Examining Search Engine Marketing in Europe

By Johnny Mathis

"I can do paid search marketing in the U.S., so I shouldn't have any problem doing it in Europe, right?"

Even though fundamentally this statement is correct in terms of operations (setting up accounts, managing bids, keyword discovery, etc.), but that is about where the similarities end. Many businesses are now being challenged in advertising their products and services outside of North America. Thus, expanding into the European market is extremely rewarding, if you know how to approach it.

Europe has a completely different set of regulations, both in privacy and online communications when compared with the United States. But more importantly, there are significant local tendencies when it comes to the value that online advertising has within the overall marketing mix of each European country, which could lead to you wasting valuable marketing dollars if your marketing plan is not carefully executed.

SEARCH MARKETING ON THE RISE IN THE EUROPEAN "BIG 3"
According to the latest Forrester Research, entitled Europe's Search Engine Marketing Forecast, 2004-2010, search engine marketing (SEM), including all aspects of paid ads, contextual search, site optimization and paid inclusions, will generate ?1.4 billion of spending in Europe in 2005, a 65-percent increase compared with 2004. And furthermore, by 2010, European advertisers will spend almost ?3 billion on search marketing, up from ?856 million in 2004.

However, to get the full story on where the online market is heading in Europe, you must examine the numbers within each country. Thus far, the United Kingdom leads the rest of Europe in SEM. British businesses budgeted more than half their total online ad spending on search in 2004 and early estimates for 2005 were expected to reach ?763 million, with the areas of travel, finance, auto and retail providing the largest gains in search marketing.

With its estimated growth in the "broadband" age, the U.K. is expected to continue to lead Europe in all aspects of online marketing growth, especially in online shopping. France was predicted to account for 19 percent of European SEM in 2005, but the Forrester report indicates that it should capture about 31 percent of the market share by 2010. Germany, Europe's largest online community with over 47 million Internet users, spent ?165 million in 2004 in SEM, and is expected to reach ?399 million in 2010. Even many smaller countries in Europe are experiencing similar growth, with the Netherlands estimated to spend 40 percent of online advertising on search marketing in 2005; while in Sweden, 26 percent of online ad spending will go to SEM.

MAKING SEO A SUCCESSFUL PART OF YOUR EUROPEAN MARKETING CAMPAIGNS
Up until now, mainly large companies have implemented search marketing in Europe; however, as it was in the U.S., small- to medium-sized companies are now including search marketing as part of their European marketing mix. Europe is a challenge because of the number of different countries, meaning different cultures, different legal regulations and different ways of doing business. The key to a successful SEO campaign is to target each country individually--a huge challenge from both a budget and a time/resource perspective.

In terms of who the major players are in SEM, Hitwise data shows that Google is still the overwhelming choice in all of Europe, taking over 65 percent of the market share in just the U.K. alone in 2004. Not surprisingly, additional U.S. engines including Yahoo!, MSN and Ask also capture a portion of the search market share in Europe, but not nearly as strong as it does in the U.S. However, expanding beyond the major SEO players can be very profitable in this fast growing medium. For instance, in France, the second most popular search engine is Orange (formerly Wanadoo), and likewise, native language engines are also popular in most other European markets. Thus, U.S. businesses that focus only on domestic search engines shut themselves out of the market for a large portion of potential customers.

With search marketing accounting for just over 40 percent of the European total online ad spending, according to IAB Europe, search engines will continue to expand on its search offerings, much like it has in the United States. However, the challenge for both the engines and the advertisers will come while working in a multi-lingual environment and finding the right balance that works. If anything, it is safe to assume looking into the future that even if it's not used as your primary advertising method, search marketing will almost be required as some part of every company's marketing plan.

Happy searching!

Johnny Mathis is CEO of Livemercial, a direct response interactive agency located in Valparaiso, Indiana (U.S.). He can be reached at +1 (219) 477-3900, or via e-mail at jmathis@livemercial.com.