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Inflation’s Impact On Ad Spend Detailed In Merkle Report

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Inflation’s Impact On Ad Spend Detailed In Merkle Report

The leading technology and data-driven customer experience company, Merkle, released its quarterly Performance Media Report last week.

Research from the past quarter shows valuable insights into marketers’ priorities, challenges, and performance.

With over 57% of respondents indicating an increase in paid search spend YoY, these findings are especially crucial as we face economic challenges and uncertainty.

I sat down with Matt Mierzejewski, SVP of Search at Merkle, where he provided his take on some of the most glaring stats from the Performance Report.

Prioritizing Privacy And Measurement

From the Merkle report, 45% of respondents stated that getting accurate reporting in the face of privacy regulations is a top priority in measurement.

Many companies are likely in the same boat but may not know where to start.

Mierzejewski states: “Brands are big on cross-device measurement. Apple disrupted the measurement game. Many companies are looking to build their data warehouses for multiple reasons:”

  • Too much reliance on individual platforms. The more conversions are modeled in a platform, the less perfect a company’s individual measurement is.
  • They’re tired of black box solutions. Brands want to be able to own or change the way they model conversions.

Mierzejewski also noted that with more brands looking to build their own reporting solutions, it changes the dependency from the platform conversion truth to their own conversion truth.

Prioritizing Audiences & First-Party Data

Looming privacy regulations have kickstarted the need for brands to create and manage their first-party data.

However, only 35% of respondents prioritize managing audiences and first-party data.

I asked Mierzejewski: “what do you see as the macro implications of so many companies waiting on this?”

He responded with a few points:

“From a digital perspective, they’re shifting towards getting their creative and messaging right.” If you’ve interacted with a brand, you’ll notice how consumer expectations have shifted.

“An implication of deprioritizing audiences and first-party data is poor customer experience.” Not prioritizing these crucial aspects of marketing will accelerate the deceleration, or further remove, the customer feeling connected to that brand.

“You have to use those unknown audience signals to your advantage to meet the expectations of consumers and beat out the competition.” For example, In-Market audiences from Google releases more signal and intent of propensity to buy. They’re allowing those signals to be in the open market.

Mierzejewski summarized: “It misses out on the opportunity for the best customers. You’ll be left competing for the worst customers!”

Paid Social Growth In 2023

An overwhelming 67% of respondents prioritized paid social more this year than 2021.

The growing number of social platforms with ad opportunities is a partial factor in increased prioritization.

When asked about what social platform would see the most growth in 2023?

“If we’re talking raw dollars, Facebook and Instagram will still win,” Mierzejewski stated.

Further, he notes: “If we’re looking at percentage growth and who to watch for, it’s TikTok.” Matt shed some light on user projections, with TikTok’s growth projected to surpass Snapchat next year.

Inflation Is Driving Faster Adoption Of Machine Learning

With inflation costs, adopting automation and machine learning may be put on the backburner.

Not according to the Merkle Performance Report.

  • 41% of respondents are beginning to take action on automation and machine learning strategies
  • 38% of respondents have made significant progress in their ML strategies

So, why is inflation driving faster automation adoption?

“Inflation is just one element. It goes hand-in-hand with the last few years. COVID accelerated Ecommerce and the digital world for many companies,” Mierzejewski noted. He went on to say:

“There’s greater scrutiny on the investments in companies. They are trying to beat the market and the competition. There’s pressure for leaders to be tied into the data and marketing measurement.”

Let’s not forget one of the most critical aspects: resources.

Mierzejewski finished by noting that if companies are having trouble hiring individuals, they’re trying to do more with less. They have to rely on automation to supplement the workload.

Inflation’s Impact On Advertiser Strategies

We’ve seen the stats on increased advertiser costs YoY.

We have a better understanding of what marketers are prioritizing in the future.

Amid economic factors that companies can’t control, advertisers might not know how or where to pivot their strategy. When posed with this question, Mierzejewski provided his expert opinions.

“Expect double-digit changes to ad spend.”

Whether the above statement refers to an increase or decrease in ad spend, this change is based on a mixed bag of strategy, cash flow, inventory positions, and the vertical.

“The economic pressure reminds me of 2008 – the downturn of the digital sphere. Some clients will pull back on ad spend. Others may take the opportunity on the downturn and have double-digit growth,” Matt commented.

CPCs will likely decline.

In these types of environments, CPCs are likely to go down. This could allow advertisers to shuffle dollars based on what will work hardest for them.

Matt notes, “If you can be bold, it’s the time to do it.” The decreased CPCs become a buying opportunity for advertisers with the financial capacity to spend more.

“Don’t over-pat yourself on the back.”

Mierzejewski emphasized, “Be careful on the data.” He explained that with inflation and rising costs, you may also see a natural rise in revenue.

For example, if you’re seeing a 10% lift in sales but spent 15% more in advertising or COGS, that can provide a false narrative in growth. The 10% increase in revenue may be attributed to inflation costs and, in this case, shows a decline in profitability.

Summary

The Q3 Performance Marketing Report provides invaluable data to unpack.

If you haven’t yet taken action on privacy regulations, you’re not the only one.

And while inflation, privacy, and other economic impacts can cause shifts in performance trends, they’re not the only factors.

The paid media landscape changes every day. Use this to understand how others in the space are shifting priorities and strategies and what this means for you.

You can download your copy of the Performance Marketing Report here.

A special thank you to Matt Mierzejewski, SVP of Search at Merkle, for taking the time to address these statistics and providing additional insights.


Featured Image: PopTika/Shutterstock



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State Of Marketing Data Standards In The AI Era [Webinar]

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State Of Marketing Data Standards In The AI Era [Webinar]

Claravine and Advertiser Perceptions surveyed 140 marketers and agencies to better understand the impact of data standards on marketing data, and they’re ready to present their findings.

Want to learn how you can mitigate privacy risks and boost ROI through data standards?

Watch this on-demand webinar and learn how companies are addressing new privacy laws, taking advantage of AI, and organizing their data to better capture the campaign data they need, as well as how you can implement these findings in your campaigns.

In this webinar, you will:

  • Gain a better understanding of how your marketing data management compares to enterprise advertisers.
  • Get an overview of the current state of data standards and analytics, and how marketers are managing risk while improving the ROI of their programs.
  • Walk away with tactics and best practices that you can use to improve your marketing data now.

Chris Comstock, Chief Growth Officer at Claravine, will show you the marketing data trends of top advertisers and the potential pitfalls that come with poor data standards.

Learn the key ways to level up your data strategy to pinpoint campaign success.

View the slides below or check out the full webinar for all the details.

Join Us For Our Next Webinar!

SaaS Marketing: Expert Paid Media Tips Backed By $150M In Ad Spend

Join us and learn a unique methodology for growth that has driven massive revenue at a lower cost for hundreds of SaaS brands. We’ll dive into case studies backed by real data from over $150 million in SaaS ad spend per year.

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GPT Store Set To Launch In 2024 After ‘Unexpected’ Delays

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GPT Store Set To Launch In 2024 After 'Unexpected' Delays

OpenAI shares its plans for the GPT Store, enhancements to GPT Builder tools, privacy improvements, and updates coming to ChatGPT.

  • OpenAI has scheduled the launch of the GPT Store for early next year, aligning with its ongoing commitment to developing advanced AI technologies.
  • The GPT Builder tools have received substantial updates, including a more intuitive configuration interface and improved file handling capabilities.
  • Anticipation builds for upcoming updates to ChatGPT, highlighting OpenAI’s responsiveness to community feedback and dedication to AI innovation.

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96.55% of Content Gets No Traffic From Google. Here’s How to Be in the Other 3.45% [New Research for 2023]

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96.55% of Content Gets No Traffic From Google. Here's How to Be in the Other 3.45% [New Research for 2023]

It’s no secret that the web is growing by millions, if not billions of pages per day.

Our Content Explorer tool discovers 10 million new pages every 24 hours while being very picky about the pages that qualify for inclusion. The “main” Ahrefs web crawler crawls that number of pages every two minutes. 

But how much of this content gets organic traffic from Google?

To find out, we took the entire database from our Content Explorer tool (around 14 billion pages) and studied how many pages get traffic from organic search and why.

How many web pages get organic search traffic?

96.55% of all pages in our index get zero traffic from Google, and 1.94% get between one and ten monthly visits.

Distribution of pages by traffic from Content Explorer

Before we move on to discussing why the vast majority of pages never get any search traffic from Google (and how to avoid being one of them), it’s important to address two discrepancies with the studied data:

  1. ~14 billion pages may seem like a huge number, but it’s not the most accurate representation of the entire web. Even compared to the size of Site Explorer’s index of 340.8 billion pages, our sample size for this study is quite small and somewhat biased towards the “quality side of the web.”
  2. Our search traffic numbers are estimates. Even though our database of ~651 million keywords in Site Explorer (where our estimates come from) is arguably the largest database of its kind, it doesn’t contain every possible thing people search for in Google. There’s a chance that some of these pages get search traffic from super long-tail keywords that are not popular enough to make it into our database.

That said, these two “inaccuracies” don’t change much in the grand scheme of things: the vast majority of published pages never rank in Google and never get any search traffic. 

But why is this, and how can you be a part of the minority that gets organic search traffic from Google?

Well, there are hundreds of SEO issues that may prevent your pages from ranking well in Google. But if we focus only on the most common scenarios, assuming the page is indexed, there are only three of them.

Reason 1: The topic has no search demand

If nobody is searching for your topic, you won’t get any search traffic—even if you rank #1.

For example, I recently Googled “pull sitemap into google sheets” and clicked the top-ranking page (which solved my problem in seconds, by the way). But if you plug that URL into Ahrefs’ Site Explorer, you’ll see that it gets zero estimated organic search traffic:

The top-ranking page for this topic gets no traffic because there's no search demandThe top-ranking page for this topic gets no traffic because there's no search demand

This is because hardly anyone else is searching for this, as data from Keywords Explorer confirms:

Keyword data from Ahrefs' Keywords Explorer confirms that this topic has no search demandKeyword data from Ahrefs' Keywords Explorer confirms that this topic has no search demand

This is why it’s so important to do keyword research. You can’t just assume that people are searching for whatever you want to talk about. You need to check the data.

Our Traffic Potential (TP) metric in Keywords Explorer can help with this. It estimates how much organic search traffic the current top-ranking page for a keyword gets from all the queries it ranks for. This is a good indicator of the total search demand for a topic.

You’ll see this metric for every keyword in Keywords Explorer, and you can even filter for keywords that meet your minimum criteria (e.g., 500+ monthly traffic potential): 

Filtering for keywords with Traffic Potential (TP) in Ahrefs' Keywords ExplorerFiltering for keywords with Traffic Potential (TP) in Ahrefs' Keywords Explorer

Reason 2: The page has no backlinks

Backlinks are one of Google’s top three ranking factors, so it probably comes as no surprise that there’s a clear correlation between the number of websites linking to a page and its traffic.

Pages with more referring domains get more trafficPages with more referring domains get more traffic
Pages with more referring domains get more traffic

Same goes for the correlation between a page’s traffic and keyword rankings:

Pages with more referring domains rank for more keywordsPages with more referring domains rank for more keywords
Pages with more referring domains rank for more keywords

Does any of this data prove that backlinks help you rank higher in Google?

No, because correlation does not imply causation. However, most SEO professionals will tell you that it’s almost impossible to rank on the first page for competitive keywords without backlinks—an observation that aligns with the data above.

The key word there is “competitive.” Plenty of pages get organic traffic while having no backlinks…

Pages with more referring domains get more trafficPages with more referring domains get more traffic
How much traffic pages with no backlinks get

… but from what I can tell, almost all of them are about low-competition topics.

For example, this lyrics page for a Neil Young song gets an estimated 162 monthly visits with no backlinks: 

Example of a page with traffic but no backlinks, via Ahrefs' Content ExplorerExample of a page with traffic but no backlinks, via Ahrefs' Content Explorer

But if we check the keywords it ranks for, they almost all have Keyword Difficulty (KD) scores in the single figures:

Some of the low-difficulty keywords a page without traffic ranks forSome of the low-difficulty keywords a page without traffic ranks for

It’s the same story for this page selling upholstered headboards:

Some of the low-difficulty keywords a page without traffic ranks forSome of the low-difficulty keywords a page without traffic ranks for

You might have noticed two other things about these pages:

  • Neither of them get that much traffic. This is pretty typical. Our index contains ~20 million pages with no referring domains, yet only 2,997 of them get more than 1K search visits per month. That’s roughly 1 in every 6,671 pages with no backlinks.
  • Both of the sites they’re on have high Domain Rating (DR) scores. This metric shows the relative strength of a website’s backlink profile. Stronger sites like these have more PageRank that they can pass to pages with internal links to help them rank. 

Bottom line? If you want your pages to get search traffic, you really only have two options:

  1. Target uncompetitive topics that you can rank for with few or no backlinks.
  2. Target competitive topics and build backlinks to rank.

If you want to find uncompetitive topics, try this:

  1. Enter a topic into Keywords Explorer
  2. Go to the Matching terms report
  3. Set the Keyword Difficulty (KD) filter to max. 20
  4. Set the Lowest DR filter to your site’s DR (this will show you keywords with at least one of the same or lower DR ranking in the top 5)
Filtering for low-competition keywords in Ahrefs' Keywords ExplorerFiltering for low-competition keywords in Ahrefs' Keywords Explorer

(Remember to keep an eye on the TP column to make sure they have traffic potential.)

To rank for more competitive topics, you’ll need to earn or build high-quality backlinks to your page. If you’re not sure how to do that, start with the guides below. Keep in mind that it’ll be practically impossible to get links unless your content adds something to the conversation. 

Reason 3. The page doesn’t match search intent

Google wants to give users the most relevant results for a query. That’s why the top organic results for “best yoga mat” are blog posts with recommendations, not product pages. 

It's obviously what searchers want when they search for "best yoga mats"It's obviously what searchers want when they search for "best yoga mats"

Basically, Google knows that searchers are in research mode, not buying mode.

It’s also why this page selling yoga mats doesn’t show up, despite it having backlinks from more than six times more websites than any of the top-ranking pages:

Page selling yoga mats that has lots of backlinksPage selling yoga mats that has lots of backlinks
Number of linking websites to the top-ranking pages for "best yoga mats"Number of linking websites to the top-ranking pages for "best yoga mats"

Luckily, the page ranks for thousands of other more relevant keywords and gets tens of thousands of monthly organic visits. So it’s not such a big deal that it doesn’t rank for “best yoga mats.”

Number of keyword rankings for the page selling yoga matsNumber of keyword rankings for the page selling yoga mats

However, if you have pages with lots of backlinks but no organic traffic—and they already target a keyword with traffic potential—another quick SEO win is to re-optimize them for search intent.

We did this in 2018 with our free backlink checker.

It was originally nothing but a boring landing page explaining the benefits of our product and offering a 7-day trial: 

Original landing page for our free backlink checkerOriginal landing page for our free backlink checker

After analyzing search intent, we soon realized the issue:

People weren’t looking for a landing page, but rather a free tool they could use right away. 

So, in September 2018, we created a free tool and published it under the same URL. It ranked #1 pretty much overnight, and has remained there ever since. 

Our rankings over time for the keyword "backlink checker." You can see when we changed the pageOur rankings over time for the keyword "backlink checker." You can see when we changed the page

Organic traffic went through the roof, too. From ~14K monthly organic visits pre-optimization to almost ~200K today. 

Estimated search traffic over time to our free backlink checkerEstimated search traffic over time to our free backlink checker

TLDR

96.55% of pages get no organic traffic. 

Keep your pages in the other 3.45% by building backlinks, choosing topics with organic traffic potential, and matching search intent.

Ping me on Twitter if you have any questions. 🙂



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