AdCenter Advertisers Like Returns, Want More

  |  September 29, 2006   |  Comments

Advertisers using Microsoft's adCenter are happy with the results they're seeing, but are getting impatient for more traffic.

While there's certainly room to grow its traffic, Microsoft adCenter is becoming a favorite among search engine marketers.

A group of advertisers assembled for a roundtable discussion in Microsoft's New York headquarters this week said they were happy with the results they've seen from adCenter so far, but all agreed they'd like to get more traffic, as long as the returns do not go down.

"We're finding the traffic is very good traffic. It's consistently performing in a way that allows us to increase our spend in search," said David Hughes, CEO of The Search Agency. Hughes said that traffic is still not at the level of other search engines, but that his clients have seen as much as 400 percent growth in traffic on their campaigns since adCenter launched fully in May.

The improved targeting tools in adCenter bring the "marketing" to search engine marketing, which is often reduced to keyword bid management, said Bill Wise, CEO of Did-It. "In search, you always buy on averages. You buy keywords based on an average ROI. AdCenter allows us to break out of that," Wise said. "Their technology, combined with the quality of their audience, has allowed us to better target and squeeze out a higher ROI."

Adding demographic, geographic, and psychographic targeting, as Microsoft has done with adCenter, adds a level of sophistication that many marketers have been clamoring to take advantage of, Hughes said. Where Google, and soon Yahoo, will effectively punish marketers for crafting an ad that is not meant to be clicked on by much of the audience, Microsoft's targeting allows the non-targeted audience to be removed from the equation, so the ad's performance goes up and is not dropped in the results.

By narrowing down the ad buy to include an audience that tends to convert better and eliminating wasted ad spend, marketers are then able to put more of their budgets into additional keywords with Microsoft, or added buys elsewhere, said Steve Jacoby, EVP sales and marketing at Sendtraffic.

For example, some of the products for client Ronco, which markets its kitchen and home products largely through TV infomercials, are more likely to appeal to either men or women, or to certain age groups. By excluding the non-performing groups from its ad buys, Sendtraffic is often able to double the conversion rate at a lower cost.

In addition, instead of trying to experiment with messaging to eliminate segments of the audience that don't convert well, marketers can do away with them through adCenter's targeting capabilities, and spend more time and energy on crafting a message that will drive conversions from the target audience.

"If you don't know who the person is, you can only market to the keyword. If you know who the person is, you can market to the person," Hughes said.

That improved ROI is becoming essential in a marketing landscape of rising keyword prices, and slowing query growth, Wise said. "Every marketer manages to a metric, and they all hit a point of diminishing returns. Now it's about segmentation, finding pockets of efficiency and finding scale in those areas," he said.

To its credit, Microsoft is being very deliberate about expanding adCenter's traffic, in order to ensure the product is well built and different from competitors, Wise said.

"Microsoft is being very patient," he said. "I get on their case because I feel like they're holding back. It seems like Microsoft's media properties alone could lead to four times the traffic volume."

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Kevin Newcomb

Kevin Newcomb joined ClickZ in August 2004, covering search marketing and other online marketing topics. He has been reporting on web-based businesses since 2000.

Before the bubble burst, Kevin was a marketing manager for an online computer reseller, handling copywriting, e-mail marketing, search marketing and running the affiliate program.

With a combination of real-world marketing experience and years of business journalism, Kevin brings to ClickZ a unique ability to deliver news and training materials that help online marketers do their jobs better.

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