Search Engine Results That Pay Off

Competition for premium placement on the Web’ssearch engines has spawned an advertising market forpaid search listings.

However, e-commerce sites that consider advertising via paid search results should understand that not all search engines are created equal, and that different engines may deliver varying returns on the marketing dollar, analysts say.

“Marketers must balance how much they are paying withhow much traffic will result and what type of customerthey will be reaching,” Forrester Research analystShar Van Boskirk told the E-Commerce Times.

This kind of diligent channel evaluation should benothing new for today’s cost-conscious Internetmarketers.

Captive Audience

It is no wonder that search engines have becomeattractive vehicles for e-commerce advertisers. Theaudience is made up of users actively seeking product andservice information who often are ready to purchase.

Yahoo! (Nasdaq: YHOO) recognized this opportunity andrecently alliedwith Overture (Nasdaq: OVER), formerly GoTo.com, tolaunch Sponsor Matches, which give Web sites increasedvisibility in Yahoo’s search results.

“Millions of commercial searches are conducted usingour search and directory service everyday,” Yahoo!general manager of search and directory Scott Gatztold the E-Commerce Times. “Businesses have expressedinterest in reaching our audience of people seekingproducts and services.”

Numbers Game

But advertisers should not necessarily equate the volumeof users with the quality of leads, Van Boskirk argued.

“Companies must figure out where their customers arecoming from,” she said, looking at such factors as the percentage of visitors with income over US$100,000.

It may make more sense for high-end e-commercecompanies to pay for premium placement on one search engine rather than on another, depending on the audience being targeted, Van Boskirk suggested.

Turning to Spiders

If e-commerce companies determine that their corecustomers are not heavy users of a particular searchengine, they may want to forgo premium placement thereand instead optimize their sites for search enginespider detection, said Van Boskirk.

A number of consultancies offer search engineoptimization services for 30 to 40 cents per lead,Van Boskirk noted.

“Companies must determine how much they are willing topay for a customer based on the supposed value of thatcustomer,” she added.

What You See

When weighing where and how to spend money with searchengines, e-commerce marketers should be aware of newpayment methods based on actual results.

For instance, Overture charges advertisers on apay-for-performance basis. That is, advertisers payonly when users click on their listings. Overture saidmore than 338 million “paid introductions” to its49,000 advertisers took place using its service in thethird quarter.

“Marketers are pinched and need to show performance,”Van Boskirk said. “Pay-for-performance and pay-for-impression models create a results-based market for advertising.”

Overture’s advertisers reportedly paid an average of16 cents per click in Q1 2001. The company said it has enjoyed success with its payment model, including a 190 percent year-over-year revenue increase for the third quarter.

Pay Fair

Regardless of which search engines are chosen, marketers whopay for premium placement must assume partialresponsibility for ensuring that listings arepresented clearly as paid-for results, said Van Boskirk.

“It is the responsibility of the search engine andmarketer to indicate which listings are sponsored,”she noted. “Many consumers are not aware of thedifference.”

A Link from Our …

Indeed, consumer activist groups like CommercialAlert have argued that paid-for search engineplacement deceives consumers. Most search enginecompanies are mindful of this sensitive issue, andthey visually differentiate sponsored results fromkeyword-driven results.

“The listings in the Sponsor Matches program appear ina separate, clearly demarcated area on the searchresults page, so it will be apparent to users whichsites have enhanced placement,” Yahoo’s Gatz said.

5 Comments

    • It always pains me to see that the search engine “placement” and/or “optimization” industry has so many deceptive practices. Firms that charge x number of cents per lead “they” generate from you are misrepresenting the nature of search engine referral traffic.

      Your own site, really, is generating this traffic. Giving a piece of your site’s growth to a search engine placement firm which plans to be around for years collecting 30 cents every time Google refers a search query to you is a BAD idea.

      Search engine optimization is something of a science, and it definitely makes sense to hire a specialist to do it for you. But the consultant doesn’t literally deliver the hits to you. There are too many variables, and the search engine optimizer’s causal impact on traffic growth is too hard to track exactly, though one can always get a general idea.

      My firm charges cash rates for each project much the same as any other consultant or specialist would. Would you expect to hire a competent programmer by promising to pay him every time your business reached some benchmark? The programmer is just there to do his job – ultimately, it’s YOUR business.

      The idea of paying consultants only “for performance” has gotten way out of hand in this field. And too many firms have to lie about the nature of search engine referral traffic in order to justify their own bizarre fee structures… and their existence.

      Why not charge reasonable rates and tell clients the truth about the SEO process? Just a wild thought.

        • After continuously reading where companies have been ripped off by so-called SEO Professionals, I have decided to jump in the water and eat the SEOs for breakfast.
          \
          The reason for this is that most SEOs tell their clients that nobody can guarantee top placement. Those words were pulled right out of the Google dictionary – LOL – as the excuse why SEOs can’t produce.
          \
          If an SEO is supposed to be an architect of search engine optimization then they should guarantee the results or they are not an architect, but simply a lower-end draftsman collecting overpayment for services rendered.
          \
          This excuse is like the faith healer saying ‘you just don’t have enough faith to be healed,’ when in reality the healer should be the one with the faith.
          \
          It’s like Steve Martin said in that one comedy, ‘Even a con man knows when to pack up when the real thing shows up.’
          \
          Perhaps SEOs have the mentality of a practicing physician – just practising.
          \
          The truth of the matter is someone can guarantee top placement – if the term top placement means the first page of the search results.
          \
          If they can’t guarantee you results, then why would you pay?
          \
          In nearly 10 years of writing on the web, I have never had a problem getting #1 rankings – but I only obtained top placement when the content was original, the information in-depth and the site properly designed.
          \
          Perhaps there should be an international challenge and certify those that can produce and either educate or whatever to those that don’t.
          Hope I didn’t rant too long.

          • How to qualify an SEO
            .
            1. Require three references from unbranded companies
            2. Ask to see a minimum of three top rankings for the companies
            3. Require that the terms to be searched are generic and that the maximum length of the search phrase be three words.
            .
            If these three points are followed to the tee and demonstrated to you in full confidence, then you might have someone who understands the process and is worth paying.
            .
            However, make sure when running the test that the test is run on Google and the minimum number of returned results is 1.25 million.
            .
            If they can’t do this, then they are wasting your money – and you are wasting your money.

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