August 2007 - Zooming in on SEM

What to some is thought of as merely shelling out a portion of the marketing budget for a few keywords will soon be a fundamental part of most media mixes. Are you adequately engaged in the search engine marketing game?

By Patrick Cauley

It’s something most of us do every day. If we need more information about practically anything, the first places most American consumers turn to are Google or Yahoo. The days of browsing through phone books and encyclopedias are quickly drawing to a close as virtually all inquiries move online-and toward search engines. Though often overlooked and oversimplified, marketers and retailers must be certain that search engine marketing (SEM) is at the top of their priority list. According to eMarketer, search currently makes up 40 percent of all online advertising.

As with any marketing channel, you’ve got to start somewhere. Getting started in SEM is not as hard as one may think, but it does require some patience-and a budget. “First, go to a search engine and play around. See if your company comes up in some organic [as opposed to paid] search results,” says Christopher Knoch, principal SEM consultant for Orem, Utah-based Omniture. With regard to organic searches, Dana Todd, co-founder of La Jolla, Calif.-based SiteLab International, advises to first look at the underlying architecture of your site. “The most effective retail sites have spent considerable time looking at how each and every product detail page is crafted to contain the maximum amount of keywords and classification information,” she says.

With paid search, things are a bit more formulaic. Before doing anything, it is essential that marketers and retailers understand their metrics, goals and also the competition. The search advertising landscape is becoming so competitive that some companies will bid on their rival’s name so that their company will appear along with the rival company in search results. “You want to compete and bid on your trademark terms. When you’re in the product development stage, you want to be thinking about the name of the product,” says Ken Osborn, CEO of Westport, Conn.-based Liquid Focus.

But, before purchasing keywords, understanding the competitive landscape is an essential piece of getting started in SEM. “You need to understand the metrics of your own business. You need to understand what you’re willing to pay for one customer, what kind of customer that is, and how you measure success,” says Ellen Siminoff, president and CEO of Efficient Frontier in Mountain View, Calif.

Along with being able to identify success criteria and knowing what one can afford to spend from a margin perspective, president of New York-based SendTraffic, Steve Jacoby, counsels that early communication is key. “You’ve got to be a good communicator with your partners. During those first 30 to 60 days, there’s a lot of data we’re exchanging back and forth about campaign performance,” he says. Marketers and retailers should not only make this early commitment to their partners, but they also need to make a budgetary commitment. “To put an inadequate budget toward search will never allow a company to gain enough traction to justify its use,” says Lisa Wehr, CEO of OneUpWeb in Lake Leelanau, Mich.

Given this budgetary commitment, one might ask, “Seriously, just how important is SEM?”

SEM is-plain and simple-a marketer’s dream. The pull marketing technique and web analytics make it a unique and quantifiable ROI driver. “Online marketers have found that SEM helps them reach a group of customers who have a high intent to purchase,” says Siminoff. These customers are typing something into a search engine, oftentimes looking for product, which in Siminoff’s eyes makes them fantastic customers. “If you’re good at SEM, you can find a lot of low-hanging fruit in terms of customers who meet your ROI metrics. Unlike any other channel, it’s demand-driven where consumers are pulling the marketer toward them,” says Eric Obeck, president of SendTec, based in St. Petersburg, Fla.

For Todd, SEM is, in a sense, the Holy Grail of marketing, being everywhere but only paying for what works. “You’re buying keywords based on their applicability to your target audience and to their predicted ability to convert for you at a price you’re comfortable paying,” she says.

Jacoby’s assessment of SEM is in line with Todd’s. “It’s probably one of the best programs for direct marketers from a bottom-line perspective, because it’s so transparent and quantifiable. In the SEM world, a click has a cost to it and all those clicks are going to yield so many dollars and should obviously yield so much in return. Since you can figure out what words work and what words don’t at different times of the day and different days of the week, it’s probably the most effective method that a retailer can use to sell products today,” he says.

Direct marketers should be paying attention to search for other reasons as well. Search is, as Knoch points out, the second-most-performed activity on the web next to e-mail. Search can also be a viable extension of a DRTV campaign. “SEM is especially important for direct response marketers using television, given the fact that consumers easily forget the URL displayed on the screen. They then turn to search to find the product they saw,” says Osborn.

Wikipedia defines web analytics as the data collected from a website to determine which aspects of the website work toward business objectives. “You want to make sure you’re not bidding too much on words, and that you’re bidding on the right words,” says Dr. Larry Harris, vice president and general manager of EasyAsk in Bedford, Mass. Johnny Mathis, CEO of Valparaiso, Ind.-based Livemercial, adds, “Through analytics you can monitor which keywords people are using to get to your site, which are paid, which aren’t, where people drop off and what kind of strategies you can employ to make them stay.”

For Wehr, it comes down to the budget. “If you’re not paying attention to revenues generated right down to the keyword level, then you can’t really intelligently shift budget or make budget decisions in search.”

All of the SEM companies agree that web analytics are beyond critical in achieving success with search. Obeck explains that analytics not only measure the click, but also measure everything after the click, showing a marketer the common track consumers take after clicking on an ad. Knoch appreciates that with analytics. What’s more, he knows how his search campaign is influencing not just purchasing decisions, but other activities on his site and how its plays off of other marketing channels. “We don’t have too many questions without answers; we almost have too many answers without questions,” he says.

SEM isn’t always a walk in the park. Since this channel is still relatively new by industry standards, many marketers could benefit from a little advice on how to sidestep novice search mistakes. Jacoby and Knoch agree that launching on only one search engine is a mistake they see marketers make time and time again. Knoch also believes that marketers focus too much on ROI or conversion rates to the detriment of looking at volume.

“Poor ad placement also can break many paid SEM ventures,” adds Mathis. “Desperately trying to compensate for a run of badly placed ads without knowing your monetary limits can also hinder your overall marketing efforts.”

Simply bidding on the terms that everyone else is bidding on is another common mistake. Often, however, it’s what occurs after someone clicks on a keyword that sends an SEM campaign into a tailspin.

Marketers must make sure that what a consumer searches for on the engines is what comes up once they get to a website. “Too often, a click will place people at the top of a page and they’ll have to search around on the site for what they already searched for on the search engine,” says Harris. Wehr stresses that the landing page must meet the consumer’s expectations of the search, because that is the conversion point. “When the consumer has a full page of other choices and they’re time-starved to begin with, they’re not going to spend much time plugging around in the website to locate what they initially came for,” she says.

Sometimes simply being new at the game is enough to put a marketer or retailer out of the loop. “Turning on a couple of terms and putting in open-ended data at $1.25 a click is not SEM,” says Osborn. Having an instinctual desire to be number one in every space is something that Todd sees marketers struggle with frequently. “I tell people to get back to their marketing basics, which sometimes get lost online,” says Todd.

As everyone in the online space continues to work out their individual kinks in SEM, one thing is certain: search is here to stay and gaining more importance every day. “Search is going to continue to become a much bigger component of most advertisers’, certainly retailers’, marketing mixes,” says Obeck.

If you’re not already involved in search engine marketing, it is probably time to get into the game before it’s too late. “People think search is a level playing field, but it’s not. As more and more of the larger advertisers come on, it’s going to be harder for the small guy to get by,” says Osborn. Don’t risk getting lost in the marketing wilderness; organize a search party in advance.

We would appreciate your feedback. To submit comments, please e-mail the magazine at [email protected].


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