Special Report: Search Engine Marketing

Introduction

Like other forms of e-commerce, the possibilities in search engine marketing (SEM) are only just beginning to be fully explored. In its own way, the craft of SEM is a lot like other methods of direct marketing: It requires a steady dose of testing, and in the end, a favorable return on investment.

According to a recent SEM survey by New York-based Jupiter Research, just 25 percent of search marketers use “sophisticated SEM tactics. Marketers must cultivate sophistication to remain successful,” the survey states.

What’s more, the search numbers continue to multiply. For instance, in November, Google doubled, to more than 8 billion, the number of Web pages its search engine can locate. MSN recently introduced a search engine that can find 5 billion, and Yahoo! can locate 4.2 billion.

This special report is meant to help you navigate your way through the SEM landscape. In it, you’ll find articles on keyword selection, the bidding process, paid vs. organic search, business-to-business SEM and more.

Find the Right Approach for You

There’s certainly no one right way to attract prospects to your Web site through search engine marketing (SEM). But for most catalogers looking to better optimize SEM, or for those about to enter the SEM world for the first time, the following three action steps must be thoroughly evaluated.

1. Select Your Keywords

When it comes to setting keywords, a niche marketer selling, say, men’s dress shirts can attract more convertible prospects to its site by using keywords such as “men’s cotton Oxford dress shirts” than simply “shirts.” Or a cataloger who is hoping to sell digital cameras online amidst the torrent of competition in consumer electronics can draw prospects who are ready to purchase by using product-specific keywords such as “Kodak EasyShare LS755” rather than simply “digital cameras.”

“Being more specific gets you better return on investment,” says David Fischer, director of Mountain View, Calif.-based Google’s AdWords advertising program. “Think like your catalog customers: What would they search for? They might start with a simple keyword, but then use SKUs, product names or numbers.”

The most heavily trafficked search engines offer easy keyword builder tools for their respective pay-per-click SEM programs. Google’s AdWords (https://adwords.google.com/select/) and Yahoo!-Overture’s Precision Match (www.content.overture.com/d/USm/ays/index.jhtml) give you simple tools to help choose appropriate keywords.

Catalogers sometimes don’t realize they think of their products a lot differently from their customers, says Heather Lloyd-Martin, president/CEO of Bellingham, Wash.-based search marketing consulting firm SuccessWorks Search Marketing Solutions. So to get a better sense of how consumers search, she suggests you consult outside sources such as Wordtracker.com, a compiled database of terms for which people search. The tool can tell you how often people search for specific keywords, as well as how many competing sites use those keywords.

What’s more, don’t forget about seasonality when it comes to keyword choices, says Diane Rinaldo, director of strategic alliances for the Pasadena, Calif.-based Overture. “You want to capture spring season keywords when you mail your spring catalogs and are introducing spring fashion, for instance,” she says.

Another way to stand out from other marketers is to use deliberate misspellings in keyword searches. “Using common misspellings can perform very well and often get large volumes of searches,” says Google’s Fischer, “because it’s something competitors might not have thought of.” For example, try keywords such as “ladeys apparel” or “telefones.”

Another tip: Attract customers to your site by using call-to-action keywords, such as “free shipping,” “overnight shipping” and “online specials.”

2. Compare Paid vs. Organic/Free Search

Even if you come up with the most effective keywords, your efforts could go to waste if they aren’t steering browsers to the most appropriate landing pages, points out Overture’s Rinaldo.

If consumers find a site by searching for “cashmere sweaters” and “sale” or “discount,” they should click through to a page from a marketer’s site that shows such sweaters up front. If you prefer to have browsers land on your homepage, that’s OK, as long as there’s a clear path to find cashmere sweaters, she says. “Be sure there’s promotional language on the homepage to convert those visitors to buyers.”

While the right keywords will attract potential buyers to your site with organic SEM, a presence in paid search can qualify prospects better because they’re more inclined to click on paid search ads if they’re more serious about buying. And the higher the clickthrough rate you can get, the higher your ads will rank.

Most marketers taking an aggressive approach to SEM incorporate a combination of paid and organic search. “The best thing is having a site that search engine spiders can [access] to get those free listings on the search engines,” Lloyd-Martin says. “But if a cataloger doesn’t use pay-per-click as well, it’s missing the boat. By using both, your prospects will see your name everywhere.”

3. Select the Best Possible Bidding Procedures

On Google, the order of pay-per-click search ads is based on cost-per-click and the ad’s clickthrough rate — the number of clicks divided by the number of impressions, Fischer says. Let’s say Cataloger A bids on “men’s dress shirts” at $1 per click and Cataloger B bids on the same key phrase at $0.50 per click. If Cataloger B’s clickthrough ad rate is more than twice the rate of Cataloger A’s, the $0.50-per-click ad will get ranked higher on Google.

In paid search bidding, not all marketers necessarily want to bid a rate that will be high enough to put them at the top. In determining how large a bid to place on a keyword, Rinaldo suggests ensuring you have an effective analytics tool. “Without that, you don’t know how any of your marketing is performing, and you wind up bidding in the dark,” she notes.

Consider bidding to push your site higher up on the list when it’s the right time, she continues. For instance, if you sell chocolates or flowers, bid high enough to push your listing to the top in the weeks leading up to Valentine’s Day.

While you must take into account how high up you want your listing to appear when placing your bids, you also should set bid limits. Says Fischer, if you know that $0.50 per keyword is what you’re willing to pay, set that as a maximum amount. “You also can set a daily budget,” he says. “Based on your keywords and cost-per-click, we have an idea of how much traffic you’ll get.”

Challenges and Rewards of B-to-B SEM

In comparison to consumer catalogers, search engine marketing (SEM) for business-to-business (b-to-b) mailers requires a considerably more technical approach. But the rewards for effectively tackling those technical challenges can be worthwhile.

“B-to-b catalogers need to understand that SEM is not just a matter of managing SEM traffic around a shopping cart,” cautions Kevin Lee, CEO of New York-based search engine campaign management firm Did-it.com. “You have more customer disconnects [with b-to-b SEM].

“For instance, an engineer may do online research for a particular product looking at specifications for, say, a router. Then the engineer may tell a purchasing agent to go to the site and buy the product. So you have one person doing the research, and another giving the purchase order,” Lee recounts. Following are some ways you can better use SEM for b-to-b marketing:

1. To track the effectiveness of SEM campaigns, Lee says, b-to-b catalogers should use a customer relationship management system to match individual buyers to their companies. “You need some sort of sales tracking system to close the loop and understand what’s working,” he says.

2. The job of tracking b-to-b customers from their initial Web searchs to actual purchase orders often is made more challenging by the fact that they tend to place large orders. “Your most valuable bulk orders don’t come through the ‘traditional’ Web shopping cart,” Lee says. “Businesses tend to place orders on the phone for, say, 75 laptops — after they do online research.” Therefore, map your telephone orders back to search marketing if you can.

3. Use search engine optimization (SEO) services. Because you undoubtedly carry many SKUs, you have key SEM-related decisions to make when it comes to managing your b-to-b product databases. Chicago-based electronic components cataloger Newark InOne, which carries 1.2 million products, has been focusing more on SEO of its most heavily searched product categories, says Mike Yantis, director of Web site sales and marketing.

Newark InOne’s catalog is comprised of 10 major product sections, but the company puts a heavy emphasis on the two sections that give it the best return on investment (ROI) in paid search. The two categories, passive components and semiconductors, which combined make up 15 to 20 percent of Newark InOne’s offerings, play best on the search sites, says Yantis. “For the other eight categories, we have pretty good placement in organic search results. But we don’t feel we need to heavily invest in those, because the two top product sections are where we have our strongest reputation.”

What’s more, the two segments Newark InOne focuses on cater primarily to design engineers, a younger segment of its customer base and people who “grew up using the Web,” he says.

Newark InOne’s efforts have coincided with Google’s and Yahoo!’s ability during the past couple of years to use their algorithms to look through and break up PDF files from its site. “They can pull out manufacturer’s part numbers, which a lot of our customers look for in their searches,” Yantis says.

4. Partner with content aggregators. Newark InOne’s SEM activities aren’t solely focused on Yahoo! or Google. The cataloger also uses content aggregators, such as OEMsTrade.com and PartMiner.com, that serve its industry. Newark InOne gets its catalog displayed on these sites for free. “These sites send real-time queries into our database for manufacturer part matches and delivers them back on our site,” Yantis recounts. “Unlike Google and Yahoo! — which once or twice a week index our site, collect data on it and build it into their indexes — these aggregators look at our site in real time, giving our customers part numbers, product descriptions, inventory availability, and pricing.”

5. Try a keyword advertising program, which is what Newark InOne rolled out last year with Google’s AdWords. “We prefer to be in organic [free] results, but we need a careful balance in both organic and paid search,” Yantis notes.

Lee of Did-it.com says all catalogers should understand what the true ROI of paid search will be. “Every keyword will have a different value — bidding higher to get more volume vs. bidding less and getting a lower search ranking to gain a higher ROI but lower volume.” But b-to-b catalogers using sites such as Google and Yahoo! naturally prefer to attract b-to-b customers buying in bulk rather than consumers searching for single items. For example: B-to-b buyers are more likely to type in “corrugated,” an industry term, while consumers may use “cardboard.”

B-to-b mailers don’t want to sell just two boxes, Lee says. “Not that they won’t do it, but they want to sell 1,000 or 50,000 boxes. And it’s not always clear when someone types in keywords if they want bulk quantities or smaller amounts.” Marketers, he says, can’t control whether they’re attracting consumers or business buyers. And with paid search, you don’t necessarily want consumers to click through, because you’re paying per click, he says. Adding ‘wholesale’ to ‘cardboard boxes’ might turn away consumers and thus help you prequalify b-to-b buyers.

Search Engines: Who Does What?

Just about everyone “Googles” these days. And catalogers not only use Google for SEM, but they also use Yahoo!, Overture, MSN, and others. But the different search engines use different technology, and for that matter, have an entirely different reason for being. Confused?

Below, with the help of Moorpark, Calif.-based SEM consulting firm Bruce Clay Inc., we’ve compiled brief descriptions of what each of the major search engines do:

Google, which offers both organic/free search and paid search, spiders (or crawls) the Web to maintain its index, with emphasis on content and link popularity. The factors that determine your ranking on Google include:

- the number of links that point to your site;

- the quality (popularity) of the sites that link to your site;

- what other sites you link to; and

- the text in and around the links that point to your site.

Overture Services, which was acquired by Yahoo! in July 2003, is the leader in paid search services on the Internet, says Clay. Overture’s mission is to offer new and powerful methods of helping businesses reach consumers on the Internet. Overture auctions its rankings, so the more you pay per click on your results link, the higher your ranking. For each keyword phrase, advertisers bid against one another for placement within the search results. Below the paid listings, Overture gives additional results that are provided by Inktomi.

The main Yahoo! index results are compiled by spidering the Web or participating in the Yahoo! paid-inclusion program. Yahoo! has both a human-edited directory and a spider-based index provided by Google. Sponsored results are provided by Overture and appear at the top of the results page. Additional entries are presented at the bottom of the page.

MSN gets its search results from myriad sources. The Web Pages section is provided by Yahoo!, although MSN drops all Yahoo! paid-inclusion results from the provided list. Although you can submit directly to MSN, Clay says, you’d be better off directly submitting to Yahoo! for the time being.

Using a crawler to spider the Web, Ask Jeeves uses Teoma 2.0 to employ its branded Subject-Specific Popularity. This ranks a site based on the number of same-subject pages in other ranked sites that link to it (not just general popularity such as page count) to determine a site’s level of authority. As with Inktomi, Teoma has no free “add URL” page. But also like Inktomi, Teoma crawls the Web, so if you have links pointing at your site, you may get included naturally. Last June, Ask Jeeves discontinued its paid-inclusion program.

Netscape gets its primary search results and sponsored section from Google. The Open Directory provides the results for Netscape’s Web sites categories and reviewed Web sites. If the Open Directory provides the reviewed Web sites section, you still can view Google results by simply clicking on “Search Again Using Google” in the left-hand column. You can no longer submit your site to Netscape. To be listed on it, submit your site to Google or the Open Directory, Clay advises.

To rank well in HotBot, use keywords in the title and meta tags, Clay says. Use high-frequency keywords in the body, and use longer documents.

Offering both organic and paid search, Lycos, one of the oldest search engines, changed from a straightforward search engine to a Yahoo!-type directory that includes news, shopping, personalized sections and a search engine component, Clay says. Lycos has partnered with Terra.com, a Spanish- and Portuguese-speaking online company. Terra Lycos now owns several Web properties, including HotBot.com, Matchmaker.com, Quote.com, Rumbo.com, Webmonkey.com and WhoWhere.com.

Case Study: SEM Proponent Shares His Trade Secrets

Sea Eagle, a $10 million multichannel merchant of inflatable boats and accessories, got into search engine marketing (SEM) before most marketers knew what SEM was — or for that matter, what the Web was.

“We set up our Web site in 1996, and very early on we realized the site wouldn’t do us much good unless people could find it,” says John Hoge, vice president. “So we designed it to appeal to both customers and search engine spiders.”

Founded as a print cataloger in 1967, today 75 percent of the Port Jefferson, N.Y.-based Sea Eagle’s sales come from customers who’ve had some interaction with its Web site. Paid and organic/free SEM combined account for one-third of the company’s sales.

Hoge says Sea Eagle doesn’t have a specific budget for paid SEM. “We play everything by ear,” he says. “It’s so easy to measure — we just look to see if we’re getting sales and making money from SEM.” Hoge looks at each search bid; if it’s tracking in the black or is breaking even, he continues using it. If it’s in the red, “we cancel immediately.”

Sea Eagle spent $11,000 in paid search on Overture in 2001, and $35,000 per year since then. It began advertising on Google in 2002, and spent $2,000 in 2002, and $37,000 in 2003 and ‘04.

Hoge says the money is well spent. “For a good search term, we can sometimes make $10 to $20 per Web visitor,” he says. “But for random, untargeted traffic, that might be only 20 to 30 cents.”

From the beginning, SEM went hand-in-hand with the company’s e-commerce efforts. “I never saw SEM as something different from Web marketing,” he notes.

The company’s first SEM efforts came through Go2. As Overture built its pay-per-click model, Sea Eagle switched to that company and then to Google.

“For a small company like ours in a niche market, pay-per-click is ideal,” says Hoge. “People looking for inflatable kayaks [often] can’t find them in their local malls. And we’re very targeted, so we can outbid most other companies and get in most of the top listings,” he adds.

Tricks of the Trade

Four of Sea Eagle’s proven tactics:

1. Repeat the keyword on your site for higher ranking. In addition to using keywords such as “inflatable boats” as often as it can, Sea Eagle puts its keywords in several places on its site so spiders can catch them.

2. Avoid links to lengthy Web addresses. Take all product descriptions and build them into Web pages. “If you link to pages with URLs that are a long, convoluted mess with all the symbols, that means the page is being generated dynamically from the database, and search engines may say there’s no point and not index that page,” Hoge cautions.

“My theory is that if the search engines don’t think a page is dynamically generated, they don’t have a predictable way of knowing when visitors will visit the actual page. So we create pages in advance or recreate them periodically from a database, keeping the URLs basically static and simple.”

3. Stick to a few keywords germane to your business. “We tend to have the best of a very narrow range of products — inflatable boats and kayaks,” Hoge says. “If we try to use more general keywords, such as boating or kayaking, it’s harder for us to make money on pay-per-click.”

4. Try misspelled keywords. “It may not generate a lot of traffic,” Hoge says, “but it’s targeted traffic. And we can bid 15 cents instead of $1 for a misspelled word like ‘inflatible.’ It’s not huge, but it’s pure profit.”

5-minute Interview

Michael Aronowitz, executive director of The Direct Marketing Association’s online wing, the Association for Interactive Marketing (AIM), shares his thoughts and suggestions on SEM.

Catalog Success: Can you name some SEM best practices?
Aronowitz: A lot of direct marketers ensure that the content management systems being used on their sites can export content in order to allow search engine spiders to crawl their sites.

CS: How is SEM impacting merchants’ bottom lines?
Aronowitz: It’s allowed smaller catalogers to compete where they haven’t been able to before. It can level the playing field for competing brands.

CS: What mistakes do you see merchants making with SEM, and what’s the remedy?
Aronowitz: Most often I see a failure to ensure that natural listings are highly ranked.

On the flip side, when a company’s ranking is high, it may not [see the need to] purchase the keywords.

Another big mistake: not tracking results, which might prevent merchants from reinvesting in a successful campaign.

CS: For those catalogers not engaged in SEM, what are the compelling reasons to get started?
Aronowitz: Traffic, sales and getting new customers at a cost you can control.

CS: What does the future hold for SEM?
Aronowitz: I see other areas of search — such as contextual and behavioral targeting — growing, since many have a pay-for-performance model. That allows for testing at a very low risk.

I think the next big step is the migration of companies to the pay-for-performance model.

Paul Miller is a veteran writer and editor specializing in all areas of catalog/ direct marketing and e-commerce. He is the former senior news editor/Web site editor at Catalog Age. He can be reached at p914m@aol.com.