October Newsletter The Joy of Budgets As we prepare and strap ourselves in for the 2009 Holiday season, many of us are in the process of finalizing our 2010 budgets.  The robust growth of the online marketing industry coupled with a volatile economy adds a whole new layer to an already tricky and at-time, frustrating process.  To help plan a strong budget in 2010, we have listed some roadblocks we all face, along with our solutions for getting around them. 1. Changing search engine economics - While CPC fluctuations depend on a number of factors, quality of management of the program being at the top of the list, conventional wisdom says changes in search engine algorithms are also a driving force behind vertical price moves.  While some verticals have seen bigger price moves than others and overall historical CPC inflation is minimal, many marketers wonder about how much these price moves affect underlying economics. Solution:  We recommend keeping an open dialogue with your search engine representative.  Try to find out if they have vertical specific research on CPC trends and also on changes in traffic.  The biggest question is whether the higher or lower prices you are seeing are because of search engine algorithm changes or quality of management of your program.  One of the best ways to sort through this is to network and find out if the trends in your business are consistent with those observed by similar businesses in your market. 2.  Varying competitive landscape -  The digital advertising industry is one that is not only constantly changing, but also constantly growing. New players come and go, overcrowding a particular vertical and snatching opportunity or leaving a treasure chest of opportunity behind them.  These competitors can help and hurt your business depending on their position and success.  How can you adjust for competition when building out budgets?    Solution:  This is where building strong internal competitive research is crucial.  Who are the big players?  Who are the small players?  Who is growing and who is shrinking?  Is there anyone in particular who is under-spending on their search program but could be disruptive if they started spending?  Strong internal dialogue is key in getting a grip on what the next twelve months may look like competitively.  We also suggest talking with your search engine representatives and drilling them for any and all information about your vertical and the competitive landscape.  When asked the right questions, they are a great resource to provide competitive data and will help you discover which companies are bidding on key generic terms in your space.  Furthermore, use of 3rd party competitive insight tools such as AdGooroo and The Search Monitor will increase visibility into your top competitors, their messaging, and overall market share on a particular keyword set. 3.  Economic instability -  Designing a twelve month budget before the completion of the holiday season is more difficult than ever this year given the current state of the US and global economy.  How can you predict where your industry (particularly retail) is going to be six months from now when you haven't seen results from one of the heaviest online times of the year? Solution:  Unfortunately, past trends are misleading because in many ways we are in a new US consumer environment.  That said, look back on what worked and didn't work in 2009 (promotions, coupons, sales, free shipping offers, etc.) and determine how to incrementally boost your traffic.  If you are already achieving ROI goals and feel there is room for keyword growth or impression share/average rank is relatively low, then factor in an appropriate increase in budget.  While management may want to be cautious due to brick and mortar sales being down, in retail, while in-store sales decline, online continues to make positive strides forward.  All signs point to this holiday season being stronger than last year's, setting up an even stronger finish to 2010.  While it is crucial you do your homework by networking with other SEM managers, picking your agency's brain, and talking to search engines, ultimately, you know your business best and need to make the call on whether there is room for growth in the program. Here are a few more opportunities to take into consideration when mapping out 2010: Display.  Google announced the addition of the Doubleclick Ad Exchange network, and we will most likely find more volume through the content network with this acquisition. Mobile Advertising.  Do not miss out on this growing opportunity!  Mobile search provides a new medium for driving traffic into stores and increasing online purchasing. ROI metrics and an "open checkbook policy".  When you hit your ROI goal, ensure management will continue to fund your program so that you can not only meet your goal, but surpass it. Volume vs. ROI.  Your top-performing keywords drive consistent, efficient revenue, but be sure to play around and test for new opportunities and undiscovered, scalable keywords. *If you are not currently working with either mobile or display through the content network, we recommend including budget for these channels, as they will become more and more useful and ROI-positive as the year moves on. About Us eSearchVision blogs Get PPC tips from our SEM experts and interact with our team! Follow-us on Twitter Follow eSearchVision1 to stay updated on what we're doing! Read us on Search Engine Land Our Creative Director, Benny Blum, is a contributing author for this popular SEM news website - read his content! Meet the team! Sascha Schlinghoff, Account Manager Sascha joined eSearchVision in February 2009 and is part of our Ann Arbor team!  Born in Germany, he successfully works with both US and International clients. Sascha is the link between his team and advertisers and works proactively to successfully optimize SEM programs.  Sascha keeps advertisers informed of campaign performance and new opportunities and provides creative solutions to improve campaigns. Sascha has always had a passion for business and earned his BBA Marketing at Eastern Michigan University.  He is also currently pursuing an MBA at Eastern Michigan University!  When he is not strategizing for SEM programs or studying for class, Sascha enjoys bicycling, disc golf and volunteering in the community. Contact Us eSearchVision 231 Sansome Street, 4th Floor San Francisco, CA 94104 415.814.1001 mw@esearchvision.com  For more information, or to schedule a free demo, visit us at www.esearchvision.com