True to form, Google announced another bumper quarter last night. But one statistic causing some hand wringing is the continual fall of CPC prices.

Google say this isn’t a problem and not a concern for their business. Not only do I agree with them, but I think Google are the cause of the decrease in CPCs. Here’s a simple thought experiment to show why.

Let’s imagine a scenario where an advertiser gets 100 clicks a day from a search query. Let’s say 20 come from a paid ad and 80 come from an organic listing. Also, let’s assume that clicks from both convert at an equal rate (5%).

So our SEM report for day 1 looks like this:

So the advertiser is happy, hitting his/her CPA target.

However, Google, in the quest for higher revenues, decides to increase the paid ad space on the page. Overnight, sitelinks, product ads etc appear, pushing the organic listings further below the fold. As a result, more traffic goes through the paid ads. The SEM report for day 2, to the advertiser’s horror, looks like this:

At this point, the advertiser does what anyone would do to get back to their target. They reduce their bids.

Satisfyingly, this prompt action means day 3′s report reveals this:

As Google increases the supply of paid ads and the demand stays the same, then the price will fall. That’s simple economics.

Google isn’t resting on its laurels. Many macro factors (e.g. spread of the internet in developing markets) and controllable factors (e.g. better targeting, more network partners) mean they can increase the revenue from paid ads despite the fall in CPCs.

The real stat, which Google doesn’t reveal, is the growth of monetisable impressions. That is, search queries that have ads against them. If that increases, all is good.

Update

Google have been releasing paid clicks and CPC variance data since Q2 2009. I’ve taken that to produce an indexed view of change over time.

As you can see since Q2 2008, although CPCs have declined about 19%, the number of paid clicks has increased by 130%. That’s not a bad trade-off.

In my last job (c.2004) one of the press buyers said to me, “Nobody would visit your bloody web sites if it wasn’t for ads in newspapers!”

I don’t think that was true then, and I’m sure it isn’t true now. Latest forecasts published by ZenithOptimedia demonstrate the enormous year-on-year growth of internet advertising in the UK over the last decade.

My copy of Google Think Quarterly just arrived in the post. Although it’s available online, Google has sent me a lovely hardback copy. Probably one of the nicest pieces of print marketing I’ve seen in a long while; I dread to think what the unit cost is. Here are some photos:

Came in a nice cardboard box with a card that was in a handwritten envelope. Note the wax seal on the ribbon.

The book was inside a red translucent protector, showing a human brain on the cover

Remove the cover, and in fact there’s a lightbulb inside the brain too

A closer look at the lightbulb reveals it’s made up of my name. Add 25% to the unit cost.

At the back there’s a three-dimensional, pop-up infographic about TFL’s cycle hire scheme. Add another 25% to the unit cost.

On the back, handwritten, is 885/1500, so I feel honoured I made it into such a short print run!

A few weeks since I’ve posted on this blog, but I have had a few articles put in other places.

On Econsultancy I wrote about cross-channel attribution and optimisation. There were a few interesting comments too.

At the Media360 blog, I posted an article on the impact of TV on search performance, borrowing heavily from Dr Sid Shah.

Finally, I put a quick write up of my experience at this year’s SES London on the Efficient Frontier blog.

Google released its Q4 ’10 earnings last week. I’ve taken the figures for the UK and converted them to pounds which gives some insight on Google’s performance here in Blighty.

2010 showed a 13% growth on 2009, as Google recorded c.£2.15bn of revenue in the UK. It’s a staggering amount – ITV will probably make £1.4bn in revenues from TV advertising in 2010 (based on their H1 results).

Here are the charts that give the quarter-on-quarter view since 2007.

Quarterly revenue in GBP and USD

Year-on-year change

Quarter-on-quarter change

Long time, no post on this blog. Apologies for that, I’ve been very busy – but then, that’s everyone’s excuse for not doing something isn’t it?

In an attempt to be less busy, or rather, to concentrate my time more wisely, I’ve been changing the way I use Outlook for email. I thought I’d share it here if you’d like to do the same in 2011.

Email is the burden of the modern office worker. We often feel controlled and dictated to by what drops into our inboxes. I hate that, so here’s what I’ve done in Outlook to improve my management and processing of email. But there’s so much to cover I’ve had to split this across more than one post. So here’s the first part.

Use Search Folders to get to important mail
Take a look at my Favourite Folders; 7/9 are Search Folders. I use Search Folders to segregate the email in my inbox, without actually moving files to different folders.

You can create a search folder from the menu: File > New > Search Folder… or use the shortcut CTRL+Shift+P. Here’s a quick run down of the folders I created and how you can do the same (in order of simplicity):

Unread mail: This is a default option at the top of the Search Folder dialogue box. Easy.

I only want the Search Folder (and the others below) to look directly at my inbox, and not any sub-folders I may have created. Do this by right-clicking on the Search Folder and selecting ‘Customize this Search Folder…’. Hit Browse from the subsequent dialogue box, then uncheck the ‘Search subfolders’ tick box.

To: me only, no cc: These are the emails that have to me only. No one else is on the To or Cc line, therefore if I don’t respond, no one will. To create, select ‘Create a custom Search Folder’, the last choice on the New Search Folder dialogue box. Name it, then click ‘Criteria…’. On the Messages tab, check the ‘Where I am:’ box and select ‘the only person on the To line’ from the dropdown.

Then on the Advanced tab, select the Cc field (under Address fields) and set the Condition to be ‘is empty’.

Add the criteria to the list and click OK on all the open dialogue boxes.

To: me only: Remember folks, it’s not who you send email to, it’s who you cc that counts! With these kind of emails you’re being asked to do something in public, so don’t ignore them. Creation is simply, follow the instructions for the Search Folder above, just don’t create the Condition on the Advanced tab.

To: me: These emails are sent to me, but not just to me, others are on the To line. Fortunately, the ‘Where I am:’ dropdown mentioned earlier anticipates this. Select ‘on the To line with other people’ and you’re done. The only downside is there’s overlap with the ‘To: me only’ folder, as Outlook will still include emails where I’m the only person on the To line. I’m not sure if there’s a way around this ‘feature’.

Cc: me: Finally, the least important emails – the ones where I’m cc’d. Again, this is easy to create. Just select ‘on the CC line with other people’ from the ‘Where I am:’ dropdown.

Calendar updates: This is where it starts to get tricky. Often the emails I want to process first are calendar updates (invites, cancellations etc) so my diary is up-to-date. Defining those is less than obvious, but there is a way. Create a new custom Search Folder and bring up the Criteria dialogue box. Then from the Advanced tab select the ‘Duration’ field (under ‘All Appointment fields’) and set the condition that it exists.

Only calendar items can have this particular field, so that’s how you identify them.

External mail: My job puts me in daily contact with customers and suppliers, so I often want to quickly see email that has come to me from outside my company. Unfortunately though, from what I can see, there is no way of creating a Search Folder that highlights external mail. So this requires a two-step process. First a rule to identify external mail and categorise it, then a Search Folder that can filter emails from that category.

Rules can be created by selecting ‘Tools > Rules and Alerts…’ from the toolbar. Create a new rule then follow these steps. First, start from a blank rule that checks messages when they arrive.

Next check ‘where my name is in the To or Cc box’ and ‘with specific words in the sender’s address’. Make the specific words to be just the ‘@’ sign.

Next check ‘assign it to the category category’. Choose or create a category for this purpose. Also check ‘stop processing more rules’.

Next check ‘except with specific words in the sender’s address’ and set the specific words to be the domain that your company uses for email. In my case, that’s efrontier.com.

Finish the rule up and you’re ready to go. Now if an email comes from an external domain, if will be categorised as such. If you use other rules, be mindful of the order in which those rules run.

Finally, we just have to create a Search Folder that filters for this category. ‘Categorized mail’ is a default option from the New Search Folder dialogue box, so this is easy to do.

And we’re done. Now it should be easy to filter all those emails so you can process the important ones quickly.

But why use Search Folders and not rules that move the emails into different folders?

First, I want the inbox to keep all the unprocessed emails together. Emails moved to folders by rules often get forgotten about. Second, I want to keep emails from the same thread together, where I may be move between the To or Cc field depending on how people reply. Third, I want to apply a little more intelligence to the way I file or discard emails and that’s the subject of part 2.

Further reading
Thanks to the following who came up with some of the solutions above:

On Wednesday Google announced separate trademark policy changes in that affect the UK, Ireland and Canada and the rest of Europe differently.

Reading about the changes on the web, I’m really surprised how many articles have got this one wrong. Mostly it seems to stem from an inability to distinguish that different policies have applied, and will apply, between UK and Ireland, and the rest of Europe. (Google has a helpful list of which countries it considers to be in Europe. To add to the confusion, some places on the list are in South America or the Antartic.)

Anyway, here’s a couple of charts that hopefully explain what’s changing.

Policy before September 14th 2010

Policy after September 14th 2010

The change happening to Europe (excluding UK and Ireland) happened in the UK in May 2008. Chaos was predicted, but failed to materialise. I wrote about it before the change and made some observations after it was implemented. I think the comments I made then still stand.

Permit me a little self aggrandisement this morning so I can point you to some stuff around the web that features me.

Yesterday Netimperative published my thoughts on Google’s acquisition of ITA. That site doesn’t seem to allow comments, so please leave a message here whether you think it’s bullshit or not.

Also I dug up the full interview I gave to Microsoft’s Mel Carson at Cannes. In the video are the more intelligent thoughts of Howard Nead and Tom George.

Finally back in April I attended the inaugural and excellent SASCon. Whilst there, I did a quick interview with video company Little Orchard about the event.

This week I was kindly taken to the Cannes Lion Advertising Festival by Microsoft Advertising. Had a great time, here’s a short video from Mel Carson summing up the week.

So Google’s Q1 results came out over a month ago, so this post is quite late. Nevertheless, here the usual UK analysis. I’ve tweaked the chart to give the USD change too.

Quarter	USD (millions)	GBP (millions)	FX
Q1 07	578	296	0.5117
Q2 07	600	302	0.5037
Q3 07	661	327	0.4948
Q4 07	692	338	0.4891
Q1 08	803	406	0.5056
Q2 08	774	393	0.5071
Q3 08	776	410	0.5282
Q4 08	685	437	0.6373
Q1 09	733	510	0.6959
Q2 09	715	463	0.6474
Q3 09	765	466	0.6093
Q4 09	772	473	0.6127
Q1 10	842	540	0.6411

FX rates are taken from oanda.com.

Here’s the chart of the data table:

Here’s the year-on-year percentage growth:

And finally the quarter-on-quarter percentage growth:

There we have it. Google UK’s biggest quarter, no matter which currency you look at, not something that could have been said last year.