Search engine marketing is much more than optimizing sites for regular search engine results, Paul Bruemmer argues. SEM now includes the use of services such as pay-per-click advertising, paid inclusion, search contextual ads and the new pay-per-call search advertising service.

By Pandia Gest Writer Paul J. Bruemmer, Bruce Clay, Inc.

Marketing pundits say that search engine marketing (SEM) is “the greatest DM medium to ever hit the advertising scene.” However, that assertion short-changes its real value because search marketing is much more than a direct response medium.

For instance, comScore has shown the latency-effect of search marketing in generating offline sales that don’t register in your log files.

Other studies by NPD Group and IAB-Nielsen/NetRatings have documented the superior branding effects of search listings compared to other marketing tactics. These studies suggest that search marketing is a multifaceted tool that can achieve different marketing objectives.

As search marketing has proven itself to be both effective and accountable, national marketers and ad agencies are making it an integral part of traditional marketing campaigns.

Search marketing is versatile. It can be used to generate leads, as well as online and offline sales. It can induce users to take desired actions such as newsletter sign-ups, white paper downloads and seminar registrations. While all this is going on, your prominent listing on the search engine results pages (SERPs) contributes to branding.

Versatile Marketing Strategy

Search engine marketing continues to expand, offering many different flavors. Current approaches include search engine optimization (SEO), pay-per-click advertising (PPC), paid inclusion (PI), search contextual ads (SCA) and the new pay-per-call search advertising service (PPCall).

Search Engine Optimization: The original search strategy was SEO, which requires alteration of site structure and content to make websites “search engine friendly.”

A properly optimized website is more easily indexed for algorithmic ranking in search engine databases by the search crawlers. Well-optimized sites will get you higher rankings. It goes without saying that sites should be optimized for customers as well as search engines to ensure success.

Pay-Per-Click: Another widely adopted search strategy is the popular PPC model. It allows you to buy search listing text ads that are ranked based on keyword bid price in the sponsored listings section of the SERPs.

You pay the bid amount when users click your listing. It’s necessary to closely monitor performance, making bid adjustments through bid management tools to get the best ROI. One should also guard against click fraud.

Paid Inclusion: This strategy requires payment for guaranteed, fast inclusion and frequent updates in a search database. However, it does not result in high rankings.

Some programs charge by the click and others charge an annual fee. PI is useful for new sites, sites with frequently changing product pages and dynamic sites.

Search Contextual Ads: A fourth strategy is the use of contextual ads on relevant publisher sites, which are distributed through Google AdSense and Yahoo Publisher Network (beta).

SCAs are displayed on publisher content pages across the web rather than on the SERPs. The text ad contains a link to your landing page and is displayed in a banner or skyscraper ad module.

Google automatically selects the number of ads to list in an ad block, depending on which ads produce the most revenue. The ads rotate, so sometimes you’ll see a single ad in the banner space; other times there might be four text ads or even a graphic.

Both Google and Yahoo! have distribution networks, which consist of approved publisher sites that agree to display ads and share revenue. Recently, contextual ad networks have been extended to include smaller, qualified publishers. Advertisers can select sites for ad display.

Robert Clough of Search Engine Guide is a satisfied customer. Talking about Google AdSense, he said, “It’s amazing how well it works. From the publisher’s viewpoint it is fantastic.”

Pay-Per-Call: Another search marketing strategy introduced this year is the pay-per-call (PPCall) ad service pioneered by Ingenio. This advertising model is designed for small and local businesses as well as firms marketing “high-touch” products and services that need personal contact to close the sale.

Advertisers bid for phone call leads at the rate of $2.00 and up. Ads are displayed through a distribution network that includes AOL, go2 and Miva. Verizon SuperPages launched a similar Pay For Calls service in September.

Most recently, InfoSpace partnered with Jambo to offer a new pay-per-call lead-generation service, and it’s been reported that eBay will offer pay-per-call with Skype. All this activity is taking place because local search, small business advertising (projected at $4 to $5 billion this year) is a growth area in search marketing.

Search Personalization

As discussed at Search Engine Strategies San Jose, search engine engineers are working on artificial intelligence systems to learn user preferences by examining past search behavior in order to adjust search results based on that data. This would greatly impact and individualize search results.

The industry is also exploring ways to combine behavioral targeting with current search technology to better meet user needs and client advertising objectives.

Claria (formerly Gator) is developing RelevancyRank, a search technology that ranks sites based on behavioral indicators gathered by Claria adware. Such indicators might be repeat visits, time spent on the site and user click rates.

Google could also measure these indicators through its personalization features, but behavioral data are not currently included in the Google algorithm. Claria claims that the major search engines do not show the most relevant sites in their top results because of this lack of behavioral influence in their algorithms.

Privacy issues become a concern as search engines accumulate more and more personal information on individuals. When search engines first came out, users were completely anonymous. Now, with the wide range of personal services offered (free email accounts, free desktop search, instant messaging, etc.), there is the possibility that users may lose this anonymity. In fact, some search engines use tracking cookies to serve more relevant ads to users, claiming that no personal information is tracked.

Policies on the use of personal data by marketers will be shaped by public opinion and perhaps even legislative action as personalization and behavioral targeting take hold in search marketing.

Search is Golden

Consumers use search engines to quickly find information, research products and services, or buy online. The most frequent user behavior besides email is search. Consumers are relying less on traditional media like TV and newspapers in favor of the Internet. Besides the convenience and time-savings, consumers like to be in control.

With search, consumers are self-directed in finding the information they seek. To quote Kevin Lee, “Searchers are in a psychological sweet spot for marketers.” That’s true because most searchers are going to be receptive to a relevant marketing message when they’re on the hunt. Give them compelling, relevant content on your landing page, and you’ve on the way to conversion.

Fly in the Ointment

Do online users object to constant pitches and privacy invasion?

Yes and no.

Consumers have consistently indicated in focus groups that they don’t mind seeing online ads for products that are relevant to the content they are viewing. It’s also a fact that consumers will agree to view ads in exchange for a free product or service. A recent Forrester Research study reported that consumers are willing to give up some privacy when offered adequate value in exchange.

On the other hand, consumers are tired of being inundated with ads everywhere they go.

They are also concerned over the lack of disclosure when behavioral indicators are collected online. Consumers and legislators are demanding disclosure when behavioral data is collection and an opt-out option. Consumers also want more value in exchange for their agreement to receive ads based on their online behavior. The demand for disclosure and control is coming to a head with HR 29 (Safeguard Against Privacy Invasions Act), which was passed in the House and is currently in the Senate for committee review.

Consumer Control

Consumer-directed search behavior has helped point the marketing landscape toward consumer control and away from advertiser control. In fact, industry experts have suggested this is a paradigm shift that will greatly impact marketing and advertising.

National advertisers and advertising agencies are adjusting their marketing plans to include more search and less traditional media in the marketing mix.

The search engines themselves are constantly evolving to keep up with user and advertiser needs in the burgeoning search industry.

While Yahoo! has provided email and other non-search related services for some time, others are catching up. Google now offers Gmail (beta), free desktop search, satellite imagery, video searching and Google Talk instant messaging.

MSN is following suit, and AskJeeves wants to be “the fourth network of search.” Today’s search portals are much more than just a means to search the Internet; they’ve become the marketing channel of choice due to SEM’s effectiveness and accountability.

Quest for Inventory

With the wide scale adoption of search engine marketing by national advertisers and ad agencies, industry experts have pointed to the scarcity of quality Internet inventory. Advertisers can’t get the reach with the web that they get with a broadcast prime time ad because there’s not enough inventory available on the SERPs. That’s one of the reasons for the rapid expansion of Google AdSense and Yahoo! Publisher Network.

Another way to expand inventory is through specialty and vertical search engines, which are picking up in popularity. Vertical search engines provide listings on a specific niche or industry sector. Some are B2B trade portals; others are industry databases and directories for searching information on products and services.

Because vertical search content is more narrowly defined, the results can be a lot more relevant than the majors for specialized needs. That’s because the major search engine databases are too vast to provide relevant results for unsophisticated searchers.

Money in the Bank

SEM revenues are rising faster than any other online/offline marketing strategy. Forrester estimated SEM would grow by 33 percent in 2005, reaching $11.6 billion by 2010. The total U.S. online advertising/marketing spend is estimated at $14.7 billion in 2005, a 23 percent increase over 2004.

About the author

Paul J. Bruemmer has provided search engine marketing expertise and consulting services to prominent American businesses since 1995. As Principal Business Analyst for Bruce Clay, Inc., he is responsible for strategizing and implementing business development activities.

Paul is a well-known industry columnist, having written articles for ClickZ, Search Engine Guide, Pandia, MarketingProfs, iMediaConnection, and SitePoint. He has also been a featured speaker at the Search Engine Strategies Conference and at eComXpo.

©Paul J. Bruemmer, Bruce Clay, Inc.