Dialing for Dollars

Whether it’s fashion, technology or commerce, what’s old often becomes new again. Pay per call is the latest revolution in performance marketing, and it focuses on incorporating a 130-year-old technology – the telephone – into the process.

While it’s not a surprise that pay per call is rapidly becoming a preferred model for local advertisers, it’s remarkable that it hasn’t been a significant part of the equation all along.

The rise in popularity of performance marketing, which now represents 40 percent of online advertising revenues, made it inevitable that someone would create a mechanism for businesses that do not have websites to market themselves, according to Greg Sterling, senior vice president at analyst firm The Kelsey Group.

Instead of ads linking to a website, pay-per-call marketing lists phone numbers, often accompanied by phone icons. Merchants pay a fee to the publisher when someone calls after seeing the ad. The number of calls is easily tracked because each ad is associated with a specific phone number, a practice that has been used for many years in print and broadcast ads.

The pay-per-call market, in all forms of media, is expected to reach $60 million this year, and rise by an astonishing 6,000 percent to $3.7 billion by 2010, according to The Kelsey Group. Pay per call enables small and medium-sized enterprises (SMEs) that do not have websites to spread the word and only pay for phone leads.

“Most local businesses don’t know how to deal with clicks,” says Sterling.

He notes that many small businesses complain that understanding and monitoring pay-per-click advertising is too complicated. Approximately 70 percent of SMEs prefer receiving calls to receiving clicks on their websites, according to Sterling, who estimates there are 10 million SMEs.

A survey of SMEs, by The Kelsey Group, indicates that 74 percent of small businesses would pay up to $1 for a call.

The persistent problem of click fraud will also spur advertisers to shift to pay per call, which is difficult to fake, Sterling says. Most companies that advertise in local Yellow Pages are more comfortable with communicating with customers on the phone. Also, two-thirds of SMEs that have websites do not participate in online marketing, suggesting that companies have been reluctant to commit the money and attention to develop leads online.

SMEs also believe that a person who calls is a better quality lead than someone who clicks on a website for information, Sterling says. “If you pick up the phone, you are more buy-oriented than people who are clicking,” he says.

The promise of pay per call has prompted a variety of networks and technology providers to enter the market in recent years, including ADSclick, Jambo, VoiceStar, Miva, eStara and Ingenio. Publishers currently offering pay per call include Verizon’s SuperPages, YellowPages.com, Local.com and Amazon’s A9. Search giants Google and Yahoo are currently testing the pay-per-call model to attract local and small business advertisers.

Microsoft is also working on a click-to-call solution to be included in its Windows Live offering, according to David Cole, a Microsoft SVP and head of MSN and the Personal Services Group.

The click-per-call capability, introduced in mid- March, will let users connect to businesses via Web-based calls by clicking on MSN search links. Last September, just a week after Google launched its Google Talk instant-messaging service, Microsoft purchased Internet-calling startup Teleo to expand the capabilities of MSN Messenger. With the Teleo acquisition, Microsoft also gained click-to-call dialing capabilities that would allow MSN’s upcoming adCenter service to offer pay-per-call pricing.

Dialing for Dollars

Sterling says the potential rewards from pay per call dictate that eventually all publishers involved in local search will incorporate some form of pay per call. “Calls can generate much more revenue than clicks,” he says.

Pay per call is desirable for publishers because companies are willing to pay a lot more for a call than a click. According to The Kelsey Group, the advertising categories willing to pay the most for leads include mortgage lenders ($35), lawyers ($30) and travel agents ($8).

More than 1 billion searches per month are performed on pay-per-call network Ingenio, according to chief marketing officer Marc Barach. Ingenio’s launched in 2004 and has relationships with America Online, MySpace, Miva and Infospace.

Pay-per-call advertisers can decide if they want their ads to reach local or global audiences. Ingenio ad network can specify geographic region, and the company has also implemented IP tracking to determine the consumer’s location, according to Barach.

One potential limitation of the pay-per-call model for publishers is that unlike clicks, which are generated around the clock, call revenue will primarily be generated during business hours. By specifying that pay-per-call ads only run at certain hours of the day (or “day parting”), customers can make sure they don’t receive calls off hours, Ingenio’s Barach says.

The amount that Ingenio’s customers pay for a call depends on the amount that competitors are willing to pay. Taking a page from the SEM model, Ingenio’s auction model charges one cent more than the next highest bid at the time the call was placed. The company sets prices based on categories, not keywords to simplify the model. The minimum charge for a call is $2, which is the case for many categories.

David Clarke, the marketing manager for American Incorporators Limited of Wilmington, Del., began placing pay-per-call ads on America Online one year ago, and is happy with the results. “The biggest advantage is that those who call are a lot further along in the decision-making process and are more serious than people who click,” he says.

Clarke pays between $15 and $18 per lead for calls requesting information about AIL’s services for forming corporations, and approximately 10 percent of those calls result in a sale.

Publishers will have to weigh the potential revenues to determine if ads that generate money from calls or clicks get top billing. Where they are available, the higher-priced pay-per-call ads seem to get preferential treatment, getting the prime spots on AOL and YellowPages.com.

Pay per call is a “small but growing portion” of Ingenio’s overall revenue, which was $83 million in 2005, according to Barach. Ingenio has deals with networks Performics and Miva to promote pay per call, he says.

While pay per call has promise, it will not overtake traditional ads in search marketing, according to Mike Kerans, a senior vice president at Miva. Pay per call is appropriate for selling complex goods such as financial services, travel and “high-ticket items” like flat screen TVs, but because of the higher premiums charged, “I wouldn’t use it if I were selling ink cartridges,” Kerans says.

Pay per call will grow in popularity for the 25 percent of searches that are local, but national ad campaigns will continue to rely on other models, according to Kerans, whose company began offering pay per call in late 2004. “It’s never been that new media completely replaces old media,” notes Kerans, adding that pay per call is an effective way for small businesses to dabble online, as only one in three have a website.

Miva works with local TV stations, newspapers and larger publishers, including Verizon’s SuperPages and Infospace in the United Kingdom, and recommends that advertisers include a telephone icon to distinguish listings from pay-perclick ads, Kerans says. Companies should also use landing pages with maps to show the proximity to the customer, or promote special offers to induce people to call, he says.

Kerans says publishers have to determine how much ad space to give to pay-per-call versus payper- click ads based on the cost per thousand (CPM) that they expect to receive.

Calling All Clicks

An alternative form of pay per call enables consumers to prompt a phone call from the advertiser by entering their phone numbers online. Click-to-call technology was originally used to provide customer service, and automatically connects the two parties when consumers click a button. Click-to-call work can be financed through a pay-per-call model when applied to advertising, or through a flat fee or volume pricing.

Using click to call for sales enables customers to continue with their online sessions without having to stop to dial the phone, according to John Federman, CEO of eStara, which offers click-to-call and pay-per-call services.

While pay-per-call advertisements require unique phone numbers that identify the referring publisher, eStara’s Web-initiated calls save money by requiring only tracking numbers for each publisher, according to Federman. Using “cross-channel data passing” technology, the customer’s information is automatically forwarded to the advertiser’s call center, where sales representatives can view it on their screens. eStara customizes the pricing for each publisher, offering auction as well as flat pricing and subscriptions.

Click-to-call technology is also being used on commerce websites to prompt customers who are idle on a website. For example, after a shopper is browsing a website for a few minutes and stops clicking, a pop-up window offers customers the chance to talk with the merchant live to complete their order or to ask for more information, Federman says.

Some people aren’t anxious to fill out forms or give credit cards or social security numbers online,” according to Federman, whose company provides click-to-call services for Amazon, DaimlerChrysler and Continental Airlines. Federman said that after switching from formbased leads to click to call, DaimlerChrysler cut its conversion time from 30 days to four days or less, and doubled its conversion rates.

Search engines and local publishers of Voice over Internet Protocol (VoIP) technology reduce the cost of click-to-call phone connections, Federman says. Consumers using dial-up connections may be hesitant to go offline to call an advertiser, but click to call using VoIP enables them to instantly converse online. Technology developed by eStara automatically checks to see if the consumer’s PC has a microphone, and if so, launches a VoIP window.

While clicking an ad to talk live with someone is a “lower barrier to action than picking up the phone,” according to The Kelsey Group’s Sterling, consumers are not yet comfortable with making calls through their computers.

However, the rise of inexpensive VoIP services from Skype and Vonage could change consumer perception. “When VoIP is mainstream, you may start to see ads with phone icons (that initiate PCbased calls), but that is years away,” Sterling says.


JOHN GARTNER is a freelance writer in Portland, Ore. He is a former editor at Wired News and CMP. His articles regularly appear on Wired.com, Alter- Net.org and in MIT’s TechnologyReview.com.

Optimized for the Future: Q & A with Noah Elkin

Noah Elkin is the director of industry relations at iCrossing, which was recently named Best Search Agency of 2005 by industry trade publication OMMA. iCrossing, started more than nine years ago in Scottsdale, Ariz., is jumping into new arenas, such as the mobile search market, and expanding client services to include content creation and website design.

Elkin is responsible for iCrossing’s public messaging and interfacing with high-profile analyst firms, along with sitting on industry committees, such as the Interactive Advertising Bureau, the Direct Marketing Association and the Search Engine Marketing Professional Organization, which puts him in a unique position to observe the online advertising industry from a variety of angles. Elkin, who previously worked as a senior analyst at research firm eMarketer for five years, has a Ph.D. from Rutgers University and received a B.A. with honors from Columbia University. He recently spoke withRevenue senior editor Maria Sample about winning industry accolades, providing services for the little guys and where search marketing is headed.

Maria Sample: Your company calls search marketing “reverse direct marketing.” How would you describe it?

Noah Elkin: It’s something of a philosophical shift in how customers and businesses interact. Customers are now actively searching for brands and products and services, for information. It’s a seismic shift from a typical push-advertising model where you get an email message or a TV spot or a regular print advertisement. It reflects the degree to which the customer is in control. With reverse direct marketing, a customer has already given an indication of what he or she is interested in. Search, as we like to say, is like a giant focus group.

MS: What’s the main difference between iCrossing now versus 1998?

NE: Our recent restructuring of the organization into three main service lines – marketing services, marketing technologies and marketing properties – is a major shift. Another difference is the building of expertise in these separate business units. And the addition of certain services like creative is one of the biggest changes, not only for us, but also for our space as well.

MS: What has remained the same at iCrossing since 1998?

NE: Certainly the talent of our people has been the constant, and the expertise across the board has been a constant since the start, and it’s something we’re very proud of. It will drive us forward as we expand. And as we continue to receive accolades from the industry, it will enable us to attract the top talent that we’ve become known for.

MS: What has changed since iCrossing won the OMMA award?

NE: We’ve been building really powerful partnerships with the world’s leading brands for more than seven years now, and along the way, really changing the ad agency landscape by helping clients connect with their customers anytime, anywhere, however they want, wherever they want, whenever they want. We feel the OMMA award is a great honor. We’re really proud to have worked so diligently to build these kinds of partnerships that we have with Fortune 500 companies. That’s a tremendous validation of the work that we’ve done, and it sends a message about the potential that search and commercial brand marketing have for helping businesses interact at a much higher level than ever with their customers.

MS: How is iCrossing different from its competitors?

NE: As our founder Jeff Herzog likes to say, iCrossing has been an innovator in search advertising since before Google was Google. What we have that’s unique is our full-service approach. We’re not just a search engine optimization vendor; we’re a fullservice marketing connection. I think that’s a major differentiator between iCrossing and other companies. We’ve really been growing the company with the evolution of search as a medium. I think it’s that kind of vision that puts us on the leading edge, helping to drive the future of advertising – with our in-house expertise on the services side and also on the technology side. We’re the largest independent agency out there, and we back up our tremendous talent with our market research, our strategic alliances, planning and client services with our proprietary technology. That’s a one-two punch that most other places can’t really boast of.

What makes us different is that we have this expertise in market research that provides clients with the deep-dive analytics about their company and industry. We give them the knowledge and tools to help succeed by planning how to accomplish short-term goals and long-term opportunities, using a full array of tools and services organized around search.

Another exciting differentiator for us is the creative service we offer. It’s one side of the business that we’ve really been building in the past year, and it’s really going to grow quite a lot in 2006. It’s everything from copy to actual website design, all organized around improving and maximizing both user experience and optimization of search. We see ourselves as a one-stop shop when it comes to advertising online as well as through emerging technologies, mobile included. We are launching a major mobile innovation called mCrossing, expanding our expertise from natural search optimization on the Web to global devices.

MS: What’s the most important service your company offers?

NE: The most important service is the fact that we offer all of the services, but our strength is expertise in natural search optimization. It’s been able to help prepare us to expand to mobile devices. Bear in mind that natural search results are clicked on 80 to 85 percent of the time, far more than paid search. It’s very important to have that grounding in natural search; it’s the bedrock of what we do. It’s important to have strong expertise, and we’ve been able to complement that with strengths across the board as well as market research and our agency services.

MS: What kind of search are you going to be capitalizing on in the next year?

NE: Mobile search is a very exciting opportunity in the year ahead. Global is one initiative, and certainly local search and classified search – yellow pages. We’ll have a product geared toward the small- and medium-sized business market organized for local search that will be going out toward the end of the quarter.

MS: I’ve heard a little criticism that some of the smaller businesses can’t afford the products you offer.

NE: That’s why we built this technology in-house – that’s a real differentiator as well, that we build all our technology platforms inhouse. Technology is the largest department in our Scottsdale office. Expanding on that, we looked at the small- to midsized business market as well and discovered people that don’t necessarily have either the need or the budget, but they probably want some of the benefits of visibility on the Web. If you’re a plumber in Illinois, you don’t really care if someone in New York finds you on a search for a plumber, because chances are that person is not going to use your services. What we’ve done is to build a selfservice platform that integrates our optimization and tracking software in a way that will make it more accessible for the smalland medium-sized business. Our approach is, whether you’re local, national or international, we help your brand make the connection and quantify the results. What we do best is help companies reach their consumer at their point of interest.

MS: How are online retailers missing the boat in search?

NE: There’s a growing need of the importance of integrating search engine optimization into the workflow process and ensuring that this takes place before the product is launched and before the copy for it is written. Companies and clients need to understand that products must be optimized well before they’re launched, and make sure that search is a priority and not an afterthought. You’re going to get the majority of traffic from natural search, so we strongly encourage clients to plan for that well in advance.

Another way companies are missing the boat is not implementing recommendations in a timely fashion. Clients who receive recommendations from the search agency and then sit on them really run the risk of not getting the online visibility for their products that they would otherwise get from implementing optimization recommendations. This can be particularly crucial at specific times of the year, such as prior to the holiday shopping season, which is obviously the most important time of the year for online retailers.

MS: Give me an example of a client that implemented recommendations in a timely fashion.

NE: One of our best examples is Fairmont Hotels & Resorts. They’ve been a client with us for a very long time. It’s really a great success story of crowding out the competition, like critical search engine traffic drivers such as Orbitz, to really control the user experience and the message that consumers are getting. That’s one that we’re extremely proud of because, as a brand, you want to make sure you control the experience and not the search engine. So it’s been a great partnership for both Fairmont and iCrossing.

At the beginning of our engagement with Fairmont, in terms of keyword visibility, we saw the number of keywords appearing on the first three pages of search results increase to 2,579; a total jump of 1,156 percent, from a baseline of 223 keywords. In terms of baseline search traffic, which was established at 29 percent, within a month of implementing optimized coding elements, the search traffic increased by 41 percent and booking reservations increased by 150 percent over the baseline.

MS: Do you have any studies planned for 2006 that you’re particularly excited about?

NE: We have a relationship with Harris Interactive – they do studies for us and we have three or four planned for 2006. But we’re really excited about a couple of themes that we’re going to work on from both a horizontal basis as well as some of the vertical industries that we’re targeting. One is branding search – why major companies are becoming more comfortable with this concept and how we can augment individual marketing and help branding efforts.

In 2005, there was a lot of talk about paid search, and quite a bit of money spent on it, but we really see natural search as the biggest driver of traffic to websites. We want to focus on and evangelize why and how you can provide the best return on marketing spend and how to budget and manage for a successful marketing campaign.

Another area is about marketers themselves, about what kind of website, from a design and architecture perspective, is going to really reinforce the brand. One of our goals is to optimize the creative and maximize the value of the client’s investment in natural search results for years to come. We do this by optimizing Web pages, building specialized microsites and landing pages designed to drive specific consumer actions, and deploying paid media and mobile marketing campaigns. We partner with clients to break down the barriers between them and their customers.

MS: Is that one of the reasons you joined the Mobile Marketing Association?

NE: In part, yes. For us, that was an industry-leading move, and we’re certainly the first search marketing agency to do that. We want to make sure we’re positioned to take full advantage of opportunities in the mobile space and, in some ways, to branch out our contacts and gain potential opportunities to companies that might not think to come to us.

MS: What do you want most for your company in the future?

NE: Continued growth, continued profitability and continued engagement with the world’s leading brands. A deepening of relationships with both interesting and new clients. As online advertising continues to grow, the lion’s share of those dollars is moving to search. And to really be able to apply our expertise on the agency and technology side, to really be the one-stop shop when it comes to interactive marketing. We want to be top of mind when companies are looking to embrace interactive and emerging technologies.

MARIA SAMPLE is a senior editor at Revenue. In the past 15 years, she has worked for Ziff-Davis, CNET, Charles Schwab and Restoration Hardware. This is her first article for Revenue.

Retooling the Web

Microsoft was late in recognizing the profit potential of online search. Meanwhile, upstart Google surpassed older search sites such as AltaVista, America Online and Yahoo to become the clear leader in search and, therefore, online advertising revenue.

In late 2005, Microsoft chairman Bill Gates and chief technical officer Ray Ozzie wrote widely quoted memoranda acknowledging Google’s success and stating that Microsoft would refocus the company’s MSN division to address the “Internet services disruption.”

The Microsoft executives said the software giant would introduce advertising-supported services to the company’s vast portfolio of services and software, which would enable it to access a greater portion of the growing online revenue opportunities. Microsoft, which had become accustomed to defending a leadership position in desktop and server software, is now on the attack, trying to catch up to hyperactive Google, which has become an incessantly moving target.

Who Should Be Afraid

Although some online entrepreneurs may be fearful of becoming casualties in the escalating competition between Microsoft and Google, it’s traditional media companies that are much more likely to see their revenue streams reduced.

For the overwhelming majority of online sellers and service providers, the Microsoft-Google tussle will create more opportunities than it takes away, observers say. Neither MSN nor Google are primarily focused on the areas of selling products, search engine marketing, developing interactive advertising platforms or generating content. MSN may even provide a boost for the partner companies in its shopping and content portals, since MSN search does not exclude other sellers.

Google likewise opens search to anyone and everyone, and one of its main tenets is to remain inclusive. The company’s unofficial motto is “Don’t be evil,” a play on the nickname “Evil Empire” given to Microsoft by high-tech insiders. So far, most industry watchers claim that Google has remained true to its original precept of exposing the universe of digital information and supporting search through ads. The company does not directly sell products or services, and it continues to derive revenue from sharing in advertising dollars, which creates opportunities for both publishers and advertisers.

However, Google is showing an interest, albeit limited, in software development and distribution. Google now offers a desktop search application and Picasa, an image searching utility that could someday become supported through advertising. Google also reached an agreement with longtime Microsoft foe Sun Microsystems to cross-promote products and jointly market “Microsoft-alternative” applications such as OpenOffice.

Regarding the heightened Microsoft-Google competition, Rachel Lyubovitzky, vice president at search engine marketing company Searchfeed, says she doesn’t see any negatives for her customers. She says that by aggregating consumers who were previously a fragmented audience, the companies are “helping to organize Internet populations so that they will be more receptive to people’s messages.”

By convincing a majority of consumers to have either MSN Hotmail accounts or Google home pages, both companies are gathering information en masse, which advertisers love. However, even these users will continue to spend most of their time enjoying the diversity of content and search services available outside of Microsoft and Google, enabling plenty of room for creativity and innovation.

The online advertising market continues to grow rapidly, and Microsoft’s announcement that it would begin to support some of its multi-billion dollars in software and services through advertising is likely to further accelerate the growth. However, it may take several years for Microsoft to develop ad-supported services for the company’s recently announced Windows Live initiative, so don’t expect a major impact in the next 12 months.

Google’s new search services – which will streamline consumers’ ability to find video, music and text published in books – will likely also create a wealth of new advertising inventory options and contribute to market growth.

During the first nine months of 2005 advertisers spent $8.9 billion online, a nearly 29 percent increase over the previous year, according to Pete Petrusky, director of advisor services for accounting firm PricewaterhouseCoopers.

Petrusky expects the double-digit growth of online advertising to continue for the foreseeable future, at the expense of other media buys. Online advertising revenue topped $12 billion in 2005, equal to the amount spent in consumer magazines, and closing in on the $16 billion spent on cable, according to Petrusky.

Increasing inventory through new services led by Microsoft and Google could correct what Petrusky sees as an imbalance between the amount of time spent online and the advertising dollars generated. “The Internet captures about 15 percent of people’s media consumption time,” says Petrusky, “… but only 3 to 4 percent of total ad spend” that includes magazines, newspapers, television and radio.

Newspapers, which have been losing revenue to online classified ad services such as Craigslist and Yahoo, will likely have more trouble competing online when both Google and Microsoft enter the arena. Television broadcasters will see their advertising revenue decline further as Microsoft and Google make it easier for people to browse video and audio content online.

Although both companies are rolling out dozens of new services, they cannot keep up with the wide variety of services created by entrepreneurs – there are too many moles to whack for either company to be dominant in all areas. In the areas where Microsoft and Google do compete with smaller companies, having a powerful brand alone isn’t enough to convince consumers to switch, according to Greg Sterling, program director with analyst firm The Kelsey Group.

“New services can’t be marginally better; they have to be much better” to prompt changes in user loyalty, Sterling says. For example, MSN search and Google’s comparison-shopping engine Froogle and Gmail email have had trouble gaining traction. Therefore, there will always be enough room for innovators such as Digg.com, Flickr.com or MySpace.com to innovate and carve out a niche (or be acquired by big players looking to expand).

Competition Is Good

The intensifying Microsoft-Google rivalry will create a better audience for advertisers and will spur innovation in the technologies that enable people to more quickly find what they are seeking. Microsoft’s interest in advertising- supported services will also provide a necessary counterbalance that prevents Google from becoming a dominant player.

“The more options, the better” for advertisers, says Michael Stalbaum, CEO of interactive marketing and advertising agency UnREAL Marketing. For several years Google has been expanding its reach as the largest player in the largest segment of online advertising dollars, so increasing competition from Microsoft could provide an important alternative solution.

According to Nielsen//NetRatings, the volume of Internet search queries grew 15 percent between June and October 2005 to more than 5.1 billion. Nearly 48 percent of those searches were performed on Google, a figure more than double the closest competitor, Yahoo, and more than four times MSN’s share of search.

If Microsoft were able to become a stronger competitor in search, “it would be a positive for advertisers,” Stalbaum says, because Google may have to revamp its pricing structure. “Prices may come down a little bit,” he says.

Technology at the Core

The primary front in the battle between Microsoft and Google is technology, which will force all participants to continually innovate or risk losing their audience. If Google or Microsoft enters an emerging service area, the existing companies have additional incentive to upgrade their existing products.

For example, in early 2005, Google and Microsoft announced separate projects for digitizing books and making the content searchable. In December, publisher HarperCollins responded by announcing it would do the same for its content.

Charlene Li, principal analyst as Forrester Research, says the increasing competition “gives better products, which leads to better spending options” for advertisers. Products tend to be not only better, but come out more quickly once the powerhouses are involved. “Microsoft and Google participating, and to a lesser extent AOL, accelerates the product development cycle,” says The Kelsey Group’s Sterling.

Google Labs produces a steady stream of new services that make information more accessible, and the company’s willingness to share unfinished ideas with developers is accelerating the rate of technological change. Not surprisingly, Microsoft has shown an increasing willingness to publicly preview technologies and similarly make available its application programming interfaces (APIs) for developers to tinker with and enhance.

Opening up the technologies has proved a boon for third-party development. Innovations from Microsoft and Google are giving momentum to the next generation of interactivity online, designated as “Web 2.0.” Google has included Web 2.0 technology AJAX (asynchronous Javascript and XML) to build interactive Web applications such as Google Maps and Google Reader, a program that aggregates RSS feeds.

Google is also testing new technologies for publishers to structure and describe their content to make it easier to search. Salar Kamangar, vice president of product management at Google, says Google Base (which he emphasizes is not a classified ad service) is an experiment in allowing publishers to tell Google how their data is structured so that the company can deliver better results to consumers.

Rather than requiring Google’s search algorithm to guess how to identify an online seller’s product inventory, Google Base enables publishers to disclose how they format information. Data entered into Google Base is then made available to any Google property, such as Froogle or Local listings. This “increases the amount of content that Google properties can draw from,” Kamangar says.

Similarly, publishers looking to optimize their presence in search results can use Google’s Sitemaps tool to reveal how their sites are organized. Sitemaps “enables us to crawl their sites more effectively,” says Kamangar, adding that spidering websites today relies on following trails of links, making it difficult to detect dynamically generated pages. These efforts give publishers more of a say in how technology is used to influence their search standing.

Microsoft’s next-generation browser, Internet Explorer 7, will automatically discover RSS feeds and include tools for managing feeds. Microsoft also built RSS support into the Vista operating system, which will greatly increase the ability of publishers to widely distribute content by opening up RSS to a mass audience. Microsoft is also developing extensions to RSS known as simple sharing extensions (SSE) that will enable feeds to be shared and synchronized. For example, SSE could give publishers and affiliates the ability to automatically share information about advertising inventories and campaign performance.

The efforts of Google and Microsoft to outdo each other with sophisticated publishing and search technologies increases the burden on marketers to keep up with the innovations or risk having their websites appear lifeless by comparison.

Some publishers are using the available APIs for these emerging technologies to create “mash-ups” that mix data from multiple providers to create new hybrid applications. For example, Frappr.com lets individuals map where their online friends are, while ChicagoCrime.org shows where crimes are committed by matching police data with Google Maps.

Targeting Targeted Ads

Advertisers and consumers will benefit from the increasing competition as Microsoft and Google implement technology that tailors the online experience for each person. Personalized searching and browsing will create audiences that are more receptive to marketing messages.

Through the MSN AdCenter platform, Microsoft began offering advertisers a method of targeting ads to a particular demographic by leveraging data collected from its millions of registered users. When a signed-in user comes to an MSN site, Microsoft anonymously matches the demographic information to the visit, enabling the company to know the gender, age and location of the people who frequent their properties.

By enabling advertisers to target users by demographic characteristics, Microsoft is introducing targeted marketing “in an innocuous way,” says David Berkowitz, director of marketing at online advertising agency Unicast. He says targeted advertising will become “arguably the most groundbreaking innovation for advertisers.”

Berkowitz says that rather than competing with Google based on audience reach (quantity), Microsoft is relying on superior information (quality) about its customers to sway prospective advertisers. “MSN’s plan is not really about better software, but about delivering demographics,” Berkowitz says. Having demographic information about a large audience of registered users gives Microsoft an advantage in targeted marketing. “Forty million Hotmail users is a huge asset.”

Senior director of advertising and marketing Eric Hadley says Microsoft will evolve MSN AdCenter to target ads to people who set up personalized home pages on its websites, including the recently launched Start and Windows Live destinations. MSN AdCenter was first launched to support advertisers on its websites, but then will be rolled out to third-party publishers, putting it as a direct competitor to Google’s dominant AdWords and AdSense products.

Hadley says a future version of the MSN AdCenter will integrate a consumer feedback mechanism. “If you hover over an ad [with your mouse], there will be a pop-up window to say ‘why am I getting this ad?'” Users would be able to request not to see the ad again if the product or service is not of interest to them. For example, married people might not want to receive ads for matchmaker services.

A not insignificant challenge for Microsoft to make MSN AdCenter a success will be to build the marketing relationships with national and regional online publishers and advertisers. Determining how to split the business model for its applications and online services between subscriptions and support through advertising places a learning curve on a company built on selling products.

Microsoft and Google are vying to create personalized experiences by customizing search results based on prior searches, tailoring information preloaded onto home pages, and delivering ads based on user actions.

For a user who has not signed in before visiting an MSN site, Microsoft will use behavioral marketing techniques to generate contextual ads based on the person’s experiences on its network of sites. For example, Hadley says if an unknown customer is browsing the MSN Music site and searches for artists Kanye West and 50 Cent, ads for other rap artists would appear.

Behavioral marketing is effective in generating high conversion rates for advertisers, says Unicast’s Berkowitz. However, because it tracks consumer actions in the background, “it is a bit creepy,” he says. Microsoft and Google need to respect privacy when building personalization services to maintain consumer confidence. “A consumer has to decide who is trustworthy and who is evil. That’s going to be a major wild card” in determining whether or not users will feel comfortable in visiting a website.

Berkowitz also says, however, that companies must be careful in their pursuit of personalization services to prevent consumers from having too narrow of an experience. Google is experimenting by personalizing search results based on prior searches, but this increases the “risk that exposure to other things that might be of interest” could occur.

“I wonder how far you want to go down that personalization road before you lose the communal experience entirely,” he says. For example, Berkowitz says that while he is primarily a New York Mets fan, he doesn’t want a search engine to stop recommending articles about the rest of the league.

Looking forward, Microsoft and Google will determine if and how to commercialize the myriad of beta services that are currently under development while keeping one eye on what the other is doing.

Microsoft will learn the ropes of the ad-supported model for services and software while trying to grow and leverage its audience of registered users. According to MSN’s Hadley, the biggest challenge for Microsoft will come after the AdCenter platform is opened to third-party publishers. “How do we absorb all this demand from [large companies like] American Express to mom-and-pop” marketing firms? “As soon as we open the gates, we have to bring people in quickly with high quality.”

Algorithm-obsessed Google will continue to refine its search technology to better match customer expectations. “We are very far from being where a person can ask a question that brings back a single answer” that matches what they were looking for, says Google’s Kamangar.

For the rest of the decade and likely beyond, Microsoft and Google will continue to play the leading roles in the unfolding drama of the growth of the Internet as a platform for commerce and entertainment. Their perpetual sparring will spur all of the players involved to perform their best to satisfy the audience.

JOHN GARTNER is a freelance writer in Portland, Ore. He is a former editor at Wired News and CMP. His articles regularly appear on Wired.com, AlterNet.org and MIT’s Technology Review.com.

Search for Tomorrow

It doesn’t take Edwin Hubble to recognize that the search universe is expanding. Instead of studying faraway galaxies to see the shifts in the cosmos, it only takes a glance at the home page of any major search engine to realize that search is moving at light speed.

The stars of search – America Online, Google, MSN and Yahoo – are attempting to extend their reach by launching a stream of search tools that provide custom filters of online information. The rate of change has sharply accelerated during the past year, and it seems that with every fortnight comes a new personalized, localized or visualized search method aimed at speeding up the delivery of relevant results.

A decade ago it was assumed that most users would find companies and information through portals that organize content into easy-to-navigate sections. However during the past few years search engines, led by Google, have become the primary resource for finding information.

According to an April 2005 Harris Interactive survey, Web surfers said they use a search engine during more than 90 percent of their online sessions.

“Google’s sneak attack was quality,” says Jon Cooper, vice president of interactive services at search marketing firm UnREAL Marketing. Instead of trying to direct users to content partners or handpicking links, Cooper says offering quality search results is the best model for satisfying surfers.

Google’s model of throwing open the doors through advertising-supported search has won out over trying to provide premium content. “As long as the content is pretty good and free, people will take the path of least resistance,” Cooper says. Google’s ad-supported search model has helped search engine marketing grow to a $4 billion industry in 2004, according to the Search Engine Marketing Professional Organization (SEMPO).

Tools of the Trade

Basic search tools provided by all of the big four include standard search, image search and news search, although the depth of the search results can vary widely among engines. For example, AOLSearch’s news tool generates results from news wire services only, while all of its competitors include links to articles from newspapers and online media outlets.

This year’s flurry of new search tools will generate additional volumes of Web traffic (and therefore advertising opportunities) by adding utility, increasing the level of competition and enhancing the significance of search in daily online activity.

Google and Yahoo have been the most active during a frenetic 2005 in rolling out new search tools, while AOL and MSN are also rapidly increasing the profile of search on their portals. Instead of taking away traffic from others, the new features will prompt more searches, and advertisers are expected to increase their search engine marketing spending by 41 percent in 2005, according to SEMPO. “The pie keeps getting bigger,” says David Berkowitz, director of marketing at search advertising agency icrossing.

Google and Yahoo have added personalization features that tailor results so that the most appropriate links for the individual are delivered at the top of the results page. Google’s Personalized Search enables users to scan their past searches to “re-find” information and uses the search history to refine the results. Yahoo’s personalization service, My Web 2.0, similarly uses past searches to refine results, as well as enabling friends to share pages that they have visited.

According to Nielsen NetRatings, nearly 70 percent of all search traffic flows through Google (48 percent) and Yahoo (21.2 percent). Personalized search could increase Google and Yahoo’s market leadership because it produces better results without asking users to change the way they search.

Most people use relatively simple one-or-two-word search terms that lack the context to filter out inappropriate results. For example, someone who searches on “Lincoln” will get results about the car, city, university and the president, but a personalized search relying on previous experiences would automatically narrow the results.

“Changing user behavior is a challenge,” says Gary Price, news editor of SearchEngineWatch.com and editor of ResourceShelf.com, because even after many years of searching, people still make the same mistakes. Since people won’t change, “search engines have to do things to make results more relevant,” he says. If what they are looking for is not delivered in the first 20 results, users will give up on a search, according to Price.

Getting Googled

Price says it’s much easier for the market leaders to get users to experiment with new search features than it is for their smaller competitors. When Google introduces a new vertical service, such as a search of academic papers or product catalogs, Web users and the press provide plenty of coverage.

“Google is a PR juggernaut,” says Price, adding that the word of mouth the company gets from enthusiastic supporters puts competitors at a disadvantage. Yahoo similarly generated considerable buzz when it launched tools for searching subscription content and comparison-shopping sites, even though similar services existed from lesser-known competitors.

The challenges for search engines not named Google or Yahoo in spreading the word will likely further the current trend toward consolidation in the search engine industry. Smaller companies that fail to distinguish themselves are likely to be acquired, according to Price.

Microsoft has become more serious about the importance of search on MSN, which previously served as more of a shopping and news portal and showcase for emerging Microsoft media technologies than a top-tier search engine. Microsoft decided in 2003 to replace the Yahoo search technology it had been using with its own search technology, which went online in February this year, according to MSN product manager Justin Osmer.

Osmer says MSN Search’s product development is focused on giving factual answers and not just links. When users type in a question, MSN searches Microsoft’s Encarta database as well as external resources for the answer, an approach similar to that of niche search engine AskJeeves.com. For example, typing in “Phillies score” will yield the score of the team’s latest game as the first result, while “population of Seattle” displays the latest statistics from the U.S. Census Bureau.

Google and Microsoft are further enhancing the importance of search in everyday computing by integrating Internet and desktop search. Both companies have launched free desktop search utilities, and Google’s Gmail email service replaces folders with a search model.

America Online is beta testing a new home page highlighting search tools that makes available to everyone a portion of the content that was previously restricted to subscribers. In addition to reference material and product search utilities, AOL now provides multimedia searches that enable users to tap into its considerable content partnerships.

AOL Search’s video search uses technology from fellow Time Warner subsidiary SingingFish and includes clips from television shows, movies and music videos, while the audio search displays radio program segments and music tracks.

Yahoo’s AltaVista also includes audio search technology, and Google is developing technology to search the text of audio, according to a report in the New York Post. Searching the spoken word currently requires developing faster and more accurate speech recognition technology, but eventually “will become just as important as the written word,” according to SearchEngineWatch’s Gary Price.

Steam Behind the Local Motion

According to Chris Henger, vice president of marketing and product development at Performics, the new tools will propel search marketing to become a $13 million industry within four years. Matching consumers with local sellers is expected to be one of the largest areas of search growth, according to Henger. “Local search is the biggest thing and opens up the door to a whole new set of advertisers,” he says. (See “Think Global, Search Local” on page 40.)

All four of the top search sites have launched local search services that look for nearby businesses selling services or items that match the search term. Henger says that working with smaller regional companies poses some challenges for search companies. Search engines will be interfacing with smaller companies that may be inexperienced in the business model, which may require search engines to augment their existing sales teams with a network of local sales representatives, according to Henger.

MSN’s beta local search service attempts to match the searcher with relevant local information by automatically scanning IP addresses, according to Microsoft’s Osmer. The location of the searching computer is used to call up nearby business listings, and the same technology is also used to identify the location of the results pages so that nearby websites are given priority.

The search engines will have to contend with established phone directory companies such as Verizon’s SuperPages.com, YellowPages.com, YellowBook.com and Amazon.com’s A9, which recently launched a visual search tool that provides images of the actual storefronts.

All of the search engines are experimenting with RSS (really simple syndication) search capabilities, which could further boost the amount of advertising opportunities. RSS is a method of formatting content used by many news sites and bloggers to share information with other publishers. Tracking feeds currently requires RSS reader applications, but search engines are likely to integrate RSS into search in the not-too-distant future.

Google rotates RSS feeds into its Gmail service, which could pave the way for broader RSS searching. MSN Search enables users to save any search query as an RSS feed, eliminating the need to repeat searches. Yahoo is integrating RSS into its news search, and AOLSearch includes video content formatted with Media RSS, which describes the content of the video.

Connecting search advertising with bloggers and news content through RSS would take advantage of some of the Web’s fastest growing segments. Google is currently posting some RSS advertisements on Gmail, and in July WashingtonPost.com became the first major news organization to include ads with its RSS feeds. Yahoo is testing RSS as a medium and looking into the viability of RSS advertising, according to senior manager of communications Gaude Paez.

Too Much of a Good Thing?

Keeping up with all of the search options and learning the benefits of each presents challenges to advertisers and users who must determine which variations will work best for them. The home pages of the top search engines now include a half dozen or more search options, and beta search technologies are often listed on their own pages.

When initiating a search, users have to keep mental notes as to which search tool will work best for each occasion. Users who would like to speed up searches through personalized search must remember yet another ID and password, and also have to remember to sign out before performing searches that they would rather not have saved on a search engine’s servers.

Marketers have to decide which of the multitude of search tools from a given search engine they want to participate in, and then figure out how to track their return on investment. For example, a search marketer might be getting good returns on standard search, but might not do as well on local search and generate no returns from news searches associated with their keyword or contextual ad.

Since each new tool increases the magnitude and complexity of search marketing, the need for interactive agencies will greatly increase, according to Chris Henger of Performics.

“Companies will need to go to specialists and third parties” to sort through the dozens of search marketing options, he says. Specialized agencies will track the new search tools for volume, user demographics and potential ROI.

Icrossing’s David Berkowitz says the rise in search tools “is phenomenal for interactive agencies because it makes it very difficult to keep track of everything that is going on.”

Search marketers also have to consider if they want to exclude having their ads show up on specific websites that include content that they consider objectionable. Berkowitz says large advertisers will call on agencies to protect their brands from unwanted associations, particularly with the rise in video and audio searches.

The search engines are committed to extracting the maximum value from the growing universe of content by producing personalized packets of information. New customized tools that anticipate the intent of users’ queries or automatically refine the scope of the search will further entrench search as the de facto first step in the quest for online information.

JOHN GARTNER is a freelance writer in Portland, Ore. He is a former editor at Wired News and CMP. His articles regularly appear on Wired.com, AlterNet.org and in MIT’s TechnologyReview.com.

Think Global, Search Local

If you are looking for help with your water heater in Plano, Texas, Harvey West is your man. Type in “water heater plano texas” on Yahoo and this ad will come up as the top sponsored result: Harvey West Plumbing Company: Water Heater. Family owned and operated repair and replacement plumbing company with fair prices and fast service. $25.00 discount to all new customers.

Off to the right, you’ll see sponsored results from the likes of Lowe’s, eBay, Target and BizRate. But West, who sold his 35-person plumbing company and now works solely with his son-in-law, manages to get the primo spot on search engines these days.

Run a Google search with the same keywords and, once again, Harvey West will be the top dog.

West admits pricing varies by geography and estimates that he shells out a mere $2 per click. Because it’s so cost-effective, Internet advertising is the only marketing the Texan plumber does these days, and it accounts for most of his leads. West is on to something: Local search is growing at an astonishing rate, and the numbers are absolutely staggering.

Searching for Profits

According to comScore Media Metrix, more than 421 million local Web searches were conducted in February. That means the number of times users conducted Web searches for local information more than doubled from January 2004 to February 2005.

Online merchants are eager to capitalize on the trend. Commerce sites typically convert 2.4 percent of visitors into customers, according to a study by retailer association Shop.org. The typical brick-and-mortar conversion rate is about 1 percent. The proliferation of broadband should help e-commerce grow even more. As people can more quickly find results, they are more likely to make purchases.

Industry observers say the already sizable local search market is likely to lift even further. Total local online advertising sales are expected to grow to $5 billion by 2009, with $3.4 billion of that coming from search engines, The Kelsey Group predicts.

Compare that figure to $670 million in 2004, with $162 million coming from search engines.

Sales of sponsored links and other forms of search advertising are expected to increase at a 12 percent compound annual growth rate, generating more revenue than display ads by 2010, according to JupiterResearch.

ComScore found that 111 million people execute 46 billion Internet searches yearly. And The Kelsey Group-BizRate estimates that 25 percent of all Internet searches are local in nature, meaning local consumers are looking for local merchants.

Although local search has really taken off only recently, local search queries already account for more than a third of all search engine queries. If surfers add a geographic term (like city or ZIP code) to their search queries, the results show them businesses within their area, usually giving them results they want – happy searchers, happy local businesses and happy publishers.

Make fun of the Yellow Pages if you want; the local listings are laughing all the way to the bank. This market has been dominated by local phone directories, like the Yellow Pages, with profit margins of 50 percent or more.

SBC made a hefty $2 billion in profits from its publishing unit last year on revenues of $3.8 billion. Researchers at The Kelsey Group predict at least $3 billion of Yellow Pages money will move online by 2008. To put that in perspective, the total Internet ad market was $9.6 billion last year.

But search engines attract 66 percent of online local search users, according to comScore. Clearly, local search is exploding. There is a huge potential to make money – it’s reportedly a $1.2 billion market – and that’s why search localization is the focus of efforts by AOL, Google, MSN and Yahoo.

Competitive Landscape

New data from Hitwise, an online competitive intelligence service, show that the top three search engines – Google, Yahoo Search and MSN Search – accounted for 93.5 percent of U.S. Internet searches across major engines in July 2005.

Visits to Yahoo Local (local.yahoo.com) were 4.4 times greater than visits to Google Local (local.google.com) in July 2005. However, Google Local’s market share increased 61 percent between February and July, while Yahoo Local grew 14 percent.

Google Local’s catch-up is occurring amid the growth of Google Maps (maps.google.com), which has quickly grown to become the third-ranked site in the Hitwise Travel-Maps category in July 2005. Maps have become important to local search users, as 17 percent of Yahoo Local’s visitors went directly on to Yahoo Maps in July 2005.

Yahoo has another advantage when it comes to local search: it has 176 million registered users, so it can direct local ads to people who have provided their cities or ZIP codes upon registration. While Google and Yahoo currently dominate the landscape, MSN has the financial resources to maneuver its way into search superiority. Microsoft spent $44 million marketing various MSN services in the first four months of 2005, while Yahoo spent $14 million – versus just $2 million for Google, says TNS Media Intelligence.

Still, underdog AOL is striving to play catch-up. AOL has long been for members only but it recently opened up its borders, enabling more of America to access its content. The move is meant to encourage advertisers, both national brands and local businesses, to fork over ad dollars because their ads will be seen by more than just AOL subscribers. It is clearly intent on trying to grab a share of search profits. And for good reason: Internet search advertising is set to overtake pedestrian online banner advertising by 2010, as online sales double to $18.9 billion, up from $9.3 billion at the end of 2004, according to JupiterResearch.

Executives at the Big Three realize that local is the way to go. “The local search market should be larger than [Google’s] other markets because most people’s purchases are local,” said Google CEO Eric Schmidt, at an investor conference in May. And Google isn’t alone in its thinking. All the major players are looking for more ways to attract the most local search dollars.

The various search parties are using several approaches to move into local advertising. Maps are a leading tool. MSN has launched a beta of its Virtual Earth application. A Locate Me feature finds a present location and lets the consumer explore and discover the area around them. The Locate Me link activates Microsoft Location Finder, which uses Wi-Fi access points or Internet Protocol address geocoding, to determine a person’s location.

Google has its Keyhole technology. Google bought dodgeball.com and, at press time, aborted plans to acquire Meetroduction, “location-aware social networking software.” Google’s interest in social networking and mobile technologies show its commitment to localized services.

Mobile search is a promising prospect because people are attached to their cell phones and are often looking for goods and services while on the go. Eyeing this mobile climate, AOL bought mobile software company Wildseed; Google has local search for mobile phones; Yahoo introduced a texting service for getting local search listings. While mobile search is still in its infancy, it is likely to take off quickly and add another element to the local search wars.

Local Winners

In August 2005, Affinity Internet announced the launch of ValueTraffic Local, a service that helps small business to target their online advertising to Web searchers in specific geographic areas. Mastering the art of local search is a skill that few possess, but those who do stand to reap rich benefits.

Harvey West, the Texan plumber, is so good at bidding on keywords and tweaking ads that a number of other plumbing outfits, from Philadelphia to Palo Alto, Calif. hire him to help them with their local search efforts.

Cabrillo Plumbing & Heating in the San Francisco Bay Area does extensive advertising – TV spots on local cable, direct mail, Yellow Page ads and moving billboards in the form of company trucks.

“We track every piece of advertising scientifically,” says President Jeff Meehan who handles Cabrillo’s advertising himself. He even shot Cabrillo’s TV commercial on 35 mm film in his mother’s kitchen.

But when it comes to Internet marketing, Meehan hands the reigns over to West. “I’ve given him carte blanche to get us at the top bar for our service area which is San Francisco and Palo Alto.”

West says a Philly plumber doesn’t have much competition and only has to pay around 75 cents a click. Meehan, however, forks over more like $4 or $5 a click because there’s more competition for eyeballs in the Bay Area.

“If you bid the most, you’ll get the highest listing,” explains West. But plumbing is a business where you can spend $300 acquiring new customers – he recalls the days when he spent $8,000 a month on Yellow Page ads alone – so $5 is a deal, says West. But local search isn’t something you let stay static.

Tweak, Tweak, Tweak

Searches for “yoga San Francisco” and “spa San Francisco” found International Orange, located in San Francisco.

“We do local search marketing for good reason,” says co-founder Amy Darland. “It’s effective, and you aren’t committed for a month or year. It’s a nice get-out-of-jail card.” Still, it’s such a tricky business that, like Meehan, she entrusts her search marketing to a Web advisor.

In the past year the average advertiser’s roster of keywords grew by 50 percent, according to Efficient Frontier a Mountain View, Calif., firm that manages $100 million in keyword purchases for its clients.

“People will go in and put in keywords and leave it like it was Yellow Pages,” says West. “You’ve got to tweak it, work on different ads, change it 15 times to see what gets the best clickthrough rates. As soon as it works, you’ll find it changes.”

Local search is a huge and expanding market. The major players are constantly changing and so it’s important to understand the evolving landscape. So how does local search impact primarily merchants and affiliates? It means that large, established merchants are bidding more to get top listings.

The growth of local search is a case of half-full, half-empty for affiliates. But they can take advantage of overlooked locales. They can bid for the top spot in small towns, getting local shoppers to connect to online merchants through their sites. While a spa search in San Francisco or New York results in a raft of sponsored results, there are many towns with only natural search results. So affiliate sites that link to SpaWish.com, for example, can take advantage of the undiscovered towns and bid to get sponsored spots that lead to commission payouts.

But affiliates hoping to be local leaders would be wise to heed Harvey West’s words: “You gotta keep on top of it.”


DIANE ANDERSON is an editor at Brandweek. She was the managing editor for Revenue magazine for Issue 4 and previously worked for the Industry Standard, HotWired and Wired News.

Killer Content Brings in Money

There are three main factors that determine the success of your Web site:

  • Effective site optimization;
  • Site popularity; and
  • Great content.

Site optimization is the process of placing your keywords in the right places and making sure your Web site is accessible to search engine spiders so that they can find you and index your content more easily.

Site popularity can be achieved by online and offline marketing (mainly good PR) and the number of people who link back to you. This is often confused with page rank, but page rank is only one factor in determining your site’s popularity.

The best long-term solution for high search engine ranking, and the factor that is easiest to tweak, is to create first-rate content. You don’t have to be a Pulitzer Prize winner to do it. You just need to focus on addressing the needs of your customers, and by doing that effectively you will also attract search engine spiders in droves.

Many search engine marketers would have you believe that the best way to get high search engine rankings is to stuff your pages full of keywords and use tiny text at the bottom of the page to create great spider fodder. They don’t focus on the usability of the page or think about how users want to view your copy.

This may be a good short-term strategy, and may get you good rankings, but in the long term that’s not a good idea. Spiders are getting smarter. They know when you are trying to spam them. From your customers’ perspective this also does a lot to minimize the credibility of your Web site.

We have all been to sites where the copy was poorly written and grammatically incorrect. It looks sloppy and leaves customers questioning the wisdom of giving you their credit card numbers. It doesn’t matter how many clicks you get or what your rankings are if you can’t convert a visitor to a buyer. First-rate copy serves all of your audiences – spiders and customers alike.

As far as high quality content goes, remember that it should offer significant value to your customers and other sites. Why other sites? Because they’ll link to your site. Good content should also be unique and be updated regularly, so that people will come back to your site often to see what’s new.

Structuring Your Content

When thinking of how to structure your page to make it usable for both spiders and customers, a good rule of thumb is to start to think like a newspaper publisher. The same rules apply when determining what your Web site copy should look like. The newspaper editor focuses on the way readers like to view content. The editor knows that users typically scan the headlines first and then, when something piques their interest, they zero in on the content they want to read.

If you structure your pages the same way, it will increase the usability of your site and also make it more spider friendly. Make good use of headline sizes to clearly identify to your readers what is the most important copy on your pages. Direct them to where you want them to go by allowing them to see at a glance which items are the most important. Include your keywords in your headings to reinforce the focus of the page for both users and spiders.

The same rules apply whether you are building landing pages to submit to paid search engines or for organic traffic. Users and spiders want clear, grammatically correct copy that helps them to find the value in your pages fast. You only have about 13 seconds to catch your users’ attention, so every page on your site should focus on one message, and include a clear call to action. It’s really just following the basics of direct response marketing and applying that to your Web site.

Once you have created great headlines, pick one topic per page and write decent articles that appeal to your users. More pages equal more spider food and more specific landing pages where you can send users for one-click information. What works for one Web site in terms of content may not work for another, so you’ll have to keep testing until you see what mix of copy makes users want to stay on your site, return again and convert to a sale.

Here are some examples to help you start thinking about what valuable content might look like:

  • CD retailer: Provide reviews of new releases and bands;
  • Accounting: Offer regular updates about legal changes that affect your clients;
  • IT trainer: Show IT folks how to train their internal clients, or offer some free online training or white papers;
  • Gardener: Show beautiful gardens from around the world, and offer tips on gardening;
  • Travel agent: Offer reviews of hotels, restaurants and attractions on different areas.

As you may have realized by now, creating and updating your content is a lot of work. It’s also hard to stay motivated if you don’t see immediate gains. It takes a very long time for word to spread about your Web site. Just as with paid placement, you have to test creative frequently. With paid placement you can see results immediately whereas with this, you need to wait a long time to get feedback. You need to hang in there and over time you will see that it really does pay off.

Another relatively pain-free way to offer frequently updated content is to create a blog. There are many great inexpensive blogging tools out there that will integrate well with your Web site and allow you to update your content on the fly. Savvy search engine marketers are rushing to add them to their sites. But be sure the quality of your blog is high. Blogs are easy to set up and are proving to be very spider friendly. After all, what the search engine wants to see is just what your users want: frequently updated, quality, relevant content. Nobody wants to read yesterday’s news, least of all search engine spiders. Increasing conversion is what it’s all about, and that’s what makes a successful Web site.

MARY O’BRIEN is a partner at Traffic- Mentor Inc. She has worked in Internet marketing for five years and was formerly senior director of sales at Overture.com.

Searching for Your Site

Unfortunately, many folks create a Web site and then sit back and wait for the orders to start pouring in. That strategy doesn’t work in the field of Internet marketing any more than it does in the offline world. With millions of new Web sites being added to the Internet every month, the old days of hanging out your shingle and waiting for customers to beat a path to your door are long gone.

Effective search engine marketing (SEM) is what separates winners from losers in the world of Internet marketing. And when it comes to SEM you have two choices. The first option is to optimize your site so that search engines find you easily and give you good ranking in their index. The second choice is to buy higher placement on search engines using paid inclusion or pay-per-click (PPC). In other words, you can pray for clicks or pay for clicks, the choice is yours.

Praying for clicks is better known as Web site optimization. When taking this approach, it helps if you offer the search engine gods a peace offering by making it easy for their spiders to find and index you. (Spiders are programs that crawl all over the Web searching for pages.) Whether you choose to optimize your site yourself or pay a search engine marketing firm to do it for you the same strategy will apply, and you should be involved in every step of the process.

Keyword Selection

Choosing the right keywords and phrases for optimization is crucial. If you choose keywords that few people search for, then you can achieve a lot of top search engine rankings, but won’t get any customers. If you choose keywords that are too competitive you’ll find the competition won’t allow you to achieve any decent rank. You should also choose keywords that are attractive to your customer demographic; otherwise visitors will arrive at your site but never make a purchase. Simply make a list of relevant keywords that balance both popularity and competition. Use a keyword research tool like Word Tracker or Overture’s Search Term Suggestion feature to do this quickly and easily.

Measure Your Rankings

Before you can improve your position, you must know where you rank for the keywords and phrases that relate to your business’s products and services. If you did a good job in picking keywords, you should now have a list of highly relevant words and phrases that your customers are using. Use a tool like Web Position Gold, or my company’s free tools at TrafficMentorSEO.com/tools .html to determine where you rank for your targeted keywords on the major search engines.

Page Content

One of the easiest ways to attract both search engine spiders and qualified traffic to your Web site is to create Web pages that are appealing both to the user and to the spider. Spiders like to see short pages with lots of text and few graphics. People probably like to see more pictures. After all, any picture is worth a thousand words, just not to spiders. Balance is what counts. Creating pages that are attractive to users and spiders and free of annoying distractions like flash and frames is the name of the game. Try to create one page for each keyword or phrase you are targeting, and develop quality content that will bring users back to your site again and again.

Optimization

This is the main focus of search engine marketing and the piece that makes all the difference in your Web site’s ability to compete effectively. Simply stated, your goal is to give the search engine spider fodder. The easiest way to determine what it wants is to study pages already ranking in the top 10 and to emulate key aspects of those pages on your own site. Don’t copy your competitors’ source code and content line for line, just learn from their example. Study the basic statistical elements of the page such as meta tags, keyword counts, link popularity, word counts, etc. A good free tool to keep you on track and ensure that your page is spider-worthy can be found at InstantPosition.com.

Submitting

Don’t try to use a submission service to submit your pages to thousands of search engines and directories. These services are a complete ripoff. There are only a few search engines that count in terms of traffic, and you are better off submitting to them manually or using a tool like Web Position. Once you develop some third-party links to your Web site, most engines like Google will re-spider your pages regularly without the need to re-submit.

Traffic and Revenue Tracking

Ultimately, it isn’t just top rankings you want, but more targeted traffic and sales. This is where your investment in search engine optimization really pays off. Once you get your traffic-building pages set up, the pay-off comes in consistently. Utilize one of the many good tools out there for tracking visitors and revenues. You can use these solutions to track both PPC campaigns and organic visitors and you will learn a lot in the process about your site’s usability and its ability to convert visitors into customers.

Follow Up

While some pages may rank well for a long time without changes, most pages will require fine-tuning as the search engines change their ranking algorithms, and index new pages. It’s important to measure your rankings at least monthly. Re-optimize any pages that drop in rank and then resubmit or wait for the engine to revisit the page.

The search engine marketplace can be daunting as things are constantly changing. In order to keep up your top rankings you need to stay informed. Read as much as you can. Sign up for the many search engine newsletters and forums and apply the tips in them religiously.

After that, just sit back and smile as you watch all the visitors coming to your Web site. The best part is that all that traffic is free, and highly targeted. Yes, sometimes even the gods can be friendly.

MARY O’BRIEN is a partner at Traffic- Mentor.net. She has worked in Internet marketing for the past five years and was formerly senior director of sales at Overture.com.

Affiliates, Start Your Engines

Unless you’ve been living in a cave for the last year or so, you probably realize by now that in order to get customers to your affiliate site you have to market it on search engines. Even if you haven’t realized this, your competitors certainly have, and if you don’t take advantage of what the search engines have to offer, your Web site is likely to go the way of many other dot-com dodos.

Over the last few years search engines have emerged as the most viable option for reaching many users on the Web. As an Internet marketer, your success online may be determined by how well you learn how to play the search engine marketing game.

In recent studies, search engines emerged as the number one way people find products or services on the Web, with about half of all Internet users utilizing search engines to find you.

Searching for what you need using search engines has become so ingrained in the Internet psyche that people even go to a particular engine like Overture, and type searches like www.Yahoo.com in the search box, instead of typing that URL into the address bar. Some of the top searches on many of the search engines come from people using the search engine to find other search engines.

As you may also have noticed, search engines are in the news lately. Google is always grabbing headlines, and the industry has consolidated, with many of the larger companies gobbling up the smaller folks in a race for Internet dominance. First, Overture bought Alta Vista, Fast and AlltheWeb; FindWhat merged with Espotting; and now Overture is hand-in-hand with Yahoo, which already purchased Inktomi.

MSN is beefing up its own search services in order to compete, and is rumored to be eyeing Looksmart and Ask Jeeves as potential purchases. So a realistic scenario in the next few years will be that three major engines will control over 80 percent of all U.S. searches on the Web, and the balance of searches will be performed between hundreds of smaller engines.

How can affiliates take advantage of that information?

Think of some keywords that represent your business. There are hundreds of Web sites competing with you for placement in millions of searches per month. Competition will only get worse as more businesses start to get their Internet act together. You can’t ignore search engines in your marketing efforts if you want to succeed. And, after all, search engines do have many advantages:

Affordability: The cost of a lead gained from a search engine marketing campaign is currently averaging about 29 cents. That’s a significant savings from the next least expensive Internet marketing vehicle, which is email at 50 cents per lead, according to a study conducted by Jack Myers LLC and presented at a Direct Marketing Association conference last March.

Equality: The Internet is still the great equalizer when it comes to marketing. Any affiliate marketer or small business with a Web site can utilize smart search engine marketing practices and to compete with their larger and better-known competitors. Even though you may not have the money to launch a large search engine marketing campaign, with a little knowledge, you can do most of the work yourself and still compete with the big boys. Many small businesses have built a decent living just using the power of search.

Flexibility: There are very few other venues where you can control so many aspects of the marketing campaign and stick a toe in the water for very little money. Search engine marketing allows you to test copy, placement, budget, messages and offers, on the fly, in real time. You don’t have to commit to a long-term contract or a minimum buy. You control the amount you spend, the cost per lead and the duration of the campaign.

Accountability: If you set up your tracking correctly, you can easily and quickly establish the return on investment (ROI) for your campaign. This will allow you to correct as you go, redesign your Web site, change your product offering and make adjustments based on your profit margin. Never start a search engine marketing campaign without the proper tracking in place. You can learn so much from the insight you receive that you may have to rethink your whole business model.

Accessibility: You can reach more targeted users utilizing search engine marketing than with any other marketing vehicle. You can target your campaign locally if your business is constricted by geography, or internationally if the world is your marketplace. Either way, Internet use is only going to grow in the next few years, so don’t let this opportunity pass you by.

In light of all this, it seems obvious that the more you can learn about search engine marketing, the more successful your Internet business will be. You don’t have to do it all yourself, but you should certainly know how it’s done. That way you can decide whether to keep search engine marketing in-house or hire someone else to do it. Either approach will yield good results.

In future columns I’ll discuss the different forms of search engine marketing and provide you with plenty of tips and tricks to ensure that you get your fair share of Internet customers. We’ll delve into all those acronyms you may have heard bandied about but never knew the definition of. Yes – the joys of SEO, WSO, PPC, CPC, SEM, PI and others, lie ahead. (Somebody stop me!)

MARY O’BRIEN is a partner at Traffic Mentor.net. She has worked in Internet marketing for the past five years and was formerly senior director of sales at Overture.com.