1. IST402 Google Online Marketing Challenge Jim Jansen College of Information Sciences and Technology The Pennsylvania State University jjansen@ist.psu.edu

2. Quiz! Scenario: You are the owner of a small-medium size business (SMB) with an online retail shop (select a Website that you are familiar with that provides either a product or a service). With the Website of this SMB in mind, answer the following questions. Note: A SMB typically has between 10 and 100 employees, inclusive. Go to ANGEL, Lessons tab -> In-class Exercises - > Search Engine Marketing Exercise

3. The Quiz! 1. What is a visitor to your Website worth? 2. When a visitor comes to your Website, what do you want them to do? Each visitor has both potential costs and benefits – dollarize each visit! The goal of each visit is some type of convert.

4. The Quiz! 3. How would a potential visitor find your Website? 4. What would bring a potential visitor to your Website? More than 75 percent of people use search engines as an entry point (Nielsen) Expression of a need - informational, navigational, transactional. (Jansen, Booth, Spink 2008)

5. The Quiz! 5. What sites are your Website’s competitors? These sites are also dollarizing each visit, trying to convert each visitor, leveraging search, and trying to bring visitors to their Website! Part of your overall campaign to achieve these goals should be sponsored search (a.k.a, keyword advertising)!

6. TAs Brooke Randel (Ad and English; Senior) Mitch Rukat (IST; Junior) Krishna Makadia (IST; Senior)

7. Course Milestones 1.Form a team and select leader (start today) 2.Select a SMB (formally begin on lesson #4) 3.Set-up AdWords account (start lesson #2) 4.Learn key factors of keyword advertising 5.Pre-campaign report (before Spring Break) 6.Campaign (starts 28 March; runs for 3 weeks) 7.Post campaign report (end of April)

8. Google Online Marketing Challenge Overview 8 Jamie Murphy Department of Marketing Business School University of Western Australia jmurphy@biz.uwa.edu.au Lee Hunter Product Manager Google Inc leehunter@google.com

9. What is it? Background Collaborative partnership between Google and Academics Timeline Spring 2008: o 8,000+ students from 47 countries participated Spring 2009: o 10,000+ students from 57 countries participated Overview Student teams receive $200 credit for AdWords Work with local businesses to devise effective online marketing campaigns Implement these marketing campaigns Student teams submit two written reports Evaluation by Google (select 15) Reports evaluated by academics Winners flown to Google Headquarters (15 top, then one from each region and one global)

10. The Google Scoring Algorithm Did not want to just look at conversions (i.e., sales or converts) Final algorithm incorporates 30 different signals in 5 categories Performance Account structure Tool and feature usage Advertiser savviness Budget management Algorithm was extensively tested and refined each time 10

11. Score Frequency Scoring Results: Histogram of Scores from 2008 Challenge 1,620 student groups were scored Results close to normal distribution Needed to narrow down to 150 for manual scoring by Google experts Mean: 11.4 Median: 9.5 Min: 0.3 Max: 27.1 Std Dev: 4.8

12. How has Penn State Done? Spring 2008, fielded 5 teams - 1 team in Top 15 and winning the Americas Region, two teams in Regional Semi-Finalists (i.e., the Top 50 in each region), one team Strong Campaign (i.e., the top 10% of teams), and one team disqualified Spring 2009, fielded 10 teams – 3 teams in Top 15 and 7 teams as Regional Semi-Finalists Winner of the Americas Region 2008! This year – honestly, I don’t care. We’ll going to focus on course learning objectives (i.e., learning techniques of keyword advertising).

13. Let’s get going Step one, skills survey Go to ANGEL Lessons tab ->In-class exercises -> Interests, Skills, and Motivation Survey

14. Let’s set the stage for Keyword Advertising Jim Jansen College of Information Sciences and Technology The Pennsylvania State University jjansen@ist.psu.edu

15. The Power of Search and the Web Sources: comScore, U.S., Feb. ’06, Stanford Institute for the Quantitative Study of Society, Nov. ‘05 Search is the top online activity Search drives over 5 billion monthly queries in the U.S. Online activity has a huge impact on people’s daily lives: –70 minutes less with family –30 minutes less TV –8.5 minutes less sleep

16. Analysis of Search Marketplace

17. Analysis of Online Traffic

18. The Power of Keyword Advertising Online advertising $ are increasing faster than any other medium. The search model is aligned with the consumer need – pull vs push Lowest acquisition cost of any medium – online or offline Low barriers to entry – cost, bias, knowledge

19. Keyword Advertising and Search Engines Web search engines require significant revenue streams! to support the free access that these search engines provide every day to millions of customers. Primary business model for these search engines is sponsored links, which advertisers pay for. These sponsored links appear on search engine results pages when users enter certain key phrases as queries. The search engines provide the overall mechanism for this sponsored search process to occur. Sponsored search is a multi-billion industry. AOL, Google, and Yahoo! receive substantial portions of their revenue from sponsored search.

20. Analysis of Online Advertising In 2008, Google earned ~$22 billion; more than 90% of this revenue came from keyword advertising (Google 2008).

21. Non-sponsored results Sponsored results

23. Sponsored Search Elements 1. Advertiser (or Provider) 2. Advertiser Content 3. Advertiser Bids 4. Search Engine 5. Search Engine Review Process 6. Search Engine Keyword and Content Index 7. Search Engine User Interface 8. Search Engine Tracking 9. Searcher Jansen, B. J. and Mullen, T. (2008) Sponsored search: An overview of the concept, history, and technology, International Journal of Electronic Business.

24. The Sponsored Search Process

25. Let’s Look at the Search Engine Advertising Platform

27. keywords control bids

28. Similar functionality on all major platforms

29. Course T-shirts

30. $500! for course! Thanks, IST!

31. $500! for course! Thanks, Smeal!

32. Course T-shirts Our shirt from Spring 2008 Our shirt from Spring 2009 We need a t-shirt for Spring 2010!; volunteer(s)

33. Let’s talk admin

34. Syllabus Review 1.Syllabus – stable (on ANGEL) 2.Calendar, subject to change (on ANGEL) 3.Lessons (on ANGEL) 4.Daily Log (on ANGEL; last 5 minutes of class) 5.Typical Lesson (short lecture; exercise and hands on) 6.Guest speakers – as available

35. Thank you! … and see you next lesson! Jim Jansen College of Information Sciences and Technology The Pennsylvania State University jjansen@ist.psu.edu