Every search marketer ought to at least consider paid search opportunities. For some, paid search will not be cost-effective, but many search marketers find paid search to be more valuable than organic search. It all depends on your site and your situation. We help you decide whether paid search is right for you, and, if it is, how to make the most of it.
But first, let's review some of the main benefits of a paid search program that we introduced in Chapter 3, "How Search Marketing Works":
As you have journeyed past Chapter 3 in this book, you have discovered that paid search offers other benefits, too:
Despite all these advantages, paid search is not for everyone. If you sell low-priced, low-margin products, you might find that the cost of advertising is more than you can justify in return. If you are unable to place any monetary value on your Web conversions, it will be hard to justify paid search spending. Many noncommercial and nonprofit sites find that paid search does not help them sustain their operations. For businesses, however, especially businesses that are trying to attract prospective customers to their site, paid search increasingly has a place in even the smallest marketing budgets.
Throughout this book, we have discussed many ways to spend money to improve your search marketing, including paid directory listings (in Chapter 3, "How Search Marketing Works"), paid inclusion (in Chapter 10, "Get Your Site Indexed"), and paid links (in Chapter 13, "Attract Links to Your Site"). Each of those techniques is important, but the two biggest paid search opportunities are in paid placement and shopping search, which we concentrate on in this chapter.
We covered the basics of paid placement in the first three chapters of this book, but there is more that you should know to run a successful program. You recall that paid placement allows search marketers to "buy" a keyword by bidding an amount they pay each time their advertisement is clicked. As a result, paid placement is sometimes called cost-per-click (CPC) or pay-per-click (PPC) search.
In Chapter 3 (in Table 3-2), we listed the leading paid placement vendors. Keep in mind that you work with the paid placement vendors directly, but that your ads might appear on many different Web sitesGoogle's ads appear on AOL Search, for example. Although Google and Yahoo! deliver 97 percent of all paid placement clicks between them (at least until MSN Search gets its paid placement into gear), some of the second-tier vendors have strengths, too. FindWhat (www.findwhat.com) is an excellent vehicle for reaching highly targeted niche audiences, as its ads are presently shown on CNET and some other popular sites. Espotting (www.espotting.com) has a large European network. Two growing vendors are Enhance Interactive (www.enhance.com) and ePilot (www.epilot.com). Each of these minor vendors drives far fewer clicks than Yahoo! and Google, but their per-click rates tend to be significantly cheaper, so they might be worthwhile for inclusion in your paid search mix.
Beyond these vendors, some very small programs might also make sense for you. These micro-vendors collect very few clicks, and lack the reporting of the big guys, but their high degree of specialization might deliver extremely qualified traffic. The best resource for locating these engines can be found at www.payperclicksearchengines.comit has a list of more than 600 sites that accept paid placement advertising. It has reviewed a number of these programs to help you select the ones most appropriate for your business.
Although the smaller paid placement programs might be valuable to some search marketers, all of you need to understand how to work with Yahoo! and Google, who manage the lion's share of the paid placement listings, so we focus on them throughout the chapter whenever discussing paid placement.
As explained in Chapter 2, "How Search Engines Work," the biggest difference between Google and Yahoo! is how they rank the paid search results. Yahoo!'s Precision Match program uses a straight auctionthe highest bidder for a keyword gets the #1 position. (All paid placement engines besides Google use that same basic technique.) Google's AdWords program, in contrast, has a patented ranking algorithm that weighs both the auction bid and that ad's clickthrough rate to decide which one will provide the most money to Google. In doing so, not only is Google richer, but listings with higher clickthrough rates rank higher, raising the value to the searcher. Although this difference in ranking methodology might seem esoteric, it has major implications for your paid search marketing program, which we cover in depth throughout this chapter, but here are a few highlights:
Generally, a Google campaign is more difficult to accurately plan, but a Yahoo! campaign is more work to manage after it is up and running. Later in this chapter, we show you how to succeed at paid placement programs, but before we do, you need to understand two relatively new twists in paid placement called contextual advertising and local search.
Contextual advertising is an increasingly popular offshoot of traditional paid placement (if you can call anything in our young search marketing industry "traditional"). In its most basic form, contextual advertising depends on the paid placement vendor striking a deal with an information site to show ads on the information site's pages. Any site that draws heavy traffic is a strong candidate to display contextual adsthink CNN or ESPN or weather.com or CNET. Every article on these sites offers possibilities for contextual ads. As Figure 14-1 shows, an ESPN story about the Yankees might attract Yankee fans who want to buy Yankee tickets, so why not advertise Yankee merchandise from your store on that page?
Figure 14-1. Contextual advertising. ESPN targets its advertising to the content of each individual news story so that highly qualified visitors click through.
MapQuest (www.mapquest.com) further illustrates the use of contextual ads. When people search on a specific location at MapQuest, they not only get maps and directions but also ads for hotels, shops, and restaurants along the route. MapQuest and other information sites could easily sell advertising directly, without any help from the paid placement vendors, and some do. But because their content changes so rapidly, some of them are unlikely to be able to charge high prices to show the adsthey could sell only banner ads that do not promise what content will be on the same page as the ad. You would undoubtedly pay less for an ad for your Yankee tickets that might appear on the same page as a tennis story, because the readers of the tennis story are less-qualified buyers for your baseball tickets.
However, paid placement vendors already know how to display different ads depending on what the searcher enters, so why not apply that same technology to rapidly changing information sites? In the example in Figure 14-2, Google has already indexed the page on PetPlace.com (www.petplace.com), so it knows what the page is aboutin this case, dogs. Google can easily select ads related to dogs to be displayed on that page alongside the story. Readers can click the ad to go to the advertiser's URL, just as with paid placement. The advertiser pays for the click and PetPlace.com and Google both take a cut. You can also see how ScubaBoard (www.scubaboard.com) uses Google contextual ads, too, but those ads are on a very different subjectscuba diving. Each information site might place the ads in different spots on their pages, but they all attempt to drive qualified visitors to the advertiser's site.
Figure 14-2. Contextual advertising from paid placement vendors. PetPlace.com and ScubaBoard both use Google to show contextual ads on their pages.
In these image-conscious times, where your ad is placed reflects upon your company. So you are probably concerned about exactly which Web sites and exactly which pages your contextual ads will appear on. Snap Electronics would not want its digital camera ad shown next to a somewhat risqué article that advised using photography to spice up your sex life, even if it was a mainstream men's magazine. The search engines are quite aware of the sensibilities of their advertisers, and they take great pains to avoid embarrassing situations, but neither Google nor Yahoo! offers any ability for advertisers to choose ad venues, the way you can with other media buys.
Not only that, but they do not even report where your ad ran after the fact. Why? If the vendors disclosed where your ads were appearing, they fear that you would make fixed-placement or banner deals directly with those sites and cut the paid placement vendors out of the action. Although this is frustrating for your public relations team, it is not likely to change and it is one of the costs of doing business. It is also one of the main reasons some companies opt out of contextual advertising.
Yahoo! and Google compete strenuously for the best information sites to display their ads. Google's AdSense program signs up information sites willing to display contextual advertising; Yahoo! fights to add similar sites to its Content Match network. Google is even exploring whole new services to serve as attractions for its contextual ads, such as the free Gmail service (gmail.google.com). Each side touts the quality of its advertising network to persuade you that highly qualified visitors will come to your site after clicking your contextual ad.
Contextual advertising programs work like any other paid placement program in which you pay for each person that clicks your ad. Google and Yahoo! both offer contextual advertising programs, but they take different approaches. Yahoo!'s Content Match program allows advertisers to use the same or different ads as they do in the Precision Match search paid placement program. Bidding for Content Match is separate from Precision Match, and those contextual bids tend to be lower.
Conversely, Google uses the same program for both paid placement and contextual advertising, AdWords. If you want to place contextual ads with Google, you must participate in Google's search paid placement, too. Search paid placement advertisers can opt out the contextual part of the program, but if they want to syndicate contextual ads, they must bid the same per-click prices as for paid placementthere is no separate bidding. Because AdWords is both the paid placement and contextual ad program, the ads served are identical for both.
Google's approach has been controversial among advertisers who believe that people who navigate pages and click contextual ads are not as highly qualified as those entering a search query. As a consequence, those advertisers believe that contextual ads should not cost the same per-click fee as search ads. Both sides agree that far less traffic is driven from contextual ads than from paid placement, but Yahoo! allows separate bidding so the market will reach its level, whereas Google has responded by automatically adjusting pricing.
Google's "Smart Pricing" might reduce the cost of clicks from contextual advertising when Google believes that the conversion rate for those clicks is lower than expected. Google offers an example that caught Snap Electronics' attention: "A click on an ad for digital cameras on a Web page about photography tips might be worth less than a click on the same ad appearing next to a review of digital cameras." Google's approach follows its normal game plan of being harder to plan for but reducing work for the marketer. Yahoo! uses an easier-to-predict marketplace method to ensure contextual ad clicks are priced lower (because they are less valuable), whereas Google lowers its prices without asking the marketer to bid separately. Whether you appreciate one approach more than the other might depend on whether you can handle the extra work and whether you can find any advantage in separate bidding against less-savvy competitors.
Contextual advertising is perfect for products predictably related to certain kinds of information. For example, if you make camera lenses, you want to advertise on the most popular photography sites, especially camera review sites. The lens maker can show contextual ads only on relevant sites that cost nothing until the reader clicks.
Despite the promise, most advertisers are convinced that those who click contextual ads are not as highly qualified as searchers. Moreover, contextual advertising's biggest challenge is the quality of the pages where the ads appear. Many contextual ad sites are highly relevant sites for your ad, but not always the most popular destinations. Those popular destinations often find they can sell ads directly to advertisers, without giving the paid placement vendors a cut. Contextual advertising, in the minds of some marketers, is associated with sites that, although relevant, are not of the highest popularity or quality.
But better technology might already be changing the quality of contextual traffic. As search engines do a better job of targeting contextual ads to the content it appears with, click rates and conversion rates might increase. Kevin Lee, co-founder of paid search management company Did-it.com, has found that improved targeting and lower prices for Google's contextual advertising are yielding contextual returns that rival search paid placement for some clients.
To see whether contextual ads are cost-effective for your keywords, you can run a test in Yahoo! with one campaign that uses your keywords in the traditional search paid placement and a second campaign with the same keywords enabled for contextual placement only. Yahoo! will report each campaign separately, and you can compare to see whether the contextual campaign delivers enough value to be worth your while. Some search marketers report that contextual advertising has been a gold mine, whereas others have been disappointed; so test it for yourself. In spite of some challenges, contextual advertising continues to grow each year and might be appropriate for your search marketing mix.
If your Web site attracts visitors from an entire country, or from multiple countries, paid placement works just fine. You can choose the countries for your keyword purchases and target your searchers effectively. But what if your business is local? You do not want to waste your budget paying for clicks from searchers outside your area. What do you do if your Web site is for a retailer that operates in a single region within a country, or for a business with just one location?
Step up to local search. As discussed in Chapter 3, several of the major search engines, as well as traditional Yellow Pages publishers, offer local search engines that help searchers find companies within a particular geographic area.
Your business can benefit from the huge increase in searchers' propensity to think local. Research conducted in 2004 shows that more than one fourth of all searches are for merchants near home or work"more than twice the rate previously reported. Seventy-four percent of all searchers say they have conducted local searches, with 45 percent of local searchers intending to buy. Some large businesses can benefit from local search, too, such as a retailer that wants to make it easy for customers to find the nearest location. Table 14-1 lists the top local search programs. Verizon and SBC have made a transition from printed Yellow Pages to the Internet; the rest of the leaders have their roots in Internet search.
Yahoo! is the biggest player at the moment, with more than 15 million Yellow Page-style listings for U.S.-based businesses, in addition to a local search engine. These two services are very similar and might be merged at some point. Yahoo! compiles its business listings from its Yahoo! Shopping member list as well as various data sources, including InfoUSA (www.infousa.com). You can add your business to the lists for free by visiting listings.local.yahoo.com, but to get a prominent advertisement, you need to pay. For $10 a month, your business can add your company's slogan, a detailed description, links to your Web site, and up to 10 photos. Most of its cometitors offer similar features, with traditional printed Yellow Pages vendors offering online tie-ins with its print advertising plans.
Local search depends on searchers telling the search engine the location as part of their search query. Beyond local search, geographic targeting is a way for paid placement advertisers to purchase general-purpose keywords (for which searchers have specified no place names), but show their ads only to searchers at a particular location. We talk about this opportunity later in this chapter.
Whether your business takes advantage of local search, contextual advertising, or any other form of paid placement, you are employing only some of the paid search programs available to you. Next we explore the other significant paid search prospect.
Paid placement is not the only paid search opportunity. For some companies, shopping search is a much more important part of their paid search budget. If your business sells the kind of product online that is offered by shopping search engines, you might find it very profitable to be listed. In fact, many advertisers say that shopping search is their most consistently profitable marketing program.
We discussed shopping search engines briefly in Chapter 1 and showed the market share of each one in Figure 1-14. Now let's look more deeply at shopping search in general and at the leading shopping search engines in particular.
Shopping search engines are primarily designed to offer "one-stop shopping" for a particular product. A shopping searcher has already moved past informational searches and is ready to conduct a transaction. The searcher has decided, for example, to purchase a digital camera, and knows the desired features, but might not know exactly which camera to buy. Or the searcher has chosen a model, but is shopping for the most favorable price or the quickest delivery. The numbers back up these assumptions. One study showed that searchers at shopping.com are twice as likely to buy and they buy twice as much as searchers at traditional search engines.
Shopping search engines support these transactional searchers by consolidating the offerings of numerous manufacturers and retailers into one searchable "mall." If shoppers are choosing between multiple cameras, for example, each camera might be listed in the search results (along with a picture, a short description or feature list, customer reviews, and the price range). As shoppers hone in on particular models of digital cameras, the Web sites (often called "stores") that offer the camera are displayed in the search results. Each store might show its logo, its merchant rating (voted on by its previous customers), its price for the camera, and other distinguishing information to coax shoppers to click through to the store's site. When shoppers click results, they are taken to Web sites ("stores") to complete their purchases. Shoppers are beginning to appreciate this approach, with 54 percent of them citing the time savings and 52 percent valuing how much money they save when they use shopping search.
Shopping search engines offer varying user interfaces to shoppers. Some shopping search engines allow searchers to narrow down their selections by product features and price, where as others support sorting the list based on price or merchant rating. Many calculate prices including tax and shipping charges if shoppers disclose their location.
Apparently shoppers are responding. A 2004 joint study done by BizRate and the Kelsey Group found that 37 percent of online consumers were very familiar with shopping search sites. It is no surprise that usage of shopping search is booming as a result, with a 22 percent market share increase in visits between 2003 and 2004, comprising nearly one half of 1 percent of all Internet traffic!
To take advantage of the traffic generated by shopping search engines, you need to be familiar with the leaders shown in Table 14-2.
Yahoo! Shopping is the leader, in products offered as well as traffic, but Shopzilla is nipping at its heels, with plans to reach 45 million products in 2005. Froogle, Google's shopping search entry, is the most interesting play, because you can provide a trusted feed containing all of your product data without incurring any per-click feesat least as long as Froogle remains in beta test. Perhaps Froogle will emerge from beta test soon, after posting 270 percent growth in 2004 over the prior year.
Table 14-3 shows the top shopping search engines in Australia, Hong Kong, and the U.K., as Yahoo! and MSN jockey for the top spots. Kelkoo, the leader in the U.K., is owned by Yahoo! and is the third most-visited site thereit also operates in nine other European countries.
As you can see, the leaders in shopping search vary among countries, owing to different languages, currencies, and shipping feasibility. If you list your product with a shopping search engine that serves the entire United States, for example, you must be willing to ship anywhere in the country. You are wasting your click fees if you cannot fulfill an order, and searchers will be frustrated with your company, which harms your reputation.
Before plunging into shopping search, realize that it is a very competitive marketplace. You must be prepared to compete against other merchants on price, shipping speed, and reliability. Having a more informative or easy-to-use Web site is important for conversion, but shoppers will compare you to other merchants before they click through to your site. If you can compete on these factors, you can succeed in shopping search.
Shopping search and paid placement are the biggest opportunities in paid search, so let's examine how to think about them.