The Search Engine Update, April 20, 2000, Number 75

April 20, 2000 - Number 75

By Danny Sullivan
Editor, Search Engine Watch

About The Update

The Search Engine Update is a twice-monthly update of search engine news. It is available only to those people who have subscribed to Search Engine Watch, Please note that long URLs may break into two lines in some mail readers. Cut and paste, should this occur.

In This Issue

+ About The Search Engine Watch site
+ Search Engine Strategies Conference

+ Paid Links At MSN Search And Direct Hit

+ AltaVista Listing Woes
+ Search Round Up: Changes at Inktomi, Lycos, Northern Light and Yahoo

Search Engine Articles
+ Interesting articles relating to search engines.

+ List Info (Subscribing/Unsubscribing)

Site News

Hello Everyone--

I have done a huge amount of updating to the Fact Files area in the Subscribers-Only section of the site and the Search Engine Resources area in the public portion. This has mainly been to add articles already covered in past newsletters, so there's no need for many of you to revisit pages in these sections. However, if you find you want to locate an article about search engine advertising, search engine revenues and other topics, the listings are now more complete. I've also reorganized the Search Engines and Legal Issues page to group articles into topics such as domain disputes and meta search complaints.

Search Engine Fact Files

Search Engine Resources

Search Engines and Legal Issues

Password Finder

Conference News

The next Search Engine Strategies seminar will be held next Thursday, April 27, in London. There is still availability for those who wish to attend, but the venue is smaller than those used during our US seminars. So, if you are planning to come, register now to avoid disappointment. The one day conference will feature both experts on search engine marketing issues and panelists from search engines, including confirmed speakers from Ask Jeeves, AltaVista, Excite, Inktomi, LookSmart, MSN, Netscape/The Open Directory, Search UK, Voila and Yahoo. I'll be presenting and moderating throughout the day, and the conference will also have a look at regional and language issues.

Search Engine Strategies London 2000

For those doing forward planning, the next seminar in the US will be on August 14, in San Francisco. I'm expecting to have a special session on shopping search at this conference, which should be of interest to any online retailers. Conference details will be available in or week or so via the page below: Seminars


Paid Links At MSN Search And Direct Hit

In the past few months, both MSN Search and Direct Hit have rolled out self-serve paid link programs. There's good reason for those with advertising budgets to investigate these new options. However, anyone used to the pay-for-placement model pioneered by and adopted by its smaller rivals will need to adjust their thinking. MSN Search and Direct Hit use completely different systems.

The biggest difference is the location of your paid link. Instead of being within the main search results, MSN Search runs its "keyword listings" in the left margin of the results page. Direct Hit runs its "text sponsorships" along the right margin of the results page at its own site, and usually in the right margin of the results pages it provides to partner sites.

Another major difference is that GoTo and its cousins charge by the click, while Direct Hit charges on how often your link is seen, and MSN Search charges a flat rate to display your link per week. Let's briefly take a closer look at the different systems, then we'll explore both Direct Hit and MSN Search's programs in more depth.

At GoTo, you might bid on the word "travel," agreeing to pay 25 cents per click. If no one agrees to pay more than this, then you'd occupy the top spot. If someone did pay more, say 26 cents per click, then you'd appear below them. In either case, every time someone clicked on your link, you'd owe GoTo 25 cents. That's your "Cost Per Click," or CPC for short.

At Direct Hit, you bid for "impressions" rather than clicks. An impression is how many times someone sees your ad. Bids are based on the cost for 1,000 impressions. So if you wanted to appear in the top spot for "travel," you'd currently have to agree to pay $15.50 for every 1,000 impressions Direct Hit delivered -- that is, $15.50 for every 1,000 times your paid link appeared before searchers. That's what ad buyers would call your Cost Per Thousand, or CPM for short. Why not CPT? The M stands for the Roman numeral for 1,000.

MSN Search also uses CPM pricing behind the scenes to set its minimum bid amounts, but save yourself headache and forget about that. What ultimately happens is that you'll agree to pay a flat rate per week to appear at MSN Search for particular terms. For instance, say you bid on the term "travel." MSN Search will calculate a monthly cost for that term, which let's say was $1,500. Since you can only buy a week at a time, you'd agree to pay one quarter of that amount, or $375. MSN Search might also estimate that you'll receive about 25,000 impressions during that weekly period, which would work out to a $15 CPM. However, you might receive more or less than this number of impressions. Regardless, you'll still pay the same $375 flat rate.

Let's recap. GoTo charges by the click; Direct Hit by impressions; MSN Search a flat rate per week. Now let's talk about how to compare performance, before getting into the details of our newcomers. This requires calculating your cost per click for each service where you purchase links.

With Direct Hit's CPM pricing, you pay whether or not someone clicks on your link. That can be good if lots of people click. For instance, let's say your paid link is clicked on 2,500 of the 5,000 times it is displayed. Divide the clicks by the times it was shown, and you get the clickthrough rate, or CTR, -- 50 percent. Fantastic! (Or fantasy, because no one gets clickthrough rates like that anywhere!). Now to find your cost per click, the CPC, just divide the price you paid by the number of clicks received. Let's say you paid $77.50 to appear those 5,000 times. Divide $77.50 by 2,500 clicks, and you get a cost per click of 3.1 cents.

Next, let's take MSN Search. Let's say you receive 1500 clicks during the week your paid link runs. You paid $375 for the week, so that divided by the clicks you received means you had a cost per click of 25 cents.

Now let's compare to GoTo. Cost per click is easy to figure there, because it's exactly the amount you agreed to pay. And if you already have paid links at GoTo, chances are you'll find them much less expensive that the cost per click at MSN Search and Direct Hit. I've certainly seen sporadic reports of this being so from those who have experimented with the two new programs. It also makes complete sense -- since MSN Search and Direct Hit place your links to the side of their main results, far fewer people are likely to click on them.

So are the programs at MSN Search and Direct Hit rip-offs and not worth pursuing? Not necessarily. It's important to know your CPC for any advertising you place, but you also need to consider how much you want to spend per lead, regardless of the source.

In other words, let's say that you can make money by bringing in leads at a cost of $2 or less. GoTo might generate traffic at a cost-efficient 25 cents per lead. MSN Search and Direct Hit might be more expensive, costing you $1.50 per lead. Nevertheless, that's still less that your $2 per lead budget. That means spending some money at these other services may still be worthwhile, and especially so if you can somehow determine if the audience is more receptive to your products or services.

Obviously, you want to spend more of your budget in the most cost efficient places. But if you are after lots of traffic, then purchasing at more expensive places can still be worthwhile if the price is below the cost you can afford to pay per lead.

Enough with the generalities. Let's cover the specifics of getting started at each service, beginning with MSN Search. To start, go to the bCentral Keyword site (link below), then choose the "Sign Up Now" option. After agreeing to the terms and conditions, you'll be asked to fill out an account information page, then you'll need to make an initial $100 opening deposit.

Next, you must create a listing for your site. You only get 56 characters in total, and no words can be longer than 10 characters, so creativity is essential. Provide your URL, a title that will be linked to your URL, and a description for your site. Finally, you have to indicate the search term you wish to bid on. You can also enter several terms at one time. Just put each one on its own line.

After submitting your listing, a new page will appear. You'll be shown the estimated "Monthly Search Traffic" for each keyword you bid on. For instance, if you were to bid on the term "travel," you'd currently be told that about 80,000 to 100,000 people are expected to search on that term during the month. Thus, your listing may be exposed to that many people during that time, but there's no guarantee. It could be more or less than this amount.

Next, you'll be shown how many people are currently bidding on the term, at the given moment. This is important, because only two people can win. If the number is zero, then you face no competition. A one means that one other person is competing against you, so you both may win. A two or higher means several people are competing for the two available spots.

Let's assume there is no bidder for a particular term. In that case, MSN Search will automatically select the "Make Me Top Bidder" option and show you the minimum amount you are allowed to bid. For instance, "easter bunny" currently has no bidders, and the minimum bid allowed is $5.90 per month. (For the curious, my understanding is that the minimum amount is $15 per 1,000 people who searched on that term in the previous month).

Now let's say there is another bidder. In that case, MSN Search will automatically add $1 to the current top bid and again choose the "Make Me Top Bidder" option for you. You cannot choose the alternative "My Bid" option to select a lower amount - you must bid at least $1 above the current top bid. So why have a "My Bid" option at all? This is to allow you to enter MORE than $1 above the current top bid. You might do this to deter the chance that someone will outbid you.

When finished, MSN Search will give you a final chance to review your bids. It will also show you how much each bid will cost you on a daily basis - more about costs and budgeting in a moment. First, it's important to understand the bid calendar.

Each week, new bids are accepted for text ads on MSN Search. Bidding comes to a close on Tuesdays at 5 pm Pacific Time. That means if you place a bid on a Wednesday, you have to wait until the following Tuesday to find out if you won. It also means that if you don't check back around Tuesday at 5 pm, someone else may have outbid you.

Make this a mantra - Tuesday, 5pm; Tuesday, 5pm. If you are bidding for the first time, you'll probably find it best to enter your bids near this deadline, so that you can outbid any competition and not lose out yourself. However, don't time it too close, otherwise you might have to wait another week.

You should also monitor your important bids for the last half-hour of this day, in order to increase the amounts of any terms you absolutely wish to win. How do you do this? If you've just placed bids, then all your current keywords will be listed. Just keep reloading the page. If you are coming back into the site, log in to the keywords area, and your current keywords should be displayed. If not, select the "List Keywords" link along the left-hand side of the screen.

After the deadline, you can check to see if you've won by using the "View Closed Bids" option, again on the left-hand side of the screen. The Status Box will show if you won for each term, plus your rank of one or two will also be displayed.

Did you win? Congratulations! Now sit back, because your listings won't show up on MSN Search until the next week. In contrast to places like GoTo, there's always a week delay from when the bids close to when your paid links show up. Not only that, but you cannot modify your paid links, once you have won. So choose your titles and descriptions carefully. You'll have to live with them for an entire week.

This leads to the next mantra - MSN is based on weeks; MSN is based on weeks. When you win a bid, you commit to buy advertising for only one week. You might lose sight of this because MSN frustratingly forces you to bid using monthly amounts, then later complicates things by giving you per day pricing. Argh! Take a breath, and I'll lead you through it.

Let's go back to the bidding process. Let's say you want to bid on "football," and MSN Search tells you the amount to win is $180. That means $180 per month. You win the bid, which means your ad will run for one week, or seven days in total. So take that monthly price, divide by 30, and you have the daily price of $6. Multiply the daily price by 7 days, and $42 is what you've agreed to pay.

Now let's say there are far more impressions for that search term than originally estimated. Don't panic. You've been charged a rate for the entire period, regardless of how many impressions actually occur. Of course, you might also get fewer impressions than estimated. If so, there will be no refund, nor does MSN Search even give you any easy way to see if you were shortchanged.

It's also important to realize that once bidding is closed, your bids amounts are automatically used to enroll you in the next round of bidding. If you don't want to bid again, you need to explicitly log in, view your "Current" keywords and choose the "Disable" option to put future bidding on hold. Of course, if you've run out of money in your account, then no new bids will be placed. You cannot accidentally spend more than you have prepaid.

Remember, bids are always a week behind, and once they are closed, nothing you can do changes them. So even though you may alter "current" keywords, making a change has no effect on the "live" listings, as MSN Search calls the paid links that are actually live on the web site.

There's good reason to disable your bids immediately after you win a round. I found that by doing so, the price sometimes dropped, probably because a competing bidder had disappeared. For instance, after winning one round for a term at $6.57, I disabled my bid, then rebid. I then found the minimum bid had dropped to $4.38. But in another case, there was no drop, so don't always expect it.

So that's the rundown on paid links at MSN Search. There's a lot I hate. The description lengths are too short. The inability to manage "live" listings is absurd, while the week lag time to appear at all is annoying. The pricing is far too complicated, as is the system in general, which desperately needs to offer more help to users. But there are pluses. I think people are shying away from paid link at MSN Search in part because of the system's complexity. That means less competition for bids. The flat rate pricing could be a good deal if you get some good terms. Certainly once you get listed, you have a week free of worrying that someone will out bid you.

Thinking of giving it a go? Here are some last tips. Considering dumping a lot of terms into the search box when you make an initial bid, especially very targeted terms. You'll discover that many of these have minimal traffic, less than 200 requests per month. That means they'll be priced at $1 for the entire month, or 21 cents per week. If you get only one click per week at this rate, that's a very favorable cost per click, for many terms. Also be aware that singular and plural terms are not combined, so you'll need to bid on them separately. Finally, remember that you can have different listings for each term you bid on. Don't be afraid to experiment from week to week. You may find that slight changes can increase your clickthrough.

Now over to Direct Hit. To start an account, go to the sponsorship section (link below), choose the New Account link to begin, then fill out the account information screen that appears. After that, you can begin creating a campaign. Unlike MSN Search, you don't need to provide a deposit until you actually want the campaign to go live.

You'll need to create a listing, which is made up of your URL, linked to a title of up to 40 characters, and a 150 word description. After that, you'll need to select terms for this listing. If you have words in mind, you'll have to enter them one by one into the search word box (in the future, you may be able to add multiple terms at once). Alternatively, try entering just one of your top terms. After that, make use of the "Suggestion Wizard." This is an excellent tool that will provide you with suggestions related to your core term. You can easily add additional terms from the list by checking the ones you like. You can also keep rerunning the wizard after you add terms, and it will use your new list to seek out even more keywords.

By the way, some terms may appear in your bid list in uppercase, but you'll be covered for all case variations, regardless. Plural forms are also automatically included. If you are unsure, just enter a variation of a term already on your list. If it is already covered by an existing term, an error message will appear.

Once you've selected your terms, you need to place bids. Up to three people can have paid links for a particular term at one time. If there are no competitors, Direct Hit will automatically make you the top bidder at the minimum amount of $5 CPM. To help you budget, it will also show you an estimate of how much the term might cost you for a month, based on current traffic.

If there are competitors, the system will automatically add 50 cents to the existing top bid -- you have to bid in 50 cent increments, so you can't go lower than this and be number one.

Once you've finished approving your bids, the last step is to fund the account. If you postpone this, your campaign will simply be placed on hold until you add money to the account in the future. In either case, after the account is funded, your terms will be reviewed and should go live within a few hours.

Because bidding is continuous, you could get bumped out of a top position or out of all three spots at any time. Direct Hit does have an option to alert you, should this happen. It also has an excellent reporting feature that shows the exact cost you've incurred to date, along with other vital statistics. You'll also never be charged more than the amount you've prepaid into your account. Of course, if you run out of money, then your paid links stop appearing.

Your paid links can be modified at any time, which is great, but you cannot easily have a different description and URL for each term. For instance, at MSN Search, if you bid on five terms, it's very simple for each term to point at a particular web page and have a unique description. To do the same thing at Direct Hit, you have to set up five different subaccounts, one for each term.

Overall, the Direct Hit system is far more flexible than MSN Search's. I especially like being able to modify listings on the fly, and the reporting and term suggestion tools are helpful. With some small changes, the system will become even more user friendly. The only real downside compared to MSN Search is the uncertainty. Being a live auction, you can get bumped out of your important terms at any time.

MSN Search/bCentral Keywords

Paid links on MSN Search are placed through Microsoft's bCentral web site, which itself evolved from the former Link Exchange web site that Microsoft purchased some time ago.

Direct Hit Sponsorships

What Is: Web Marketing and Advertising Terms

Provides the ABCs of terms like CPC, CPM, CTR that are used by ad buyers and marketers.

How GoTo Works

Basic introduction to bidding at Also be sure to see the "7Search Sells Results" and "GoTo Gets Cloned" articles at the bottom of the page, which list similar pay-for-placement search engines, along with bidding tips.

Password Finder


AltaVista Listing Woes

Complaints are coming in to me once again about pages going missing at AltaVista. The service has recently cracked down more tightly on oversubmissions and the use of doorway pages. About the only new twist are new messages some people are receiving saying that they've been blocked for submitting "machine/program generated pages." Some users of WebPosition suspect that using the default pages that program generates may be somehow cause those pages to be identified as machine generated. Hopefully, I'll have more information on this new development in the next newsletter. In the meantime, my previous article below is still valid for avoiding problems with AltaVista, at least in terms of submission.

Missing Pages At AltaVista
The Search Engine Update, March 3, 2000

Password Finder

MarketPosition Monthly
WebPosition, April 2000

This issue of WebPosition's newsletter has specific advice for its users relating to AltaVista.


Search Round Up

Here's a quick look at some other developments, which I'll expand on in the next issue, as appropriate:

+ Inktomi has announced that a 500 million page web index will be available next month, which will make it the largest search engine on the web.

+ Lycos seems to be favoring its own content for some popular queries. Try a search for "travel," "sports," or "entertainment" and notice how many of the URLs point back toward Lycos-owned web pages.

+ Northern Light has rolled out a geographical-based web search capability. Check it out at

+ Yahoo has moved forward with a redesign that I hinted at last month. Take a look at the horoscope category:

Notice how there's now a "Most Popular Sites" section above a new "Complete List of Sites" section. Expect to see many more categories begin to have a "Most Popular" area.

Search Engine Articles

What to Look for in a Search Engine Optimization Specialist
ClickZ, April 13, 2000

Covers key issues to consider when hiring a search engine optimization specialist.


5th Annual Search Engine Meeting - Special Report
About WebSearch Guide, April 17, 2000

Great coverage of the Infonortics search engine conference held in Boston earlier this month can be found here. There's a summary of my presentation on search trends, along with write-ups of talks by some of the major search engine players.


Making Your Site Search Engine Friendly
ClickZ, April 12, 2000

Basic tips on making a site friendly to crawler-based search engines.


Yahoo Chief Addresses Hot Topics
PC World, April 11, 2000,1510,16241,00.html

Chief Yahoo Jerry Yang speaks on privacy and ecommerce issues.

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