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March 26, 2007

Is Google Positioning itself to the Television Model?

By Account Deleted

Googletv If there is one thing that Google has taught us online marketers, it is to play the SEM game by their rules. They educate us and push us all to follow their own best practices and we have reacted as if it's gospel. If you don't follow the rules, they will penalize you in terms of increased cost per clicks and  higher budgets. But they do it in such a way where it appears to be benefiting everyone.

Over the years, Google has preached its Quality Score which is based on relevancy at the keyword, Ad/Creative and Landing page levels. So, we are all at the mercy of Google for when they make a change to an algorithm or change their quality score. However, I have to raise the question: Why is Google doing this?

It's easy to conclude that Google has already changed the online marketing world and everyone wants a piece of it. But there's comes a point where important decisions have to be made to sustain growth. Market Over Saturation is becoming an increasing problem and Google needs to find a way to handle both their investor's wallets where they need to constantly increase their adwords revenue as well as provide a product that continues to drive qualified leads and sales to businesses that will not drive up their online budgets.

My Prediction: I honestly believe there will be a major shift the Google Quality score in the next year where we will see an major increase in CPC (cost per click) for all search terms, (no matter what keyword match) and everyone will be re-focusing on Quality Score as the answer to helping their ROAS %. This would be welcome news to SEM agencies and SEM Blog sites where they have the most knowledge and insider tactics to improve Quality score.

I see that the change in New Quality Score will be based on Keyword Saturation, Competition, Negative keywords and Day parting. We have to believe there is a big percentage of customers users who are not taking advantage of Google's Quality Score tactics and raising the CPCs is Google's way of forcing everyone to play their game. Why? As more and more people bid in this marketplace, the saturation increases. I also believe that Day parting (choosing specific times of the day to advertise your business) will be more prominent as Search Engine Marketing matures itself towards the Television Advertising model.

What will happen is that in order to keep costs down, advertisers will spend more of their money at certain points in the day. For example: There is a business selling widgets and using Analytics, they discover that 75% of all sales occur during the the evening and early morning hours from 8pm-4am .EST rather than during the day. So, utilizing the Day-parting option, will allow for more qualified purchasers, rather than browsers, hence increasing their CPA, ROAS%, or whatever is their KPI metrics. This tactic keeps them profitable in SEM because the CPC's are lower and competition has tailed off because most would be running out of their daily spend.

In conclusion: These are actually very exciting times in Search Engine Marketing as we are starting to see trends of how to get the most out of the Internet channel. There are high saturation levels emerging and online marketers and strategists are starting to look at tactics from other media outlets such as TV to combat this very natural change in the Industry. Let's just hope everyone can grasp to all of the changes and make ourselves and our clients more profitable.


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