S&P 500 % Change by Month, Correlation to US Dollar

I was a little curious today how the S&P performed by month over it’s history (1988-2014). It turns out the 4th quarter brought the most promising returns. However, it’s easy for outliers to distort the gains so I ended up looking at the number of times each month had a decline. Over the last 26 years, December was a losing month only 15% of the time while Q3 months had the most potential for downside.

With the looming interest rate hikes by the federal reserve, one must speculate it’s long term effect on US equities. Over the history of the S&P 500 and US Dollar Index, there exists a positive .39 correlation between the two. As foreign investment in US equities increase, the dollar benefits as US dollars are required to purchase US stocks. As long as interest rates and the dollar continue to rise, precious metals will continue to struggle. Optimism in US equities are reaching historic levels thus I’m implementing a more cautious investment plan for 2015.

Month % Chg Losing %
January 0.53% 37%
February 0.13% 37%
March 1.26% 33%
April 1.78% 26%
May 1.09% 30%
June -0.30% 44%
July 0.93% 52%
August -0.85% 41%
September -0.24% 48%
October 1.40% 33%
November 1.29% 36%
December 2.16% 15%

Using Google Correlate To Understand Your Customer

Google Correlate Oakley

Correlation is a mutual or reciprocal relationship between two or more things. The higher the correlation coefficient the stronger the relationship. Negative coefficients represent inverse relationships.

.8 to 1.0 or -.8 to -1.0 (very strong relationship)
.6 to .8 (strong relationship)
.4 to .6 (moderate relationship)
.2 to .4 (weak relationship)
.0 to .2 (weak or no relationship

Looking at the term “Oakley”, high correlation exists for terms like: camelbak, iced tea, razor burn, kabobs, bike mounts, etc. Using this information, one could say that Oakley customers are familiar with the outdoors, yet are also keen on their appearance (razor burn). The Oakley customer may prefer a healthier lifestyle, possibly choosing foods like kabobs and tea over burgers and beer in a camp/ outdoor setting. If Oakley is planning on filming a lifestyle ad in a campground setting, perhaps having the actor bbqing something healthy would be the way to go.

Google Correlate

Hello Feedly, Adios Google Reader

My search for a new reader began when Google announced that they would close Google Reader this July 1st due to declining usage. I’m glad they did, because searching for an alternative led me to Feedly – which to my surprise has been around for several years. Bottom line, Feedly is extremely efficient, and it took only a few seconds to sync all my Google Reeder subscriptions. No need to say more, Feedly is my new favorite app, try it out for yourself. Download the Feedly app here. More info: CNET Review

The Rise of the Planet of Apps

Mobile Apps

Mobile is going bananas: The CPC advertisers pay Google each time someone clicks on an ad, decreased 6 percent from the fourth quarter a year ago, falling for the fifth consecutive quarter on a yearly basis. Why? Mobile traffic is increasing. Since, conversion rate on mobile devices is lower, advertisers must decrease spend in order to meet their original CPA goals. This results to an overall decrease in CPC. See charts below.

Google’s Response: “We’re in some uncharted territory because of the rapid rate of change in these things, but I’m very optimistic about it,” said Larry Page, Google’s chief executive, on a conference call with analysts after the earnings were announced. “I think the C.P.C.’s will improve as the devices improve, as well.”

Mobile Conversion Rate

Can the rise of mobile apps lead to the destruction of search and Google?

As mobile usage continues to increase, so is the use of mobile applications. Since consumers are increasingly using apps, like Yelp, Amazon, Target or Kayak, to search on mobile devices, will searches on Google decrease? Since, a lot of Google revenue comes from branded advertisement, what happens when retailers develop their own app? Once the consumer downloads the Target app, they don’t need to do a search on Google to find Target, the app is already installed on their phone… right? In retrospect, why haven’t searchers embraced bookmarking Target in their web browser instead of searching on Google every time they want to go to Target.com? If users still prefer the Google search over bookmarking, then how can we assume that mobile applications will share any different of a fate?

As more and more websites are converted to RWD – responsive web design – optimized for mobile devices, the incentive to download apps becomes less. People download apps because apps make content easy to consume and navigate on a mobile device. If an RWD site is just as easy to navigate on a mobile device as on an app, then why would someone download an app?

As it stands, in 2012, 64% of mobile phone time was spent on apps. Even at 64% penetration, app usage doesn’t seem to influencing mobile searches on Google. Another reason why I don’t see individual apps replacing Google is because mobile apps require people to do extra work, opening one app to search for flights and another to find restaurants. Google is the one-stop shop, and still the easiest and most accurate source to locate the content you are looking for.

Mobile Downloads

Piggybacking Off Bloomreach

Well I must say it’s always nice to have a main competitor sync up with Bloomreach. In today’s example, it’s Forever 21. If you are not familiar, Bloomreach is a company that takes your existing feed and conversion data and uses that data to build out a more comprehensive set of potential profitable organic keywords. A lot of bigger retailers have a very similar issue – their only landing pages consist of not so SEO friendly product pages and category pages – say 500 to 2k landing pages total. The trouble begins when you have a long tail keyword like “cute gold tops for teens”. The majority of retailers are not going to have a category or product that will match that keyword. Bloomreach fills in the gaps. Instead of being limited to your product and category pages, Bloomreach can dynamically create thousands of complementary pages such as the page for “cute gold tops for teens”; with correlated title and h1 tags. They get that page ranked by dropping a link into a Bloomreach specific (SEO) area of the Forever 21 page, right above the footer. The “related searches” and “related products” area you see below is all to help Bloomreach obtain better organic ranking for those keywords. Google/ Bing will crawl this page, see the links and hopefully index them. Every time a user clicks on the Bloomreach created organic listing you pay a CPC.

With that said, Bloomreach does a lot of work for me – for free. They build a great set of longtail keywords (related search area) that I’m able to copy and use to expand my existing SEM campaigns. In fact, the majority of the keywords I pull from Forever 21 and use in my SEM campaign cost (CPC) the same if not less than what I would have been paying Bloomreach (CPC). Another advantage with using SEM, is that controlling the ad position and CPC in Adwords is much easier to do than trying to manage a Bloomreach organic listing. If the keyword is yielding high conversions it may be in your best interest to bid for the #1 position to obtain the most traffic. You don’t have that same level of flexibility or instantaneous control with organic search.