June 28, 2005

Buying ads and placing relevant content is either a drawn-out process or just simply plain luck.

How much better would your response rates be if every ad you ever placed was directly related to the environment and page it was placed in? Well, of course, you can get that online– it's called search-engine marketing.

Search – and in particular pay-per-click (PPC) – marketing has never been bigger. PPC alone accounts for some 40% of the total spend for online advertising, estimated at £356m for the end of 2005.

According to some figures, online as a whole is more than matching radio for the size of its market, but just PPC search alone has left cinema trailing in its digital wake, and its ad spends are set to get bigger as advertisers see the rewards that can be reaped and how accountable every penny spent really is.

Even with such compelling stats available, there still exists a pervading sentiment of "I never click on a paid-for search listing ad".

Recent research by e-consultancy reported that 92% of UK internet users claim they never click on a paid-for listing.

But when you consider more than 60% of UK search users don't know the difference between paid-for listings and organic listings (free listings), [source: IT Facts], you start to appreciate how confused the original statement really is and that maybe they actually are clicking on the links.

The search model initially developed from the growth of natural or organic search. This was the preserve of the pioneering online boffins who developed web-crawling technology, implemented metatags and all sorts of other crazy things to allow the simple user fast navigation and an invaluable way of identifying individual web pages.

Those pioneers were Yahoo!, Excite and Lycos. As the technology developed and the internet matured beyond the stage of a place to simply find out some cool stats and jokes, the commercial possibilities started to flow.

Media owners, in particular Overture – now Yahoo! Search in US – and Espotting – now Miva – saw the value that could be had from guiding the online user direct to the information they wanted and charging the advertiser for bringing them.

But rather than rely on sourcing the right environment, as was being done with banner advertising online, users were telling advertisers exactly what they wanted to see and then choosing from the results that they were presented. And so, PPC advertising developed.

We have seen the market develop further since then. The offering has become a lot more consumer focused. The early natural search was about allowing users to identify individual sites within the multitude of sites on the web. PPC then meant that advertisers could start pushing products and services directly to the consumer far earlier in the process.

Importantly though, it meant that the user was being presented with solutions at the time of asking and so was far more likely to convert than before.

As the small table opposite shows, while Google may well be the household name, it doesn't dominate the market. What the results also identify is the completely different approach Overture and Espotting have gone to the market with.

Google was all about pushing the brand. It had a very simple decision to make – the phenomenal growth and user base it had developed through the ground-breaking natural search offering afforded them the ideal platform with which to expand into PPC, without having to cannibalise their user base through the creation of a secondary site.

The story differs for Overture and Espotting. Not having a strong consumer-facing property of their own, they followed the path of forging deals with already established sites. This allowed them to have the functionality of search, above and beyond what they could offer themselves, with the bounty paid for the click being shared between the listings provider and the host site.

The beauty of this type of approach was that, very quickly, Overture and Espotting were able to develop quite advanced distribution networks without the need for costly investment in building their own audience – which is slightly ironic as the strength of the PPC model is that they are able to drive a targeted audience to your site cheaply.

The search engines, and in particular Overture and Google, having established the key relationships with portals such as MSN, Yahoo! and AOL, have now shifted the market. The key battleground has developed into more vertical sectors.

Now, rather than just relying on sourcing the user directly from the search engine listings page of a site, the PPC list providers have been able to define new markets in the form of contextual listings.

A good example of this is on Guardian Unlimited, whereby when you are reading an article, the advert at the foot of the page is taken up with search engine listings which are triggered by the content within the article.

Although this is a movement away from the original pure functionality of PPC advertising – request-based content, do a search and get relevant results.

This targeting sees the user being presented with results that, while not requested, are relevant to the environment they are in.

Content targeting has also seen the growth of new companies which, while not traditional search engines, offer a similar functionality – such as Vibrant Media. Vibrant, much like the Overture/Guardian relationship, allows the advertiser to attribute itself to specific content on a website.

But rather than relying on a group of listings at the footer of the page and determined by the search engine, this new breed of contextual search company allows the advertiser to latch onto exact terms within the copy and list alongside them as a rollover or click function on the highlighted term.

All of the major search engines are now offering content functionalities as a way of increasing the access they have to the user.

With that spawns the new hot topic of the moment – "desktop search". The key points are that it allows you, the user, to download a piece of software that will scour your desktop for all the information held and then sort it in such a way that you can keyword-search it, rather than having to rely on remembering the correct file names.

Straight away, the rewards of utilising search technology for the individual user becomes apparent, but how does it benefit the media owner? It isn't as if they are charging for this or hitting the user with ads relating to the files they are searching for.

At the moment it looks like the true value of this will be realised in building brand loyalty, so when you or I do eventually go on to make a proper search from web information, we are already tied in to a particular search engine.

To round up, the traditional online banner and skyscraper advertising is an efficient way of identifying and reaching the plethora of sites needed, and natural search was developed to cater for this.

We then saw the progression to PPC search, then when that market was reaching its peak, the move into vertical markets developed.

From that came content targeting and trying to catch the searcher before they have even started the search, by locking on their desktop.

The market is changing and almost seems to be going back on itself. Google recently announced that it is moving into banner advertising.

So, from humble search beginnings, we are seeing Google expand the product offering and move into the greater online media sphere.

Not simply content with owning the desktop, we are now seeing the search engines strive to increase dominance across the web and break out of just search results.

Well, search-engine advertising will continue to grow and will be the leading factor in helping the internet fulfil the promise of the late '90s of targeting the individual user and driving quality leads to help clients deliver maximum return on investment.

One also shouldn't ignore the role that PPC search will continue to play in the media schedule as a whole. PPC search feeds into and off of all the other placements you do, be it banner advertising, affiliate deals or whole site takeovers.

Just as traditional offline media impacts upon each other, so you see similar patterns online with search activity increasing on the back of banner activity launching.

PPC is often the first place the consumer will turn to in order to try and recall the information given from another advertising medium.

So any planner/buyer who is worth their salt will appreciate that PPC search can not be planned and managed in isolation.

Source: MediaWeek.co.uk

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