Last week the PPC Hero team attended a lecture by Jim Koehler, Senior Statistician for Google. The lecture was on the campus of Indiana University as part of their Statistics Symposium (we are about a 7 minute drive from campus!). We had no serious expectations on the topic or content. But when someone from Google speaks, you listen!
The content was geared toward the target audience of the symposium; graduate students who are enrolled in the Statistics Program. Mr. Koehler’s presentation provided some details on how his team executes their quantitative marketing research. There were graphs that displayed how they track logistical regression and conversion attribution.
Honestly, some of the scientific elements and methods of how they test were over our heads (we’re not grad students in statistics!). But we did find what Google is testing to be very interesting and perhaps telling.
Throughout the presentation Mr. Koehler focused his presentation on testing that Google has been doing at the DMA level (Designated Market Area). DMAs are defined by Nielsen Media Research, and are used to identify specific media markets for those interested in buying and selling television, advertising and programming. Basically, this means that Google is testing the success rates of local, geo-targeted campaigns.
Mr. Koehler mentioned that during a recession, big companies will often pull back on their advertising budgets. This can ease up the competition in the paid search marketing space. And during this time, small/mid-size companies can make big gains by locally targeting their PPC campaigns.
Is this the wave of the future? Does Google think that paid search marketing will evolve and be dominated by campaigns that are geo-targeted to specific areas? Numerous advertisers already use this method of delivery, but does Google feel that a shift in focus is coming?
Honestly, we don’t know (even though other blogs have mentioned that the number of local advertisers is growing). But we do know that Google is conducting a lot of testing with DMAs and how to create the best marketing mix for success.
Perhaps Google wants to attract more local advertisers to AdWords, rather than catering toward “big companies” that advertise nationally. And perhaps they want to get this formula right before making a big push toward these smaller/mid-size companies.
Or perhaps Google really does think that geo-targeted campaigns with a smaller, regional focus will be the face of paid search advertising.
Side note: as part of their DMA testing, Mr. Koehler discovered that even Google can’t make advertising on YouTube profitable. None of the their tests generated a positive ROI with YouTube. Was this a wise acquisition since even Google has trouble generating positive results?
Mr. Koehler also gave a brief overview of the AdWords Quality Score. But he didn’t shock us with any new revelations or insider information. This portion of the presentation didn’t shock our brains. And if you read PPC Hero, it probably wouldn’t have shocked yours either.
Normally, we prefer to make claims or speculations that we can back up with hard facts. However, this time we are interpreting Mr. Koehler’s presentation and looking for those hidden signals on what Google is thinking, or least testing.
     | do some of that social network stuff. |
“Or perhaps Google really does think that geo-targeted campaigns with a smaller, regional focus will be the face of paid search advertising.” Personally, I believe this to be the case. In the words of Massachusetts politician Tip O’Neill, “All politics are local.” So it would follow that a highly geo-targeted advertising model would allow marketers to speak to the slight, but meaningful, nuances that matter greatly at the local-market level. Case in point: While at Ford Motor Company, dealers in the same county would insist that “my customers are different” (from the other Ford dealer’s customers in the same county). Turns out, that was the truth. And Google is paving the way for micro-market success.
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@Rob: Excellent comment! I think you may be on to something here. This is certainly a trend we’ll be monitoring in the near future. And trying to stay ahead fo the curve!
[...] that Google may be testing local geo-targeted advertising based on these DMAs. This is from the PPC Hero blog: Throughout the presentation Mr. Koehler focused his presentation on testing that Google has been [...]
Wow, thats a great lecture I would have loved to be there, congratz on always getting your foot in the door PPC Hero !
Interesting that someone from Google says they can’t monetize YouTube well enough, because over here in France, they are doing a massive push to get us to advertise on YouTube, sayong its amazing etc etc… Is it the same over on your side of the pond?
and did you know, YouTube is now in the Search Network? I find that pretty bad…
@ Eloi: Thanks! That’s very interesting that Google is doing a big push for YouTube in Europe. So YouTube is in the search partner network? That is bananas! Keep us posted on how YouTube performs for your campaigns (should you choose to test them out)! Thanks again!
DMA’s in many cases are much too large of a geographic area for most small businesses to target. Take for instance the Google DMA for Miami… well it’s also Fort Lauderdale and down through the keys. That DMA covers hundreds of square miles. If I’m looking for a local pizza place in Miami, Purple Porpoise Pub located in Key West isn’t really going to work for me. So in this particular example targeting by DMA wouldn’t make sense.
Google targeting by DMA really should be treated in a case by case scenario.
@Dax: Yes, this is true. Google’s DMAs do make a broad stroke when it comes to targeting. I think targeting by specific location is much a better strategy!