At Razorfish Search we’re wincing in anticipation of the day Larry Page snuffs out Exact Match, a beautiful bit of engineering that delivers EXACTLY what we paid for. If yesterday’s post on the Google Blog — announcing the new default option of including misspellings and plurals with exact match — is any indication, Google is going to slide into evil with a level of transparency and a sense of history that would make an oil company blush.

The post didn’t mention that Google’s new matching is exactly the same as Yahoo’s unlamented “Match Driver,” a factor in advertisers’ preference for Google back in the days when the two companies competed in search. The post also didn’t mention the likely impetus for this change: a surprising 8% year-over-year CPC decline that put a damper on GOOG’s Q4 earnings call. Seems a few too many Google customers found out you can get more conversions for less money with a smart keyword strategy of multiple-match-type buys of the same keywords. (Razorfish didn’t see the 2011 CPC decline – presumably because our clients have been enjoying these discounts for years.)

Rolling back the glorious precision of exact match is one way to “earn” more per click. If Google were our client, though, we’d point out angering your best customers and being less than straightforward about the decision is a tough way to win Likes and Friends. Oh, right — we mean +1s. Whatever.

A few weeks ago I went to the hair salon to get my hair cut.   As my hair dresser cuts my hair, we begin talking about hobbies, friends, family and…my career.  Once he learns that I’m into “online advertising” (as I put it, to refrain from trying to explain SEM), he immediately talks to me about Twitter (in a very excited and enthusiastic manner).  For the next half hour, our conversation consists of him telling me – “Follow me on twitter!” “We should be friends!” “Can you tweet that you’re at Salon XYZ?” and “Oh yeah, don’t forget… follow me on Twitter!”  Whoa, what did I get myself into?   After I left the salon, of course I followed him on Twitter. (Hang in there, there’s a reason for this anecdote.)

A few weeks later, I read this article on Search Engine Land, and it made me think about the conversation my hairdresser and I had.  Social media has grown to become a viable tool for many small businesses.  Social  media helps businesses to create brand awareness and build brand relationships with their customers or potential customers.  My hairdresser insisted that I follow him on Twitter so that he could develop a relationship with me, by sending tweets for upcoming salon events – and also in the hopes that I would recommend his salon to my friends.

A recent report from Borrell Associates predicts that small businesses will focus more dollars on social media advertising and other promotional spending (i.e. email marketing) over paid search advertising.

Come again?  Yes, that’s right – the new study shows that social media advertising spend will surpass paid search advertising spend by 2012.   According to the study about 45 – 70% of small businesses are already using social media as a medium.   In late November, a survey from MerchantCircle discovered that 70% of small businesses use Facebook to promote their business.  The chart below illustrates the percentage of businesses that used different social platforms for their businesses in 2011.

In 2011, social media spend was just behind paid search for small businesses.  The Borrell report estimated that approximately $6.2 billion was spent on social media advertising in 2011 (overall small and large businesses) – 65% of those dollars was spent on Facebook advertising.   Small businesses accounted for $1.14 billion of social media spend.

The Borrell report goes into further detail on how small businesses measure success.   57% of small businesses said “new customers” was a key metric in measuring success, followed by “additional fans, friends, followers,” “increased visits to business social network pages”, etc.

With the ever evolving search landscape – and Google’s recent rollout of Search, plus Your World, it makes sense how social media is becoming so important to businesses as a whole.  It is becoming imperative that businesses (both small and large) begin to think about their social media strategies and the integration of social media and paid search marketing in their business initiatives.  Now that users have the ability to choose between more personalized search results rather than standard web results, it is important that businesses have a presence in social communities.

Where does your business or brand stand in social media adoption? … And speaking of social media adoption, remember to follow us on Twitter and like us on Facebook!

I wish I could say told you so… Oh wait, I just did. First things first… the Internet is growing… at least in terms of traffic. However, we already know that! Last April I wrote a POV on the rise of the tablet devices and a follow-up is in order. In the world of search advertising, mobile phones and tablets continue to outpace the performance of search ads on PCs, while representing only a fraction of impressions and investment, according to Marin Software.

Lots of factors are affecting this, such as the continued upgrades that telephone service providers are providing, the cost of mobile and tablet devices are going down, and the growth of mobile and tablet internet impressions and clicks. Phones and tablet devices are allowing users to do more than ever online… while on the go. According to eMarketer, tablets shipped out have nearly tripled from 2010, which confirms the usage of these devices is rising fast.

Remember, the average consumer is using multiple devices during the purchase funnel when deciding on a product or service. This division will increase and our job, as a search marketer, is to ensure that the consumer has a good experience on all devices. Also, our job will best serve client’s interests by focusing on three fronts:

1. Tablet-friendly sites: With greater usage of tablet devices, brands will have to maintain a user-friendly presence across all devices. Tablet conversion could ultimately double or triple if optimized correctly.
2. Attribution: A purchase that begins with a tablet device often ends on the desktop or at the store (depending on vertical). As search marketers, we need to keep this in mind and allocate search budgets across devices appropriately after accounting for attribution.
3. Tailor Search Campaigns: Search marketers should aim to reach the consumer across devices in a manner consistent with how these devices are used. Remember, the medium is the message.

If you want to shoot me a line, a question or send cupcakes, you can direct all these inquiries to Rebecca.Keen@razorfish.com.

There are so many Google product releases and industry news bulletins about their implications, it’s easy to miss a big one. We’re calling attention to www.focusontheuser.org, a project designed by interested Google-watchers, to highlight a monumental decision by the search giant: to overrule its ranking algorithm in promoting Google+.

The product in question – “Search Plus Your World” – was marketed as simple elevation of relevant social links in search results. The people behind focusontheuser built a widget to demonstrate that, actually, the new product cherry-picks Google’s own social results from Google’s index, no matter what the holy algorithm has deemed most relevant to the user’s query. It does indeed look very much like “Search Plus Your World” lifts Google+ results above Twitter, Facebook and LinkedIn results that Google’s search algorithm correctly ranked higher.

This flies in the face of Google’s culture, core to which is the belief that optimal engineering is the optimal business plan. No wonder the decision is causing a wave of disgust in the developer community. It’s fascinating that Google has released no statement defending the decision (we requested a comment and waited 48 hours before publishing this post). Google resisted the business case for advancing its own properties via search throughout Eric Schmidt’s 10-year tenure as CEO. It seems co-founder Larry Page feels differently now that he’s the one reporting quarterly earnings. The fact that Google’s communications department doesn’t have its story straight yet suggests this huge decision wasn’t even thought through.

As newspaper circulation continues to decline, so does the reach of printed ad circulars/free standing inserts, which are important drivers of both brick and mortar and ecommerce sales. Along with challenges of decreased reach, retailers are also finding that the promotional lift of circulars is declining. According to research conducted by Nielsen, printed circulars are less effective than they were 6 years ago. In 2010, the average ROI boost of printed circulars was 20% compared to 28% in 2005. Retailers are faced with the challenge of maintaining and/or expanding the reach and efficiency of circulars in a declining print market.

In many ways, the internet has replaced the Sunday paper. According to an Audience Insight Survey released in December 2011 from interclick, two thirds of Americans are learning about in-store deals online. In addition, 42% of consumers prefer online advertising to newspapers and other sources, and those consumers who see in-store deals online are more likely to visit a brick and mortar store. This is especially true for electronics, grocery, drug, department, and clothing retailers.  Many retailers have made circulars available on their websites; however the associated user experience of these is fairly poor and very few can be viewed on tablet or mobile devices.

Google has acknowledged this challenge and recently launched a new product that offers an interactive and personalized circular experience aptly named Google Circulars. This product was launched in October 2011 with a small alpha test of US retailers including Macy’s, Best Buy, Home Depot and others. The success of the alpha has led Google to move this product into a beta release launching in Q1 2012 with an expanded set of retailers and vendors.

Google has always had an emphasized focus on the retail industry, and many of the beta opportunities they have rolled out over the past few years have been designed specifically for retail partners. They have increasingly understood the challenges retailers face in utilizing online channels to drive in store purchase. With Google Circulars, they are hoping to further bridge this gap by offering a more robust and user friendly digital circular solution.

Google Circulars presents an exciting new opportunity to utilize digital circulars in a highly customized and targeted way. The breadth of data that Google has access to use in serving personalized circulars is unprecedented and this new ad format has shown early success. As with any new marketing opportunities, there are risks involved in being an early adopter. The lack of proven success, as well as the potential resources required to run such a program, are very real barriers. In addition, the monthly minimum media spend would result in incremental cost or reduced spend in existing tactics. Success of this initiative is ultimately dependent on consumer adoption and engagement. While it’s too early to say whether or not Google Circulars will be a success, this product offering does attempt to fill a growing need of offer communication between retailers and consumers.

To read the full Razorfish Health POV on Google Circulars, click here.