 for people to say tweets, although the results can be a little bit sketchy.

The problem with that of course is that because Twitter is so expensive, this whole kind of black market of tweets has emerged, and it’s money that Twitter is not getting. That’s got to be really frustrating for them, and it also disturbs their ecosystem with people paying other people to say stuff rather than appearing as sponsored tweets.

I would expect a lower entry point for that, but for them also to adopt a bidding system like Google. so the more you pay, the higher you’ll be. The big brands will still be happy that they’re at the top, and the rest of us who want to just give it a go and see if Twitter advertising is going to work, will hopefully be able to do it for just a couple of hundred pounds rather than a few thousand pounds.

Those are all my predictions for 2013. General rule of thumb: Expect prices to go up. Expect competition to increase. Expect Google to try new things in AdWords that allow your ads to stand out. So always keep any eye on the Google AdWords blog. And expect Facebook to get more competitive as they try and use advertising as a primary method of increasing a share price that has been less than stellar in 2012, if we’re honest.

Thanks for watching.

Mike Essex

Mike Essex

Mike Essex specialises in digital marketing and everything search. A recent project of Mike’s was featured on BBC News, Radio 5Live and the Times here in the UK, whilst also featuring on USA Today and ABC News in the US. He will be writing throughout the month about digital marketing and much more...

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