Advanced Pay Per Click (PPC) Certification Program

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The Search Opportunity Tutorial

3.2 Introduction

Hi. I'm Brad Geddes, the author of Advanced Google AdWords, the founder of Certified Knowledge, the PPC faculty chair for Market Motive. In this module, we're going to look at media consumption. Where time is spent and the big numbers involved with search.

3.3 Web Is Essential

So first off, the web has become an essential part of our daily lives. It is common to see web use grow more than five billion hours year over year. That's the same as one person being online for three million consecutive years. In fact, we've become completely reliant on the web. Majority of people say that not having access to the web would disrupt their daily routine, because we use the web daily. We examine media consumption of individuals. You see that TV and videos watched a little over three hours a day. Music and radio, an hour and a half a day. Mobile phones, another hour or so a day. People game another half an hour a day. They read less than 24 minutes offline. Online media consumptions is more than four hours per day. It's higher than any other major media type. However, there's a new breed of consumers growing up who don't just use one media type at a time. Look at 8 to 18 year olds in the US. They spend 25% of their media time using multiple media at once. They're watching a TV show while using a cell phone. They're on the computer while texting. They're watching TV and using a computer at the same time. Common behaviors. 24% of 12 to 18 year olds use another media most of the time when watching TV. So another reason online consumption is growing so much is we can interact online, either it's computer or a cell phone, while watching TV or listening to the radio. It's easy talk about the US's fast media consumption. However, the growing trend to use the Internet more and more is not limited to a single country. Most countries are seeing growing usage of the web. And some of the most common reasons we use the web are, it saves me time. This could be from researching your products, to finding information, and other uses. The Internet helps keep me connected to family and friends. Well, this explains the large growth of social networking site. The last reason people really like to use the web is that it helps them make better decisions. The web has replaced our traditional means of information retrieval, the yellow pages, newspaper, radio, trade magazines. And other media types are not being completely displaced by the web. Those media forms are also placed in their content on the web, which makes it more searchable and easier to find than traditional paper format. That you can do paid search advertising on newspaper sites. So newspapers and yellow pages aren't going away. They're being transformed to a different media format.

3.4 Even the C-Level Uses the Web

And it's not traditional consumers we're moving online. C-Level executives and decision makers also rely on the web. Forbes, which is a big magazine dedicated to serving business individuals, did a survey among C-Level executives. What they found is the Internet continues to be the most influential and important source of business information around the world. Before starting the work day, C-Level executives prefer to access the web rather than read a newspaper. Seven out of ten executives believe the web is the most important source of information. What's interesting is that C-Level executives consume media on the web more than any other medium. They use the Web more than TV, radio, print. And in fact, C-Level executives use online media more than the average consumer.

3.5 C-Level Trusts Internet Above Work Contacts

What's amazing among this Forbes study is that C level executives trust the internet more than their personal networks of individuals. In addition, executives aren't giving up traditional print media, they're consuming it online. 70% percent of executives say when they consume traditional media they do so via the web instead of print. So this trend goes beyond print to include traditional media broadcasts such as tv and radio. The world hasn't stopped consuming traditional media. We've just changed where we consume it. So the question is how much do you trust the web? This is also from the Forbes digital study. When you look to results you see a large dichotomy based upon age ranges. Under 50, trusts the web a whole lot. They trust paid listings 72%. They occasionally or frequently click on these ads. Over 50 plus 33%. Trusting banner ads, 65%. Under 50 said they trust them, 50 plus, not nearly as much clicking on these ads. You can put PPC ads as a banner or static ad on other websites. So page search does go beyond just search formats to reach in other formats where the content is trusted by executives and decision makers.

3.6 Online Activities By Time

Now I'm going to look at where time is spent online. Search only makes about 3.5% of time spent online. It's increased a little bit year over year, but it's not a huge amount of time spent on search, as opposed to social networks, online games, email, so forth. However, search is the second most common online activity that people do. In fact, there's more than 100 billion searches per month worldwide. Google processes about 88 billion queries per month. And then you have Baidu, eBay, Bing, Yahoo also processing search queries. This makes a huge amount of search inventory. In North America, it's about 22% of all searches. But even when you leave North America, Europe's 32% of the searches. Asia's 30% of the searches. There are searches everywhere. When you look at penetration of searches though, North America's online population is about 270 million people. That's not total population, that's online population. It's about 14% of the world's Internet population. However, they do connect 22% of searches, so a very engaged population. Europe, their Internet population's about 500 million people. That's about 24% of the world population. They connect 30% of searches, so again, a very engaged population. Asia's 30% of the total search query. It's a larger percent of the population though. So in Asia, Latin America, and Africa, the online search queries don't match population. Europe, North America, online search activity is higher than population equivalence. Now Google dominates the US search market share. In fact, Google dominates global search share. There are some countries they're not the dominant player in. But when you look overall at total search queries, Google is by far the dominant player. Now the biggest exceptions would be Russia where you have Yandex, China where there's Baidu. So there are exceptions to that rule. But generally when you want to advertise online, Google is definitely a place to put your ads.

3.7 World Wide Advertising Revenue

And we look at advertising revenue. We see that online activity in 2009 was about 12%, advertising offline about 88%. It's projected by 2014 that online will only comprise 17% of total spent. In fact, some people think online spends even smaller in their projections. However, we look at media consumption trends over the past century, we see is that is when the Internet was invented, its Internet usage spiked very, very quickly as a higher growth projection than any other media type.

3.8 User Attention Does Not Equal Advertising Spend

So here's the real opportunity. Look at media consumption. The average person spends 13 hours a day, consuming some media. And advertisers spend up $465 billion advertising those 13 hours a day. And we break that out to online versus offline behavior. Is that 41% of time is spent online. Not quite 12% of spend is online. 59% of time is spent offline. That's 88% of advertising revenue. It's a big difference between spent and media consumption.

3.9 Consumers Are Now In Control

What's happened is consumers have taken control. This is something that advertisers are still trying to deal with. So, first we had TV and we were forced to watch a channel. Then we got a remote control so we could switch channels during commercials. And then came Tivo. Well TiVo DVRs, now we can just fast forward through commercials. However it's not ending at commercials, it's now that we can record our content and watch it whenever we feel like. Then we had big cable companies. Big cable companies came along and told us what we could watch. And then, we had Netflix on demand. Watch whatever you want, whenever you want. Back in 2000, AOL released AOL 6. You had to view the AOL home page. The browser didn't actually have a home page button. Your home page is AOL. Now most people's homepage, Google, it's a blank page, it starts with a search box. What do you want to do today? Consumers have taken control. And this is where advertisers still trying to adopt to consumers. It's why if you target consumers based upon what they're trying to accomplish, their user behavior, search queries, pages they're on, topics they're interested in. Consumers maintain their control and your ads are relevant to what the consumer wishes to do right now. That's a good combination.

3.10 SEM Spend Projections

And we'll look at spend projections. You see paid search it's just going to up and up and up, it's just going to increase over the next several years. So putting your money in paid search, selling paid search if you want to be an agency, managing paid search if you want to work for a company, pretty much any career in paid search, it's a solid career choice. Now but here's the issue. I mean, look at paid search. The ad spend, it's pretty low. And overall, it's going to increase a lot but it's still, online total is 4% is spent. Only 3.5% of our time is actually spent on search pages. So why do we talk about paid search so much? And it's a few reasons. One, lead cost. It's estimated lead cost is below on your average for 74% of companies. I mean, look at search advertising in general it's $8.50 a lead. Yellow pages $20 a lead. Direct mail, $70 lead. Now, I want to clarify real quick, for the email list in here? This was for untargeted emails. Not internal email lists. That needs to be clarified. Email is a good method of advertising. But internet search? Vast overall lead acquisition cost. Fact search leads online product discovery. And look at how you discover new products. Search engines. So, search engines help you find information when you know what you're looking for, they help you discover new products when you're looking for something new. They're a good place to really get our information from. Yet it's still a small percentage of spend, this is your opportunity. Why is paid search so effective?

3.11 Moment of Decision

It's because it's the moment of decision. When Google was a small company, and they didn't have any revenue yet, they were asked by potential investors, how do you plan to make money? If we're going to invest in you, we need a revenue plan, and Larry Page and Sergey Brin, the two founders of Google, they couldn't answer the question. They didn't know how they were going to make money yet, but what they did say is that, when someone is searching, we have all of their attention. And that whenever you have someone's complete attention, you can monetize that moment of decision because, when someone is searching, they aren't looking at anything but a single page. It's the moment of decision and the moment of monetization. At that moment, everyone is an equal player. Anyone can be on that search page. It's that moment of total consumer attention that you can convince that searcher to come to your website and become your next customer.

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