As we saw with search, there is no doubt that Facebook’s features and tools will become more sophisticated and radically improve over time.  Facebook would surely like to monetize its 450 million users, and we know there are enhancements to the program already in the works.  With the attractive CPC pricing model, Facebook and would-be Facebook advertisers are lined up and waiting to sync up with APIs or at minimum, get easy access to reporting and some kind of bid management tool.

Looking into the future, could Facebook CPC ads ever become a force to be reckoned with in the media mix, matching or even exceeding paid search as a proportion of total online spend?

If you are a direct response advertiser, the answer is no.  The reason is because Facebook users are not there with an intent to purchase.  It is the element of intent to purchase that has made paid search effective for ecommerce. 

Direct response marketing relies on a combination of intent plus interest or demographic targeting  in order to be successful.  It’s easy to explain this dynamic as it applies to direct mail list selection.  A toy cataloger’s best lists are probably other toy catalogers.  The fact that names on a mailing list have purchased toys through the mail in the past is the implied intent to purchase.  Further, if the list of prior toy buyers makes recency available, it is the most recent buyers who will usually do the best (called “hotline buyers”).

What probably would not work, though, is a list of people who are known to have children within an age range that is appropriate for the toy cataloger’s merchandise.  Just because a person has a child does not mean they buy their toys through catalogs.  While this person may hit the exact target the toy cataloger is looking for, the intent to purchase is not there.  If I were a direct mail list planner, I would not select this list.

Lack of known purchasing intent is the reason Facebook CPC ads won’t outperform paid search cpc ads for direct response offers anytime soon.  Even if Facebook could target a person with a nine year old boy, serving a toy ad on Facebook would not be as effective as it would be on a search engine served to someone who keyed in “toys online for a nine year old boy.”  The latter is more likely to result in a sale.

In terms of what would work well with Facebook CPC ads today is using it to build up fan bases, brand advertising, and possibly direct response offers in very niche categories.

Google has made significant strides in improving their content offering over time, which, like Facebook CPC ads, may be perfectly targeted but are lacking intent to purchase.  Facebook should be carefully evaluating the tools Google now offers to leverage content and apply similar principles as they evolve their CPC product.  Comparatively, contextual search is probably the most similar model out there to Facebook CPC ads, and everyday contextual search performs a little better for direct response offers.

Suzy Sandberg is President of PM Digital.

Search is a big channel. There are die-hard people in the SEO world who never think about paid search as part of search…it’s advertising they say. There are PPC jockeys who have disdain for anything that doesn’t have an easy metric and a quick way to A-B test. Anything else is squishy, they say.

Well, any debate that pits natural search vs. paid search is missing the synergistic whole.

It’s all SEARCH.

Search is about the traffic that comes from results to specific queries. And while there is a difference between the way paid and natural search works, as a marketer, it may help you to think of them as a single channel, because they work together so well.

Imagine that your best paid keyword is dog bones and you pay $1.00 per click. And you drive some high quality traffic through paid search. And then you start to grow your presence in natural search. Let’s say you get dog bones into the top 10, and you start driving big traffic from that word. You might think about giving up your paid search budget for that word, because your natural search has started driving traffic at volume, and you have become overly efficient in your paid advertising for dog bones. You can no longer amp up the paid search volume by bidding more…so paid search can no longer put the pedal to the metal, as they say.

What has happened here? Has paid search lost it’s magic? NO WAY.

Let’s jump into some math – if you generate 5,000 clicks from dog bones via paid search per month, you are spending $5,000. If you are making a good ROI on that amount then great! But as your natural search visibility creeps up, you may find that it is only possible to spend $4500 at the same efficiency. Does this mean that that dog bones is no longer a good word? Absolutely not.

If you expand your focus and look at paid search and natural search together as a single channel, you might see a different story. Your TOTAL traffic from the word dog bones may have skyrocketed. Think of your 4,500 clicks from paid search in the context of the 5000 clicks that you are also getting from natural search. If you look at this as a whole channel, your average cost per click has just been more than halved (or your ROI has more than doubled). And if I use my fancy MBA calculator, I am pretty sure that either result is pretty great.

If we go back to your original budget of $5,000 for 5,000 clicks, and we look at your current situation of 9,500 clicks for $4,500, you will see that you are in a much better position with regard to the word dog bones. And you have at least $500 of budget that you can apply to testing new words, or amping up the volume on a word like dog bone holders where you don’t have premiere organic search visibility.

Search as a whole is a more powerful tool than looking at the natural and organic sides independently. Search is too big to be contained in silos. Let’s think that paid and natural search are different sales funnels, but they all point to the same cash register….yours.

Tim Kilroy is Vice President of Natural Search at PM Digital.

For those still awaiting VIPPS certification, Google shut down all keywords across all campaigns beginning last weekend.  Many companies were affected by the policy and few were prepared.  The implications of what Google would do and when they would do it were not clear enough.  A week later, many of these companies remain dark on Google paid search.  A great deal of revenue has been and continues to be lost while these pharmaceutical companies scramble to rectify the situation.

Prior to the new policy, Google, Yahoo and Bing all used the same company to verify that the pharmacy codes associated with a given marketer were legit: PharmacyChecker.com.  For whatever reason, Google switched to VIPPS, but the transition process has been flawed.  Affected companies received minimal notice (10 or so days), and it was unclear that all campaigns would go dark right away without the new certification.

Also troubling is that the cost of using VIPPS is incremental to what pharmaceutical companies will still have to pay for PharmacyChecker.com to cover Bing and Yahoo.  Plus VIPPS is more expensive.  With a $5,000 application charge applied to the first year plus a $3,000 survey fee, VIPPS costs nearly seven times more than the $1,200 annual for PharmacyChecker.com.

In the past, Google has allowed merchandise that was outside of special policy areas to remain live with only the special policy keywords brought down (this was the case with ammunition and tobacco, for example).  But in the case of pharmaceuticals, all keywords across all campaigns came down — not just the keywords related to pharmaceutical products.

At present, there are many companies who sell pharmaceuticals online who are scrambling to get certified since their Google campaigns went dark.  Most have applications pending with VIPPS, but in the pet pharmaceutical category, for example, only one company has received certification thus far.  While everyone else is in limbo, this approved company is buying up the trademark terms for those companies that are down.  It’s a wide-open playing field for those with early accreditation while companies still awaiting VIPPS certification are losing sales every day.  For small companies, it is hard to sustain this type of hit on revenue and one wonders whether NABP has any sense of moving the smaller guys to the front of the line.

I don’t know why Google opted to replace PharmacyChecker.com with VIPPS as their certification provider of choice, but there’s no question that the idea of requiring online pharmacies to be certified is sound.  It’s important to ensure that medications sold online are safe for those purchasing them.

The online pharmacies we’ve spoken with don’t object to the certification per se, but they would have preferred that the new policy be implemented on a level playing field.  Pharmaceutical companies should have been given the same amount of time to get their paperwork in order (and certainly with more than 10 days).  The implications should have been clearer.  All companies either should have been able to stay live for a period of time while they got everything in order, or everyone should have gone dark for the same period of time on a defined set of keywords.

The current VIPPS process seems to be putting companies back up on a rolling basis as applications are processed.  I’m sure the NAPB is inundated at present.  But processing requests in an unclear order and within an unspecified amount of time is giving a clear advantage to those who have already made it through the VIPPS process.  As many of these still-unapproved pharmaceutical marketers wait in limbo and watch competitors squat on their trademark terms, large amounts of revenue are being lost by some and taken by others.

PM Digital’s 4Q & Holiday 2009 Rewind report has been released with a look at paid search performance for retailers during the 2009 holiday season.  And as the study quickly points out, what a difference a year makes.  With 12 months’ distance from the bleakness of late 2008—a season in which e-commerce holiday sales actually dropped—online shoppers in 2009 seemed ready to buy with a renewed commitment to enjoy the holidays.

While research firm comScore cited 5% growth for online retailers, PM Digital’s clients saw paid search demand grow 19% on average.  Clicks, conversion and average order value were all up.

Overall, the data reported for Holiday 2009 conformed to patterns predicted one year ago, patterns which have become even more pronounced. Cyber Monday was again the top day for clicks, orders and demand; Black Friday again kicked off a surge in demand and orders that lasted for the first two weeks in December and spilled over into the third.

Looking ahead, Holiday 2010 will bring one more shopping day than 2009, plus an additional Monday on which it may be possible to ship orders. While consumer sentiment and, more importantly, unemployment figures remain an unknown for late 2010, successful search marketers must continue to measure, optimize and budget for key dates, and to leverage timely sales, free shipping, and other incentives.  Social media will evolve further in 2010 and will garner even more buzz, but the bulk of demand will continue to be generated by paid search, especially Google and Bing.

If you’re interested in receiving a full copy of PM Digital’s 4Q & Holiday 2009 Rewind, send an email with your contact information to info@pmdigital.com.

Internet Retailer – Internet Retailer currently hosts two key shows each year – the Web Design & Usability Conference which was just held last week in Orlando, and the larger Internet Retailer Conference & Exhibition in June.  This year’s main conference will be in Chicago from June 8-11.   If you are actively involved in web design, the February show would be valuable to attend.  For more general retail info, I am a big fan of the June show.  It draws a huge crowd (great for networking and exhibiting), and there is a ton of great content.  Our clients also rate this show highly for value and time well invested. 

Shop.org – Shop.org hosts several conferences throughout the year.  The best known and largest of all the online retail shows is the Shop.org Annual Summit in the fall.  This show has frequently been held in Las Vegas , but it’s moving to Dallas for 2010.  The change is unfortunate as I predict they are going to take a hit on attendance.  The Mandalay Bay venue in Las Vegas was much loved and Dallas pales by comparison.  The Shop.org shows have the reputation of being extremely retailer-focused, as opposed to eTail which is more vendor-focused.  Shop.org has retailer-only days and retailer-only events.  But despite their somewhat heavy-handed non-vendor stance, there are many sponsorships available to vendors, although some (like the vendor-hosted tables on retailer-only day) come with a pretty hefty price tag.

One of Shop.org’s other (smaller) events has just been retooled.  It is called the Retail & Innovation Marketing Conference and will be hosted in San Francisco from March 2-4.  This show focuses on next-generation media.  Social media had been a key topic at prior shows, and this year mobile will be a big area of focus.  I have really enjoyed this show in the past, but the reality is that there are so many shows crammed into a tight six-week period between February and March that marketers are challenged to squeeze them all in.  I personally could not make the Retail & Innovation show work with my schedule this year.

Retail Marketing Conference and DMA - These are two offline shows that attract many of the same retailers who also attend the online retail shows.  After years of declining attendance, the ACCM catalog conference has been renamed and presumably retooled.  It is now called the Retail Marketing Conference and will be held May 24-27 in Kissimmee, Florida.   The thrust of the agenda for this year’s show is “integrated marketing” with mostly online content spanning social media, SEM, mobile, e-commerce and catalog/print.   The new show doesn’t sound that much different than the Internet Retailer, E-Tail or Shop.org conferences.  I’m sure the Retail Marketing Conference will continue to draw a large offline audience made up of prior attendees of the ACCM, so the Direct Marketing Association (who runs this show) would be foolish to kill that offline content.  After all, there are still plenty of catalogs in my mailbox every day, so it’s not like this business is going away.   I remain on the fence about this event.  If the retooled content and rebranding works, it would be a great show.  If they aren’t able to get attendance back up, however, I imagine it may be the last year for this conference.

With regard to the DMA itself, I have attended the big annual conference for the past 10 years and have come to the conclusion that from an online perspective, I get very little out of this show.   One year the DMA filled up a pretty awesome online pavilion of exhibitors, but it wasn’t successful because they housed it across the street which drew very little foot traffic.  The next year, the online and offline exhibitors bordered each other in the main exhibit hall, and in subsequent years, many of the online exhibitors dropped out.  So thinking solely of online, I am ambivalent about the fate of this show. The DMA:2010 Conference & Exhibition is scheduled for October 9-14 in San Francisco.

ad:tech – This is such a fun, mobbed, upbeat show with great energy!  There are two large U.S. ad:tech conferences along with a variety of smaller events throughout the year.  The big U.S. shows are ad:tech San Francisco (April 19-21) and ad:tech New York (November 2-4).  Audiences for these events consist largely of agency and technology people, job hunters and employers.  There is very little content that is applicable to an actual marketer – it is largely technology-focused for agencies.  It will be interesting to see if this year’s NYC show can maintain the same high-energy atmosphere in its new digs at the Javits Center vs. the Hilton which had been its home for many years. 

Last year we saw attendance at all the shows plummet.  We are optimistic that this year they will go back up.  We have also noticed that marketers often attend the exact same conference year after year.  My recommendation would be to mix it up and do one of the eTail, Internet Retailer, or Shop.org shows and then perhaps add an SES or SMX show.  Next year you should consider switching it up.  Note that in my opinion there is really no reason to go to more than one or two of the retail shows and only one of the search shows in a given year.  You’ll quickly find that the content is not exclusive to each show.

Click here for Part 1 of our Online Marketing Conference Guide.

Suzy Sandberg is President of PM Digital.

Because PM Digital has a heavy penetration of retail clients, we attend many conferences in the retail category as will be evident in this roundup.  The list below takes into account that there are generally three reasons to attend trade shows:  1) networking, 2) keeping current, and 3) investigating new technologies.

eTail - eTail hosts two big shows each year.  eTail West (which starts today) is the larger and runs from February 22-24 in Palm Desert; eTail East will be held in Baltimore from August 9-12.   I personally love the timing of the February eTail show since it’s the first big event after the holiday season.  People have had a few weeks to relax and breathe, but they also recognize that now is the time to launch new initiatives in order to maximize the next year-end holiday.  Attendees are definitely looking and researching at this conference.

A common criticism of the eTail shows is that it seems partial to vendors rather than retailers, and this manifests itself in sessions that occasionally sound like paid commercials.  Many of the session panels include vendors, and there are some big keynote slots given to vendors (and as a vendor, we are aware that there is a cost to speak at this show as well as some of the other events).   I once left a multivariate testing session and found one of the companies represented on the panel was also the manning the exits with one-sheeters.  I haven’t seen anything that blatant happen in a while but it’s a good example of how eTail developed its vendor-first reputation.  The August eTail conference is very convenient if you are on the East Coast, and I’ve found it attracts a high-level retail attendee.  It is much smaller than the West Coast show.

NEMOA – Otherwise known as the New England Mail Order Association, NEMOA typically holds a spring and fall conference each year.  The NEMOA Spring 2010 Conference runs from March 10-12 in Boston.  As one can deduce from the organization’s name, attendance is comprised largely of New England retailers, although a smattering of companies who are based elsewhere also come to this event.  This show definitely draws a high-level executive and is far more intimate than the other retail shows.  For example, content is delivered in a general session as opposed to the myriad of tracks and concurrent sessions you find elsewhere.  NEMOA has a very strict policy for its vendors in order to ensure that this conference is entirely retail-focused.  There are no exhibitors at NEMOA.

SES (Search Engine Strategies) and SMX (Search Marketing Expo) - These are rival companies who put on shows with similar search-engine related content.  Each has an East and West Coast show with smaller regional events in between.  SES New York will be held in its namesake city from March 22-26; SES San Francisco will run from August 16-20.  SMX West will be held March 2-4 in Santa Clara and SMX East in NYC from October 4-6.  These shows all have great search engine content spanning both PPC and SEO.  The SMX show has a reputation for being a little heavier on higher level SEO content whereas the SES shows gives equal weight to both.  If someone wants to immerse themselves in PPC and SEO, these shows are great – especially for those who do not have much (or any) contact with search engine vertical teams.  My recommendation would be to first attend SES for a more general overview and then try SMX if you are in need of deeper SEO content.

For for Part 2 of our Online Marketing Conference Guide.

Suzy Sandberg is President of PM Digital.

Here is the information on where we’ll be:

February 22-24, we will be at eTail West 2010 in Palm Desert, CA. Our booth is #11.

March 2-4, we will be at SMX West in Santa Clara, CA. Our booth is #310.

March 10-12, we are a sponsor at the Spring NEMOA conference in Boston, MA.

March 22-26, we will be at the Search Engine Strategies conference in New York City. Our booth is #215.

As with every conference and exhibition we attend, our focus is clear…to learn more about the industry trends, and to see our clients and business partners. If you are unable to attend any of these shows, we’ll be sure to pass along any insights or important information we learn from each conference.

Safe travels and hope to see you there!

Take the Lupus Research Institute’s Shady Ladies gala last Saturday night in Wellington, Florida.  The goal was to stir awareness for a deadly disease that mostly affects young women.  The evening event included dinner and good fun but, also, had silent and live auctions for celebrity sunglasses (Bruce Springsteen and Patti Scalfia, the Kardashians, Tom Bergeron of Dancing with the Stars fame, Beyonce etc.), as well as a few fashion pieces.

The organizers buzzed about the event on Facebook to sell tickets and raffles. Initially there was lots of intrigue but few buyers.  It projected only 70% attendance with 24 hours to go.  But 12 hours pre-event, the event sold out and was SRO.  Why?  It became a fascination. On a smaller scale, but with similar intensity, momentum for the Shady Ladies event was akin to Lance Armstrong tweeting his 2,400,000+ Twitter followers to see who wanted to ‘go for a bike ride’.

Single Play

The auction hit big and made great money, but the show-stopper was Badgley Mischka.  Designers Mark Badgley and James Mischka were in attendance and personally sold a custom-fitted dress and accessories, plus two tickets to their upcoming fashion show.

Double Play

The dress was a fantastic item but what dramatically changed the energy was their decision to showcase a size 10 dress, not the size 0 that many expected (for perspective, the Olsen twins are two of Badgley Mischka’s most infamous models).  This was a brilliant move. The mostly 30+ crowd bid up the deal to thrilling levels.  The after-party Facebook buzz caught on.  ‘Badgley Mischka makes a size-10 dress?!’ I would expect the Badgley Mischka store in Palm Beach to be very busy these days.

Triple Play

Not a bit of the resulting financial performance is measurable, but the upstream and downstream demand impact of analog and digital social media is bursting the seams of that size 10!

Chris Paradysz is CEO of PM Digital.

I watched the unveiling of the Apple iPad with some genuine excitement the other day. At the end of the presentation, I can honestly say that I was underwhelmed. The iPad is just a big iPhone…so what?!?

And then I thought…wait a minute…the thing is a big iPhone…that changes everything! (Well, not really, but it does have some interesting implications.)  What has really resonated with me is the concept of intimacy. With Steve Jobs demonstrating the iPad from a cushy looking chair, engaging the internet with his finger, it dawned on me what has just happened. The internet became a much less cerebral place. No longer is your interactivity with content tempered by mouse navigation, the internet reacts to your finger. It is instinctual, organic and perhaps even a little impulsive.

So, what exactly happened when Steve Jobs gave us the finger? Well, he just made the internet more visual. What makes you want to reach out and touch something more? A gorgeous picture, or a line of text? A blue link or a well-crafted image? Me, I think it is all about pictures when it comes to slate based computing (like the iPad). I think that the physical connection between user and screen meets at the image.

What does this mean for search? I believe that we are at the very beginning stages of a shift to a world of hybrid search engagement. Depending on your device, you may get a more visual search interface (iPad, iPhone, Android Phone…anything touch based) or a more text based interface (laptop, desktop, anything keyboard driven).

Google and Bing are all over this stuff. Google is ingratiating images into SERPs and AdWords. Bing has an interface that presents images really nicely. I predict that image based search and interactivity is going to skyrocket this year.

I am thrilled that Steve Jobs just gave me the finger.

Tim Kilroy is Vice President of Natural Search at PM Digital.

Tomorrow is a huge day in our lives as marketers.  I’m taking a not-so-wild shot at this not because I love Apple products (I don’t) but because their ability to transform entire industries by re-thinking how people want to live their lives is stunning.  Apple’s new tablet product will be launched and, with it, the typical hype and expectations are at a fever pitch.  And, they should be.  Although the Kindle from Amazon was a game-changer for the content industry, it hasn’t really changed the lives of marketers as Apple’s launch will.  

The new Apple product will be far more than a device.  It will integrate multiple forms of content into a single destination and do what all of us have wished for since we started buying cellphones and computers for personal use. Voice, music, video, print, data, calendars and phone are all going to be experienced through this technology.  

What does this mean for PM Digital clients and marketers overall?  It most definitely is going to accelerate the opportunities and challenges for the content business, and not just the printed word.  Communicating and consuming and shopping are going to change as well.  Paying for a “subscription” or content in any form will be far easier to actually do and to understand its benefits.  I anticipate the role of the search engines is going to be significantly altered as well, especially if Bing becomes the primary search partner, not Google. 

But it also means that marketers’ direct relationship with consumers is changing.  Who collects the money is one thing.  Who is responsible for the cultivation and nurturing of customers – and how marketers will leverage new and existing media to reach those customers — is changing as well.

There’s much more to speculate about, but let’s see what happens tomorrow.  We’ll have lots to figure out once this gets released and marketed. More to come.

Chris Paradysz is CEO of PM Digital.