All you search-engine marketing consultants watch out. Sequoia Capital just invested in Kenshoo, an Israeli startup that automates the whole process of creating and managing search-engine marketing campaigns. It is a labor-intensive activity that has given rise to an entire cottage industry. Kenshoo competes with bid-management software from all the giants in online advertising (DoubleClick, aQuantive’s Atlas Solutions, and Omniture), but it goes a step beyond that to look at the quality of the campagns. It finds relevant keywords across search engines, and changes the campaigns to maximize their returns. The company’s press release quotes Sequoia partner Michael Moritz (who invested in Google):
Mastery of search engine marketing is the biggest single challenge facing any marketer or advertiser. Sequoia Capital invested in Kenshoo because of its fresh approach to this task and because the company’s battle-hardened software has already paid off in thousands of different search campaigns.
Although Moritz sat on the evaluating committee, he is not the investing partner. Yuval Baharav, a partner in Sequoia’s Israeli office, is the one who invested and will take a board seat. This is Kenshoo’s first venture round. Terms were not disclosed, although one report in an Israeli paper puts it at a few million dollars. Previously, the startup raised about one million dollars from angel investors, and has been funding itself from operations. The new money will be used to make a marketing push into the UK and parts of Europe in the first quarter of 2008, and the U.S. in the second quarter.
Kenshoo launch your product at Searchnomics http://www.searchnomics.net. It where the SEM, SEO, Social Media hang.
We are using Kenshoo’s services for the past few months and are really happy with the results, we are happy to hear they will have even more resources to extend their excellent work and provide more features in the future.
I knew they were looking at another company that does similar things…interesting to see that they went with these guys.
Hey Erick,
Who is Sequoia Capitral? Are they a brother company of Sequoia Capital?
Just teasing…nice job.
They don’t have much info on their site about what they offer. I filled out the form and requested a demo and more information. Hopefully this can help the industry guys that manage the smaller clients.
Great problem to solve, horrible name. Best of luck to Kenshoo.
LOL @ #6. It would be interesting to see how they created that name. Love to hear more about Kenshoo’s approach in this space.
Shalom.
thats because all the good names are already taken…so your only choice is either to pay a ton of money for a domain name, or come up with some random name. And thanks to google the domain name is no longer important
Kenshooo!
God bless you!
hehehehe
I so funny!
virb.com/balm/
WOOOO!! One point for Israel!! You Californians are being dominated. Tel Aviv>SoCal
Erick – it would be nice to read who they compete with and who TC has covered in this space before. That would really complete the article… Thanks for the nice article.
@ #11: While there are plenty of good SoCal companies, and I agree that Israel is a big competitor, most of us New Media types that want to change the world are clustered in NorCal!
Again – why is no one creating a futures market for clicks??? It makes all the sense in the world to me – if you know what your conversion rates are and what your avg cost per transaction etc – the only variable is the CPC….example: I read that BlueNile cut back on its CPC advertising significantly bc of costs in jewelry keyword space….imagine if they could lock in 20,000 clicks in March 2009 for $x per click…I realize it would take work, but payoff would be huge
SEM is important, but it has become essential for many businesses because they haven’t figured out SEO. E.g. expedia spends millions on SEM because they don’t know how to get the free stuff that tripadvisor, yahoo travel etc. used to build their business
But as long as Google and Yahoo continues to be the art form it is, Kenshoo is going to have a huge and growing customer base
Their site doesnt contain much info – we are looking for new ways to manage our smaller clients campaigns
thanks for the headsup.
Sounds similar to SEM Director and Clickable … how can you automate experience, consumer behavior, seasonal trends, etc.?
Nice article Erick. The article mentions the product, but they also have a great team. Kenshoo gets the job done. I hope to continue and work with you guys.
Once they get to scale, they can’t function as anything other than a secondary auction on top of Google, Yahoo, MSN, etc. More specifically, what happens when two or more of their customers want to buy the same keyword?
And that’s not the biggest problem with the black box of “automated campaign management” – the fundamental and insurmountable problem is that, once you’ve decided a keyword is not performing, you shut it off and can never derive another data point from it. Sure, you can come up with arbitrarily complicated strategies to give failed keywords another chance, but then you’re just sampling from a result space that Google and friends own and you’re making assumptions about future performance that may or may not be justified.
Given that, only the ad networks themselves can hope to “fully automate” anything in this space. My guess is that Kenshoo has either the fantasy of the machine-learning PPC robot or swarms of people to make “course corrections” when the robot runs off the rails.
I’ve been through an attempt to solve the same problem, and it is, on its face, intractable without access to the data that the ad networks will never provide.
I wish Kenshoo luck.
Good article I wish them luck.
We have been using Kenshoo for about four months now across multiple large and complex campaigns. Very impressed with the results we have been able to achieve, as well as the advanced features such as keyword tracking and crawler for deep linking campaigns. The level of service Kenshoo provides also sets them apart from the competition.
automation is good….but they are underestimating the lack of knowledge of their “users” if that wasn’t the case, they won’t need SEM companies to run campaigns for them…..companies like ReachLocal are doing it right….hand holding at a massive scale….it’ll be interesting to see their traction…..
There is value in automating the key work management process but the biggest breakage happens after the click. Our experience at Naehas (www.naehas.com) has shown that automating and optimizing the landing pages after the click will deliver a better ROI.
Looks like Kenshoo does some of that but not sure about the specifics.
Erick, you should have consulted with someone knowledgeable in the SEM space before writing such an article. A few things you got wrong:
1. Kenshoo’s competitors aren’t the big guys. Omniture is making *very little* headway in a) getting non-SiteCatalyst users to use it; and b) getting SiteCatalys users to *pay* for it. IMO, Omniture needs to make a big acquisition in the space to be taken seriously in the SEM space (Efficient Frontier, with $500M in spend under mgmt and the best technology, would make sense). Kenshoo will compete against 10+ private companies:
Efficient Frontier
Marin Software
The Search Agency
360i/SearchIgnite
Did-It
KeywordMax
BidHero
others in different geographies
2. Agreed that the 3 big players you mention do do much in the way of optimization, but don’t feel yourself & readers into assuming that describes the rest of the industry – it doesn’t. Efficient Frontier, for one, has gotten to the point of being the world’s biggest SEM firm as measured by spend under management by having a very unique technology (portfolio algorthms adapted from the Wall St automated trading world) that drives very real lift. As often as not, when a big Internet-focused transactional company beats guidance, EF’s system plays a role thru SEM optimization. Moreover, there *are* others like Marin Software and 360i/SearchIgnite that do exactly what Kenshoo is trying to do, so it’s more than a stretch to describe Kenshoo as a novel approach. Frankly, whoever executes best will win, but I don’t really like the odds of an Israeli company busting their way into either the European or U.S. markets.
BigIdeas – I’ve thought about a search futures market as well, but the problem is it would probably require that advertisers use Google’s Broad Match in order to attain the level of mano-y-mano ad competition that a futures market would need to be interesting to the search engines. Also, I doubt Yahoo or MSN would have the level of tech sophistication to pull it off.
Kango – I think you’re mostly wrong. SEM has become essential not because advertisers haven’t figured out SEO, but because Google has made it too hard to see near-term benefits from it. It takes 9-12 months to see scaled benefits from even top-notch SEO efforts, and most businesses don’t have the luxury of time. Also, SEM is essential…because it works, just like other forms of advertising are essential because of their efficacy and nothing else.
BJ – agree with you wholeheartedly that no tool will help someone without experience/knowledge. That’s why Efficient Frontier (where I used to work for 4 years) has always taken the route of being a technology-enabled service provider rather than [primarily] a self-service tool. By my estimates >75% of the top 1000 advertisers in search (as measured by spend) would cite experience & knowledge as more important to their success than choice of tool.
Erick Herring – as long as the SEM provider uses each advertisers’ cost & revenue data uniquely for the purposes of optimizing *that* advertiser’s campaign, managing two ads on the same query presents no obstacles. There’s no matter/anti-matter tool supernova, so to speak. That’s a non-sensical ‘reflex’ argument IMO.
Erick H. – on the topic of poor performing keywords, all I’ll say there is that drawing ROI-meaningful conclusions from sparse data & via sophisticated learning algorithms is where the SEM winners & losers differentiate themselves. There *are* ways to efficiently learn about underperforming keywords, but you’re right that verrrry few firms know how to do that.
Erick H. – lastly, don’t wait for G, Y or MSN to have a good SEM mgmt tool. I can’t tell you how many large PPC advertisers have told me they’ll *never, ever, ever* give conversion data to the search engines (Google primarily) for fear of that data being used against them. Advertisers are already over-dependent on Google for traffic/conversions, and most view SE-provided optimization as a deal with the devil for no ’sure’ benefit.
RabG – agree with you 100% that there are multiple ways to skin the SEM cat, and focusing on having the best conversion rates is one of them. I know a large SEM advertiser in the UK who spends 800 hours doing split A/B testing for each & every site he launches, to the point where he knows which way the pretty girl’s eyes should be looking on the lead submission form…
Nice article Erick!
) and as others had mentioned here – their Team is amazing!!! Of course I can not say that everything was smooth from the start, but at the bottom line I was never left with an unanswered problem or query. I can share with you that we’re utilizing all three Kenshoo’s tactics – fully-automatic, semi-automatic & manual and obviously you need to find the right match for the specific campaign, but that’s why you need to have a Pro SEM team…
I was one of the early adapters, using Kenshoo’s platform from the beginning of 2007 and I must say that after running tens of tests, pilots and demos with almost any small-large player in this area – I was amazed!
My team is running a few tens of PPC campaigns worldwide with a scale of a few MM’s, some of them for VERY complex websites, such as huge e-commerce & price comparisson websites with tens to hundreds of landing pages that sometimes change once a week (or even more often) and some of them in a quite competative space like Forex, Real Estate, Diamond, Jobs etc. At the bottom line – their platform enabled me to double-triple the capacity we’re handling without expanding the team. I’d loved their Quality Management methodology, as all of us know by now – Bid Management is dead (you can just argue on the specific date of death
I’m really happy to hear about Kenshoo’s expansion & wish them the best of luck!!!
Hi Erick,
Per Searchquant’s comments, I would be happy to brief you on Efficient Frontier and more general information about the SEM landscape. If it continues to be an area of coverage for TechCrunch, some additional background knowledge would be helpful for you.
“DoubleClick, aQuantive’s Atlas Solutions, and Omniture”.
These guys maybe some of the biggest in the ad serving market, but don’t cut the mustard within the PPC space. A leading European player here, would be td Searchware, previsouly known as BidBuddy and probably the very first PPC mgmt tool.