Heavy traffic ahead

May 7, 2007
By Joyzelle Davis, Rocky Mountain News

Search engines steering more consumer dollars toward savvy advertisers

Deciphering the black art of search engines like Google and Yahoo! is turning into a big-bucks business.

Search engine marketing - helping consumers find a company's Web site by using specific key words - hardly existed eight years ago. Last year, it was a $9.45 billion annual industry, nearly double the revenue from 2005, according to SEMPO Research.

"There's been a fundamental shift in the past two to three years in the way people consume media," said Patricia Hursh, president of Boulder-based SmartSearch Marketing. "The entire U.S. population, on average, spends as much time online as they do watching TV. And a lot of what they're doing online is search."

According to forecasts, the growth is just getting started. By 2011, SEMPO predicts the search engine marketing industry will reach $18.6 billion as more small and midsized companies shift their marketing budgets to Internet advertising.

Figures like that cause print and television executives to sweat and advertising agencies to scramble for ways to incorporate search engine marketing. Last month, advertising behemoth Interpublic Group bought search engine marketing firm Reprise Media for an undisclosed sum.

"Search is becoming such an integral part of a marketing campaign that (big agencies) have to have it," said Andrew Beckman, president of Denver-based SearchAdNetwork.

There are several search engine marketing strategies, including paying for text ads next to search results and helping a company's Web site fare more prominently in the "organic" search results.

The ability to top Google, MSN or Yahoo's search rankings "in order of relevance" can be influenced only a limited amount because the search engines use closely guarded algorithms to create the results. But there are ways to help, such as improving a site's presentation and analyzing the key words people use to search for a particular Web page.

At least 40 percent of searches are local in nature, Hursh said, and that number is poised to grow as Internet users increasingly migrate to Google Maps and Yahoo Local to find neighborhood information. The Internet's ability to target users based on their IP address has appeal both for mom-and-pop stores such as plumbers and also nationwide chains that want to make their local presence known.

"The challenge with advertising is getting your message in front of the right person," she said. "Search eliminates that because the person is pulling the ad instead of you pushing it."

For Greenwood Village-based WildBlue, which sells high-speed Internet access in rural areas, local search marketing provides a way to bypass customers served by DSL and cable modems.

"If you're in Evergreen or you live on the top of a mountain, you'll see us" in an Internet search for high-speed Internet providers, said Tom Gallagher, online content manager for WildBlue. "If you're in Denver, you won't."

WildBlue still spends the majority of its advertising budget on local newspaper, trade magazine and small-town radio buys, but Gallagher sees that shifting over time to more of a focus on search advertising. Search is less expensive, and it provides more of an ability to target specific customers, he said.

With search, advertisers "can start and stop when they like," Beckman said, unlike with more physical advertising such as local billboards.

But there are potential land mines in the search engine market. Last year, EchoStar and DirecTV became two of the highest-profile companies to tussle over the use of trademarks as key words to trigger sponsored links (the companies settled the lawsuit on confidential terms this year).

Another growing problem is click fraud, a scam that takes several forms but results in merchants being billed for fruitless traffic generated by mischief makers who repeatedly click on an advertiser's Web link with no intention of buying anything.

Tips for successful search engine marketing

GO AHEAD - DO . . .

• Create broad key word lists, including misspellings and multiple-word phrases. Also include "negative" terms - such as Tom, as in Tom Cruise, if you're advertising your cruise ship business.
• Refine key word bids based on performance analyses.

STOP! DON'T . . .

• Set your campaign on "autopilot."
• Keep key words or ads around that aren't performing well.
• Use too many or too few key words.
• Create a site with a poor user experience.
• Be oblivious of conversion rates, or the number of times that a customer takes specific actions such as downloading software, placing an order with an online retailer, signing up for an e-mail newsletter, etc.

BE CAUTIOUS OF . . .

• Click fraud, a type of Internet crime that occurs in pay-per-click online advertising. Unusual click volume might be someone trying to ring up your advertisers' bills, which could result in lost advertising.

KNOW YOUR PRICING

• Key word bids can start at 5 cents and rise to $100 or more. Longer, specific phrases and ones for specific geographic areas tend to cost the least.Source: Search Adnetwork

davisj@rockymountainnews.com or 303-954-2514

Copyright 2007, Rocky Mountain News. All Rights Reserved.

Posted on May 7, 2007 10:00 AM

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