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The "Secret System" of Search Engine Advertising

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Search engines have become one of the fastest growing venues in the advertising market, bringing clients from the old world of traditional advertising to the new world of paid listings. Yet while ad revenue increases for the search engines, so do the concerns for some long-time search advertisers who have invested a huge stake in the industry.

A special report from the Search Engine Strategies 2003 Conference, August 18-21, San Jose, CA.

A longer version of this article that goes into more extensive detail about search engine advertising issues, including questions and concerns about paid inclusion programs, whether search marketing is just a fad, and other topics is available to Search Engine Watch members.
Click here to learn more about becoming a member
.

Some of search advertising's more prominent spokespersons gathered to share their profession's grievances at the Search Engine Strategies conference in San Jose this past August, speaking on the panel, "Search Economics - Advertiser Roundtable" along with addressing the shared concerns of search advertising specialists worldwide.

But before we dive headfirst into the fracas, first a quick introduction on search advertising for the uninitiated.

Search engine advertising refers to the various ways for advertisers to pay money in exchange for placement and/or positioning on search results pages. Often time it serves as a major component (or for many companies, the sole component), of a client's search engine marketing campaign and even their entire online marketing campaign.

Types of Search Engine Advertising

Search advertising generally falls into three categories: paid placement, paid inclusion, and the latest addition to the family contextual ads.

With paid placement, advertisers are guaranteed a high placement or top position in search results, usually in relation to specific keywords or a broad range of words. Positioning for paid listings on the page can vary, but they will usually run in three areas: (1) at the top of the page's search results, (2) on the side (usually the right-hand side) of the page, or (3) at the bottom of the page. Sometimes they are clearly marked as "sponsored listings" and segregated from editorial results, and other times they may be hard for the average user to distinguish. While pay-per-click (PPC) is the most common form of paid placement, fixed fees (usually for a premium amount) for paid placement exist for sponsorships or "featured listings" areas on Web sites.

With paid inclusion, a site owner pays a fee to be included in a search engine's editorial listings. There are two types of paid inclusion. The first is a paid submission program, where you pay a fee to have your site reviewed by a human editor to be considered inclusion into their directory under the category of your choice (or sometimes, their choice.) Yahoo and Business.com are two directories that currently offer a paid submission program.

The other type of paid inclusion involves the submission of individual pages for guaranteed indexing into a participating search engine and their partners. Inktomi, AlltheWeb, Teoma, and AltaVista are the search engines that currently offer paid inclusion programs. Pricing is usually a fixed per-URL fee for smaller page submissions, or an optional cost-per-click (CPC) pricing structure for large page submissions.

Positioning of submitted pages will appear in all participating engines' editorial results. It does NOT guarantee that the pages will appear in top positions. Thus, all pages submitted through paid inclusion programs should be optimized.

Contextual ads are new partner program that brings content-targeted advertising to the Web. Ads are targeted to the content of the page by a participating site, instead of on search results. Although at this time one must participate in a search engines paid keyword listings campaign to also opt-in for contextual advertising. Google's AdSense and Sprinks are examples of contextual ad programs.

Benefits of Search Engine Advertising

All of the panelists agreed that search engine advertising is growing at such an extraordinary rate not just because of guarantees and the popularity of search, but also because advertisers can do a much better job at targeting effectiveness than in traditional advertising mediums.

"Talk about a surgical buy -- search engine advertising is the best possible buy you can get right now. It beats traditional advertising," said Dana Todd, Founding Partner of SiteLab International, Inc.

Kevin Lee, CEO of DidIt.com, came from the traditional advertising realm before there was search advertising. "Even though we founded our company in 1996 when really all there was organic search engine optimization (SEO), we knew paid advertising was going to be a powerful medium. Over the years, we evolved into exclusively into helping agencies and clients to directly manage their paid listings in a variety of different engines."

"One of the ways that you can recognize the power of this medium is how even one of the most widespread product buzzes could still fail to harness the power of search," elaborated Frederick Marckini, CEO and Founder of iProspect.

"Remember when Dean Cayman's Segway scooter (also known as 'IT') was talked about in the press for years and was supposed to change our way of life and the world as we knew it? Yet despite all of the publicity and marketing beforehand, 'IT' could not be found in Google, Yahoo, MSN or any other search engine. They forgot that people search."

"There's no excuse because search engine advertising allows you to be visible almost instantaneously," Marckini continued. "You can buy in the morning and show up in the afternoon. And search engine advertising separates the wheat from the chaff. It allows you to market to people who are seeking you; who are already getting off their butt, taking an action and looking for your product and services. And when a query is launched, there are only two possible outcomes: they will find you, or they will find your competitor."

Moderator Danny Sullivan likened search engine advertising to a "reverse broadcast system." Instead of broadcasting to people on what they should want, search engine advertising works for the audience in telling you what they want, first.

"You are not trying to convince them as in traditional advertising. They are telling you, 'This is exactly what I'm looking for.' Do you have it?' That's why it can be so powerful. It's not about convincing them of what they want or building demand, it's about where can I buy it from?'"

"It's like a secret system for us for years, where very few people know about it and how to do it," continued Sullivan. "Our secret system is now becoming more vindicated as interest by the major brands has gone up. I think there's still a ton of advertisers who will be coming into this with their eyes open because they will realize that they don't have to build the brand."

"They can just sell the product people already want," said Sullivan. "But it will take some time for some of them to make that shift, especially if its something they know nothing about. Agencies tend to be about building brands, so it will be harder for them to understand."

Sullivan concluded that the added complexity of search advertising would separate the professional from the amateurs. "The dumb marketers will fall by the wayside. The smart marketers understand the big picture and how to value traffic. In the end, the best marketer will win. That may take years, and that may more evident in certain marketing segments."

"The question is will the bubble burst on this industry -- for both the search engines and advertisers? I don't think so," said Sullivan. "Or, are all of these advertisers going to band together? I don't think that will happen, either."

Grant Crowell is the CEO and Creative Director at Grantastic Designs, Inc., founded in 1993 in Honolulu. He has 15 combined years of experience in the fields of print and online design, newspaper journalism, public relations, and publications.

A longer version of this article that goes into more extensive detail about search engine advertising issues, including questions and concerns about paid inclusion programs, whether search marketing is just a fad, and other topics is available to Search Engine Watch members.
Click here to learn more about becoming a member
.

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