Microsoft Canada Co. launched a search engine marketing tool, amid much fanfare in Toronto on Tuesday, that should enable Canadian advertisers to better understand their target market and plan their online advertising campaigns accordingly.
Microsoft adCenter is based on a pay-per-click model whereby advertisers decide how much they’ll pay Microsoft for each time a consumer clicks on their advertisement.
The idea is that clicks will convert to purchases.
But the degree to which a particular ad garners attention – or clicks – will, in part, depend on its positioning among search results, said David Jakubowski, general manager for Microsoft adCenter.
“Ads are shown based on a combination of price, ad relevance and quality,” he told IT World Canada.
The higher the price per click, the higher the ad appears on search results. The factor of advertiser market relevance is determined by Microsoft and can change with time given consumer response.
But Microsoft adCenter is more than just paying for clicks, it’s a tool that enables advertisers to understand their target market, said Blake Irving, corporate vice-president for Windows Live.
“It’s also about knowing why they clicked and who clicked,” he said.
The adCenter’s new features include an Audience Profiler that offers a snapshot of who has previously searched on specific keywords. This will enable advertisers to tailor their marketing campaigns accordingly, according to Microsoft.
With Campaign Optimization, advertisers can assign different bid amounts (or price per click) by gender, demography, geography, day of the week, and time of day depending on which cross-section they think will draw the most traffic.
Another feature, the Cost Estimator, allows advertisers to budget ahead by forecasting consumer traffic based on ad ranking and cost per month and per keyword. (Popular search words will draw more traffic, and therefore, more clicks.)
The Keyword Suggestion Tool provides popular keywords on MSN that generated high traffic in the past month.
Other new features include Post Sales Audience Intelligence & Reporting, and Site Analyzer.
“It’s a one-stop shop for advertising needs,” said Irving.
World Vision Canada, a Toronto-based charitable organization, participated in the adCenter pilot for two months and claims conversion rates of 3 to 4 times higher than other pay-per-click search engines.
Adcenter’s demographic profiler has helped contain costs and target the audience that the organization thinks will be most responsive, Adam Hadley, e-marketing manager at World Vision Canada, told IT World Canada.
“We’re meeting Canadians where they want to interact,” he said.
Digital search marketing is an important tool for today’s advertisers in that it captures the consumer at that instant when the demand is strong,” said Kevin Lee, founder and executive chairman of New-York-based Did-it Search Marketing.
Traditional advertising merely stimulates interest and demand, while digital search takes it one step further, he told IT World Canada.
Did-it Search Marketing is an agency that manages clients’ paid search across Microsoft, Google and Yahoo search engines.
While Lee called targeted search the “holy grail of advertising”, he admits the pay-per-click model isn’t exactly void of imperfections.
In more mature pay-per-click markets – which Canada is currently not – there is a tendency for advertisers to bid irrationally giving their ad more prominence than it might otherwise deserve, said Lee.
“The drawback is the auction nature of pay-per-click. As the auction gets crowded, it can start to get a little exasperating.”
There’s also the consumer trust element that factors into the equation, said Kyle Murray, assistant professor and marketing director at Richard Ivey School of Business.
“There is some risk of losing trust because you do see some people elbowing others out of the way,” he told IT World Canada.
But besides the occasional bully advertiser, the pay-per-click paradigm itself presents some trust problems in that consumers may see it as Microsoft being paid to pass on information to them, said Murray.
“There’s been a shift in perception that this kind of marketing isn’t necessarily a bad thing,” said George Goodall, research analyst at London-based Info-Tech Research Group.
Google’s practice of clearly delineating organic search from paid search is a good example of how to tackle this, he said. “Consumers are expected to separate these two types of things.”
Trust aside, digital search engines are a necessity for advertisers as the Web increasingly becomes a commercial tool, he said.
In particular, “cost per acquisition”, or how much it costs to nab a customer, relies on identifying specific demography and commercial intent, he said.
“This is one of the beauties of adCenter where Microsoft has taken an aggressive approach with integration with Passport/Live ID to identify who an individual user is.”
If they have a high commercial intent and you know who they are “there’s a good likelihood they’ll click on a specific ad.”