Retail Bonanza Starts With Search – Part 1

Can you imagine using online advertising to drive people to Sears to buy a wrench? Well, that’s what’s happening today as marketers begin to discover that retail traffic comes from the Web.

ComScore (2006) reported that 63% of search-related purchases occurred in offline retail stores while 37% converted online. Over 80% of the offline conversions occurred in categories such as Video Games, Toys & Hobbies, Consumer Electronics, and Music/Movies/Videos. The study found that over half (56%) of ecommerce conversions are latent buyers while 44% were direct buyers.

Serious Buyers Are Search Driven

The study analyzed the search behavior of 83 million Americans conducting over 552 million searches within 11 product categories using one or more of 24 search engines during the 2005 holiday season. Of these, the 8.6 million who subsequently purchased items online were found to be intense users of search engines across all product categories. They performed nearly ten times as many searches as non-buyers.

Search Marketing Reaches Critical Mass

Search marketing has become a line item in the marketing budget, but it hasn’t always been this way. I remember it being a tough sell back in the days when search represented less than 1% of the online advertising budget. Currently, search takes up 34% of the average online marketing budget, while search engine marketing accounts for 41% of all online advertising.

Paid search spending has increased faster than any other online marketing channel. Search marketing revenues in North America totaled $5.75 billion in 2005 and are projected to reach $11 billion in 2010 (SEMPO).

Search marketing effectiveness is well known for direct response, branding and latent offline sales. This year’s annual MarketingSherpa survey at ad:tech shows that search advertising outperforms email marketing with 52% of marketers reporting that “search performance is ‘Great-outperforms other tactics’ compared to 47% for email house lists.”

We know search works, but how can it enhance ecommerce? Here’s how:

1. Boost conversions with search engine optimization (SEO)
2. Further enhance conversions with pay-per-click advertising
3. Increase conversions with site search
4. Enhance keyword bid management with Web analytics

State of eCommerce

The Department of Commerce estimated total ecommerce sales for 2005 at $86.3 billion, an increase of 24.6% over 2004. Total retail sales in 2005 increased 7.2% over 2004. Ecommerce sales in 2005 accounted for 2.3% of total sales. Ecommerce sales projections from eMarketer are as follows:

• 2006 — $101.0 (~20% increase)
• 2007 — $119.1 (~18% increase)
• 2008 — $139.0 (~17% increase)

Preparing for the Holiday Season

Holiday shoppers start early. The comScore study found that 60% of all searchers started their search process before November 15, 2005. The take-away for search advertisers is that holiday-season advertising budgets should be ample and released early enough to cover the aggressive search behavior of serious buyers.

Latent Search Buying

If you have a hard time believing that Web search drives retail sales, take a look at these two studies.

1. A 2004 comScore study reported that latent purchase conversions account for the majority of online buying activity. This study caused quite a stir last year by revealing that search marketing is more than a direct response vehicle; it provides branding as well.

The study also revealed the importance of using generic search terms in addition to trademark and product terms. Generic search terms (camera, PDA phone) received more than 70% of the total search volume versus 20% for trademark names (Best Buy, Gateway) and 10% for specific product terms (Canon digital camera, HP notebook).

2. In “The Role of Search in Business to Business Buying Decisions,” Enquiro and MarketingSherpa found that:

• Search engines play a dominant role in B2B purchases
• Search engines are used in early or mid research phases of the buying cycle
• Google is favored over other search engines
• Search engine research takes place at least one to two months before a buying decision
• Good balance between organic and paid search is necessary
• Organic SEO gets over 70% of the clicks
• Position is a factor, with over 60% clicking on the top three listings
• Most users decide which listing to click on within seconds of scanning the page

Retail Sites Lack SEO

Most ecommerce sites are still not well optimized for organic rankings. Industry research confirms this two years running (2004 and 2005). OneupWeb’s 2005 study reported that 83% of Internet Retailer Magazine’s top 100 Websites are not using basic search engine optimization principles to gain high rankings.

What are these basic SEO principles? Your Meta tags, site architecture, keywords and content. These are the factors that allow your website to be readily indexed by the search spiders for favorable positioning on the search engine results pages (SERPs). The following data was reported for Internet Retailer Magazine’s top 100 Websites:

• 17% well optimized (compared to 12% in 2004)
• 25% moderately optimized (compared to 23% in 2004)
• 35% nominally optimized (compared to 29% in 2004)
• 23% not optimized at all (compared to 36% in 2004)

Because of the strong correlation between search engine optimized sites and high rankings, traffic, and sales conversions, it is important for retailers to avail themselves of this marketing strategy. If not, the risk is lost opportunity costs and a loss in market share.

The study reported that 89% of the well-optimized sites were indexed on pages 1, 2 and 3 in the SERPs for their respective keyword queries, and 52% appeared on page 1. In contrast, only 4% of the non-optimized sites fared as well.

We’ve been talking about SEO for organic listings as a first step, but retailers can improve conversions even more by including paid search in the marketing mix. The advantage of sponsored listings is that they go live almost immediately and you can optimize the campaign with testing and control costs with bid management.

How does paid search compare to organic listings when it comes to conversions? Read Part 2 next week for a review of how SEO stacks up to PPC in terms of conversions. We will also cover strategies for boosting ecommerce search conversions and take a look into the future of search and ecommerce.

In Search of Better Organic Rankings

Your customers need to know who you are before they invest in your products and services. Most companies go into traditional advertising or direct marketing campaigns. Fine. But there is a better way.

I think we can agree that the Web site, the Search Engine, and the Browser have changed the business landscape. With Search Engine Optimization, you can increase brand awareness, attract targeted prospects and convert more leads. Sound interesting? You bet. Let me tell you how.

How Search Engines Work

Search engine technology is complex; therefore, the challenge is to simplify the parts that make up the whole. In my view, there are three primary parts to a search engine: the spider, the index and the search leg.

The spider crawls the servers on the Internet to find HTML documents, dumping them into the index. The index has filtered the HTML pages and stands by as a repository of data answering to the search leg. The search leg is the connection between a browser, the index and a search result. Confusing? Let?s draw a diagram.

The filtering process between the spider and the index is where the search engine applies its algorithm for organizing the data in its index. In its simplest form, genuine search engine optimization (SEO) occurs as an iterative loop of research, analysis, submission, monitoring and reporting. This process allows for the constant improvement of your Web pages as they travel through the search engine filter process from one month to the next, molding them into the form search spiders seek to index.

A search engine like Google is tasked with finding expert advice, knowledge, information and opinion while also ranking what it considers most relevant for a particular query. The science of relevance is a responsibility Google and other search engines take very seriously. Showing respect for this science and understanding how search engines work is the quickest way to acquire good organic search results.

There are three entities that must communicate with each other for indexing and ranking to take place: the Web Site, the Search Engine and the Browser.

The Web Site

The server hosting your Web site is at the heart of the entire process. Its ability to communicate properly with the spider is of utmost importance. The server DNS configuration, its organization of certain files and its method for directing a search engine to various documents or URLs is also critical.

Think of the server offering a handshake to the spider; if there are issues hindering good communication, the spider retreats accordingly. The spider has a limited time to respond to issues while crawling the Internet; it wants everything in proper order. Web sites with high organic rankings are those that have their servers configured and organized properly.

The HTML code on your Web site residing within the server is also important to search spiders. Spiders can process simple HTML code much easier than JavaScript or complex code.

The Search Engine

A search engine such as Google is looking for content from subject matter experts to rank in its top organic listings. It wants to provide a good user experience to users searching its database by producing relevant, unbiased, useful information.

In order to accomplish this task while relying on the automated procedure of interpreting HTML code, the search engine must filter and store its data in a safe place known as the index. After gathering data from servers on the Internet, the spider filters it into the index.

The index is at the core of search engine credibility. If an index is corrupt, search results will be inferior. This is why search engines take so much care in filtering and monitoring their indexes.

Getting your Web site into a search engine index is a good start toward acquiring high-rankings; however, the two are not synonymous. There is a world of difference between making your Web site a subject matter expert in the eyes of Google vs. getting into its index. This difference lies in the training, skills and performance of your search marketing vendor.

In 1996, it was easy to get indexed because the search leg sifted through fewer than a hundred million documents. Today, the search leg must weave through billions of documents and return millions of relevant results within 16/hundredths of a second. The level of competence required to have your Web page URL migrate from millions of similar documents into the top 10 organic results is higher today than ever before.

The Browser

The browser is where a search query takes place on a desktop. It communicates with the search leg and index to return a search engine result page.

When you hit the search button, your browser is simply jumping on the search leg, tapping into the index and receiving the search engine?s best guess at answering your query with relevant results.

The remarkable event that takes place after the search is the click-through. The click- through rate for organic results on Google is 28% for the #1 position and 3-12% for the #2-#10 positions. Research and case studies document significant increases in conversions when a Web site enters the top 10 rankings in Google.

SEO Best Practices

If you understand how search engines work and comply with their guidelines, it becomes easier to obtain superior results. Complying with search engine guidelines is a very important part of SEO best practices.

To arrive at best practices, the industry needs to adopt standards. This will bring more credibility to our trade and help eliminate devious tactics. Red Door Interactive is committed to helping industry leaders establish search engine marketing standards and best practices.

SEO and the Bottom Line

As reported recently, companies are allocating 33 percent of their online budgets to Web site updates, driven by SEO changes. Organic SEO gives you a better functioning Web site, which in turn delivers a better bottom line.

How Much Should You Budget for Search?

Estimates for search spending can vary, depending on the source. Research firms and trade associations use different methodologies for conducting the research that yields their budget forecasts.

For instance, the search marketing spend in North America was reported at $5.75 billion last year by the Search Engine Marketing Professional Organization (SEMPO) and forecast to reach $7.19 billion in 2006.

That estimate may be conservative, as TNS Media Intelligence projected total online spending at $20 billion by the end of 2006 with half of that going to search. The $20 billion figure gives online advertising a 12 percent piece of the $161 billion total ad-spend pie.

Estimating Your Search Marketing Budget

There are a number of ways to establish your budget. You can base it on historical industry data, on a market share basis or on a percentage of sales.

Considering that 87 percent of commercial search engine traffic is organic (natural listings), and the balance of traffic is paid (sponsored listings); it makes a lot of sense to allocate a fair portion of your search marketing budget for organic search engine optimization (SEO).

Multiple links in the search engine results pages (SERPs) create authority and trust, while custom landing pages convert beyond the click. Organic SEO campaigns provide conversion rates three times those of pay-per-click (PPC) campaigns and can last indefinitely when maintained properly. PPC campaigns give you immediate exposure in the SERPs, can be controlled to fit your budget and can be optimized quickly for better performance. A combination of SEO and PPC links will give you brand lift and increased conversions.

There are 175+ million search engine users in the U.S. today who are conducting approximately 5.5 billion searches each month, and 90 percent of them are going to Web sites from the first three search result pages. With combined organic and paid search campaigns, you maximize profits from the increased traffic and conversions, achieving branding with your search listings at the same time.

Retailers Reveal Marketing Budget Guidelines

The latest Internet Retailer Survey shows the following summary for percentage of sales allocated to marketing. As you can see, most retailers spend between 6 and 10 percent of sales on marketing. While the data refers only to retailers, we believe it generalizes across industries as a fairly good benchmark guide.

• 4.1% of all companies spend over 25% of sales to marketing
• 7.7% spend less than 1%
• 18% spend between 2% and 3%
• 19.9% spend between 4% and 5%
• 28.1% spend between 6% and 10%
• 21.9% spend between 11% and 25%

Search Wins Hearts and Minds

JupiterResearch reports continued growth in the size and complexity of search campaigns with nearly 24 percent of search marketers spending over $500,000 on SEM campaigns in 2005 versus 12 percent in 2004. This year, 66 percent of marketers plan to increase search spending.

The same study reported marketers are spending larger budgets and generating more revenues. The share of search marketers with annual revenues of $15 million or more has risen from 25 percent in 2005 to 37 percent in 2006.

What does this tell you about search marketing? We believe it means that search has become first and foremost in the hearts and minds of marketers and with good reason: every action can be tracked at very granular levels.

Marketers are shifting money from other channels to search because it is incredibly effective for both conversions and return on investment. Savvy marketers will use both organic SEO and paid search advertising to achieve superior branding and meet direct response goals.

Segmenting Your Media to Improve Results

After convincing you to add SEO to your marketing dashboard, I?d like to focus on the importance of segmenting all the sources of your Web site traffic to improve results.

Segmenting traffic sources to your Web site from all your media campaigns (paid search, organic search, email marketing and banner ads, as well as the TV, radio and print ad URLs) is important for maximizing Web site and campaign performance. This allows you to focus on each subset to calculate its value, make recurring adjustments based on the data and ultimately ensure the highest return for marketing and sales expenditures.

Your site visitors place different values on price, volume, technical features, complexity, risk/reward, brand name, options, status quo, social trends and benefits. Therefore, the manner in which a visitor perceives your offer is critical, especially when the introduction to your business is via your Web site.

The point of entry, the pathway followed to view your offer, and your messaging are all of utmost importance. A dashboard tracking keywords and their traffic sources can reveal behavior from click-through to landing page. This provides the necessary data to evaluate conversions vs. non-conversions so you can make improvements at the right point.

The Importance of Analytics

All online campaigns provide the opportunity for continuous improvement through analytics. The value of having good analytics and regular reporting following site optimization can?t be overemphasized. Measurement is the key to discovery, and discovery uncovers the factors responsible for your site?s maximum success.

If you sell mops, whether you sell through a worldwide, national or regional distribution center, you want to direct your prospects and visitors through an optimized conversion funnel that results in a purchase. As obvious as it seems, few Web sites consistently use analytics for continuously improving conversions.

Your Web site performance is directly related to the changes triggered by the regular use of analytics. Without a dashboard in place to monitor key performance indicators (KPIs), you will experience opportunity loss. By reviewing data to improve your media spend and maximize Web site performance you have a clear advantage over traditional, pre-1995 business strategies.

Finding a Centerline

Running a business at the speed of light is a major challenge in today?s business environment, and on the Web, it?s more like warp speed. If you are accelerating to 1,000,000 mph, you?ll need a centerline to follow.

Analytics, KPIs, periodic reporting, and ongoing Web site optimization can serve as your centerline. They are the key to increasing conversions and accomplishing your business goals.

First Impressions Count

To over-simplify what is going on with many Web sites — every day, search engines and humans seek to understand your subject matter as quickly as possible and then leave.

First impressions are critical, and the first thought consumers experience upon arrival to your Web site is based on the very first piece of information you present to them.

It doesn?t matter if it is a search engine or a human being, upon entering your site, there is an expectation. This is also true of your ad campaigns on the Web or TV, radio and print.

Human expectations are often set through marketing and advertising initiatives. For example, in its simplest form, companies set an expectation with keywords in Sponsored Listings at Google and Yahoo. Each keyword you use is setting a specific visitor expectation. When that expectation is matched with a highly relevant landing page, the visitor is satisfied. When the links and supporting information on the landing page are relevant to the first impression (their keyword query), the visitor will go deeper and is much more likely to convert or take the desired action.

Make Your Landing Page Relevant

Don?t you just love it when you ask a question and you get an answer relevant to that question? Wouldn?t you dislike it if you asked a question and got gobbledegook?

The content on the landing page generated for a keyword search or any other advertising campaign is of utmost importance and should address the customer?s query. This page should provide the visitor with a first impression that directly answers the query. The page and its content must greet the visitor at the highest level of relevancy in order for that visitor to feel good and take the next step.

Improve Marketing ROI

Placing strategic variables in your dashboard and adhering to sound marketing principles can further enhance your Web site and marketing campaign performance. By putting all the right media in your dashboard for analysis and action, you will get the best return on ad spend and marketing ROI.

Putting SEO on Your Dashboard

As a marketing manager, you want to understand how your campaigns are maximizing results. One of the best ways to improve results is to create a marketing dashboard and then measure, test and tweak for continuous improvement.

Your marketing dashboard should be tailored to meet specific business goals. The dashboard might include offline media as well as a number of interactive strategies. Regardless of your objectives, Search Engine Optimization (SEO) belongs on your dashboard and here’s why.

Effective Marketing Strategy

Search Engine Optimization is one of today’s most effective marketing strategies. Web use seems to revolve around search with 80 percent of users finding their destinations from a search query. Over half (55 percent) of all ecommerce transactions originate from a search listing.

SEO is poised to drive substantial profits for your business. As a multi-purpose marketing tool, search marketing can be used for direct response to generate sales leads, collect newsletter subscriptions, gather site registrations and convert online and offline sales. It is even an excellent branding tool.

Search marketing works because people pre-qualify themselves by typing search terms in a search box. What makes search so powerful is that you can get the right message to the right person at the right time as search engines attract people with a high level of interest in their search topic. Search can provide a huge reach, as 90 percent of U.S. consumers use search engines (Pew Internet ALP).

Search has the lowest cost-per-lead of any marketing strategy (U.S. Bancorp Piper Jaffray). While formerly second to email in popularity, search recently surpassed email and has become the most popular online activity (MarketingSherpa).

Advantages of SEO

The original search marketing strategy is cost-effective both in terms of conversions and return on ad spend (ROAS). While it takes time to generate prominent organic links, once achieved they last indefinitely, and this long-term quality is what makes SEO cost effective. The average company SEO project averages about $3 per-day, per-keyword, and you can generate ten times that much per day in additional business by being found more often in the search engines.

Recent research (comCast and MarketingSherpa) shows that search engines drive offline sales. Organic links are important because they yield more conversions. The Search Marketing Benchmark Survey (MarketingSherpa) shows that conversions with organic links outperform PPC links thusly:

• Average conversion rates: organic links 4.2 percent vs. PPC links 3.6 percent
• Delayed ecommerce/service purchases: organic links 6.3 percent vs. PPC links 4.2 percent
• Ecommerce product /service purchases: organic links 4.1 percent vs. PPC Links 3.8 percent

Earlier research shows that 70 percent of your prospects will click on an organic link over a sponsored link and that organic clicks outnumber PPC clicks by 5:1. JupiterResearch found that “algorithmic listings in search indexes generate an estimated six of seven commercially natured search referrals.” Therefore, it’s important to put SEO in your marketing dashboard.

SEO services require modification of your site content and structure to improve relevancy and rankings in algorithmic search engines. This is sometimes referred to as making your website “search engine friendly.” A properly optimized website is more easily indexed by the search robots for indexing in search engine databases. Well-optimized sites naturally achieve higher rankings.

SEO goes a long way toward making your website successful because it energizes your site content and structure for maximum effectiveness. SEO works in tandem with other important variables on the marketing dashboard.

Segmenting Media to Improve Results

You’ll want to segment all sources of traffic to your website, using your dashboard and web analytics to maximize results. My next article will focus on how media segmentation improves results.

Search Marketing for C-Level Managers – Part 2

Benefits of Sponsored Search

Sponsored search requires significant management and controls to achieve the results you need. Yahoo Search Marketing is one of the leading providers of sponsored search traffic. Two examples of sponsored search case studies conducted by Yahoo Search Marketing are quoted below:

• Fairmont Hotels has been able to achieve an average cost-per-sale (CPS) of 3 percent within its Yahoo Search Marketing campaign. Fairmont increased its revenue by a whopping 57 percent, and its brand awareness went from 2 percent in 1999 to 17 percent in 2003 to 26 percent in 2004.
• EverythingHome, formerly EverythingBagel, is an online retailer that offers hundreds of home-related products. They wrote customized titles and descriptions that attract interested buyers to their site. EverythingHome’s search listings grew to nearly 5,000 so did their business. Consistently, EverythingHome has seen results as they have achieved almost a 50 percent ROI while generating close to $500,000 in sales.

Imagine the pleasure your top management would have with these results. However, in both cases, it took a lot of time and money to acquire these results, and it was no easy walk-in-the-park. Yes, it can be done. No, it’s not just a matter of signing-up and counting the clicks. There are dozens of granular issues to address with sponsored search. But that?s for another article.

Virtues of Organic Search

With organic search, your search engine results page (SERP) translates into the real estate mandate for “Location, Location, Location!” Type in a search query at Google for “Fraud Protection” and you may see the following SERP with listings in the Golden Triangle (the F-shaped area on SERPs where websites appear for optimal search engine visibility in both paid and natural listings).

A primary factor to consider in organic search is user preference for organic links, illustrated in the chart below on Internet User Behavior.

Studies suggest that B2B Internet users prefer natural (organic) search results when presented with a choice. As shown in almost every instance, users chose organic over sponsored search results. Other studies indicate that B2C and B2B2C Internet users mirror B2B user behavior in similar percentages. Couple the Golden Triangle eye tracking results with user preference for organic links, you can begin to appreciate the value of being listed in the top three organic search results for your industry.

Reinventing Your Business

Once you integrate web analytics with your website functionality and achieve a good balance of organic and sponsored search links, you will have reinvented your business with improved website performance. Installing analytics and search on your dashboard will require the completion of several prerequisites, including site architecture, page construction, content and linking. Your site architecture will be a thematical vault of valuable data. Your page construction and content will match up with the science of relevance. And popularity, as others link to you, will be yours to have and to hold.

In the process, you will develop a superior site and will be presenting yourself to the world as the subject matter expert. Your competitors may try to take you down, but it can take them years to catch up. And when budget time comes rolling around, you’ll have plenty of proof to show value to your decision makers.

Your next step will be to set-up a perimeter, define additional objectives, add new features to the dashboard and continuously improve performance. You’ll be strong and centered with support from the basics that got you there.

Before signing off, I have one tip for you: Get a methodology document from your search marketing vendor or agency. Read it and understand every detail; study it as you would study the manual to your new 60″ plasma screen or Bentley Arnage T.

Last but not least, remember to keep that shovel in the manure pile, letting your company leadership know the value of search marketing and its amazing impact on the firm’s bottom line.

Search Marketing for C-Level Managers – Part 1

A millionaire friend once told me, “What it all boils down to, Paul, is that I always keep my shovel in the manure pile.” He went on to explain that he keeps track of every single aspect of his business– bottom up, top down and in every nook and cranny. It is a management style I admire, and one that distinguishes today?s successful C-level managers.

C-level Managers Need SEM Knowledge

As we all know, search engine marketing (SEM) is a critical and effective marketing strategy that provides an excellent return on investment (ROI). Savvy marketers understand SEM?s value by virtue of the improved KPIs (key performance indicators) in their web analytics reports. But what about your C-level execs? Do they know? Do they care? A word of advice: They better.

Your Internet Presence

Your website touches virtually every aspect of your business, as well as every one of your employees, new and old customers, vendors, investors and business associates ? even your competitors. Your site has a tremendous impact on successful achievement of your business goals. It is the workhorse that pumps up your bottom line. This means its health and maintenance are key to your company’s success.

While your website is the engine that drives success, search marketing is what fuels that engine. That’s because search engines drive qualified prospects to your site that are likely to convert. This is something you can quantify and bring to the attention of your company leadership. It will quickly show them the value (ROI) of your marketing efforts.

While you can direct customers to your website through online and offline marketing campaigns, just imagine the implication of this statistic reported by comScore recently:

U.S. residents conducted 5.48 billion searches in January 2006, up 11 percent from January 2004. Google’s search sites processed 2.3 billion of those searches (41.4 percent of web traffic), followed by Yahoo sites with 1.6 billion (28.7 percent).

Both your corporate image (brand), and your company’s product/service, is being viewed and sought while you sleep at night, 24 hours a day, 365 days a year.

Where Is Your Shovel?

Search is a great place to start digging, and if you don’t like to dig, then delegate to your VP of marketing, asking him or her to keep you informed. Whatever you do, you must get your website and its search marketing strategy under tight control. You must understand every aspect of search marketing as it relates to your business and its competitors.

Know all the search strategies available that can drive unique visitors and conversions to your site. With search engine optimization (SEO) as your foundation, you can also take advantage of various paid search strategies including paid inclusion, pay-per-click, search contextual ads, pay-per-call and more.

Don’t play Russian roulette with your marketing program; get educated on how search marketing can enhance your internet presence while improving your bottom line. Research shows that national advertisers are creating a new budget item for SEM while other companies are shifting money from existing marketing and website development programs to search marketing. As a C-level decision maker, you need to be eminently aware of the marketing programs that provide the best ROI.

Don’t Do the Hokey Pokie

Do not “put your left foot in, take your left foot out.” Jump in with both feet and familiarize yourself with the features and benefits of all search marketing strategies.

While the uninitiated may simply grab the low-hanging fruit of pay-per-click, savvy marketers will lay the foundation with organic SEO. Research shows that 70 percent of Internet users click on natural listings, versus 30 percent on paid listings. Organic links are perceived as unbiased, therefore more credible than paid links. Recent research shows that SEO is the best driver of latent conversions. If you have an e-commerce site, take note.

When you don’t have SEO in your marketing mix, you incur an opportunity cost as search rankings and keywords become more competitive from year to year. For example, I had a client who wanted to be well ranked for a keyword with 1.5 million pages indexed in Google two years ago, relying only on sponsored links. Today, that keyword has over 80 million pages indexed in Google. According to Yahoo Search Marketing, that keyword is now searched over 1 million times each month, averaging about $2 per click. Currently, it can take up to two years to become well ranked in the natural listings — that’s your opportunity cost.

Empowerment With Analytics

Web analytics both validates and empowers search marketing. Search is the first step toward improving your Internet presence. That’s because most users start with search engines to get where they’re going, and search is the most popular Internet activity after email. This means most of your traffic comes from search.

The first step after setting up your KPIs through web analytics is to address your organic search results before your sponsored search results. According to Jupiter Research, 87 percent of commercial traffic from major search engines is organic or natural, non- sponsored traffic results.

Your analytics KPI reports are the first line item to check off your list. KPIs are one of several items on the dashboard. If you’re going to drive company profits, make sure you have a dashboard to look at ? and a rear-view mirror to see where your business comes from. This data is available with web analytics, the tool that contributes to the continuous improvement of your website performance and marketing campaign performance as well. Analytics is an extremely useful tool for C-level executives.

Search Looms Large

Last year was definitely a Google year, but rivals Yahoo! and MSN also made some waves. Search looms large, enabling new technologies to mushroom in cyberspace and beyond. This year saw the advent of consumer control, largely made possible due to the role of search in RSS and blogging. We saw a renewed emphasis in behavioral targeting and personalized search. With multimedia search and local mobile now widely available, search is not only ever-present, it is simplifying life for all of us.

RSS Goes Mainstream

RSS (Really Simple Syndication), the XML-based format for content distribution, has enabled blogging to spread like wildfire, giving users the ability to opt in for content from blogs and websites. In so doing, it gave rise to the idea of consumer content choice and control over media consumption, causing seismic changes in marketing strategies throughout the online world.

RSS is becoming increasingly more important as a content delivery channel because it allows marketers to deliver updated content while establishing customer relationships. It can be used for direct marketing, PR, ecommerce, online publishing and even SEO. Plan your RSS feeds by segmenting your target audiences into prospects, clients, business partners, search engines, etc. You’ll want to plan different feeds for each target audience, depending on why you want to reach them. You can use product feeds, podcast feeds, article feeds, news feeds, etc. You’ll also want to promote your feeds on your website and in email newsletters, as well as through external channels like search engines.

The Blogosphere Comes of Age

You could say 2005 was the Year of the Blog. Like them or not, blogs have had a huge impact on both journalism and marketing. They can play an important role in keeping your brand visible in the eyes of consumers. Some promotions go viral through blogging. Just look at the way Apple promoted its Video iPod through blogs, creating a new form of consumer-generated media.

While search giants like Google and Yahoo! were sleeping, new startups like Technorati, BlogPulse, Daypop, Feedster and IceRocket gained a foothold with blog search engines. Google finally launched its blog search in September. One month later, Yahoo! launched a blog search site as well. Technorati and BlogPulse each index over 20 million blogs. Industry experts say the marketing potential in blogging is huge for large and small companies alike.

JupiterResearch believes the number and influence of blogs will continue to rise, citing its recent survey that states “11% of online consumers read blogs at least monthly, a number that is rising rapidly.” In September, Technorati reported that the number of online blogs is doubling every five months or so, while Intelliseek BlogPulse reported adding 50,000 new blogs daily.

Behavioral Targeting Redux

Search engineers have been working on artificial intelligence systems to learn user preferences from past search behavior in order to adjust search results based on individual user data. DoubleClick was the first to attempt behavioral targeting by marrying personal data with user web activities tracked by cookies. But that idea was a little ahead of its time; consumers and advocates went into a frenzy. Subsequently, DoubleClick reneged on its plans to use its Abacus Direct database to target relevant ads to users on a massive scale through its ad network back in 1999.

Fast forward to 2005, when Claria (formerly Gator) came out with the next extension of search. Personal Web (PW) is an application now running on the Claria computers in beta with public launch scheduled for Q1 2006. This downloadable software profiles the sites you visit and the content you read, deducing your news and information interests the same way behavioral targeting infers your advertising interests. Using a combination of your personal choices and its algorithm, PW can bring you more and better content on your topics of interest, also suggesting content of likely interest. You get a homepage, which is automatically reworked to match your interests over time.

Search Personalization Is De Rigueur

One of the biggest problems with search today is that keyword-based queries will too often return a vast amount of irrelevant data (not to mention spam). That’s because search engines index the huge body of information that comprises the Internet based on text analysis (along with numerous other factors including site structure and links). So users have to wade through a lot of outdated, irrelevant listings to find the information they’re looking for.

Search personalization presumes that users show an interest in specific topic areas, and that knowledge of such interests can be used to improve relevance in search engine returns. Therefore, a solution to the relevancy dilemma would be to limit search results to only the topics the user is interested in, based on her/his past searches.

At first, major search engines Google, Yahoo! and MSN ignored the shortcomings of their main search results due to the difficulty of providing personalized search. However, Yahoo!’s MyWeb (Beta) debuted in November. It lets you sign up to create your own personal searchable web, allowing you to save the full text of web pages.

In December, Google’s Personalized Search (Beta) became available to users on 38 Google domains in addition to the main search page. This option reorders your search results based on your history of past searches, giving more weight to topics of interest.

Coming from MSN in 2006 is Windows Live Search, which will deliver personal search services to help users find what they’re looking for on the web, their desktop, their mobile device, or in their local geographic area. Live.com is available in beta and more information can be found at http://ideas.live.com.

Multimedia Search

The role of search has expanded way beyond documents and text. For instance, you can get audio video content links through content alerts to your RSS aggregator service for any search term from all or some of Blinkx TV’s more than 30 audio and video channels including BBC News, Fox News, CNN, Bloomberg Television, NBC, MSNBC News, ABC, and ESPN.

You can download audio and video content online from AllOfMP3, touted as the cheapest music download service. Try MusicMP3 for more than 100,000 mp3 tracks. Then there’s Napster’s on-demand legal music service and eMusic, a digital mp3 music service.

You can get audio books, audio magazines, newspapers and radio programs at iTunes, with more than 8,000 best sellers and classics audio books, and thousands of radio programs you can download and listen to on your computer or iPod. Audible offers over 18,000 audio programs, including digital audio books, audio magazines, newspapers and radio programs for your PC, iPod, Palm Handheld or Pocket PC. You can even get free movie downloads at Open Flix, which offers movies in the public domain. Local Mobile

Google launched its new Local for Mobile service, which gives you a mini version of Google Local. You can get maps and driving directions. U.S. users can search for specific addresses or businesses and even business categories like in a directory. Data is limited to address and phone number with an option to call by clicking a link.

Yahoo! Mobile has a “Send to Phone” feature that lets you send and store names, phone numbers, addresses and cross-street info on your mobile phone for use on the road. The “Send to Phone” link is next to the address of the local business you look up on Yahoo! Local. The info goes directly to your phone, sending you a text message link that takes you to the Yahoo! Mobile webpage for the business with map and driving directions.

MSN Mobile gives you MSN Hotmail, MSN Messenger, MSN mobile web and MSN alerts on your cell phone or wirelessly enabled Windows Mobile-based device. The alerts let you receive information alerts on weather, traffic, news, sports and more.

The Name of the Game

Why all this emphasis on search? For one thing, it simplifies life and saves time when you know how to use it. Secondly, search will soon edge out email as the most popular web activity. Pew Internet and American Life tracking surveys and comScore Media Metrix research on consumer behavior indicate that approximately 60 million American adults use search engines on any given day, a sharp increase over the June 2004 figure of 38 million Americans.

Taking a Look at LookSmart

Despite the industry slowdown, LookSmart is doing nicely. The company refocused on its core business of providing search directories for leading portals and ISPs and was monetizing search services early on. Last year’s $19.5 million Q4 revenue was up slightly from the previous quarter.

LookSmart’s directory has three revenue streams: licensing the directory, advertising, and e-commerce. Since 2000, monetizing listings with programs such as LookListings and SitePromote has been a priority. “We believe 90 percent of the value in search lies in the center of the page, not the banners and buttons around the sides,” said Dakota Sullivan, VP of marketing, “In Q4 last year, our listings revenue grew 33 percent.”

Learning the Ropes

LookSmart is alone in providing both paid-placement and paid-inclusion listing services for large and small advertisers. “Most small businesses don’t really understand that these two distinct paid-listing models yield clearly differentiated benefits,” said Sullivan. Using both models in combination provides advantages.

For example, a business can purchase a handful of core keywords from Overture, then put a large number of URLs into LookSmart and Inktomi for inclusion. It’s a cost-effective approach to generating a volume of leads.

Monetized Listings

LookSmart’s paid-inclusion programs include Directory Listings for large and medium-sized businesses and LookSmart Small Business for small and medium-sized enterprises (SMEs). Marketers purchasing these services show up in results on MSN, AltaVista, Netscape, Juno, and Prodigy and on over 300 ISPs.

Paid-placements are called Featured Listings. LookSmart recently launched SitePromote, offering small businesses a slot in the Featured Listings section of the search page for $29.95 per month. “We are now the third-largest paid-placement player, after Overture and FindWhat. Featured Listings are distributed to many of the above mentioned ISPs, plus LookSmart.com, Ask Jeeves, and meta-search engines such as MetaCrawler, Mamma.com, Search.com, and DogPile,” said Sullivan.

“MSN now uses Overture for three listings at the top of the page — LookSmart for the directory layer, and Inktomi as fall-through,” said Sullivan. He believes this triumvirate will ultimately control a majority of the listings business.

Maintaining Balance

LookSmart sees a need to maintain balance between user and advertiser needs. It strives to deliver relevance with strong monetization for distribution partners.

Last year, LookSmart acquired Zeal. The community search engine’s volunteer editors add numerous sites to LookSmart’s directory. “It’s the fastest growing community directory and was a runner-up in the 2001 Search Engine Watch Awards for [Most Webmaster Friendly Search Engine],” said Sullivan. “Zeal adds a goldmine of granular, noncommercial content to the LookSmart search directory experience. We provide this to our distribution partners, such as MSN, who in turn provide it to users. Ultimately, it reaches 77 percent of Web users across our network.”

Through Zeal submissions, sites can be listed free in LookSmart, especially noncommercial and content sites. You must “Become a Zealot” to submit, which requires passing the Member Quiz and the Zealot Quiz.

The Directory Distinction

Directories don’t index documents mechanically. Human editors ensure pages cataloged are appropriate and relevant. LookSmart increased its editorial staff for scaling up new directories.

Today, with most global directories at market scale, LookSmart has about 150 editors in over 30 countries. Editors review submitted material and material they search for themselves. “To facilitate the Herculean task of reviewing the millions of sites it takes to keep our 3 million URL database growing, editors rely on spidering and categorizing technologies,” said Sullivan.

Present and Future Search

Most people believe search behavior has changed. Sullivan is no exception. “In 1996, if you attempted to do a search for ‘ball valves’ on Yahoo you’d get, well, I don’t know what you would have gotten, but it wouldn’t be ball valves. Today, people routinely search and find name-brand consumer and industrial products, in addition to the same noncommercial searches they’ve always done.”

LookSmart reports 40 percent of its searches are for commercial products and services. Responses are increasingly more relevant as deeper content is accessed. “People will come to rely on search engines and directories for a wider range of information,” opined Sullivan.

“Search is becoming the white and yellow pages of the Internet,” said Sullivan. “You’ll also be able to search for images, music, and all kinds of files. Just as maps are more crucial to travelers today than they were in 1930, search will continue to become more important and useful as the Web grows and becomes increasingly complex.”

Lycos: Weaving a New Web

Search engines are reviewing their business strategies, and Lycos is no exception. The name is derived from the Latin “Lycosidae” (“wolf spider”), an arachnid famous for being the hunter rather than the hunted.

Tom Wilde, the newly appointed general manager of Lycos Search Services said, “We made a decision in 1999 to focus on our network strategy by building customer acquisition and retention, content aggregation, and brand.” Over the past year, Lycos diversified its model significantly by launching subscription-based services in finance, online dating, and home-page publishing.

New Search Subscription Products

One new subscription service, InSite, offers site search and paid inclusion:

• Lycos InSite Select allows owners to submit their sites to Lycos for guaranteed inclusion in the Lycos Web index within 48 hours with full refresh, starting at $18 per year. You’re notified once indexed and have online access to billing and submission status.
• Lycos InSite Pro offers paid inclusion and hosted site search starting at $189 per month. Site search is hosted in the Lycos Data Center, providing a secure environment for indexes. No software or hardware is involved, and search can be customized. A search box easily integrated into site design is provided.

Site search solutions of one kind or another are being offered by most major search engines. AltaVista, Ask Jeeves, and Inktomi have provided site search products over the past couple years, FAST joined the fray more recently, and now Lycos and Google are on board.

The need is there. Not only did Jupiter Media Metrix report that “80 percent of online users will abandon a site if the search function doesn’t work well,” but an IDC study reports that 50 percent of searches are abandoned and up to 97 percent of some site searches show no click-throughs to any results. Couple that with an earlier Forrester study indicating 93 percent of commercial sites either don’t provide site search or use software that fails basic tasks, and you can see why everybody’s on board to fill those needs.

Focus on Relevancy and User Experience

Lycos improved its user interface last November, including an enhanced version of Advanced Search and a new version of Fast Forward (formerly Side Search). The feature appears at the end of each Web Results listing. Click on Fast Forward, and it allows you to view all the listings from a left-side menu while viewing a destination site on the right. This makes it convenient to click to different destination sites while viewing results on the same page. Cool!

What about labeling Overture listings? “We now display a maximum of three (paid) listings from Overture,” conceded Wilde. “We’ll change the heading for the Overture listings from Products & Services to Sponsored Search Listings this month,” he added. This should make critics and users alike happy. Wilde pointed out Lycos directory listings are from Open Directory and feature no paid content, in contrast to Yahoo’s display of Overture listings above and below the fold.

Lycos plans to release a number of relevancy-enhancing features this year, many based on query analysis. Query analysis presents several choices to the user to make a query less ambiguous. For example, “Saturn” could mean the planet or the car. Synonyms and related queries can facilitate relevancy. “To do this on a large scale requires a huge knowledge base that understands the context underpinning the English language, resulting in many potential interpretations for a query. This is a major focus this year,” said Wilde.

Scoring High

What gets high rankings on Lycos? “Relevancy, relevancy, relevancy — nothing attracts and retains searchers more than the quality of the search results, thus we prize relevant content,” said Wilde. Lycos doesn’t use meta tags but won’t penalize use when used in relevant descriptions. What about minisites and doorways? “Minisites are fine if they honestly represent the content of the Web site, [and the] same goes for doorways,” said Wilde. What do they penalize for? “We don’t tolerate cloaking or spam — and we watch keyword patterns and frequency to safeguard against these abuses.

“At the highest level, the best formula for profitability is creating and maintaining the best possible search experience for our users,” said Wilde. “Without them, none of the other business models are viable.”