Advertisers Take Over Search Engines

.By Kate Lyons
 
The simplicity, efficacy and relative cost efficiency of search-engine marketing to other forms, such as display advertising, has placed it in pole position to outpace all other online advertising in the next decade.

The increasing importance of search-engine marketing is evidenced in Australia by its growth of up to 100% a year, and that it accounts for up to 20% of advertising for engines such as Yahoo.

And it’s a very competitive market for the search engines. According to figures supplied by Hitwise Australia for January this year, Google holds nearly 40% market share compared to Yahoo at 6.72%. Search activity in Australia has also increased and changed dramatically since 2002—then Australians used local search engines for less than 20% of searches, but now that figure is 61%.

Hothouse Interactive MD Simon Van Wyk says the latest findings from the US (Pew Internet and American Life Project, January 2005) indicate that on an average day, about 53% of American internet users use a search engine, with search second only to email as a daily habit for those online.

 

Nuts and bolts of Search Engine Marketing

As Van Wyk points out, the basis for search-engine marketing is the idea that the higher a website ranks in a search result, the greater chance it has of being visited by a user. Achieving that pole position is known as search engine optimisation (SEO): the process of making your site more accessible to search engines as defined by the elements those engines look for.

These elements can include everything from search keywords that appear near the top of a web page, relevance of the keyword to website content and the reciprocal link, and a webpage’s title tags, alt tags and word density.

Paid search or pay-per-click advertising allows the marketer to choose keywords they would like to link to their site and only pay when someone uses them to click through to their site. The more you pay, the higher your site will appear in the hierarchy of results for the allocated keywords.

Hitwise vice-president, search, Gavin Appel, says advertisers have come to realise that search-engine marketing can attract high volumes of quality and cost-effective leads to their businesses, enabling them to buy textual advertisements alongside search results which only appear when a user searches on a particular phrase—a marketing activity which is entirely performance driven in terms of cost.

“The ability to purchase ads on search provides advertisers with direct control over when, where and how their ads appear,” Appel says. “This means advertisers can run targeted promotional campaigns around sale times, holiday seasons or specific events. With the real-time nature of search marketing, advertisers can target ad copy and search terms toward specific marketing initiatives.”

According to Mel Bohse, managing director of Yahoo’s paid search consultancy, Overture, the most significant trend in Australian search marketing is how advertisers are integrating search-engine marketing with offline campaigns.

“Search is all about driving direct to site or to other forms of advertising,” she says. “Some advertisers still believe that they have such a well-known brand they don’t need paid search or online advertising, but an algorithmic listing [the ‘raw’or natural search results from a search] appears below a paid search listing, and if you aren’t there you are letting consumers go to your competitors.”

Google Australia and New Zealand head of sales Kate Vale believes search also has the potential to become the new customer acquisition tool for direct marketers as it is very effective in bringing buyers and sellers together at the moment of their greatest interest.

“One of the most significant attributes of search marketing is that it reflects peoples’ level of interest at every point in the buying cycle, from initial fact-finding to order fulfilment,” Vale says.

“Of course, the role of search isn’t limited to buying and selling. Beyond the buying cycle, search enables businesses to locate market research, scientific data, and legal and regulatory information with accuracy, as well as deliver competitive information and trends.”

Bohse adds that one of search-engine marketing’s major advantages is flexibility—within 20 minutes advertisers can refresh and change listings. And Overture also offers content matching with partner sites such as Ninemsn, where, apart from web search results, consumers accessing content are exposed to relevant paid search terms.

“The other huge advantage of paid keywords is that you are not paying unless someone clicks on your website. And because of the nature of search, where a consumer is already looking for your goods and services, you are only getting qualified leads,” Bohse says.

Who’s using it?

Finance and travel advertisers are strong search-engine marketing spenders Bohse says, as are personal and dating services. New advertisers include e-commerce categories such as food retail, with marketers such as Woolworths and Greengrocer.com.au, and Bohse sees particular potential in international travel.

Fairfax Digital media sales director Liam Walsh is more circumspect, saying search-engine marketing is very important for categories such as classifieds and travel, but is a small-scale marketing opportunity for a lot of larger advertisers.

The other fast-growing area in search-engine marketing is local search, particularly since the launch of an integrated Sensis package last year, incorporating Yellow Pages and White Pages, and Yahoo local search.

Yahoo Australia & NZ head of search Peter Crowe says many small businesses which don’t have a site are using Yahoo local search—a hit offers information such as company name and phone number under the relevant categorisation.

Crowe agrees with Bohse that search is being used increasingly in tandem with other forms of online marketing such as display advertising, with big financial institutions in particular doing a lot of crossover between the two.

Google, which offers cost per click search-engine marketing through its AdWords program, has recently introduced local targeting, which Vale says helps focus advertising.

Advertisers can specify the countries where their ads appear and they can choose states and cities to target, or customise their own regions.

“If advertisers want to target very specifically, they can customise a target area by selecting a location and surrounding radius or by picking points to define the borders of their target area,” she says. “The function is built into AdWords, so is easy to implement and manage within the existing campaign management interface.

“Advertisers can run national campaigns in addition to local campaigns and attract national and local customers. The new location targeting is based on IP address and search query.”

Pitfalls of search Advertising

Van Wyk says the accountability of search-engine marketing, that the advertiser pays for every click-through to their site, means they need to be very careful about who they attract, so well-crafted campaigns and relevance are vital.

“While more expensive keywords might give you a high listing, that doesn’t necessarily guarantee a high click volume. Understand your target audience and know the search terms you are using.”

Vale says her personal mantra in search-engine marketing is “test, test, test”.

“Search is unique in that you can easily see what is working and what is not. Using Google’s free tracking tool you can see how your campaign is performing, and which keywords and ad copy are effective (or not).”

Advertisers can also use keywords in the ads served to searchers, which amplifies the advertiser’s message to them. Combining keywords to create multiple versions of ads that reflect what a user is searching for is also effective, Vale says.

She points out that popular search words change over time so tracking conversions helps an advertiser’s dollar work harder.

24 March 2005