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Search Marketing on the Efficient Frontier

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Is the war between the search engines -- Google, Yahoo, MSN, Ask, Facebook, MySpace -- or between those search engines and the technology platforms designed to manage search marketing for large enterprises?

At the Oppenheimer Digital Media Conference, I spoke on a panel that addressed those questions, which led to a conversation today with James Beriker, president of Efficient Frontier, about global search marketing, one of our readers' favorite subjects.

Oppenheimer analyst Sandeep Aggarwal led the lively discussion for an audience of instititutional investors, as well as CEOs.

Everyone in the audience clearly understood the top-line revenue driven by search marketing, so it was a fun presentation. Well, at least my idea of fun.

Quant jocks in the audience understood -- without question -- the value of technology platforms in managing search marketing campaigns.

There also wasn't any doubt that search strategists were not only needed, but highly valued, by the companies in attendance and the audience members who invest heavily in them.

After the conference session, one of my fellow panelists, Morgan Simonson, Efficient Frontier vice president, said, "I wish you'd mentioned Efficient Frontier."

Efficient Frontier is headquartered in Google's backyard -- Mountain View, California -- with offices in New York, London, Paris and Chennai, India. They boast:

  • 165 employees worldwide.
  • 250 clients worldwide.
  • $500 million+ search marketing spend under management.
  • Over 40 million keywords actively managed.
  • An average of six marketing objectives per portfolio campaign.
  • 40,000 bid changes per day. Per client.

I remember when Efficient Frontier was in stealth mode as a search marketing solution. Untested. Unproven. Willing to offer proof-of-concept with one client.

As a competitor at the time, I tracked their site daily, waiting for an official announcement.

Then they launched with -- in effect -- one client.

Not any client. They launched Google-style: tackling the most complex problem in the search space -- essentially the most complex campaign in existence -- and staked their business reputation and the future of the company on it.

eBay.

If you were in search marketing five or so years ago, you'll remember the early jokes about eBay selling everything under the sun and buying every search term available in Google and Overture (Yahoo/MSN) for their global product catalog.

In fact, just to hedge their bets, eBay bought (and still buys) perhaps the highest percentage of the English language -- commercial words, generic words, non-commercial words. Virtually any word that can be dynamically inserted into a text ad.

Here's a little of what James Beriker has said previously.

Last week, Beriker told BtoB's Karen Bannan that non-U.S. search engines are smaller and much more willing and able to help clients because they have a vested interest in getting the market to believe in the search channel. They can help you figure out how to improve your search quality scores (define) or help you do keyword generation.

So it would seem like global SEM (define) management would best be left in the capable hand of the search engines themselves. After all, Beriker was president of one of the early (founded in 2000) second tier engines (Search 123) which went to extraordinary lengths to help clients.

I remember meeting Beriker before ValueClick acquired the company, and he subsequently led the ValueClick search team.

"Listening to our customers reports on the effectiveness of our partnerships is paramount to the success of our business," Beriker, Search123's then senior vice president of search services, told Kevin Ryan at the time of the acquisition. "We live and die by the quality of our traffic."

I found a common theme in the providers I spoke to: each set high standards for the sites in their networks.

Back then, Ryan nailed the benefit of the ValueClick acquisition when he said, "Search123 was recently acquired by ValueClick, adding, well, value, to the unique selling proposition offered by both companies. Search123 expanded its traffic, and the combined entity will enhance ValueClick's contextual search offerings."

Now contextual search -- or content advertising -- is a key aspect of the bidding strategy for all search advertisers. The search engines have placed their bets on search expanding to the behavioral targeting efficiencies engendered by contextual advertising networks.

So it's no surprise that Efficient Frontier recruited Beriker to lead the company to its next stage of evolution. Research data is a key tool that Efficient Frontier shares not only with clients, but the search marketing community.

For example, Hitwise data shows Google accounted for 85 percent of UK search query volume in October 2007. Efficient Frontier Europe revealed the breakdown of its European spend: nearly 88 percent of UK client spend occurred on Google Adwords or AdSense. Other European countries in which clients advertises (France, Spain, Italy, and Germany) show an even greater trend toward Google, with approximately 94 percent of client search spend in those countries.

It's that kind of data sharing that educates the entire search industry. For that reason -- and many others -- I'll be going in-depth with James Beriker to discuss the war games in the search engine industry for supremacy in technology platforms and search strategies designed to deliver the best results for large corporate clients.

We'll focus on 2008 trends and why:

  • Paid search remains most complex interactive ad channel.
  • Europe dominates, but becomes more complicated.
  • Display ads will be purchased through search platforms.
  • Social media (define) ad buys are search buys.
  • Brands need to tread carefully.
  • Data is still king.


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