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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.


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Google’s Web Crawler Fakes Being “Idle” To Render JavaScript

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Google's Web Crawler Fakes Being "Idle" To Render JavaScript

In a recent episode of the Search Off The Record podcast, it was revealed that Google’s rendering system now pretends to be “idle” to trigger certain JavaScript events and improve webpage rendering.

The podcast features Zoe Clifford from Google’s rendering team, who discussed how the company’s web crawlers deal with JavaScript-based sites.

This revelation is insightful for web developers who use such methods to defer content loading.

Google’s “Idle” Trick

Googlebot simulates “idle” states during rendering, which triggers JavaScript events like requestIdleCallback.

Developers use this function to defer loading less critical content until the browser is free from other tasks.

Before this change, Google’s rendering process was so efficient that the browser was always active, causing some websites to fail to load important content.

Clifford explained:

“There was a certain popular video website which I won’t name…which deferred loading any of the page contents until after requestIdleCallback was fired.”

Since the browser was never idle, this event wouldn’t fire, preventing much of the page from loading properly.

Faking Idle Time To Improve Rendering

Google implemented a system where the browser pretends to be idle periodically, even when it’s busy rendering pages.

This tweak ensures that idle callbacks are triggered correctly, allowing pages to fully load their content for indexing.

Importance Of Error Handling

Clifford emphasized the importance of developers implementing graceful error handling in their JavaScript code.

Unhandled errors can lead to blank pages, redirects, or missing content, negatively impacting indexing.

She advised:

“If there is an error, I just try and handle it as gracefully as possible…web development is hard stuff.”

What Does This Mean?

Implications For Web Developers

  • Graceful Error Handling: Implementing graceful error handling ensures pages load as intended, even if certain code elements fail.
  • Cautious Use of Idle Callbacks: While Google has adapted to handle idle callbacks, be wary of over-relying on these functions.

Implications For SEO Professionals

  • Monitoring & Testing: Implement regular website monitoring and testing to identify rendering issues that may impact search visibility.
  • Developer Collaboration: Collaborate with your development team to create user-friendly and search engine-friendly websites.
  • Continuous Learning: Stay updated with the latest developments and best practices in how search engines handle JavaScript, render web pages, and evaluate content.

See also: Google Renders All Pages For Search, Including JavaScript-Heavy Sites

Other Rendering-Related Topics Discussed

The discussion also touched on other rendering-related topics, such as the challenges posed by user agent detection and the handling of JavaScript redirects.

The whole podcast provides valuable insights into web rendering and the steps Google takes to assess pages accurately.

See also: Google Renders All Pages For Search, Including JavaScript-Heavy Sites


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Google’s Indifference To Site Publishers Explained

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Google inadvertently reveals reasons that explain their seeming indifference to publishers hurt by algorithm updates

A publisher named Brandon Saltalamacchia interviewed Google’s SearchLiaison in which he offered hope that quality sites hit by Google’s algorithms may soon see their traffic levels bounce back. But that interview and a recent Google podcast reveal deeper issues that may explain why Google seems indifferent to publishers with every update.

Google Search Relations

Google has a team whose job is to communicate how site owners can do well on Google. So it’s not that Googlers themselves are indifferent to site publishers and creatives. Google provides a lot of feedback to publishers, especially through Google Search Console. The area in which Google is indifferent to publishers is directly in search at its most fundamental level.

Google’s algorithms are built on the premise that it has to provide a good user experience and is internally evaluated to that standard. This creates the situation where from Google’s perspective the algorithm is working the way it should. But from the perspective of website publishers Google’s ranking algorithms are failing. Putting a finger on why that’s happening is what this article is about.

Publishers Are Not Even An Afterthought To Google

The interview by Brandon Saltalamacchia comes against the background of many websites having lost traffic due to Google’s recent algorithm updates. From Google’s point of view their algorithms are working fine for users. But the steady feedback from website publishers is no, it’s not working. Google’s response for the past month is that they’re investigating how to improve.

What all of this reveals is that there is a real disconnect between how Google measures how their algorithms are working and how website publishers experience it in the real world. It may surprise most people to learn that that this disconnect begins with Google’s mission statement to make information “universally accessible and useful”  and ends with the rollout of an algorithm that is tested for metrics that take into account how users experience it but is 100% blind to how publishers experience it.

Some of the complaints about Google’s algorithms:

  • Ranking algorithms for reviews, travel and other topics are favoring big brands over smaller publishers.
  • Google’s decision to firehose traffic at Reddit contributes to the dismantling of the website publishing ecosystem.
  • AI Overviews summarizes web pages and deprives websites of search traffic.

The stated goal for Google’s algorithm decisions is to increase user satisfaction but the problem with that approach is that website publishers are left out of that equation.  Consider this: Google’s Search Quality Raters Guidelines says nothing about checking if big brands are dominating the search results. Zero.

Website publishers aren’t even an afterthought for Google. Publishers are not not considered at any stage of the creation, testing and rollout of ranking algorithms.

Google Historically Doesn’t Focus On Publishers

A remark by Gary Illyes in a recent Search Off The Record indicated that in Gary’s opinion Google is all about the user experience because if search is good for the user then that’ll trickle down to the publishers and will be good for them too.

In the context of Gary explaining whether Google will announce that something is broken in search, Gary emphasized that search relations is focused on the search users and not the publishers who may be suffering from whatever is broken.

John Mueller asked:

“So, is the focus more on what users would see or what site owners would see? Because, as a Search Relations team, we would focus more on site owners. But it sounds like you’re saying, for these issues, we would look at what users would experience.”

Gary Illyes answered:

“So it’s Search Relations, not Site Owners Relations, from Search perspective.”

Google’s Indifference To Publishers

Google’s focus on satisfying search users can in practice turn into indifference toward publishers.  If you read all the Google patents and research papers related to information retrieval (search technology) the one thing that becomes apparent is that the measure of success is always about the users. The impact to site publishers are consistently ignored. That’s why Google Search is perceived as indifferent to site publishers, because publishers have never been a part of the search satisfaction equation.

This is something that publishers and Google may not have wrapped their minds around just yet.

Later on, in the Search Off The Record  podcast, the Googlers specifically discuss how an update is deemed to be working well regardless if a (relatively) small amount of publishers are complaining that Google Search is broken, because what matters is if Google perceives that they are doing the right thing from Google’s perspective.

John said:

“…Sometimes we get feedback after big ranking updates, like core updates, where people are like, “Oh, everything is broken.”

At the 12:06 minute mark of the podcast Gary made light of that kind of feedback:

“Do we? We get feedback like that?”

Mueller responded:

“Well, yeah.”

Then Mueller completed his thought:

“I feel bad for them. I kind of understand that. I think those are the kind of situations where we would look at the examples and be like, “Oh, I see some sites are unhappy with this, but overall we’re doing the right thing from our perspective.”

And Gary responded:

“Right.”

And John asks:

“And then we wouldn’t see it as an issue, right?”

Gary affirmed that Google wouldn’t see it as an issue if a legit publisher loses traffic when overall the algorithm is working as they feel it should.

“Yeah.”

It is precisely that shrugging indifference that a website publisher, Brandon Saltalamacchia, is concerned about and discussed with SearchLiaison in a recent blog post.

Lots of Questions

SearchLiaison asked many questions about how Google could better support content creators, which is notable because Google has a long history of focusing on their user experience but seemingly not also considering what the impact on businesses with an online presence.

That’s a good sign from SearchLiaison but not entirely a surprise because unlike most Googlers, SearchLiaison (aka Danny Sullivan) has decades of experience as a publisher so he knows what it’s like on our side of the search box.

It will be interesting if SearchLiaison’s concern for publishers makes it back to Google in a more profound way so that there’s a better understanding that the Search Ecosystem is greater than Google’s users and encompasses website publishers, too. Algorithm updates should be about more than how they impact users, the updates should also be about how they impact publishers.

Hope For Sites That Lost Traffic

Perhaps the most important news from the interview is that SearchLiaison expressed that there may be changes coming over the next few months that will benefit the publishers who have lost rankings over the past few months of updates.

Brandon wrote:

“One main take away from my conversation with Danny is that he did say to hang on, to keep doing what we are doing and that he’s hopeful that those of us building great websites will see some signs of recovery over the coming months.”

Yet despite those promises from Danny, Brandon didn’t come away with hope.

Brandon wrote:

“I got the sense things won’t change fast, nor anytime soon. “

Read the entire interview:

A Brief Meeting With Google After The Apocalypse

Listen to the Search Off The Record Podcast

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20 Confirmed Facts About YouTube’s Algorithm

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20 Confirmed Facts About YouTube's Algorithm

Instead of counting the number of clicks or views a video gets, YouTube’s algorithms focus on ensuring viewers are happy with what they watch.

This article examines how YouTube’s algorithms work to help users find videos they like and keep them watching for longer.

We’ll explain how YouTube selects videos for different parts of its site, such as the home page and the “up next” suggestions.

We’ll also discuss what makes some videos appear more than others and how YouTube matches videos to each person’s interests.

By breaking this down, we hope to help marketers and YouTubers understand how to work better with YouTube’s system.

A summary of all facts is listed at the end.

Prioritizing Viewer Satisfaction

Early on, YouTube ranked videos based on watch time data, assuming longer view durations correlated with audience satisfaction.

However, they realized that total watch time alone was an incomplete measure, as viewers could still be left unsatisfied.

So, beginning in the early 2010s, YouTube prioritized viewer satisfaction metrics for ranking content across the site.

The algorithms consider signals like:

  • Survey responses directly asking viewers about their satisfaction with recommended videos.
  • Clicks on the “like,” “dislike,” or “not interested” buttons which indicate satisfaction.
  • Overall audience retention metrics like the percentage of videos viewed.
  • User behavior metrics, including what users have watched before (watch history) and what they watch after a video (watch next).

The recommendation algorithms continuously learn from user behavior patterns and explicit satisfaction inputs to identify the best videos to recommend.

How Videos Rank On The Homepage

The YouTube homepage curates and ranks a selection of videos a viewer will most likely watch.

The ranking factors include:

Performance Data

This covers metrics like click-through rates from impressions and average view duration. When shown on its homepages, YouTube uses these traditional viewer behavioral signals to gauge how compelling a video is for other viewers.

Personalized Relevance

Besides performance data, YouTube relies heavily on personalized relevance to customize the homepage feed for each viewer’s unique interests. This personalization is based on insights from their viewing history, subscriptions, and engagement patterns with specific topics or creators.

How YouTube Ranks Suggested Video Recommendations

The suggested videos column is designed to keep viewers engaged by identifying other videos relevant to what they’re currently watching and aligned with their interests.

The ranking factors include:

Video Co-Viewing

YouTube analyzes viewing patterns to understand which videos are frequently watched together or sequentially by the same audience segments. This allows them to recommend related content the viewer will likely watch next.

Topic/Category Matching

The algorithm looks for videos covering topics or categories similar to the video being watched currently to provide tightly relevant suggestions.

Personal Watch History

A viewer’s viewing patterns and history are a strong signal for suggesting videos they’ll likely want to watch again.

Channel Subscriptions

Videos from channels that viewers frequently watch and engage with are prioritized as suggestions to keep them connected to favored creators.

External Ranking Variables

YouTube has acknowledged the following external variables can impact video performance:

  • The overall popularity and competition level for different topics and content categories.
  • Shifting viewer behavior patterns and interest trends in what content they consume.
  • Seasonal effects can influence what types of videos people watch during different times of the year.

Being a small or emerging creator can also be a positive factor, as YouTube tries to get them discovered through recommendations.

The company says it closely monitors success rates for new creators and is working on further advancements like:

  • Leveraging advanced AI language models to better understand content topics and viewer interests.
  • Optimizing the discovery experience with improved layouts and content pathways to reduce “choice paralysis.”

Strategies For Creators

With viewer satisfaction as the overarching goal, this is how creators can maximize the potential of having their videos recommended:

  • Focus on creating content that drives high viewer satisfaction through strong audience retention, positive survey responses, likes/engagement, and low abandon rates.
  • Develop consistent series or sequel videos to increase chances of being suggested for related/sequence views.
  • Utilize playlists, end screens, and linked video prompts to connect your content for extended viewing sessions.
  • Explore creating content in newer formats, such as Shorts, live streams, or podcasts, that may align with changing viewer interests.
  • Monitor performance overall, specifically from your existing subscriber base as a baseline.
  • Don’t get discouraged by initial metrics. YouTube allows videos to continuously find relevant audience segments over time.
  • Pay attention to seasonality trends, competition, and evolving viewer interests, which can all impact recommendations.

In Summary – 20 Key Facts About YouTube’s Algorithm

  1. YouTube has multiple algorithms for different sections (homepage, suggested videos, search, etc.).
  2. The recommendation system powers the homepage and suggested video sections.
  3. The system pulls in videos that are relevant for each viewer.
  4. Maximizing viewer satisfaction is the top priority for rankings.
  5. YouTube uses survey responses, likes, dislikes, and “not interested” clicks to measure satisfaction.
  6. High audience retention percentages signal positive satisfaction.
  7. Homepage rankings combine performance data and personalized relevance.
  8. Performance is based on click-through rates and average view duration.
  9. Personalized relevance factors include watch history, interests, and subscriptions.
  10. Suggested videos prioritize content that is co-viewed by the same audiences.
  11. Videos from subscribed channels are prioritized for suggestions.
  12. Consistent series and sequential videos increase suggestions for related viewing.
  13. Playlists, end screens, and linked videos can extend viewing sessions.
  14. Creating engaging, satisfying content is the core strategy for recommendations.
  15. External factors like competition, trends, and seasonality impact recommendations.
  16. YouTube aims to help new/smaller creators get discovered through recommendations.
  17. AI language models are improving content understanding and personalization.
  18. YouTube optimizes the discovery experience to reduce “choice paralysis.”
  19. Videos can find audiences over time, even if initial metrics are discouraging.
  20. The algorithm focuses on delivering long-term, satisfying experiences for viewer retention.

Insight From Industry Experts

While putting together this article, I reached out to industry experts to ask about their take on YouTube’s algorithms and what’s currently working for them.

Greg Jarboe, the president and co-founder of SEO-PR and author of YouTube and Video Marketing, says:

“The goals of YouTube’s search and discovery system are twofold: to help viewers find the videos they want to watch, and to maximize long-term viewer engagement and satisfaction. So, to optimize your videos for discovery, you should write optimized titles, tags, and descriptions. This has been true since July 2011, when the YouTube Creator Playbook became available to the public for the first time.

However, YouTube changed its algorithm in October 2012 – replacing ‘view count’ with ‘watch time.’ That’s why you need to go beyond optimizing your video’s metadata. You also need to keep viewers watching with a variety of techniques. For starters, you need to create a compelling opening to your videos and then use effective editing techniques to maintain and build interest through the video.

There are other ranking factors, of course, but these are the two most important ones. I’ve used these video SEO best practices to help the Travel Magazine channel increase from just 1,510 to 8.7 million views. And these video SEO techniques help the SonoSite channel grow from 99,529 views to 22.7 million views.

The biggest recent trend is the advent of YouTube Shorts, which is discoverable on the YouTube homepage (in the new Shorts shelf), as well as across other parts of the app. For more details, read “Can YouTube Shorts Be Monetized? Spoiler Alert: Some Already Are!

Brie E. Anderson, an SEO and digital marketing consultant, says:

“In my experience, there are a few things that are really critical when it comes to optimizing for YouTube, most of which won’t be much of a surprise. The first is obviously the keyword you choose to target. It’s really hard to beat out really large and high authority channels, much like it is on Google. That being said, using tools like TubeBuddy can help you get a sense of the keywords you can compete for.

Another big thing is focusing on the SERP for YouTube Search. Your thumbnail has to be attention-grabbing – this is honestly what we test the most and one of the most impactful tests we run. More times than not, you’re looking at a large face, and max four words. But the amount of contrast happening in the thumbnail and how well it explains the topic of the video is the main concern.

Also, adding the ‘chapters’ timestamps can be really helpful. YouTube actually shows these in the SERP, as mentioned in this article.

Lastly, providing your own .srt file with captions can really help YouTube understand what your video is about.

Aside from actual on-video optimizations, I usually encourage people to write blog posts and embed their videos or, at the very least, link to them. This just helps with indexing and building some authority. It also increases the chance that the video will help YOUR SITE rank (as opposed to YouTube).”

Sources: YouTube’s Creator Insider Channel (1, 2, 3, 4, 5, 6), How YouTube Works

More resources: 


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