Digital Marketing | Digital Strategy | This Digital World

Small Businesses Spending More on Paid Search

US small businesses are spending more than double on paid search campaigns compared to a year ago. That's according to a new report out by Webvisible, which looked at how small businesses were spending their marketing dollars and how well paid search was performing in particular.

Paid search spend (those text ads you see down the side of Google), was up 159% in 12 months, with small businesses buying more keywords than ever before.  Performance, measured by conversions or actions resulting from the click through, was also up, although the reasons are unclear.  Maybe they have all become super-hot landing page optimizers in the last year.

Part of the reason for the increase in spend is probably because keywords just get more expensive over time.  The cost of a typical paid search campaign on Google is significantly higher than two or three years ago because more companies are bidding on the same keywords.  This drives CPC (cost per click) up on the keywords that typically have big volumes.  Advertisers are then forced into the 'long tale', hunting for keywords that are less popular and therefore cost less.  So by default, the number of keywords in a typical category buy is bound to increase.

I think this is going to become a big problem, not just for small businesses, but for any business that relies on paid search to drive the majority of their acquisitions.  At some point it just won't be profitable to buy certain keywords, because the cost will outweigh the return.

Two things will happen as a result of this:

1. Advertisers will have to look to other channels to make up the difference - get better at organic search, use social media more effectively, get better at word of mouth referrals etc.

2. Landing page optimization and keyword conversion will become even more of an art.  Having solid analytics and a platform that enables you to do simple A/B testing and more complex multivariate testing will be critical to stay profitable.

Social Networking Now the Most Popular Past-time in the UK

Spending hours looking at your favourite social network is now the most popular past-time for Brits, according to Irish social media experts Simply Zesty.

The agency just published an excellent short video, which you can watch below, detailing the social networking habits of the UK population.

I pulled out some key stats which reinforce why businesses must start taking the social networking evolution seriously:

85% of the population are now online and 60% of them read blogs
- do you know the most influencial bloggers in your line of work?  You should be establishing relationships with them, feeding them information and generally keeping them happy!

64% of the population have a social network profile
- does your business?

78% use the Internet to research products and services before buying
70% of people online trust reviews from strangers and 90% trust reviews from friends
- this means two things:
 
1. You need to be aware of what people are writing about your product or establishment and if necessary take measures to correct it.
 
2. You need to establish social relationships with your existing customers through Facebook and Twitter.  Offer your fans special deals, show them the love. They are your biggest ambassadors.

Facebook Virtual Goods Revenue Just Tip of the Zuckerberg

The digital world often looks to Asia for trend and growth prediction and the developments in social media are no exception.  Because of local restrictions by governments on sites like Facebook, local social networks have sprung up and are big business.

According to a video created by Thomas Crampton of Ogilvy, which you can watch below, Facebook generated only $5M in virtual goods revenue (mainly from social games) compared to $87M by Chinese firm QQ, $100M by Mixi in Japan and $200M by Cyworld in South Korea.

Anyone in the social games industry already knows the potential for virtual goods revenue over the next few years, which is why Disney recently snapped up Playdom for $763M.

The question is whether the trends we are seeing in Asia with respect to buying virtual goods online, will hold true for Westerners.

Casual Gaming Crosses Into Food Retailing

 This story is a great example of how the worlds of online and offline are becoming increasingly intertwined.  Farmville, a social casual game played by 65 million people worldwide, has teamed up with Green Giant, vegetable makers to the masses (owned by Betty Crocker), to put Farmville cash coupon stickers on various products in 4,000 stores across North America.

The idea is that this virtual currency is of real value to the game players, who can use it to buy all sorts of things in the virtual game itself, so they will be more likely to buy these food items as a result.

It's a very interesting cross-over between online and retail marketing don't you think?

Social Networks Now a Popular Hiring Tool

How do you find great talent for your business?  Recruitment firms do a lot of the legwork, but can also cost an 'arm and a leg'.  Traditional job sites like Monster may be cheap, but the lack of filtering can mean wading through hundreds of CVs.

So what about social networks?  According to new research by recruiting platform Jobvite, the traditional ways are now being challenged by social networks.

 Almost three quarters of companies that took the survey in June 2010 said that they now use social networks to hire staff.  Unsurprisingly, LinkedIn was top of the social networks for hiring, with 90% of new hires through social networks coming from LinkedIn.

LinkedIn's job search functionality has improved significantly in the last 18 months and provides a simple way for job seekers to find available jobs in their area as well as research companies that they might be interested in working for.  The killer feature though, is the ability to use your existing network to find a 'back door' into the organisation that is hiring.  Having people recommend you for a position is much more likely to get you noticed.

The survey showed that Facebook and Twitter were also growing in popularity as platforms to advertise open positions on.  And with half of those companies surveyed expecting to increase their spend on social media this year, now is the time to look at your own recruiting methods and decide whether social networks might be a more efficient way for you to find your rock stars.

David Cameron, Facebook and Social Research

 The UK government today released a video on YouTube, showing David Cameron chatting with Mark Zuckerberg about using Facebook to engage the UK population on policy change.

I take my proverbial hat off to Cameron; not only is he putting himself and his government in the place where a large proportion of his voters hang out (there are 26 million UK Facebook users) but through the Democracy UK initiative, it seems like he might actually care about what the voters want and think.

Engaging the public, asking their opinions on how to spend the billions he has at his disposal and doing it in a way that is natural and easy for people makes a lot of sense.

Interestingly Cameron remarks towards the end of the video, "If Government wants to engage people we often spend millions, sometimes billions...this is a way to do it for free!"

The potential for businesses to use Facebook as a research platform is huge and it's simple.  Announce a new product feature and ask for feedback; ask your users what they want to see next; ask them what's not so great about your product or service. The possibilities are endless, the upsides huge.

Remember there are also downsides.  The users that become a fan of your Facebook page will be your most vocal customers.  If they are spending the time to leave comments that will help you make a better product and ultimately more money, then they expect to be listened to.  They expect to get timely feedback.  They will criticize and expect you to deal with it in a level-headed way.  Learning how to communicate effectively with your customers/supporters through Facebook takes time and is not easy.  But if you are respectful of them, treat them like you would expect to be treated yourself and understand the power of Facebook as a research tool, you will be able to:
1. Do research for free
2. Make a better product/service
3. Change your 'brand' perceptions for the better
4. Create more loyal users

That's what Cameron is hoping to do with this initiative and I wish him every success.

You can watch the video below: